Loading...
HomeMy WebLinkAbout2012 CON San Diego Habitat for Humanity - HOME Housing Construction - RehabilitationHOME CHDO FUNDING AGREEMENT BETWEEN THE CITY OF NATIONAL CITY AND SAN DIEGO HABITAT FOR HUMANITY COMMUNITY HOUSING CORPORATION, INC. FOR CONSTRUCTION AND/OR REHABILITATION OF SINGLE FAMILY RESIDENTIAL HOUSING IN THE CITY OF NATIONAL CITY This Agreement is entered into this 30th day of October, 2012, by and between the City of National City ("CITY") and San Diego Habitat for Humanity Community Housing Corporation, Inc, a California non-profit public benefit corporation ("SD-HFH"). RECITALS A. WHEREAS, City of National City ("CITY") is a recipient of funds from the United States Department of Housing and Urban Development (hereinafter "HUD"), pursuant to Title II of the National Affordable Housing Act of 1990 (42 U.S.0 12701 et seq.) as amended (hereinafter "ACT"); and B. WHEREAS, CITY desires to plan for the new construction or rehabilitation of existing housing to create affordable residential developments for the benefit of low- and moderate- households, including certain pre -development activities as allowed under HOME regulations; and C. WHEREAS, SD-HFH has demonstrated development experience in National City and is qualified to develop or rehabilitate and subsequently sell affordable single-family residential housing and perform the other services as specified in this Agreement; and D. WHEREAS, SD-HFH has been certified by CITY as an eligible Community Housing Development Organization (hereinafter "CHDO") pursuant to the definition of such organizations contained in 24 CFR 92.2; and E. WHEREAS, both parties to this Agreement, SD-HFH and CITY, agree that they are subject to the federal restrictions and qualifications listed in Title 24 of the Code of Federal Regulations, Part 92 ("24 CFR 92"); and F. WHEREAS, CITY allocated $650,000 of federal HOME funds on May 2, 2012 that may be used for the construction and/or substantial rehabilitation of as yet not identified six single-family (6) HOME assisted housing units ("Assisted Units") for Eligible Households earning 80% of the Area Median Income for San Diego County or less; and G. WHEREAS, in an effort to establish a continuous source of housing development funding capacity for SD-HFH, CITY has elected to permit SDHFH to retain all net proceeds from HOME CHDO Funding Agreement Page 1 of 22 the sale of the rehabilitated units ("CHDO Proceeds"). As a further condition of this Agreement, SD-HFH must use and restrict any and all CHDO Proceeds for the production of additional units until six (6) Assisted Units are completed and sold and the balance of CHDO Proceeds remaining after the completion of six units is committed to developing affordable housing in National City. Upon cycling the balance once, any other CHDO Proceeds will be unrestricted and not subject to HOME requirements; and H. WHEREAS, CITY has also elected for SD-HFH to income qualify households, originate and process second mortgages for each qualifying household and prepare loan documents including but not limited to a HOME regulatory agreement, deed of trust, and promissory note to be by executed with the CITY as Beneficiary of each mortgage. NOW, THEREFORE, in consideration of the mutual benefit to be derived therefrom, CITY and SD-HFH agree to the following: 1. SD-HFH shall furnish all of the services as described in this Agreement and all attachments incorporated by this reference. 2. CITY shall advance payment or reimburse eligible costs expended by SD-HFH in the amount and pursuant to the conditions contained in this Agreement and all subsequent/supplementary documents. 3. SD-HFH shall be responsible for the professional quality, technical accuracy, timely completion and coordination of all reports and other services furnished by SD-HFH under this Agreement, except that SD-HFH shall not be responsible for the accuracy of information supplied by CITY. 4. Work to be Performed A. SD-HFH agrees to fully perform the Work and develop the Project as described in the Work Plan, attached hereto as Exhibit A and incorporated herein by reference (the "Work"). CITY reserves the right to review and approve in advance all Work to be performed by SD-HFH in relation to this Agreement. Any changes to the Work Plan described in Exhibit A proposed by SD-HFH must be approved in advance by the CITY, in writing, which approval shall not be unreasonably withheld, delayed or conditioned. B. After rehabilitation has been completed on each unit, the HOME Assisted Units will be sold to an Eligible Household at the agreed upon sales price supported by a certified appraisal at the time of sale. CITY will be the Beneficiary of a silent loan in second lien position equal to the difference between the sales price, less any down payment, and the amount of the first mortgage for which the Eligible Household has been provided a bona fide lender approval. SD-HFH will be responsible for complying with the loan guidelines and requirements under Exhibit 1. SD-HFH will prepare, process, and deliver to escrow a fully executed HOME Regulatory HOME CHDO Funding Agreement Page 2 of 22 Agreement, Deed of Trust, and Promissory under Exhibit I for each assisted unit sold to an Eligible Household. 5. Use of Funds The CITY agrees to provide to SD-HFH $650,000 for work as specified in this Agreement. In no instance shall the CITY be liable for any costs for the Work in excess of this amount, nor for any unauthorized or ineligible costs. The CITY will administer this allocation in accordance with the provisions of the HOME Final Rule, 24 CFR Part 92 and the Consolidated and Further Continuing Appropriations Act of 2012, P.L. 112- 55. 6. Conditions SD-HFH agrees to comply with all conditions of this Agreement. SD-HFH's failure to comply with these conditions may result in cancellation of this Agreement as expressly provided for in this Agreement. 7. Method of Disbursement A. SD-HFH agrees that it shall expend the funds for eligible costs within the time limits specified by 24 CFR 92.502(c)(2) and this Agreement. B. Project set-up and disbursement requirements for HOME Projects will be in conformance with 24 CFR 95.502(b) and 24 CFR 92.502(c). C. Project completion requirements for HOME projects will be in conformance with 24 CFR 92.502(d). Upon submittal of the final project drawdown request to CITY, SD- HFH must provide to CITY a project completion report in a form and content to be prescribed by CITY. In the event that the project completion report is not received by CITY, CITY may suspend all project drawdowns not yet paid until the project completion report is received and accepted. D. In the event CITY determines funds were used for ineligible expenses, further payments shall be withheld until the findings are resolved to the satisfaction of the CITY. 8. Commencement and Term This Agreement is effective upon execution by all parties. SD-HFH agrees that Work will not commence, nor will any HOME related costs be incurred or obligated before CITY executes this Agreement, SD-HFH completes all required environmental clearances, and SD-HFH complies with the applicable conditions of this Agreement. SD-HFH agrees that the Work will be completed by the date(s) specified in the Project Timeline, Exhibit B, unless a written request for an extension is approved in advance of this date and in writing by CITY; extensions will automatically be granted for circumstances outside the control of SD-HFH, but in no case will extensions be permitted that will cause the project not to be completed by June 30, 2014. Failure to complete the Work on time without a written extension from CITY constitutes a material default of this Agreement by SD- HFH. 9. Termination HOME CHDO Funding Agreement Page 3 of 22 A. CITY may terminate this Agreement for cause by giving fourteen (14) days written notice to SD-HFH following the time allotted to cure violations per the provisions of section 10 (B) of this Agreement. Cause shall consist of any violation of the requirements of HOME or of any terms and/or conditions of this Agreement or upon violation of any local, state or federal law or regulation, or upon the request of HUD. Unless otherwise approved by the CITY, upon termination of this Agreement, SD- HFH must complete all Work in progress and terminate any other activities that were to be paid for with HOME funds. Any unexpended funds received by SD-HFH must be returned to the CITY within fourteen (14) days of the Notice of Termination. A rate of interest of six percent (6%) may be added to all funds due but not paid within fourteen (14) days of the Notice of Termination. In the event of such termination, CITY may proceed with the Work in any manner reasonably deemed proper by CITY. The actual costs reasonably and actually incurred by CITY to perform the remaining Work shall be deducted from any sum due SD-HFH under this Agreement, and the balance, if any, will be paid by SD-HFH upon demand. B. In the event that CITY notifies SD-HFH of its intention to terminate this Agreement pursuant to 10 (A) above, CITY will allow SD-HFH a time period of 30 days, to be specified in the notice of termination, for SD-HFH to cure or commence to cure the violation to CITY's satisfaction provided that if the violation is as such that it cannot be fully cured within said 30-day period, SD-HFH shall have such additional time as may be reasonably necessary to cure such violation so long as SD-HFH proceeds promptly after receipt of CITY's notification and proceeds diligently at all times to complete said cure. C. This Agreement is valid and enforceable only if sufficient funds are made available to CITY by HUD for the purposes of this program. It is mutually agreed that if Congress does not appropriate sufficient funds for the HOME Program, this Agreement will be amended to reflect any reductions in funds. In addition, this Agreement is subject to any additional restrictions, limitations, or conditions enacted by the Congress, promulgated in federal regulations or any federal statute or federal regulation which may affect the provisions, terms, or funding of this Agreement in any manner. The CITY has the option to terminate this Agreement under the fourteen (14) day cancellation clause or to amend the Agreement to reflect any reduction of funds. 10. Contractors and Subcontractors A. SD-HFH may not enter into any agreement, written or oral, with any contractor which has been deemed to be not eligible to receive HOME funds. A construction contractor or subcontractor is not eligible to receive HOME funds if the construction contractor is not properly licensed and in good standing with the State of California, Contractors State License Board, is listed on the Federal Consolidated List of Debarred, Suspended, and Ineligible Contractors, or is deemed an ineligible contractor by CITY. HOME CHDO Funding Agreement Page 4 of 22 B. CITY reserves the right to review and disapprove any contracts or agreements executed by SD-HFH related to the Work over $25,000. Approval will be assumed unless disapproval has been made within a one week period. C. The agreement between SD-HFH and any construction contractor shall require the construction contractor and its subcontractors, if any, to: 1. Perform the Work in accordance with federal, state, and local housing and building codes as applicable. 2. Comply with applicable Labor Standards described in Paragraph 20 of this Agreement. In addition to these requirements, all contractors and subcontractors must comply with the applicable provisions of the California Labor Code; 3. Comply with the applicable Equal Opportunity Requirements described in Paragraph 21 of this agreement; 4. SD-HFH shall comply with all of the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California, the applicable provisions of Division 4 and 5 of the California Government Code and all amendments thereto; and all similar State or federal acts or laws applicable; and shall indemnify, and hold harmless CITY and its officers, and employees from and against all claims, demands, payments, suits, actions, proceedings, and judgments of every nature and description, including reasonable attomey's fees and defense costs presented, brought or recovered against CITY or its officers, employees, or volunteers, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by the SD-HFH under this Agreement 5. Maintain, if so required by law, unemployment insurance, disability insurance and liability insurance in an amount to be determined by CITY (maximum requirements in Paragraph 11 of this Agreement) which is reasonable to compensate any person, firm, or corporation who may be injured or damaged by the contractor or any subcontractor in performing the Work or any part of it. 11. Insurance SD-HFH, at its sole cost and expense, shall purchase and maintain, and shall require its subcontractor(s), when applicable, to purchase and maintain throughout the term of this Agreement, the following checked insurance policies: A. ❑ If checked, Professional Liability Insurance (errors and omissions) with minimum limits of $1,000,000 per occurrence. B. Automobile Insurance covering all bodily injury and property damage incurred during the performance of this Agreement, with a minimum coverage of $1,000,000 combined single limit per accident. Such automobile insurance shall HOME CHDO Funding Agreement Page 5 of 22 include owned, non -owned, and hired vehicles ("any auto"). The policy shall name CITY and its officers, agents and employees as additional insureds, and a separate additional insured endorsement shall be provided. C. Commercial General Liability Insurance, with minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate, covering all bodily injury and property damage arising out of its operations under this Agreement. The policy shall name the City and its officers, agents and employees as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location". D. Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of SD-HFH'S employees and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of CITY. Said endorsement shall be provided prior to commencement of work under this Agreement. If SD-HFH has no employees subject to the California Workers' Compensation and Labor laws, SD-HFH shall execute a Declaration to that effect. Said Declaration shall be provided to SD-HFH by CITY. E. The aforesaid policies shall constitute primary insurance as to CITY, its officers, employees, and volunteers, so that any other policies held by CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to CITY of cancellation or material change. F. If required insurance coverage is provided on a "claims made" rather than "occurrence" form, SHDFH shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. G. Insurance shall be written with only California admitted companies that hold a current policy holder's alphabetic and financial size category rating of not less than A VIII according to the current Best's Key Rating Guide, or a company equal financial stability that is approved by CITY's Risk Manager. In the event coverage is provided by non -admitted "surplus lines" carriers. they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. H. This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, are filed with and approved by CITY' s Risk Manager. If does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. HOME CHDO Funding Agreement Page 6 of 22 I. All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by CITY. 13. Inspections A. CITY may inspect any Work performed hereunder to ensure that the Work is being and has been performed in accordance with the applicable federal, state and/or total requirements, the construction contract, and this Agreement. SD-HFH agrees to require that all Work found by such inspections not to conform to the applicable requirements be corrected, and to withhold payment to the construction contractor or subcontractor until it is so corrected. B. CITY reserves the right to inspect the property at any reasonable time during normal business hours during the period of construction and throughout the period of affordability. 14. Records A. SD-HFH must maintain the following general program records for inspection by CITY, and must upon request provide to CITY copies of: 1. Records of the efforts to maximize participation by the private sector, including nonprofit corporations and for -profit corporations in all phases of the HOME program (financing, development, construction, and management) as required by 24 CFR Section 92.200; 2. Records which demonstrate that 100 percent (100%) of the homeownership assisted units are occupied by households that qualify as low-income families, as required by 24 CFR Sections 92.217 and CITY's first time homebuyer program as may be used for this project; and 3. Any other records necessary to determine that expenditures were made in accordance with this agreement. B. SD-HFH must maintain and provide copies to the CITY of the project -specific records listed below for inspection by the CITY: 1. Records which demonstrate that the combination of governmental assistance to the project is not any more than is necessary to provide affordable housing as specified in 24 CFR Section 92.250(b); 2. Records which demonstrate that the project meets the property standards specified in 24 CFR Section 92.251 and the CITY's first time homebuyer program as may be used for this project; and 3. Records which demonstrate that the homeownership requirements of 24 CFR Section HOME CHDO Funding Agreement Page 7 of 22 92.254 for the applicable period of affordability. Records must be maintained for each family assisted. C. SD-HFH must maintain the following federal overlay records for inspection by CITY: 1. Records which demonstrate compliance with the Equal Opportunity and Fair Housing requirements outlined in Paragraph 22 of this Agreement, including: a. Data on the extent to which each racial and ethnic group and single head of household (by gender of head of household) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with HOME funds as required by 24 CFR Section 92. 508( a)(7)(i)(A); b. Documentation of actions required by 24 CFR Section 92.508(a)(7)(i)(S) undertaken to meet the requirements of 24 CFR Part 135 which implements Section 3 of the Housing Development Act of 1968 (economic opportunities for low -and very low-income persons), as amended (12 U.S.C. 1701u); c. Documentation and data on the steps taken to implement outreach programs to minority -owned and female -owned businesses, as required by 24 CFR Section 92.508(a)(7)(ii), including data indicating the racial/ethnic or gender character of each business entity receiving a contract or subcontract of $25,000 or more paid, or to be paid, with HOME funds, the amount of the contract or subcontract, and documentation of SD-HFH's affirmative steps to assure that minority business and women's business enterprises have an equal opportunity to obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction, and services; and d. Documentation of the actions SD-HFH has taken to affirmatively further fair housing as required by 24 CFR Section 92.508(a)(7)(i). 2. Records indicating compliance with the affirmative marketing procedures and requirements of 24 CFR Section 92.351; 3. Records which demonstrate compliance with environmental review requirements outlined in 24 CFR Section 92.352 and 24 CFR Part 58; 4. Records which demonstrate compliance with the requirements for minimizing displacement of persons, when utilizing HOME funds, as described in 24 CFR Section 92.353 and Paragraph 23(1) of this Agreement. At a minimum, these shall include project occupancy lists identifying the name and address' of all persons occupying or moving into the real property on (a) the date the Application for funding was submitted to the City if SD-HFH has site control, the date the City approves the applicable site, and the name and address of all persons who have the right to return to the project upon completion of rehabilitation; HOME CHDO Funding Agreement Page 8 of 22 5. Records which demonstrate compliance with Labor Standards, as stated in Paragraph 21 of this Agreement and 24 CFR Section 92.354, including contract provisions and payroll records; 6. Records concerning lead -based paint in accordance with Paragraph 23(8) of this Agreement and 24 CFR Section 92.355; 7. If applicable, records which support any requests for waivers of the conflict of interest prohibition as stated in 24 CFR Section 92.356; 8. Records of certifications of contractor qualifications as they relate to the licensing and debarment and suspension requirement as stated in 24 CFR 92.350; and 9. Records which demonstrate compliance with flood insurance requirements discussed in Paragraph 23(A) of this Agreement and 24 CFR Section 92.508 (a)(7)(1 ii). D. SD-HFH must maintain the following financial records for inspection by the CITY in conformance with separate instructions: 1. Records of all account transactions, including deposits, disbursements, and balances; 2. Records supporting requests for disbursements of HOME funds and other information required under 24 CFR Section 92.502; 3. Records of written agreements and monitoring required by 24 CFR Section 92.504; 4. Financial and related records as specified in 24 CFR Section 92.508; and 5. Records of all audits and resolution of audit findings. E. If so directed by CITY upon termination of this Agreement, SD-HFH agrees to deliver all records, accounts, documentation and all other materials relevant to the Work to CITY. 15. Outreach and Marketing Marketing and outreach efforts will include the use of informational mailings, providing information at City facilities, community organizations, places of worship, employment centers, and fair housing groups, and providing periodic information sessions on the program. Outreach will include notification of program availability. Marketing brochures and pamphlets will at a minimum include the following information: 1. basic eligibility criteria, i.e. income restriction, owner occupancy, etc. 2. the statement "the program is provided without regards to race, color, religion, sex, national origin, handicap, or familial status." 3. include the use of the Equal Housing Opportunity logotype HOME CHDO Funding Agreement Page 9 of 22 4. program description 5. loan terms During the period of the Work, the CITY may place on the property signs stating that the HOME Program is providing financing. If SD-HFH places any signs, it must indicate in typeface and size commensurate with its funding that the CITY and HUD are a source of financing through the HOME Program. Failure to do so is a material default of this Agreement. 16. Reporting Requirements Commencing with the effective date of this Agreement and continuing through the acceptance of the project completion report, no later than thirty (30) days after the end of each calendar quarter SD-HFH must submit a performance report to CITY on letterhead of the SD-HFH and describing the progress during the previous quarter and outlining anticipated upcoming key steps. 17. Audit Retention and Inspection of Records A. All records, accounts, documentation and other materials deemed relevant to the Work by CITY must be accessible at any reasonable time during normal business hours to the authorized representatives of CITY or federal government, on reasonable prior notice for the purpose of examination or audit. B. An expenditure which is not authorized by this Agreement or which cannot be adequately documented must be disallowed, and funds must be reimbursed within thirty (30) days of the discovery to the CITY by SD-HFH, unless CITY approves in writing an alternative repayment plan. The determination by CITY of the allowability of any expenditure will be final. Pursuant to 24 CFR Part 44 and OMS Circular A-133, SD-HFH must perform an annual audit at the close of each fiscal year in which this Agreement is in effect. The audit should be performed following generally accepted government auditing standards (GAGAS). The audit reports shall be made up of at least the following three parts: C. D. 1. The financial statements and a schedule of federal awards and the auditor's report on the statements and the schedule; 2. A written report of the independent auditor's understanding of the internal control structure and the assessment of control risk; and 3. The auditor's report on compliance. F. The audit must be performed by a qualified independent auditor. SD-HFH shall notify CITY of the auditor's name and address immediately after the selection has been made. HOME CHDO Funding Agreement Page 10 of 22 F. SD-HFH must submit one copy of all required audit reports to CITY within seven months from the close of the required audit period addressed to: City of National City Housing and Grants Attn.: Jim Ridley 1243 National City Blvd. National City, CA 92139 G. SD-HFH is responsible for the completion of audits and all costs of preparing audits. H. If there are audit findings, SD-HFH must submit a detailed response for each audit finding to CITY. The CITY will review the response and, if in agreement, the audit process will end and CITY will notify SD-HFH in writing. If CITY is not in agreement, SD-HFH will be contacted in writing and told what corrective actions must be taken. This action could include the repayment of disallowed costs or other remediation. I. SD-HFH must retain all books and records relevant to this Agreement for a minimum of five (5) years after the expiration of the Agreement and any and all amendments hereto, or for three years after the conclusion or resolution of any and all audits or litigation relevant to this Agreement, whichever is later. The CITY and HUD and/or their representatives must have unrestricted access to all locations, books and records for the purpose of monitoring, auditing or otherwise examining said locations, books and records, with or without prior notice. 18. Compliance with State Law and Regulations SD-HFH agrees to comply with all state laws and regulations that pertain to the sale of real estate, construction, health and safety, hazardous substances, labor, fair employment practices, equal opportunity and all other matters applicable to SD-HFH, its subrecipients, contractors, or subcontractors, or the Work. 19. Compliance with Federal Laws and Regulations SD-HFH agrees to comply with all federal laws and regulations applicable to HOME and to the Work, and with the required federal provisions set forth in this Agreement. 20. Environmental Requirements This Agreement is subject to the provisions of the National Environmental Policy Act (NEPA) as contained in 24 CFR Part 58. As this project is refined and proceeds, and prior to the acquisition of any property for development or rehabilitation, SD-HFH shall cooperate with the CITY in the preparation and completion of all appropriate environmental documents, to include the research and, HOME CHDO Funding Agreement Page 11 of 22 compilation of documentation, maintaining environmental files, performing site reviews, and publishing of legal notices. The CITY shall be responsible for review and approval of the environmental documents and process and making the determination whether the information is in compliance with NEPA environmental requirements. The approval of the project set-up report and release of program funds by HUD is expressly conditioned upon performance of the NEPA review work performed by SD-HFH and the CITY in a manner which is deemed satisfactory and acceptable by HUD. 21. Labor Standards All new construction or rehabilitation projects with 12 or more units assisted with HOME funds shall comply with HUD requirements pertaining to such contracts and the applicable requirements of the regulations of the Department of Labor under 29 CFR Parts 3 and 5, governing the payment of wages and the ratio of apprentices and trainees to journey persons, provided that if wage rates higher than those required under such regulations are imposed by State or local law, nothing hereunder is intended• to relieve SD-HFH or any contractor/subcontractor of their obligation, if any, to require payment of the higher rates. This project will be a self-help project with all applicable restrictions. When applicable, SD- HFH shall cause or require to be inserted in full, in all such contracts in excess of $2,000 and subject to such regulations, provisions meeting the requirements of 29 CFR Section 5.5. 22. Equal Opportunity Requirements A. The Civil Rights, State, and Age Discrimination Acts Assurances: During the performance of this Agreement SD-HFH assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, national origin, sex, age, handicap, religion, or religious preference, under any program or activity funded by this Agreement, as required by Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. B. Rehabilitation Act of 1973 and the "504 Coordinator": SD-HFH further agrees to implement the Rehabilitation Act of 1973, as amended, and its regulations, 24 CFR Part 8, including but not limited to, ensuring that no otherwise qualified individual shall, solely by reason of his or her handicap, be excluded from participation (including employment), denied program benefits, or subjected to discrimination under any program or activity receiving federal funds. SOHFH shall designate a specific person charged with local enforcement of this Act, as the "504 Coordinator," if SD-HFH has fifteen (15) or more permanent full -or part time employees. Notices may be sent to: Section 504 Coordinator San Diego Habitat for Humanity HOME CHDO Funding Agreement Page 12 of 22 Community Housing Corporation, Inc. 10222 San Diego Mission Road San Diego, California 92108 E. Training, Employment, and Contracting Opportunities for Business and Lower Income Persons Assurance of Compliance: 1. The Work to be performed under this Agreement is on a project or projects assisted under a program providing direct federal financial assistance from HUD and are subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u. Section 3 requires that to the greatest extent feasible, opportunities for training and employment be given to lower income residents of the project area and contracts for Work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in the area of the project. 2. The parties to this Agreement will comply with the provisions of said Section 3 and the regulations issued pursuant thereto by the Secretary of HUD set forth in 24 CFR Part 135, and all applicable rules and orders of the State issued thereunder prior to the execution of this Agreement. The parties to this Agreement certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements. 3. SD-HFH will send to each labor organization or representative of workers with which it has a collective bargaining agreement or other contract or understanding, if any, a notice informing the said labor organization or worker's representative of SD-HFH's commitments under the Section 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training. 4. SD-HFH will include these Section 3 clauses in every contract and subcontract for Work in connection with the project over $25,000 and will. at the direction of the CITY, take appropriate action pursuant to the contract upon a finding that SD-HFH or any contractor or subcontractor is in violation of regulations issued by the Secretary of HUD, 24 CFR Part 135, and will not let any contract unless SD-HFH or contractor or subcontractor has first provided it with a preliminary statement of ability to comply with the requirements of these regulations. 5. Compliance with the provisions of Section 3, the regulations set forth in 24 CFR Part 135, and all applicable rules and orders of the CITY issued thereunder prior to the execution of the Agreement shall be a condition of the federal financial assistance provided to the project, binding upon SD-HFH, its successors, and assigns. Failure to fulfill these requirements shall subject SD-HFH, its contractors and subcontractors, its successors, and assigns to those sanctions specified by the Agreement through which federal assistance is provided, and to such sanctions as are specified by 24 CFR Part 135. HOME CHDO Funding Agreement Page 13 of 22 D. State Nondiscrimination Clause: 1. During the performance of this Agreement, SD-HFH and its subcontractors shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex, race, color, ancestry, religious creed, national origin, physical disability (including HIV and AIDS), medical condition (cancer), age, or marital status. SD-HFH and subcontractors must ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. SD-HFH and Subcontractors must comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12990 (a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full. SD-HFH and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. 2. SD-HFH must include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform Work under the Agreement. 3. Americans with Disabilities Act (ADA) of 1990 By signing this Agreement, SD-HFH assures CITY that it complies with the Americans with Disabilities Act (ADA) of 1990 (42 U.S.C. 12101 et seq.), which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. E. Assurance of Compliance with Requirements Placed on Construction Contracts of $10,000 or more: SD-HFH hereby agrees to place in every contract and subcontract for construction exceeding $10,000 a copy of Executive Order 11246, including the "Standard Equal Employment Opportunity Construction Contract Specifications." SD-HFH furthermore agrees to insert the appropriate goals and timetables issued by the U.S. Department of Labor in such contracts and subcontracts as required by Executive Order 11246. 23. Other Required Federal Provisions A. Flood Disaster Protection: This Agreement is subject to the requirements of the Flood Disaster Protection Act of 1973 (P. L. 93-234). No portion of the assistance provided under this Agreement is approved for acquisition, rehabilitation, or construction purposes as defined under Section 3(a) of said Act, for use in an area identified by the Secretary as having special flood HOME CHDO Funding Agreement Page 14 of 22 hazards which is located in a community not then in compliance with the requirements for participation in the National Flood Insurance Program pursuant to Section 201(d) of said Act. The use of any assistance provided under this Agreement for such acquisition, rehabilitation,• or construction in such identified areas in communities then participating in the National Flood Insurance Program shall be subject to the mandatory purchase of flood insurance requirements of Section 102(a) of said Act. Any contract or agreement for the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this Agreement shall contain, if such land is located in an area identified by the Secretary as having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4001 et seq., provisions obligating the transferee and its successors or assigns to obtain and maintain, during the ownership of such land, such flood insurance as required with respect to financial assistance for acquisition or construction purposes under Section 102(s) of the Flood Disaster Protection Act of 1973. Such provisions shall be required notwithstanding the fact that the construction on such land is not itself funded with assistance provided under this Agreement. B. Lead -Based Paint Hazards: Assistance provided under this Agreement is subject to 24 CFR Part 92 as well as subject to the HUD Lead -Based Paint regulations, 24 CFR Part 35. Funding commitments made by the CITY or SD-HFH shall be made subject to these provisions for HOME -assisted housing constructed prior to 1978. SD-HFH shall be responsible for notification, testing, abatement activities and project clearance. C. Compliance with Air and Water Acts: This Agreement is subject to the requirements of the Clean Air Act, as amended, 42 USC 1857 et seq., the Federal Water Pollution Control Act, as amended, 33 USC 1251 et seq., and the regulations of the Environmental Protection Agency (hereinafter "EPA") with respect thereto, at 40 CFR Part 15, as amended from time to time. SD-HFH shall insert or cause to be inserted in full in all contracts and subcontracts with respect to any nonexempt transaction under this Agreement, the following requirements: 1. A stipulation by the contractor or subcontractor that any facility to be utilized in the performance of any nonexempt contract or subcontract is not included on the List of Violating Facilities issued by the EPA pursuant to 40 CFR Section 15.20; 2. A stipulation that the contractor comply with all the requirements of Section 114 of the Clean Air Act, as amended (42 USC 1857c-8), and Section 308 of the Federal Water Pollution Control Act, as amended (33 USC 1318), and all regulations and guidelines issued thereunder relating to inspection, monitoring, entry, reports, and information; HOME CHDO Funding Agreement Page 15 of 22 3. A stipulation that as a condition for the award of the contract, prompt notice will be given of any notification received from the Director, Office of Federal Activities, EPA, indicating that a facility utilized or to be utilized for the contract is under consideration to be listed on the EPA List of Violating Facilities; and 4. A stipulation that all contractors will include or cause to be included the criteria and requirements in paragraphs (a) through (c) of this section in every nonexempt subcontract and that the contractor will take such action as the government may direct as a means of enforcing such provisions. In no event shall any assistance provided under this Agreement be utilized with respect to a facility which has given rise to a conviction under Section 113(c)(1) of the Clean Air Act or Section 309(c) of the Federal Water Pollution Control Act. D. Obligations of SD-HFH with Respect to Certain Third Party Relationships: SD-HFH shall remain fully obligated under the provisions of the Agreement notwithstanding its designation of any third party or parties for the undertaking of all or any part of the program for which assistance is being provided under this Agreement. SD- HFH shall comply with all lawful requirements of the National Environmental Policy Act of 1969 (NEPA) necessary to ensure that the program is carried out in accordance with the environmental responsibilities under 24 CFR Section 92.352. E. Interest of Certain Federal Officials: No member of or delegate to the Congress of the United States and no resident commissioner, shall be admitted to any share or part of this Agreement or to any benefit to arise from the same. F. Interest of Members, Officers, or Employees of CITY, Members of Local Governing Body, or other Public Officials: No member, officer, or employee of the CITY and/or SD-HFH, or their designees or agents, no member of the governing body of the locality in which the program is situated, and no other public official of such locality or localities who exercise any functions or responsibilities with respect to the program during his/her tenure or for one year thereafter, may have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for Work to be performed in connection with the program assisted under the Agreement SD-HFH shall incorporate, or cause to be incorporated, in all such contracts or subcontracts a provision prohibiting such interest pursuant to the purposes of this section. Fulfillment of sweat equity obligations as defined in Section 8201 of the HOME regulations will not be considered a violation of this prohibition. G. Certification Regarding Lobbying HOME CHDO Funding Agreement Page 16 of 22 SD-HFH will require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and no more than $100,000 for such failure. "The undersigned certifies, to the best of his or her knowledge and belief, that: 1. No federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement; and 2. If any funds other than federally appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress-, or an employee of a Member of Congress in connection with this federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form- LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions." H. Prohibition Against Payments of Bonus or Commission: The assistance provided under this Agreement shall not be used in the payment of any bonus or commission for the purpose of obtaining State or CITY approval of ,the application for such assistance, or State or CITY approval of the applications for additional assistance, or any other approval or concurrence of the State required under this Agreement, Title II of the Cranston -Gonzalez National Affordable Housing Act of 1990, or state regulations with respect thereto; provided, however, that reasonable fees for bona fide technical, consultant, managerial or other such services, other than actual solicitation, are not hereby prohibited if otherwise eligible as program costs. I. Federal Relocation, Displacement and Acquisition: If applicable, prior to project set-up, SD-HFH shall provide the CITY with a project specific relocation plan and a certification that it will comply or has complied with the federal relocation, displacement and acquisition rules goveming the HOME program, which are contained in the Uniform Relocation Act, 49 CFR Part 24, and applicable HOME CHDO Funding Agreement Page 17 of 22 program regulations. 24 CFR Section 92.353 requires that tenants who are displaced from housing units demolished or converted as a result of HOME funded activities be provided with relocation assistance. J. Drug -Free Workplace: By signing this Agreement, SD-HFH hereby certifies under penalty of perjury under the laws of the State of California that SD-HFH will comply with the requirements of the Drug -Free Workplace Act of 1990 (Government Code, Section 8350 et seq.) and will provide a drug -free workplace by taking the following actions: 1. Publish a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the workplace and specifying the actions that will be taken against employees for violation of such prohibition; 2. Establish an ongoing drug -free awareness program to inform employees about: a. the dangers of drug abuse in the workplace; b. the policy of maintaining a drug -free workplace; c. any available drug counseling, rehabilitation, and employee assistance programs; and d. the penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; 3. Make it a requirement that each employee to be engaged in the performance of the HOME award be given a copy of the statement required by paragraph (1); 4. Notify the employee in the statement required by paragraph (1) that, as a condition of employment under the HOME award, the employee will: a. abide by the terms of the statement; and b. notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction; 5. Notify the City in writing, within five (5) calendar days after receiving notice under paragraph (4 )(b) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to the loan officer or other designee on whose project the convicted employee was working, unless the CITY has designated a central point for the receipt HOME CHDO Funding Agreement Page 18 of 22 of such notices. Notice shall include the identification number(s) of each affected project; 6. Take one of the following actions, within thirty (30) calendar days of receiving notice under paragraph (4)(b), with respect to any employee who is so convicted: a. Take appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or b. Require such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; 7. Make a good faith effort to continue to maintain a drug -free workplace through implementation of this section. Failure to comply with these requirements may result in suspension of payments under the Agreement or termination of the Agreement or both and SD-HFH may be ineligible for award of any future CITY contracts if C1TY reasonably determines that any of the following has occurred: SD-HFH 1) had knowingly made a false certification, or 2) knowingly violated the certification by intentionally failing to carry out the requirements as noted above. 24. City Coordinator The coordinator of this Agreement for the CITY is Jim Ridley, Community Development Specialist or his/her designee. Unless otherwise informed, any notice, report, or other communication required by this Agreement shall be mailed by first class mail to the City HOME Coordinator at the following address; City of National City Housing and Grants Attn.: Jim Ridley 1243 National City Blvd. National City, CA 91950 25. Waivers No waiver of any breach of this Agreement will be held to be a waiver of any other prior or subsequent breach. The failure of the C1TY to enforce at any time the provisions of this Agreement or to require at any time performance by SD-HFH of these provisions shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of the CITY to enforce these provisions. 26. Litigation HOME CHDO Funding Agreement Page 19 of 22 A. If any provision of this Agreement, or underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, will not affect any other provision of this Agreement and the remainder of this Agreement shall remain in full force and effect Therefore, the provisions of this Agreement are deemed severable. B. SD-HFH must notify the CITY immediately of any claim or action undertaken by or against it which affects or may affect this Agreement or the CITY, and shall take such action with respect to the claim or action as is consistent with the terms of this Agreement. 27. NLRB Certification SD-HFH warrants by execution of this Agreement and does swear under penalty of perjury that no more than one final unappealable finding of contempt of court by a Federal Court has been issued against SD-HFH within the immediately preceding two year period because of SD-HFH's failure to comply with an order of a Federal Court which orders SD- HFH to comply with an order of the National Labor Relations Board. 29. Miscellaneous A. Time is of the essence in this Agreement. B. If any date or time period provided for in the Agreement is or ends on a Saturday, Sunday, or federal, state, or legal holiday, then such date shall automatically be extended until 5:00 pm Standard Pacific Time of the next day which is not a Saturday, Sunday, or federal, state, or legal holiday. B. SD-HFH agrees to indemnify, defend and save harmless the City, its officers, agents and employees from any and all liability or claim of liability or claims and losses, including attorney fees accruing or resulting to any and all contractors, subcontractors, suppliers, laborers and any other person, firm or corporation furnishing or supplying work services, materials or supplies in connection with the performance of this Agreement, and from any and all liability or claim of liability or claims and losses, including attorney fees, accruing or resulting to any person, firm or corporation who may be injured or damaged by the negligent, reckless, or intentional acts, errors or omissions of SD-HFH in the performance of this Agreement. C. Without the written consent of the City, this agreement is not assignable by SD-HFH either in whole or in part D. No alteration or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties hereto, and no oral understanding or agreement not incorporated herein, shall be binding on any of the parties hereto. E. SD-HFH, and the agents and employees of SD-HFH, in the performance of this Agreement, will act in an independent capacity and not as officers or employees or agents HOME CHDO Funding Agreement Page 20 of 22 of the City. F. This Agreement will be construed in accordance with, and governed by, the laws of the State of California. All disputes requiring the commencement of any judicial proceeding under this Agreement will have the place of venue as the South County Regional Judicial District of the County of San Diego, State of California. G. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the rest of the Agreement will remain in full force and effect and shall in no way be affected, impaired or invalidated. H. The Exhibits attached hereto are hereby incorporated herein by this reference for all purposes. Exhibits A. Purchase -Rehabilitation -Resale Workplan B. Production Timeline and Development Calendar C. Purchase -Rehabilitation -Resale Budget Worksheet D. CHDO Proceeds Agreement E. Unsecured Environmental Indemnity F. Construction Requirements G. Housing Quality Standards H. Specifications and Technical Standards I. First -Time Homebuyer Assistance Program Manual --- Signature Page to Follow --- HOME CHDO Funding Agreement Page 21 of 22 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first herein set forth. CITY OF NATIONAL CITY on Morrison, Mayor Its: Mayor PROVED AS TO FORM: usia City A y SAN DIEGO HABITAT FOR HUMANITY COMMUNITY HOUSING CORPORATION, INC. f t By: C`- Lori Holt Pfeiler Its: Executive Director By: Randy C. hiri, h Its: Board of Direct:" irman HOME CHDO Funding Agreement Page 22 of 22 EXHIBIT A PURCHASE AND REHABILITATION WORK PLAN The purpose for the City of National City's investment of $650,000 in HUD HOME Investment Partnership funds with Habitat for Humanity -San Diego (HFH-SD) is to assist HFH-SD to purchase, rehabilitate and re -sell, as a goal, a minimum of six (6) single family homes within the city limits of the City of National City to first-time homebuyers earning 80% or less of the HUD determined Median Area Income by June 30, 2014. This investment partnership will turn vacant (foreclosed on or otherwise) single-family homes into lead-free/asbestos-free rehabilitated, quality affordable homeownership opportunities. To achieve these ends the City, through its certified Housing Inspectors, will provide a lead -based paint assessment and inspect each potential home purchase for existing health and safety and building code violations (un-permitted additions, garage conversions, electrical/plumbing upgrades, etc.) and HFH-San Diego will provide an asbestos assessment and then incorporate all that information into its overall rehabilitation plan for the house. This will ensure that the future buyer(s) will have a home free of problems for the long term and intervene in many of the unscrupulous practices that assisted lower income buyers to purchase inadequate housing during the last housing market boom/bust. Specific tasks related to achieving a completed purchase/rehabilitation/re-sale project are as follows: • It must be acknowledged that in order for the City to distribute the $650,000 in HOME funds pledged to the project in a timely manner to avoid the risk of paying back or returning funds to HUD the program must start out with the purchase of two homes within an approximately 30 day time frame of each other. • HFH- SD will access any and all means available to it to identify potential houses to buy. The projected cumulative budget to purchase/rehabilitate/resell a single property is $230,000 with the difference between the affordable first loan and the appraised value being rolled over into second loan at the time of re -sale. The flexibility will allow multiple permutations of purchase versus rehabilitation expenditures such as purchasing properties in good condition needing only upgrades to purchasing homes with potential for resale which need major rehabilitation work. The latter scenario provides the overall best return to the City, from a community development perspective, by removing problem properties from the housing stock and returning them to viability. • For project expediency, once a house has been selected HFH-SD should contact the City and arrange for an inspection and record review as soon as possible to best facilitate determining the scope of work to be pursued. Seller permission is required if such inspection occurs before escrow has been entered into and/or escrow instructions must indicate that such an inspection will occur. The City at this time will also facilitate submission of the HOME Program required historic structures review and perform the rest of the required HUD environmental documentation. • HFH-SD will, during this time (or immediately after the close of escrow), provide a rehabilitation Scope of Work for the City's review and approval incorporating the City's Health & Safety report into the overall rehabilitation plan. The Scope of Work will include a budget with a 10% contingency. The rehabilitation budget can include the cost of an after -rehabilitation market appraisal to establish the final sales price. • Prior to the close of escrow for the initial purchase, the City will deposit the required funds to facilitate the transaction. • When the Scope of Work has been finalized the City, immediately after the close of escrow, will deposit the rehabilitation budget amount plus the flat rate of $30,000 per unit Developer's Fee into a Dixieline Fund Control account to fund the rehabilitation activities on the house. Any unused construction funds will be left in the Fund Control until such time as they can be rolled over into the Fund Control for the next house. Up to $20,000 of the flat rate Developer's Fee can be extracted during the rehabilitation process with the remaining $10,000 to be paid when the sale to the new owner has been completed. • HFH-SD must establish a separate bank account to deposit sales proceeds from each house it sells. Co -mingling of funds is unacceptable. A copy of the bank statement should be provided to the City each month. • HFH-SD can use prior sales proceeds to enter into the next home purchase and the City will continue to fund the rehabilitation and project management costs as detailed above until the entire $650,000 in HOME funds have been distributed. HAZARDOUS MATERIALS NOTIFICATION Asbestos • Materials containing asbestos (ACM) that are to be removed as a condition of contract shall be removed and disposed of in a proper and safe manner by a certified asbestos abatement contractor or in accordance with locally - approved disposal standards. • See California Code of Regulations, Title 8, Section 1529 for laws and regulation detailing asbestos removal and disposal. • See California Asbestos Consultants and Certified Site Technicians • Database from the California Department of Occupational Safety • and Health to make sure the testing consultants and demolition • technicians are certified by the State of California. • See www.sdasbestos.orq for San Diego County asbestos information • and resource site. • No asbestos containing materials shall be used for repair, replacement or • new installation. • Assessment of the need to test for asbestos will be made by the City inspector prior to issuing the bidding specifications. Lead -Based Paint • Every unit constructed before 1978 which is or may become occupied by children under the age of seven must be tested for the presence of lead (exceeding Federal Standards) in paint. Testing and assessment services will be provided by the City Lead Inspector/Assessor at no cost. • Lead based paint must be abated in accordance with federal regulations. The HUD regulation requires that lead -based paint must be abated (completely removed or encapsulated in such a way that it is rendered harmless for a minimum of 20 years.) • Lead waste can be very hazardous to human health and must be disposed of in accordance with applicable laws and regulations. This Guidance is intended to help property owners and contractors understand how to correctly dispose of lead waste when performing lead abatement activities or renovation work that disturbs old paint. Please Note: When the painted surfaces of pre-1979 structures are scraped, sanded, or demolished, You must assume that the paint debris created by this work is hazardous waste. If a certified laboratory confirms otherwise, documentation is required. Separate the paint debris and any other lead - contaminated waste from the rest of your trash and follow the disposal procedures detailed below. Lead -contaminated waste that must be properly disposed of includes rags that were used to wipe away lead -contaminated dust and vacuum cleaner bags that contain lead paint chips. These are common examples of lead waste that must be disposed of correctly. EXHIBIT B PRODUCTION TIMELINE AND DEVELOPMENT CALENDAR Project Timeline Assumptions: • Assume close to parallel purchase of two homes to start program once agreement is fully executed • Assume 120 day construction schedule once construction funds are in place for each project • Assume buyer solicitation starts at close of escrow of first two houses purchased for rehabilitation and resale Estimated Individual Project Development Timeline: • 30 days to find house(s) after agreement is fully executed • HFH enters 30 day escrow • City sends historic properties to SHPO to get 30 day clearance and completes HUD environmental review • Preliminary inspection by City for Health & Safety/Lead- based paint within 20 days of closing (or sooner if there is seller permission in place)- SD-HFH checks for asbestos at earliest opportunity • Rehabilitation Plan and Budget to City within 20 days of receiving City inspection report • City reviews Plan/Budget and agreement is reached within 20 days of receiving proposed Plan/Budget • Once purchase escrow has closed City deposits funds in Dixieline Fund Control within 20 days of Plan/Budget agreement (rehab + project costs) or within five days of closing if agreement is reached during the escrow term • Construction term is approximately 120 days from the deposit of construction funds • Sale to new owner is approximately 165 days from start of construction • HFH establishes "escrow" account to keep 1st mortgage proceeds from home sales to establish fund account for future purchases. Estimated Lonq Term Calendar • 1st house completion- April 15, 2013 • 2nd house completion- July 15, 2013 • 3rd house completion- October 15, 2013 • 4th house completion- February 15, 2014 • 5th house completion- May 15, 2014 • 6th house completion- to be determined EXHIBIT C HFH PURCHASE/REHAB/RE-SALE BUDGET PROJECTION $ 650,000.00 BEGINNING PROJECT BALANCE $ (380,000.00) $ (80,000.00) $ (60,000.00) PURCHASE OF HOUSE #1 & HOUSE #2 Rehab cost/2nd loan HFH project payment $ 190,000.00 $ (190,000.00) $ (40,000.00) $ (30,000.00) from House #1 PURCHASE OF HOUSE #3 rehab cost/2nd loan HFH project payment $ 190,000.00 $ (190,000.00) $ (40,000.00) $ (30,000.00) from house #2 PURCHASE OF HOUSE #4 rehab cost/2nd loan HFH project payment $ 190,000.00 $ (190,000.00) $ (40,000.00) $ (30,000.00) from house #3 PURCHASE OF HOUSE #5 rehab cost/2nd loan HFH project payment $ 190,000.00 CHDO Proceeds from house #4 $ 190,000.00 CHDO Proceeds from house #5 $ 380,000.00 HFH CHDO PROCEEDS BALANCE AFTER HOUSE #5 $ (190,000.00) $ (40,000.00) $ (30,000.00) PURCHASE OF HOUSE #6 rehab cost/second loan HFH project payment $ 190,000.00 CHDO Proceeds from House #6 $ 310,000.00 RESTRICTED HFH CHDO PROCEEDS BALANCE AFTER HOUSE #6 TO BE USED FOR ADDITIONAL AFFORDABLE HOUSING DEVELOPMENT IN NATIONAL CITY. NOTE: ONCE THESE FUNDS HAVE BEEN CYCLED THROUGH HOUSING DEVELOPMENT ACTIVITIES THEY BECOME UNRESTRICTED CHDO PROCEEDS NOT SUBJECT TO HOME REQUIREMENTS. $ 180,000.00 TOTAL PROJECT DEVELOPMENT PAYMENTS TO HFH AFTER THE PURCHASE/REHAB/RESALE OF SIX SINGLE FAMILY HOMES Exhibit D CHDO Proceeds Agreement This Agreement between the City of National City and San Diego Habitat for Humanity ("the CHDO") for the use, allocation, accounting, and monitoring of proceeds realized by the CHDO in the performance of the CHDO's contractual obligations to the Jurisdiction. 1. Definitions a. Project i. A project is any single address. b. Proceeds: i. Proceeds result from the sale of a single family property financed by the Jurisdiction through the HOME program. 1. Proceeds include both HOME funds and any other funds from any source which are realized by the sale of property assisted in any form or fashion with HOME funds. ii. The total HOME funds provided by the Jurisdiction to the CHDO for any specific project under this contract, less the actual expenses for the project, the buyer's down payment, the buyer's contribution, the project fee to the developer and any non -HOME or non-CDBG mortgages are defined as CHDO Proceeds, or Proceeds. c. Allowable Use: i. An eligible activity defined by either the HOME program regulations or this agreement that directly supports the creation of affordable housing in CITY shall be collectively known as an "allowable use." Allowable uses are further defined and limited by this agreement. d. Governing Law and Regulation i. Final HOME Rule: 24 CFR Parts 91 and 92 ii. CPD Notice 97-9 2. Allowable Uses of Proceeds a. Any eligible use of HOME funds, as defined in 24 CFR Parts 91 and 92 of the Final HOME Rule shall be an allowable use under this contract, so long as the allowable use results in or supports the creation of new units of affordable single family housing for purchase by HOME qualified buyers. 3. Prohibited Uses of Proceeds a. Proceeds may not be used to fund, finance or pay for a loan counseling, debt counseling or homebuyer counseling programs or efforts as long as the Jurisdiction provides funding to any other organization or entity to provide these services. b. Proceeds may not be used to fund any operating reserves of the CHDO. c. Proceeds may not be utilized to make repairs, reconstruct, or rebuild any unit previously financed with HOME funds without the express written permission of the Jurisdiction. 4. Accounting a. The CHDO shall retain proceeds in a separate bank account and shall provide an accounting of the use of proceeds to the Jurisdiction on a quarterly basis. i. The accounting shall designate the project and show the flow of funds into and out of the project account until all funds in the account are expended in accordance with this agreement. b. To facilitate proper accounting for the proceeds, the CHDO shall utilize the spreadsheet designated by the Jurisdiction and included here by reference. c. The auditor of the CHDO shall, at each annual audit, review the CHDO proceeds account of the CHDO and shall include in the annual audit specific language stating whether or not th CHDO has complied with the terms of this agreement. 5. Allocation and Use of Proceeds a. Under the CHDO's contract with the Jurisdiction, the Jurisdiction provides the CHDO with a development subsidy to assist in the development of single family housing within the Jurisdiction. b. The development subsidy is expended by the CHDO to build the home. c. Proceeds are realized upon the sale of the completed home to a qualified buyer per the definition provided above. i. Proceeds are realized on the date of the close of the property with the homebuyer. d. To facilitate the quick rollover and expenditure of proceeds, the CHDO will invest proceeds in the next available project as soon as the proceeds are realized, and before a request for additional funds for development activity from the Jurisdiction. 6. Draw Requests a. Requests to the Jurisdiction for disbursement of funds for land acquisition, site development and/or construction financing on any subsequent project under this contract, shall include the following: i. The full amount of the requested disbursement. l . The amount drawn from proceeds a. Including the project name or names the amount is drawn from. 2. The net amount of the requested disbursement. 7. Monitoring and Compliance a. Each year, on or before the 3151 of March, the CHDO shall deliver an audit by a certified public accountant to the Jurisdiction. i. The audit shall contain the provision noted under accounting. b. The Jurisdiction may request at any time, without prior notice, any file, financial record, or document related to any project that received any HOME funds or Proceeds. i. The CHDO agrees to comply with any request within five business days of the request. c. The Jurisdiction will monitor the CHDO's use of Proceeds based on a risk assessment. Typically, the Jurisdiction will notify the CHDO thirty days in advance of the monitoring. d. Failure by the CHDO to deliver the audit, to submit the required quarterly report, segregate the Proceeds in a separate account, or to properly account for the Proceeds to the standard provided shall by this agreement, shall be a breach of contract under the terms of this Agreement. i. The Jurisdiction, may, at the Jurisdiction's sole discretion, end all payments under the contract until the terms of this Agreement are met. EXHIBIT E UNSECURED ENVIRONMENTAL INDEMNITY AGREEMENT THIS UNSECURED ENVIRONMENTAL INDEMNITY AGREEMENT ("Indemnity") is dated as of this day of , 20XX, by San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Indemnitor"), to and for the benefit of the City of National City ("CITY"), its successors and assigns and, to the extent not otherwise referenced, the Indemnified Parties (as hereinafter defined). RECITALS A. CITY has agreed to make a grant ("Grant") to Indemnitor as described in that certain CHDO Funding Agreement between CITY and Indemnitor, dated as of , 20XX ("Agreement"). B. It is a condition of CITY's making the Grant that this Indemnity be executed and delivered by Indemnitor. CITY is making the Grant in reliance upon this Indemnity. C. This Indemnity is unsecured. D. This Indemnity Agreement provides blanket indemnity for all properties purchased with Grant funds as described in the Agreement referenced above. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of CITY granting the Funds, and other valuable consideration, the receipt of which is hereby acknowledged, Indemnitor agrees as follows: I . Indemnity. (a) Subject to Sections 2, 3 and 4 below, Indemnitor hereby agrees to defend, protect, indemnify and hold harmless CITY, CITY's affiliates, directors, officers, shareholders, agents and employees, and CITY's participants, successors and assigns specified in Section 4 hereof (hereinafter, collectively, the "indemnified Parties''), from and against, and shall reimburse the Indemnified Parties for, any and all actual out-of-pocket costs (including, without limitation, attorneys' fees, expenses and court costs), expenses or losses arising from any claim, liability, damage, injunctive relief, injury to person, property or natural resources, fine, penalty, action or cause of action (collectively, "Costs and Liabilities"), incurred by or asserted against any Indemnified Party and arising directly or indirectly, in whole or in part, out of the release, discharge, deposit or presence, or alleged or suspected release, discharge, deposit or presence, of any Hazardous Materials at, on, within, under, about or from the Property, or in or adjacent to any part of the 1 Property, or in the soil, groundwater or soil vapor on or under the Property, or elsewhere in connection with the transportation of Hazardous Materials to or from the Property in violation of any Hazardous Materials Laws, whether or not known to Indemnitor or Indemnified Parties, whether foreseeable or unforeseeable, regardless of the source of such release, discharge, deposit or presence or, except as expressly provided to the contrary in Sections 2 and 4 hereof, regardless of when such release, discharge, deposit or presence occurred or is discovered. Without limiting the generality of the foregoing indemnity, such Costs and Liabilities shall include, without limitation, all actual out- of-pocket costs incurred by Indemnified Parties in connection with (i) determining whether the Property is in compliance with this Indemnity and with all applicable Hazardous Materials Laws or the amount of money required to remediate any environmental contamination, and causing the Property to be or become in compliance, with all applicable Hazardous Materials Laws, (ii) any removal or remediation of any kind and disposal of any Hazardous Materials present at, on, under or within the Property or released from the Property to the extent required by applicable Hazardous Materials Laws in effect at the time of such removal, remediation or disposal, and (iii) repair of any damage to the Property or any other property caused by any removal, remediation or disposal. (b) Upon demand by any Indemnified Party, Indemnitor shall defend any investigation, action or proceeding in connection with any claim or liability, or alleged claim or liability, that would, if determined adversely to such Indemnified Party, be covered by the foregoing indemnification provisions, such defense to be at Indemnitor's sole cost and expense and by counsel reasonably approved by such Indemnified Party, which counsel may, without limiting the rights of an Indemnified Party pursuant to the next succeeding sentence of this Section 1(b), also represent Indemnitor in such investigation, action or proceeding. If any Indemnified Party determines reasonably and in good faith that its defense by Indemnitor is being conducted in a manner which is prejudicial to its interests, such Indemnified Party may elect to conduct its own defense through counsel of its own choosing and at the expense of Indemnitor. (c) As used herein, the term "Hazardous Materials" means and includes any flammable, explosive, or radioactive materials or hazardous, toxic or dangerous wastes, substances or related materials or any other chemicals, materials or substances, exposure to which is prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, may or could pose a hazard to the health and safety of the occupants of the Property or of property adjacent to the Property, including, but not limited to, asbestos, PCBs, petroleum products and byproducts, substances defined or listed as "hazardous substances" or "toxic substances" or similarly identified in, pursuant to, or for purposes of, the California Solid Waste Management, Resource Recovery and Recycling Act (California Government Code §66700 et seq.), the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.), Section 25117 or Section 25316 of the California Health & Safety Code; and any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material; or any substances or mixture regulated under the Toxic Substance Control Act of 1976, as now or hereafter amended (15 U.S.C. §2601 et seq.); and any "toxic pollutant" under the Clean Water Act, as now or hereafter amended (33 U.S.C. §1251 et seq.); and any hazardous air 2 pollutant under the Clean Air Act, as now or hereafter amended (42 U.S.C. §7901 et seq.). Notwithstanding the above, the term "Hazardous Materials" shall not include small amounts of chemicals, cleaning agents and the like commonly employed in routine household uses in a manner typical of occupants in other similar residential properties provided they are used in compliance with applicable laws. The term "Hazardous Materials Laws" means any federal, state or local law, code, statute, ordinance, rule, regulation, rule of common law or guideline relating to Hazardous Materials now or hereafter enacted or promulgated (collectively, and including, without limitation, any such laws which require notice of the use, presence, storage, generation, disposal or release of any Hazardous Materials to be provided to any party). 2. Time Limits on Claims. Notwithstanding the foregoing provisions: (a) No claim shall be made hereunder by any Indemnified Party unless and until the following event shall have occurred: vesting of title to the Property in CITY or any Indemnified Party through judicial or non -judicial foreclosure or acceptance of a deed in lieu thereof. (b) Indemnitor shall not have any obligation under this Indemnity to an Indemnified Party with respect to any Costs and Liabilities that, prior to the first to occur of the events described in Section 2(a) above: (i) were actually known to CITY; (ii) were liquidated in amount, or were otherwise readily determinable in amount without undue delay; and (iii) would have been lawfully and properly includable as part of any breach of the Grant Agreement (c) If any Indemnified Party or any affiliate of any Indemnified Party has acquired ownership of the Property through foreclosure or deed in lieu of foreclosure, the obligations of Indemnitor hereunder shall apply, without limitation, to all Costs and Liabilities that arise out of or are attributable to, whether directly or indirectly, ownership of the Property or any part thereof by any Indemnified Party or any such affiliate, or to the position of such Indemnified Party or such affiliate as an owner in the chain of title to the Property or any part thereof. (d) If the requirements of the Grant Agreement has been completed in full the obligations of Indemnitor hereunder shall continue to apply, without limitation, to all Costs and Liabilities that arise out of or are attributable to, whether directly or indirectly, any claim or allegation against an Indemnified Party relating to any act or omission of such Indemnified Party in respect of the Loan or the Property, or in connection with any exercise of such Indemnified Party's rights under the Grant Agreement. 3. Acts of Indemnified Parties. (a) Notwithstanding anything to the contrary herein, Indemnitor shall not be liable hereunder to an Indemnified Party to the extent of that portion of any Costs and Liabilities which Indemnitor establishes is attributable to an affirmative act of such Indemnified Party, its agent or any successor in interest of an Indemnified Party at the Property which causes (i) the release, discharge, deposit or presence, or alleged or suspected release, discharge, deposit or presence of a Hazardous Material at the Property, or (ii) material aggravation of a then existing Hazardous Material condition or occurrence at the Property, if and only if, in either such case referred to in (i) or (ii) above, such 3 act was in violation of any Hazardous Materials Laws or was carried out without reasonable care under the circumstances. (b) In addition, Indemnitor shall not be liable hereunder for that portion of any Costs and Liabilities which Indemnitor establishes is attributable to the introduction and initial release, discharge or deposit, or alleged or suspected introduction, initial release, discharge or deposit of a Hazardous Material at the Property by any party, other than Indemnitor or an affiliate of Indemnitor, at any time after Indemnitor's ownership interest in the Property terminates. Notwithstanding the foregoing, but subject to Sections 2 and 3(a) above and Section 4 below, the liability of Indemnitor hereunder shall otherwise remain in full force and effect after CITY or such affiliate of CITY so acquires title to the Property, including without limitation with respect to any Hazardous Materials which are discovered at the Property after the date CITY or such affiliate of CITY acquires title but which were actually introduced to the Property prior to the date of such acquisition. 4. Indemnified Parties. This Indemnity and Indemnitor's obligations hereunder shall inure to the benefit of and be enforceable only by (a) CITY, CITY' s directors, officers, shareholders, agents and employees, (b) any person or entities to which any CITY participates, assigns or sells all or any portion of its interest in the Loan, or which otherwise succeeds to the interest of CITY under the Agreement, whether by purchase or otherwise, and (c) any affiliate of CITY which acquires title to the Property at a foreclosure sale or by deed in lieu of foreclosure. 5. Unsecured Obligations. The obligations of Indemnitor hereunder are unsecured. This Indemnity is not intended to be, nor shall it be, secured by the Deed of Trust or any other instrument or agreement executed by Indemnitor or any other entity or person in favor of CITY or any Indem- nified Party relating to the Grant. The obligations of Indemnitor under this Indemnity are independent of any indemnification or other obligations of Indemnitor under the Grant Agreement with respect to any Hazardous Materials. The rights and remedies of the Indemnified Parties under this Indemnity shall be in addition to any other rights and remedies of such Indemnified Parties under the Agreement. In no event shall any provision of this Indemnity be deemed to be waiver of or to be in lieu of any right or claim, including without limitation any right of contribution or other right of recovery, that any person entitled to enforce this Indemnity might otherwise have against Indemnitor under any Hazardous Materials Laws. Any sums payable hereunder shall not be deemed to be based upon any diminution in or other impairment of the value of any collateral held by CITY to enforce the Grant requirements. 6. Interest on Unpaid Amounts. Any amount claimed hereunder by an Indemnified Party not paid by Indemnitor within thirty (30) days after written demand made by such Indemnified Party and accompanied by a reasonable summary of the amounts claimed, shall bear interest at the rate of ten percent (10%) per annum or the highest interest rate permitted by law, whichever is less. 7. Limitations on Liability. The liability of Indemnitor under this Indemnity shall in no way be limited or impaired by (a) any amendment or modification of the provisions of any of the Loan Documents; (b) except as set forth in Sections 2, 3 and 4, any participation in or sale or assignment of the Loan Documents or any sale or transfer of all or part of the Property; (c) the release of Indemnitor or any person or entity from performance or observance of any of the agreements, 4 covenants, terms, or conditions contained in any of the Loan Documents by operation oflaw; and, in any such case, whether with or without notice to Indemnitor and with or without consideration. Except as provided in Sections 2, 3 and 4, Indemnitor's obligations hereunder shall in no way be impaired, reduced or released by reason of (i) an Indemnified Party's omission or delay in exercising any right described herein or (ii) any act or omission of an Indemnified Party in connection with any notice, demand, warning, or claim regarding violations of codes, laws or ordinances governing the Property. 8. Recourse Obligations. Notwithstanding anything to the contrary in the Loan Documents, lndemnitor shall be personally liable on a recourse basis for the obligations of Indemnitor set forth herein. 9. Successors and Assigns. This Indemnity shall be continuing, irrevocable and binding upon each of the persons and entities comprising Indemnitor and their respective heirs, successors, and assigns. 10. Inconsistencies. In the event of any inconsistencies or conflicts between the terms of this Indemnity and the terns of the Grant Agreement (including any exculpatory language contained therein), the terms of this Indemnity shall control. 11. Separate Causes of Action. A separate right of action hereunder shall arise each time an Indemnified Party acquires knowledge of any matter described herein. Separate and successive actions may be brought hereunder to enforce any of the provisions hereof at any time and from time to time. No action hereunder shall preclude any subsequent action. 12. Severability. If any provision of this Indemnity shall be determined to be unenforceable in any circumstances by a court of competent jurisdiction, then the balance of this Indemnity never- theless shall be enforceable, and the subject provision shall be enforceable in all other circumstances. 13. Attorneys' Fees. In any action or proceeding brought by the Indemnified Parties to enforce any rights under this Indemnity, the prevailing party shall be entitled to all reasonable attorneys' fees and all costs, expenses and disbursements in connection with such action. 14. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and will be effectively served upon personal delivery or, if mailed, no later than 48 hours after deposit in first class or certified United States mail, postage prepaid, sent to: To CITY: To Developer: City of National City 1243 National City Boulevard National City, CA 91950-4397 San Diego Habitat for Humanity, Inc. 10222 San Diego Mission Road San Diego, CA 92108 5 which addresses may be changed by written notice. 15. Governing Law. This Indemnity shall be governed by and construed in accordance with the laws of the State of California. 16. Counterparts. This Indemnity may be executed in any number of counterparts and, as so executed, the counterparts shall constitute one and the same agreement. The parties agree that each such counterpart is an original and shall be binding upon all the parties, even though all of the parties are not signatories to the same counterpart. 17. Exhibits and Recitals Incorporated. All exhibits referred to in this Indemnity, if any, are hereby incorporated in this Indemnity by this reference, regardless of whether or not the exhibits are actually attached to this Indemnity. The Recitals to this Indemnity are hereby incorporated in this Indemnity by this reference. 18. Signature Authority. All individuals signing this Indemnity 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 CITY 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. 6 EXHIBIT F CONSTRUCTION REQUIREMENTS San Diego Habitat for Humanity's receipt of HOME funds for purposes of paying construction related costs in connection with the Project is conditioned upon the SD-HFH adherence to certain construction requirements imposed by the City in connection with the Project, including, without limitation, the requirements set forth in this EXHIBIT F. 1. Submittals and Review Procedure; Construction Monitoring (a) Submittal requirements shall include the following: (i) SD-HFH shall submit to the City a Project team -staffing plan ("Staffing Plan") for review and approval by the City. The Staffing Plan shall show all component functions and reporting relationships. (ii) SD-HFH shall submit to the City a Scope of Work with a corresponding line item budget as support for any request for funds. SD-HFH shall make sure they are familiar with the City of National City building permit requirements and apply for any and all permits as required. (iii) SD-HFH shall provide to the City a copy of the approved building permit and any construction drawings required to receive said permit. (b) The City will provide construction monitoring oversight of the Project. SD- HFH shall maintain at the job site adequate records and shall permit site access to the City at all reasonable times to accommodate the monitoring activities. The monitoring program may include, but is not limited to, the following: attendance at job site meetings; review of job correspondence; site inspections; pay request reviews and approvals; 2. Loan Disbursement and Requisitions. Requests to the City for construction progress payments (Progress Payments") by the SD-HFH under the terms of this Agreement are to be made on the basis of percentage of work completed to the date of each such request. Dixieline Fund control will be contracted to distribute funds, obtain invoices, and require execution of appropriate lien releases from all contractors and material suppliers pursuant to California mechanics lien law. Requests will be made per Dixieline's adopted fund control format. If a site visit is required by the City, the City agrees to perform the Site Visit within two working days of receipt of the request. The City shall have up to four business days to approve the request from the original date of the request. Time is of the essence in the processing of requests. 3. Insurance (a) The purpose of this Section is to establish insurance requirements. (b) SD-HFH shall require that any contractor working on a project shall procure and maintain at Contractor's expense the following insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work by such Contractor, its agents, representatives, or employees that the contractors shall otherwise meet the insurance requirements set forth below: (i) Comprehensive General Liability: $500,000 combined single limit for each occurrence ($1,000,000 General Aggregate) for bodily injury, personal injury and property damage, and products and completed operations coverage for all subcontractors. (ii) Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage covering owned, non -owned and hired vehicles. (iii) Workers Compensation as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident. (iv) SD-HFH shall furnish the City upon request, copies of certificates of insurance maintained by it (and all subcontractors and sub - subcontractors) with original endorsements affecting coverage as required above. 4. Construction Budget Changes. The line item construction budget may be subject to change from time to time based on possible change orders and/or changes in the scope of work. Provided there is adequate contingency remaining in the construction budget to cover such change, the Borrower may approve any changes in the line item construction budget up to the greater of $2,500 or 10% of the original line item amount without the approval of the City. The City shall have the right to approve any changes above the aforementioned limits. The Borrower agrees to provide the City with an updated construction budget within 10 days of any such change. EXHIBIT G HOUSING QUALITY STANDARDS These housing rehabilitation/construction standards are intended as a guide for housing assisted with United States Department of Housing and Urban Development (HUD) HOME Investment Partnership Program (HOME) funds and/or any other public funding sources. All HOME and other publicly assisted housing must, upon completion, be affordable, decent, safe, and sanitary. As such, assisted housing must meet or exceed these standards and all local codes, zoning and ordinances. With the exception of locally adopted variations, all habitable structures assisted with HOME must meet these standards. New construction shall comply in full with all applicable codes and regulations. The City of National City reserves the right to insist on repair of any item which, in accordance with this standard: 1. renders a property unsafe and/or unsanitary; 2. constitutes a major building system in danger of failure; 3. fails to meet applicable codes. SUBSTANDARD CONDITIONS When substandard conditions are encountered in a unit to be rehabilitated with HOME Program funds, all substandard items must be addressed. Any building or portion thereof which is determined to be an unsafe building in accordance with the Building Code or Housing Quality Standards, or any building or portion thereof including any dwelling unit in which there exists any conditions that endangers life, limb, health, property, safety, or welfare of the public or occupants thereof shall be deemed to be substandard. • Structural Hazards. Buildings or portions thereof shall be deemed substandard when they are or contain structural hazards. Structural hazards shall include, but not be limited to, the following: • Deteriorated or inadequate foundations • Defective or deteriorated flooring or floor supports • Flooring or floor supports of insufficient size to safely carry imposed Toads • Members of walls, partitions or other vertical supports that split, lean, list, or buckle due to defective material or deterioration • Members of walls, partitions, or other vertical supports that are of insufficient size to carry imposed loads with safety • Members of ceilings, roofs, and supports or other horizontal members which sag, split or buckle due to defective material or deterioration • Members of ceilings, roofs, and supports or other horizontal members that are of insufficient size to carry the imposed loads with safety • Condition of stairs, railings and porches that are hazardous or not sound • Potential for collapse of the chimney or the chimney is not capable of safely carrying smoke, fumes and gasses from the unit to the outside • Hazardous Electrical Wiring. Electrical wiring which was installed in violation of code requirements in effect at the time of installation or electrical wiring not installed in accordance with generally accepted construction practices in areas where no codes were in effect or which has not been maintained in good condition or which is not being used in a safe manner shall be considered substandard. • Hazardous Plumbing. Plumbing which was installed in violation of code requirements in effect at the time of installation or plumbing not installed in accordance with generally accepted construction practices in areas where no codes were in effect or which has not been maintained in good condition or which is not free of cross -connections or siphoning between fixtures shall be considered substandard. • Hazardous Mechanical Equipment. Mechanical equipment which was installed in violation of code requirements in effect at the time of installation or mechanical equipment not installed in accordance with generally accepted construction practices in areas where no codes were in effect or which has not been maintained in good and safe condition or which is not being used in a safe manner shall be considered substandard. • Faulty Weather Protection. Buildings or portions thereof shall be considered substandard when they have faulty weather protection. This is defined as conditions that would allow significant amounts of water or air to enter the unit which would result in damage such as the following: • Deteriorated, crumbling or loose plaster or stucco • Deteriorated or ineffective waterproofing of exterior walls, roof, foundation or floors, including broken windows or doors • Broken, split, rotted or buckled exterior wall coverings or roof coverings • Visible internal water damage that indicates roofing failure • Faulty Materials of Construction. The use of construction materials which are not specifically allowed or approved by the Building Code, or the use of approved materials which have not been adequately maintained in a good and safe condition, shall cause a building to be substandard. • Hazardous or Unsanitary Premises. The accumulation of weeds, vegetation, junk, dead organic matter, debris, garbage, offal, rat harborages, stagnant water, combustible materials and similar materials or conditions on a premises shall constitute fire, health or safety hazards and shall be abated. • Improper Occupancy. All buildings or portions thereof occupied for living, sleeping, cooking or dining purposes which were not designed or intended to be used for such occupancies shall be deemed substandard. Structures with additions or modifications must comply with applicable building codes. Substandard workmanship, unsafe items, or hazardous situations are not acceptable. If repair of these items is not cost effective, the addition or modification must be demolished. The requirements outlined in this document do not preempt local or state codes or ordinances, nor do they alter or affect a contractor's obligation to comply with local or state law or requirements. All new work must conform to local codes. Any work performed shall not cause existing buildings to become unsafe. Existing buildings legally constructed in the past shall be considered acceptable today unless they do not conform to specific local retroactive requirements as detailed in the locally enforced building codes. RESIDENTIAL HOUSING STANDARDS Structural Requirements • General. Residential structures may be of any type of construction that is permitted by the Building Code. Roofs, floors, walls, foundations, and all other structural components of the building shall be capable of resisting any and all forces and loads to which they may be subjected. All structural elements shall be proportioned and joined in accordance with the stress limitations and design criteria as specified in the appropriate sections of the Building Code. Buildings of every permitted type of construction shall comply with the applicable requirements of the Building Code. • Shelter. Every building shall be weather protected as to provide shelter for the occupants against the elements and to exclude dampness. The roof covering shall be capable of accommodating required loads as specified in the Building Code. The roof shall provide a barrier against the weather to protect the supporting elements and the structure beneath. Roof covering materials shall be approved and installed in a manner consistent with the manufacturer's requirements and in accordance with the Building Code. • Protection of Materials. All wood shall be protected against termite damage and decay as provided for in the Building Code. • Foundations. The foundation and its' structural elements shall be capable of accommodating all superimposed live, dead, lateral, and all other loads in accordance with accepted foundation design practices. Lots shall be provided with adequate drainage and shall be graded as to drain surface water away from foundation walls. Finish grade shall be below floor grade as per the Building Code minimum requirements. Space and Occupancy Requirements • Location on Property. Newly constructed buildings shall be located with respect to property lines and to other buildings on the same property as required by the Building Code. • Light. Habitable rooms within a dwelling unit shall be provided with natural Tight by means of exterior glazed openings (i.e. windows, skylights) with a minimum opening area of 10 square feet. Habitable rooms include those for living, sleeping, cooking and eating. Bathrooms, closets, halls, storage or utility space are not considered habitable rooms. • Ventilation. Habitable rooms within a dwelling unit shall be provided with natural ventilation by means of operable exterior openings (i.e. windows, doors) with a minimum opening area of 5 square feet. Bathrooms, laundry rooms, and similar rooms shall be provided with natural ventilation by means of operable exterior openings with a minimum opening area of 11A square feet. In lieu of required exterior openings for natural ventilation, a mechanical ventilation system may be installed providing the number of air changes to meet code for the room being ventilated. Sanitation Requirements • Plumbing Systems. An acceptable plumbing system consists of three separate parts: an adequate potable water supply system; a safe, adequate drainage system; and ample fixtures and equipment. All installations shall be consistent with the Building Code. • Septic Systems. A septic tank with the field located away from the house is acceptable in rural areas. Documentation or certification is to be obtained from the local health department or authorized local agency indicating that it is an approved sanitary system. • Bathrooms. Each unit must have a bathroom. The bathroom must be in a separate room with a flush toilet in operating condition. The unit must have a shower or a tub with hot and cold water in operating condition. These facilities must be connected to an approved disposal system. The facilities may be scattered within the unit (such as a toilet in one enclosure and washbasin in another area. The washbasin or sink must have a gas trap (drain trap). Floors of bathrooms shall be resistant to damage from water or dampness. • Kitchens. Each dwelling unit shall be provided with a kitchen which is defined as being a separate room or area of a larger room which is used primarily for preparation of meals and storage of food. A bedroom with a refrigerator in it cannot be defined as a kitchen. Defined by facilities contained, a kitchen or kitchen area must have a separate kitchen sink for preparing food and washing dishes, with piped hot and cold water which drains into an approved system, a stove for cooking food, a refrigerator for storing food and facilities for the sanitary disposal of food and refuse. The sink shall be of a nonabsorbent material. All appliances must be free of hazardous conditions including a damaged or broken stove, sink or refrigerator that endangers users. There must be no evidence of gas or water leakage that presents the danger of fire or electrical shock. The stove and refrigerator must be free of potential hazards due to improper hookup. • Fixtures. All plumbing fixtures shall be connected to a sanitary sewer or to an approved private sewage disposal system. All plumbing fixtures shall be connected to an approved system of water supply and be provided with hot and cold running water, except water closets may be provided with cold water only. All plumbing fixtures shall be of an approved nonabsorbent material. All sanitary facilities shall be installed and maintained in a safe and sanitary condition and in accordance with applicable requirements of the Building Code. Mechanical System(s) Requirements • Heating. Dwelling units shall be provided with heating facilities capable of maintaining a room temperature of 70° F. (21.1°C.) at a point 3 feet above the floor directly or indirectly in all rooms used for living. Such facilities shall be installed and maintained in a safe condition and in accordance with all applicable laws and requirements of the Building Code. Un-vented fuel - burning heaters are not permitted. Wood, wood pellet or similar heating devices must be installed according to the manufacturer's directions and according to applicable requirements of the Building Code. All heating devices and wood burning heaters shall be of an approved type. • Evaporative Cooling Systems. Evaporative cooling systems shall be installed according to the manufacturer's guidelines. Evaporative cooling systems shall be installed so as to minimize the probability of damage from an external source. Every evaporative cooler shall be accessible for inspection, service and replacement without removing permanent construction. • Electrical Equipment. All dwelling units shall be connected to electrical power. Every habitable room shall contain at least one electrical convenience outlet and at least one electric light fixture. Every water closet compartment, bathroom, and laundry room shall contain at least one GFCI type electrical convenience outlet and one electric Tight fixture. Every kitchen shall have at least two GFCI type electrical convenience outlets and one electric light fixture. • Water Heaters. Gas water heaters may not be in bedrooms or other living areas unless safety dividers or shields are installed. Water heaters are to be properly installed and maintained with adequate venting, relief valves and discharge lines conforming to current Uniform Plumbing Codes. • Ventilation. Ventilation for rooms and areas and for fuel burning appliances shall be provided as required in the Building Code. Ventilation systems shall be maintained in good operational order. Safety Requirements • Attached Garages. Garages attached to dwelling units shall be completely separated from the residence and its' attic area by means in accordance with the Building Code. Openings from a private garage directly into a room used for sleeping purposes shall not be permitted. Other openings between a garage and residence shall be equipped with a properly fire rated self closing door as prescribed by the Building Code. Garage and carport floor surfaces shall be of approved noncombustible material. That area of floor used for parking vehicles shall be sloped to facilitate the movement of liquids toward the main vehicle entry doorway. • Exits. Dwelling units shall have access directly to the outside or to a public corridor. All buildings or portions thereof shall be provided with exits that meet the local Building Code, Fire Code or considered adequate by the appropriate local officials. Sleeping rooms shall have at least one operable window or exterior door approved for emergency egress, escape, or rescue. The unit must be operable from the inside to a full clear opening without the use of separate tools. • Smoke Detectors. Each unit must have at least one hardwired (with battery backup) smoke detector in proper operating condition on each level of the dwelling unit, including basements but excluding crawl spaces and unfinished attics. Smoke detectors are to be installed inside of each separate sleeping area or bedroom, in the corridor giving access to each separate sleeping area, and where there is a ceiling elevation change of two feet or more. Detectors must be installed in accordance with and meet the requirements of National Fire Protection Association Standard (NFPA) 74. If the unit is occupied by any hearing -impaired person, smoke detectors must have an alarm system designed for hearing impaired persons as specified by NFPA. EXHIBIT H HOUSING REHABILITATION PROGRAM SPECIFICATIONS AND TECHNICAL STANDARDS The specifications on the following pages are incorporated by reference into every rehabilitation contract entered into through the City of National City Residential Rehabilitation Program (NCRRP). The standard specifications are grouped by trade and include general and specific requirements for various rehabilitation tasks. All demolition, additions, alterations, modifications, repairs, or improvements to property(s) and/or structure(s) performed shall fully comply with the following regulations. The table below provides information on the regulatory components that are referred to collectively herein as "local building code". These various components, taken singularly or in total, provide the regulatory framework for the standards below and have precedence over the standards. KNOW THE CODES!!! City of National City Municipal Code Title 14 (Water and Sewer) City of National City Municipal Code Title 15 (Building and Construction) City of National City Municipal Code Title 18, Chapter 18.50 (Fences, Walls, Hedges) City of National City Municipal Code Title 18, Chapter 18.54 (Landscaping) City of National City Municipal Code Title 9, Chapter 9.12 (Fire Hazard Abatement) City of National City Municipal Code Title 9, Chapter 9.16 (Garbage) California Health and Safety Code Division 13- Housing Part 2.5 2010 California Building Code 2010 California Plumbing Code 2010 California Electrical Code 2010 California Mechanical Code 2010 California Fire Code 1997 Uniform Housing Code 2010 California Energy Code 2010 Green Building Standards California Code of Regulations, Title 8, Section 1529 (Asbestos Regulations) Residential Lead -Based Paint Hazard Reduction Act of 1992 (Public Law 102-550) as amended through April 21, 2005. HUD Lead Safe Housing Rule HUD Title X, Sections 1012, 1013, 1018 EPA Lead Renovation, Repair and Painting Program- June 23, 2008 California Civil Code 1941.1& California Health & Safety Code 17920.10, 17961, 17980, 10525 to 105257 (Lead Safe Housing and Lead Hazards) Fair Housing for HOME Program Participants- released 2005 Fair Housing Act Design Manual- amended 1998 NOTES: Substitutions: It is not desired of the Owner to exclude any product of quality equal to those specified herein or in the Invitation to Bid. Trade names are generally used only to establish the level of quality desired, but before any substitutes are made, the approval of the Owner and NCRRP Staff must be obtained. Measurements: All measurements and sizes stated or implied in the Invitation to Bid are approximate only, and shall be verified by the contractor on -site. Applicability: In the event of a conflict between these Standard Specifications and the Invitation to Bid, the latter shall govern. Not all tasks for which bids might be solicited can be specified in this Manual. Tasks for which methods and materials are not specified will be performed as indicated in the Invitation to Bid and in accordance with the best practices of the trade. SITE WORK DEMOLITION AND DEBRIS General Instructions: Demolition work shall conform to the requirements of all applicable codes, ordinances and utility company regulations. Existing shrubs and trees to remain shall be protected until demolition is complete and the site is cleared. Areas of grass killed by demolition or by storage of debris and other materials shall be raked clean, leveled, and re -seeded, unless otherwise noted in the work list. All debris must be removed prior to final inspection and all areas be left in a neat condition. GRADING Yards: Yards scheduled to be graded will be filled and/or raked smooth to finish grade that ensures proper drainage of the lot. Backfill material shall be clean and free from debris, with no wood scraps. It will be placed according to acceptable practices. Where applicable, the top 4 inches shall be top soil suitable for plant growth. Rough grading shall establish a sub -grade parallel to and approximately 4 inches below the proposed finished grade. Finished grading shall ensure that surface and ground water does not collect either under slabs or at the outside face of basement and foundation walls. All surfaces adjacent to foundation or basement walls shall slope a minimum of 2% (1/4" inch per foot) to ensure adequate surface runoff. In no case shall surface waters be diverted into adjacent private property. Crawl Spaces: No wood surface shall be closer than 6 inches to any soil. If a moisture problem is evident in the crawl space, grading shall be done to take surface water to best outfall. When a furnace is installed in a crawl space, grading shall be done according to clearances defined in Chapter Seven of the 2007 California Mechanical Code. Grading shall be done to take water away from furnace location. All scrap wood and concrete forming materials shall be removed from crawl spaces. Site Drainage: All local ordinances regulating the disposal of storm water, including type of piping, shall be followed. Crushed Rock Surfaces: Remove any large rocks or foreign material. Where substantial depressions exist, remove existing materials, fill with dense, well drained soil and grade to obtain a uniform surface. Top with crushed rock in sufficient amount to achieve a total depth of 4 inches. Crushed rock surfaces shall not be installed on grade in excess of 7% (7/8" per foot). The surface shall be crushed rock no less than 4 inches in depth. Borders shall be provided at all perimeter edges to retain rock. LANDSCAPE Shrubs: When shrubs are to be removed, they shall be removed complete with roots. Any depressions shall be filled with topsoil and the entire area raked smooth and clean. New Planting: Type and size of new shrubs shall be as indicated in the work list. Trees: When trees are scheduled to be removed, they shall be cut to a point as close to the finish grade as possible. The NCHPP/owner may elect to have the stump(s) ground to ground level. All debris shall be removed and the entire area shall be raked and/or broom swept clean. CONCRETE GENERAL INSTRUCTIONS When patching concrete, apply a bonding agent prior to application of flush patching material. New concrete shall not be placed on extremely wet or frozen ground, and no concrete shall be placed when temperature is Tess than 40 degrees F. or greater than 90 degrees F., unless it is properly protected and controlled in accordance with recommendations of the American Concrete and the Portland Cement Association. The type of footing, foundation or slab system used shall be determined by load bearing capacity of the soil. Soils of low bearing capacity necessitate provisions for greater load distribution. On fill material, footings shall extend to undisturbed soil unless the fill has been sufficiently compacted to insure against excessive differential or overall movement of the structure. PAVING Sidewalks: Sub -grade shall be well drained and uniformly graded 3-1/2 inches below finish grade. New concrete shall be at least 3-1/2 inches thick (@2,500 psi minimum). Finish surface of new sidewalks shall be approximately parallel with that of adjacent soil; sidewalks shall be constructed so as not to impede drainage of surface water away from the house and off the property. Contraction (control) joints shall be placed 4 to 5 feet apart, but never more than 2-1/2 times in feet the thickness of the slab in inches. Depth of joint shall be 1/4 to 1/5 the thickness of the slab. Width of new concrete sections shall be as indicated in the work list but will never be less than 36 inches wide. Wearing surfaces shall be floated with a wood float and receive a light broom finish. Concrete shall be properly sealed with a curing agent meeting ASTM standard 309 or kept moist for a period of three (3) days to ensure proper curing. FLATWORK Deck Slabs and Patios: New deck slabs and patios shall be a minimum of 3-1/2 inches thick (@ 2,500 psi minimum). Slab shall be reinforced as needed for each installation. Provide flashing between the slab and wood construction. Slope the deck slab to drain away from the foundation wall. Wearing surfaces shall be troweled and have non-skid texture. Control joints shall be provided for all flatwork in accordance with industry standards. Floor Slabs at or Below grade: Base for slab shall be well -compacted 4 inch sand -gravel sub - grade. New slab shall be a minimum of 4 inches thick (@ 2,500 psi minimum). When available, slope concrete to floor drains. Surfaces shall be troweled smooth. FOOTINGS Pier Blocks: New pier blocks shall be pre -cast or poured units. Block shall extend a minimum 4 inches above finished floor elevation or 6 inches above earth. They shall have the same or larger top dimensions as the wood posts. Bottom dimension will be a minimum of 12 inches square. Pier blocks shall have steel anchoring pins or recessed pockets. Post and Pier Footings (@2,500 psi minimum): Footings supporting wood piers shall extend from a point at least 12 inches below grade to a point 6 inches above grade. They shall have the same or larger top dimension as the piers. Bottom dimensions will vary with the footing design. Pier blocks shall have steel anchoring pins or recessed post pockets. Footings supporting masonry piers shall extend at least 12 inches below grade and have the same top dimensions as the piers or a minimum of 12 inches by 12 inches. Footings supporting a second floor load must meet requirement FOR STRUCTURAL CALCULATIONS DETAILING SOIL CONDITION, LOAD CALCULATIONS, EARTHQUAKE STANDARDS, and ETC. AS PER CURRENT BUILDING CODE REQUIREMENTS. Footings for wood posts shall extend from a point at least 12 inches below finished floor elevations to a point at least 4 inches above; footing shall have the same top dimension as the post. When necessary to remove a section of existing floor slab, cut out a 12 inch by 12 inch section using a masonry saw or chisel. Dovetail edges so that the opening at the bottom of the slab is larger than the opening at the top. Remove enough earth to pour new concrete. Footing shall sit on a 4 inch sand gravel base. Provide steel anchoring pin or galvanized brackets. Finish concrete to match adjacent surfaces. WALLS Retaining Walls: New walls shall be gravity or cantilever type. They shall be structurally sound and durable. Design walls to resist the lateral pressure exerted by the earth behind the wall, including that material above the top of the wall. Retaining walls shall extend at least 12 inches below grade and have a 6 inch wide layer of gravel, crushed rock or sand between the earth and the wall, extending the full height of the wall. Provide reinforcement as needed and construction joints at 30 foot intervals. Place weep holes 10 feet on center and at the lowest point possible above grade. All weep holes shall be screened. All retaining walls constructed adjacent to the public way shall have the design approved by the local planning/public works department prior to commencement of work. Foundation Walls: New walls shall be no less than 6 inches wide for wood frame and 8 inches for masonry or masonry veneer and shall extend below finish grade as required for the particular installation. Footing dimensions shall be determined by the thickness of the wall. Provide reinforcement where needed. Concrete shall be poured continuously and vibrated to remove air pockets. Where continuous pouring is not possible, provide construction joints with reinforcement for transfer of stress. All wall openings shall be properly reinforced. Any existing walls, intersecting walls, porch or entrance slabs, or areaways shall be anchored to the new wall. One half (1/2) inch diameter anchor bolts shall be set no more than 8 inches into the concrete at 8 foot intervals, or 6 foot intervals in earthquake design areas. The top of the foundation wall shall be carefully finished and leveled for the sill plate. For foundation walls on basement houses or where conditions warrant, the exterior face of the wall shall have at least one coat of bituminous damp proofing material from footing to finish grade. New 4 inch drain piping shall be placed at the perimeter of the footing, if required by ground conditions, and connected to a storm sewer system or natural outlet. Backfill material shall be an appropriate sand gravel mixture for proper soil drainage, and the top 3 inches be topsoil suitable for plant growth. Replace sod or install new sod. STEPS Poured Steps: New steps shall be as wide as the sidewalk and at least 6 inches to each side of the entry door. The treads shall be a minimum of 9 inches, the risers a maximum of 7 1/2 inches and a minimum of 4 inches. Rise and run shall have a variance of no more than 3/8 inch throughout flight. Provide 1/8 inch pitch for drainage. Wearing surfaces shall be troweled and have a non-skid texture. Porch and steps will be poured a minimum of 2 inches below grade. MISCELLANEOUS FORM WORK Sump Pump Wells: New wells shall have at least 8 cubic feet capacity. Wells in crawl spaces shall have 4 inches of gravel in the bottom. The crawl area shall be trenched to the well and gravel installed where specified. Discharge from a well in a crawl space shall be to a code approved outlet. A sump well in a basement discharging to the sanitary sewer shall be vented as required by Section 409 of the Uniform Plumbing Code. MIX DESIGN Footings, foundations, etc., shall be 2,500 psi minimum. Outside slabs, porches, stairs, driveways, sidewalks and patios shall be 2,500 psi or 5.5 sack minimum with 5% ± 1.5% air entrainment. Concrete pours should not exceed 3" - 4" slump. Calcium chloride is not to be used as a curing accelerator. MASONRY GENERAL INSTRUCTIONS Existing masonry units may be reused if undamaged and cleaned. New masonry units shall be true to size without cracks, chips, or other defects. New masonry units shall match existing as closely as possible. Repair and replace as specified in work write up. Where fresh masonry joins existing, the exposed surface of the set masonry shall be clean and lightly wetted so as to obtain the best possible bond with the new work. Lay masonry units plumb, square and properly anchor by keying units or utilizing manufactured ties. Lay all courses with a full mortar bed and tool all exposed joins. All grouted cells shall be vibrated twice. The color of mortar shall match existing as closely as possible. Where applicable, back parge masonry below grade. Mortar shall be protected from freezing until it has set. Thoroughly clean all exposed new masonry and all repair areas. All new and repaired masonry installed below grade shall be sealed. REPOINTING -- TUCKPOINTING Rake out all old mortar to a depth equal to the width of the joint or 1/2 inch, whichever is greater. All deteriorated and loose mortar shall be removed, regardless of depth. Re -mortaring shall be done as specified under general instructions above. Trowel all mortar joints to a hard, smooth, water tight surface, matching the shape of the original joint. Remove all excess mortar and thoroughly clean all repaired areas. PARGING: Parging is applying a smooth coat of mortar on a foundation wall. The end result shall be a uniform smooth finish completely covering all exposed surfaces. Parging shall also include raking out old mortar to depth 1/2 inch. Deteriorated and loose mortar shall be removed regardless of depth. CHIMNEY REPAIRS When a chimney is to be repaired, this shall include re -pointing, replacing damaged or missing masonry and installing a new cap or flue extension • New chimney cap shall be at least 4 inches thick at the outside edge and shall slope away from the flue. • New flue extension shall be 5/8 inch fire clay. Joints shall be close fitting and left smooth on the inside. The top of the flue lining shall be at least 4 inches above the top of the chimney. CHIMNEY RELINE Chimney relines, stainless steel or inflatable form fire clay, shall be done in accordance with all applicable building and fire codes. WALLS Retaining Walls: New walls shall be structurally sound and durable. Walls shall be designed to resist the lateral pressure exerted by the earth behind the wall, including the material above the top of the wall. Masonry walls shall be constructed in accordance with the recommendations of the National Concrete Masonry Association. They shall have a 6 inch wide layer of gravel, crushed rock or sand between the earth and the wall, extending the full height of the wall. Block shall be set in full mortar beds with joints tooled smooth, except where the exposed surface is to be parged. Reinforce block laterally and vertically where needed and fill cavities containing reinforcement with mortar. Place weep holes 10 feet on center, and at the lowest point possible above grade. All weep holes shall be screened. The top course shall contain a bond beam or be capped to provide a finished surface. All retaining walls constructed adjacent to the public way shall have the design approved by the local planning/public works department prior to commencement of work. Block Foundation Walls: New walls shall be a minimum of 8 inches thick and shall have poured in place concrete footings not less than 6 inches thick that extend below finish grade as require by the particular installation. Block face shells shall provide a 1-1/2 inch wide mortar bed. The first course shall be set in a full mortar bed. Joints shall not exceed 3/4 inch and shall be tooled smooth, except those on an exterior face being parged. The joints between wall and footing shall be tight and have a cove of elastic caulking compound on the exterior side. Stack bond shall be laterally reinforced every second course. Provide other reinforcement where needed, or specified. Location of control joints shall be determined by the height of the wall. The top course shall be filled or capped with at least 4 inches of solid masonry or wire mesh reinforced concrete, unless the sill plate board rests on both inner and outer face shells. Anchor bolts shall be placed no more than 6 feet on center and extend through sill and cap and two filled courses. Walls shall be bonded, keyed, or anchored to existing and intersecting walls. Porch and entrance slabs and areaways shall be anchored to the wall. All openings in the wall shall be covered with at least one coat of Portland Cement parging no less than 3/8 inch thick. Walls shall have at least one coat of bituminous damp proofing material from the footing to finish grade. New 4 inch drain piping shall be placed at the perimeter of the footing if required by ground conditions, and connected to a storm sewer or natural outlet. Backfill material shall be an appropriate sand gravel mixture for proper soil drainage. The top 3 inches shall be topsoil suitable for plant growth. Replace sod or install new sod unless otherwise specified. MISCELLANEOUS METAL WORK Ornamental Metal Handrails, Railing and Columns: New handrails, railings and columns shall be installed complete with all posts, rails, pickets, base plates, rail supports, etc. Posts shall be 1 inch square heavy gauge steel tubing. Metal shall be wrought iron. Railings shall be single - welded construction, railings welded t posts. Railings shall be securely anchored to porches, steps, retaining walls, etc., and when installed on new concrete, posts shall be embedded in concrete. Railing heights shall be as determined by code. Ornamental metal shall be factory primed or factory finished. Pickets shall be a minimum of 1/2 inch square tubing or solid bar. Scrolls shall be a minimum of 1/8 inch by 1/2 inch flat bar. Prefabricated chimneys & Vents: All prefabricated chimneys, vents, and vent connectors installed for use with any fuel burning appliance shall be installed in accordance with the manufacturer's specifications. CARPENTRY GENERAL INSTRUCTIONS Carpentry: All rough and finish carpentry shall be accomplished in such a manner as to provide true, straight, square, plumb, level and rigid assemblies. Framing Lumber: All softwood framing lumber shall be #2 or better fir except for non -bearing partitions. Good quality hemlock (hem/fir) may be used for non -bearing partitions. Framing lumber for girders, beams posts, columns and other structural members shall be of a species and grade which will provide sufficient strength and rigidity to support the design load without exceeding the allowable stresses consistent with good engineering practices, and shall conform to Chapter 25 of the Uniform Building Code. All framing lumber shall be identified by the grade mark of a recognized grading association. The moisture content of the lumber shall not exceed 19% at the time of installation. New lumber in contact with masonry shall be pressure treated. All framing members shall be accurately fitted and securely connected to each other in accordance with Table 25-D, Chapter 25 of the Uniform Building Code. Board Lumber: The grade of board lumber shall be suitable for its intended use. In general, loose knots or knot holes shall not exceed 1/3 of the width of the piece. Splits are unacceptable. Boards with defects may be used if the defects are sawed out. Lumber shall bear the label of a recognized grading association. Moisture content shall not be above 19% at the time of installation. Plywood: Plywood shall bear the label of a recognized grading association as to grade and type. Type and grade shall be suitable for its intended use as designed and shall be installed in accordance with Chapter 25 of the Uniform Building Code. Finish Lumber: All finish lumber shall be dressed free of tool marks and other objectionable defects. Lumber for exterior trim and millwork shall be kiln -dried or otherwise seasoned; moisture content shall not be above 19%. All wood for interior wood trim shall be thoroughly kiln -dried to withstand dry artificial heat; it shall not be installed until all plaster is thoroughly dried out. Exterior wood trim and millwork shall be at least #2 or "D" cedar, except that casing for doors and windows may be of clear pine or fir. New wood for interior trim shall match existing as closely as possible in shape, size, and species. If not available, select pine or fir may be used to manufacture trim of the same style and shape. ROUGH CARPENTRY Wood Porches: When a new porch is scheduled to be built complete, it shall include piers, footings, beams, joists, 5/4 x 4 tight knot cedar decking, or other decking material as specified, railings if specified, 3 foot wide steps and a roof if specified. The size of the porch shall be as indicated on the worklist. Treads shall be treated (outdoor wood) unless otherwise specified. Non-skid strips shall be installed when specified. Rise and run shall be according to Chapter 33 of the Uniform Building Code. Wood Steps: When new steps are scheduled to be installed with rise and run the same as existing, they shall include new stair jacks, treads and risers. Treads and risers shall all be even but exceed requirements of Chapter 33 of the Uniform Building Code to maintain limited headroom to a non -living or storage area. FINISH CARPENTRY Instructions for Wood Trim and Millwork: Exterior wood trim which cannot be repaired by re - nailing shall be replaced. Existing interior trim which is broken, splintered, cracked, chipped, warped or otherwise defective shall be replaced with new material. When drywall is being installed over existing wall finish and cannot be butted up to existing trim, room shall be re - trimmed (including door and window casings). All trim within a room shall be similar. Insofar as practical, new trim and millwork shall be delivered ready to be put in place. Moldings shall be clean cut and sharp. Single lengths of wood shall be used whenever practical. Splicing or piecing of finish work shall be done with mitered joints over a solid backing. Finger jointed material is unacceptable for natural finish wood trim. Tooled materials shall be planed or sanded smooth. The woodwork shall be installed level and plumb, be scribed neatly to the walls and be secured firmly in place. Exposed nails used in fabrication and installation shall be finishing nails, set 1/8 inch deep. The scribing, mitering and jointing shall be secured to prevent separation. External corners shall be mitered. Protect finish woodwork until time of painting. Cabinet Hardware: Hardware to be replaced shall include various knobs, catches, drawer slides, drawer rollers, etc., necessary when building a cabinet. When scheduled to be installed, all of the above found to be worn, defective or missing shall be replaced. New hardware shall be brass or aluminum finish. All miscellaneous hardware within a room shall be similar in style and finish. Mixing painted with unpainted hardware is unacceptable. Repairing Kitchen Cabinets: All damaged or missing doors, drawers and shelving shall be repaired or replaced as indicated in the worklist. Doors shall be properly aligned and shall operate freely. Drawer guides or slides shall be repaired or replaced as scheduled so that drawers slide or roll easily. Kitchen and Bath Cabinets: Contractor shall verify in the field all cabinets and countertop dimensions listed in the Invitation to Bid or shown on the drawings. Cabinet style and finish shall be indicated in the contractor's bid as per specifications and/or related cost allowances. Should new cabinets adjoin existing acceptable cabinets, the new cabinets shall match existing cabinets as closely as possible. Both wall and base cabinet assemblies shall be custom built on the job or consist of individual units joined into continuous section, and with the exception of drawer cabinets, all units shall be fully enclosed with backs, bottoms and panels, including tops for wall cabinets. Face framed, when used, shall be of necessary thickness to provide rigid construction. Corner and lineal bracing shall be provided where needed to insure rigidity and proper jointing of components. Adjustable shelves shall be supported on ends and every 18 inches front and back. All shelves shall be solid wood, edge banded plywood or fiber board type material. Cabinets shall have all wood frames with face frames constructed of solid hardwood. Drawer and door fronts may be constructed of plywood or fiberboard type material faced with birch, oak, or similar hardwoods. Drawer and door front shall match cabinet fronts. Cabinet backs and sides may be particle board with a plastic or wood veneer covering. Base cabinets that are designed to rest directly on the floor shall provide a toe space at least 2 inches deep and 3 inches high. All exposed construction joints shall be fitted in a workmanlike manner, nails shall be set and holes shall be filled. Swinging doors shall have a device sufficient to hold doors closed. The device may be spring catch, magnetic catch, self -closing hinges or equivalent. Doors shall be properly aligned and operate freely. Drawers shall have drawer guides with nylon glides and shall slide easily. Cabinet finish shall be clean and free from scratches and other defects. All wood surfaces, inside and out, shall be finished and sealed. Cabinet units shall be installed level, plumb and true to line. They shall be fastened to suitable grounds as per manufacturer's instructions. New upper cabinets shall be attached with wood screws; nailing cabinets is not acceptable. Use closers, filler strips and finish moldings when needed for sanitary and appearance purposes. Upper cabinets shall be set 16-18 inches above the countertop and 24 inches at sink. At the range there shall a 30 inch clearance to the bottom of the upper cabinet and 24 inches to the bottom of the range hood. Cabinets at the refrigerator shall be set to clear existing refrigerator. Countertops: Top materials shall be high pressure plastic laminate, at least 1/16 inch thick, securely bonded to the base material. Countertops made on site shall use void free exterior grade plywood or high density particle board for base material. Provide 1-1/2 inch front edges and, unless specified otherwise, 4 inch back splash and end splashes. Color and pattern shall be chosen by the owner. Should new countertop adjoin existing, the new material shall match existing as closely as possible. If a new sink is not scheduled to be installed, re -installing the existing sink shall be part of the countertop installation. Metal Bathroom Accessories: All bath accessories shall be chrome plated unless otherwise specified. All locations shall be checked with owner prior to installation. Bath accessories specified for handicapped must comply with any and all California and Federal requirements (Fair Housing, ADA, etc.) THERMAL AND MOISTURE PROTECTION Insulation: Insulation work shall comply with specifications on the Invitation to Bid and current California Title 24 Energy Efficiency Standards. A certificate of insulation shall be posted on site and a copy sent to the NCRRP. SIDING General Instructions: Remove all damaged sections before repairing existing siding. Sheathing and framing behind siding must be solid. New siding shall match existing as closely as possible. Apply siding with corrosion resistant nails long enough to penetrate into studs, blocking and wood sheathing. Head lap and coursing shall be required to prevent entrance of moisture into walls. Stagger joints in adjacent pieces of horizontal siding. Replace all trim incidental to this repair and caulk all joints, paying particular attention to where siding abuts trim or other material. Porch Skirting: New skirting shall be as specified in the Invitation to Bid. When new skirting is scheduled to be installed, existing skirting is to be removed completely. Install sufficient framing or backing for new skirting. All wood shall be at least 6 inches above grade. Vinyl Siding: Prior to starting work, the contractor shall examine the exterior of the house, including the fascia and soffited areas, to determine if any additional repairs need to be completed that will affect the proper installation of the siding. If any unforeseen repairs are needed, the contractor will contact NCRRP Staff and request a change order. New vinyl siding shall also include, unless otherwise specified, the following: window and door wraps, fascia and soffited wraps, belly bands, porch trim and all exposed beams, posts and/or columns. New vinyl siding shall have a lifetime manufacturer's warranty. Use aluminum or galvanized steel nails with 5/16 inch to 3/16 inch diameter head and avoid face nailing where possible. All nails should penetrate solid lumber a minimum of 3/4 inch excluding point. When going over 1/2 inch plywood sheathing, use screw shank nails with full penetration of the sheathing. The contractor shall provide manufacturer's warranty information to the homeowner upon completion of the work. ROOFING AND SHEATHING General Instructions: Prior to starting work, the contractor shall examine the roof to determine that all repairs affecting roofing have been completed as scheduled. When new metal chimney, vent stack, roof vent, etc. are scheduled to be installed, the contractor shall cooperate with other contractors in installing flashing and counter flashing. This contractor shall also install new flashing in place of all damaged, deteriorated or missing flashing incidental to the repair or new installation. New flashing shall be installed in all valleys. The contractor shall seal all roof openings and exposed roof edges, chimneys, porch roofs, dormers, skylights and vents, with plastic asphalt cement as needed to insure water tight joints. Roofing shall be applied in accordance with the recommendations of the manufacturer. Once it has been started, the roof application shall not be delayed, except when absolutely necessary due to inclement weather. Each layer of roofing felt shall have been surfaced or glazed by the end of the working day. Should inclement weather arise it is the responsibility of the contractor to provide adequate protection of the structure and is contents. When a new roof is installed, roof vents shall be installed to provide adequate ventilation in all attic areas as per current building codes. New roofing installation shall conform to the requirements for the Underwriter's Laboratories, Inc. Class C label or better; a copy of the guaranteed fire classification shall be provided to the owner. New roofing material shall have a minimum 25 year manufacturer's guarantee. When existing roofing is brittle, badly cupped, or rotted, new material shall not be placed over existing. Final determination will be made by NCRRP staff. The quality of materials and workmanship for repairs shall meet the same standards as new installation. The contractor shall make repairs or replacements needed to roofing, flashing, drip edges, cant strips, gravel stops, etc. to provide a water proof installation. When removing damaged sections of existing roofing, replace asphalt saturated felt. Color, size and texture and type of new roofing material shall match existing as closely as possible. Asphalt or Fiberglass Roofing: For repair, since new shingles shall match existing in type, repair procedure may vary from that for re -roofing with new seal downs. Therefore, install new shingles as per manufacturer's recommendation to provide a watertight Class C label roof. For new installations, when going over existing roofing, exposed edges shall be cut back to the edge of the eaves and new metal drip edge installed. New roof shingles shall provide at least double coverage at all points, including both eaves and rake edges. All new roof installations shall have metal drip edges. If the gable end has no overhang, additional wood trim piece shall be installed so roofing projects at least 1-1/2 inches beyond the face of the siding. Metal drip edge shall not be installed over new roofing material. New roof underlay shall be one layer #15 asphalt saturated felt and shall be double thickness from the eaves to a point not less than 24 inches beyond the inside face of the exterior wall. Seal double underlay lap to a point 24 inches beyond the inside face of the exterior wall with a continuous layer of plastic asphalt cement. Roof valleys shall be flashed with corrosion resistant sheet metal. New shingles shall be seal down asphalt or fiberglass 3-tab, with a 25 year manufacturer's warranty. Minimum exposure shall be 5 inches; minimum head -lap shall be 2 inches. Exposure shall be not less than that required for U.L. Class C label. The starter course of shingles and rake shingles shall project over eaves and rake edges approximately 1 inch. Nails or staples shall be corrosion resistant roofing nails or staples and shall be long enough to penetrate sheathing or roof boards. Color of roofing shall be owner's choice of standard readily available products. Torch down Roofing Material: Torch down roofing material shall not be installed over existing roofing. Remove existing roofing to wood deck or sheathing. Repair sheathing as needed or specified. Install metal starter edge on all edges. Install torch down roofing as per manufacturer's specifications. Supply the owner with a copy of manufacturer's warranty. Apply a full coat of reflective top coat if specified. Built -Up Roofing: For repair, remove existing gravel and broom clean roof area. Cut and repair all blisters with hot asphalt. Reinforce low spots. Apply one ply of 40# asphalt -saturated felt. Minimum end lap shall be 4 inches; minimum side lap shall be 8 inches. Cover felt with two mop coatings of asphalt. Average mopping coats shall be 25# asphalt. Replace gravel stops at exposed edges of built-up roofing where needed. All stops shall be properly secured and lapped sections shall be sealed with plastic roofing cement. Mop all edges thoroughly. Where roof drains occur in built-up roofing, the roofing for a distance of approximately 18 inches in all directions from the drain shall be pitched towards the drain. Pitch shall be uniform. Contractor shall repair roof drains to working order. For new installations, remove old roofing down to sheathing. Nail base sheet according to manufacturer's specifications. Base sheet to be 40# felt or equivalent nailed to decking. Then embed 3 layers of 15# felt, mopping between layers with 25# asphalt. Flood coat surface with 30# asphalt and embed gravel or crushed rock. Gravel or crushed rock shall be included with all new roof installations. Asphalt Roll Roofing: New roofing shall be mineral surface asphalt roll roofing, with a minimum weight of 90# per square. Coverage and underlay shall be the same as for asphalt shingle roofing described above. End -lap shall be 19 inches minimum for a 3 foot wide roll. Starter strip and edges of roofing shall project over eaves or rake edge approximately 1 inch. Nails shall be corrosion -resistant roofing nails and shall be long enough to penetrate sheathing or roof boards. Roll roofing used for low slope applications shall be selvage type or other product specified by the manufacturer for low slope installations. Color of roofing shall be owner's choice. Metal Roofing: New metal roofing shall be installed in accordance with the manufacturer's recommendations. Maximum eaves overhang shall be 2 inches and roofing shall lap away from prevailing winds. Full length sheets are to be used when possible. All roofing materials shall carry a minimum 20 year manufacturer's warranty. For new installations with a 4:12 pitch or greater, end lap of roofing panels shall be a minimum of 6 inches; for roofs pitched under 4:12, end lap of the roofing panels shall be a minimum of 12 inches. All metal roofing installations shall include ridge vents and/or gable vents unless otherwise specified. All new metal roof installations shall include valley flashing, gable and eaves trim, foam ridge and eaves closure, plumbing vent flashing and eaves and sidewall flashing. Roofing panels shall be fastened to the base with metal screws with rubber washers; nailing is not acceptable. Color of roofing shall be owner's choice of available colors, however, galvanized and aluminum roofing will not be allowed. Caulking: All loose, cracked, rotted and broken caulking shall be removed. Apply new caulking at all roof openings and exposed roof edges. New caulking shall be plastic asphalt cement. Clean immediately all brick, concrete or woodwork soiled during caulking. Roof Flashing: When roofing or roof flashing is installed, new flashing shall be galvanized sheet metal, .024 inch thick. Piping passing through the roof shall be flashed with one piece metal flashing and cover or two piece flange and sleeve flashing. Nails shall be corrosion -resistant nails and be long enough to penetrate sheathing. All openings through the roof shall be flashed regardless of whether they were flashed previously. Roof Sheathing: The repair of portions of existing sheathing shall result in the sheathing for that entire area being on the same plane, so that when new roofing material is applied, the finish surface is even. The quality of materials and workmanship shall meet the same standards as new installation described below. New sheathing shall be exterior grade 1/2 inch plywood, 3/8 inch exterior grade plywood may be used over skip sheathing unless specified otherwise. Plywood sheets shall be installed in a staggered pattern. If sheet edges do not meet on skip sheathing, H-clips shall be used between each rafter run. Nails or staples shall be galvanized. Nailing Instructions: For new roof installations over sheathing and felt only, stapling of shingles is acceptable. Staples must be 16 gauge. zinc coated with a minimum crown of 15/16 inch, and a minimum length sufficient to penetrate 3/4 inch into the sheathing. Staples must be driven parallel to shingles length by pneumatic stapler, assuring that the crown bears tightly and flush against the shingle without cutting the shingle surface. When re -roofing over existing roofing, nailing of shingles is the only acceptable means of anchoring the new roof, unless another method is designated by the manufacturer. Use 4-6 nails per shingle for composition or fiberglass shingles. Nails shall be galvanized, 11 or 12 gauge with a head diameter of 3/8 inch. Nails shall be sufficient length to penetrate at least 3/4 inch in sheathing. GUTTERS AND DOWNSPOUTS Galvanized metal Gutters and Downspouts: Galvanized metal shall have corrosion preventative coating on the inside surfaces. Gutters and downspouts may be baked enamel finish. Minimum thickness of metal shall be 26 gauge. Only seamless gutters shall be installed. No joints will be allowed except at corners and where downspouts attach. New gutters shall be 5 inch OG ("K style) or half round type. Gutters shall be attached with aprons and hangers or combination hangers every 24 inches on center. No exposed strap hangers shall be used. Metal gutter installed over fascia boards on a house with no roof overhang shall be attached to spacer blocks 24 inches on center on wood framing to get gutter at least 3-1/2 inches away from siding and shall be properly flashed. Gutters shall be installed with proper pitch to downspouts so that no water overflow can get back into framing members. New downspouts shall be 2 inch by 3 inch corrugated rectangular or 3 inch corrugated round. Downspouts shall be attached to gutters and be securely fastened with strap or cast hangers at top and bottom. Provide at least one additional hanger for every 6 feet of downspout. Downspouts shall be provided with extension pieces (elbows) located not more than 6 inches above the splash block and pointed in the direction of flow. Splash blocks shall be installed with all new gutter installations unless otherwise specified. Aluminum Gutters and Downspouts: New gutters shall be 5 inch OG ("K type"). Aluminum shall be baked enamel finish with corrosion preventative coating on inside surfaced. Minimum thickness of gutters shall be 0.027 inch; minimum thickness of downspouts shall be 0.019 inch. Only seamless gutters shall be used. No joints will be allowed except at corners and where downspouts attach. Installation shall be the same as for galvanized gutters and downspouts. Cleaning and Tightening Gutters and downspouts: When cleaning and tightening of gutter and downspouts is scheduled, all joints shall be made watertight. All gutters and downspouts shall be securely connected and firmly supported and fastened. Splash Blocks: New splash blocks shall be either fiberglass or cast concrete and be installed in such a manner as to direct water away from the building. DOORS AND WINDOWS GENERAL INSTRUCTIONS Whenever a window assembly, sash or doors are being replaced, frames, headers and sills shall be repaired to provide a true, straight, square, plumb, level and rigid enclosure for the new installation. Flashing shall be replaced as needed. All openings between wood, masonry, and metal shall be caulked. Should the openings be deeper than 1/4 inch, they shall be first packed with a backing (flexible polyurethane, polyethylene, polyvinyl chloride, cured polysulfide, sponge rubber, neoprene or butyl rod) manufactured for this purpose to within 1/4 inch of the face surface and then caulked. All new sash or doors shall fit tightly in their frames and shall operate smoothly and easily. Contractor shall repair all trim supplementary to the operation of the sash or doors. When windows are to be glazed, new glass shall be dual pane insulating glass, unless otherwise specified. When storm doors are to be re -glazed, sheet plastic ("Plexiglas") may be used in place of tempered safety glass. All hardware within a room shall be similar in style and finish. New finish hardware shall be furnished with the necessary screws, bolts, or other fastenings of a suitable size and type to anchor the hardware in position for heavy use and long life. These fastenings shall harmonize with the hardware as to material and finish. The finish hardware shall be securely fitted on properly prepared surfaces in conformity with the hardware manufacturer's instructions and templates. Carpentry cuts for the finish hardware shall be carefully and accurately made. Screws shall be turned to a firm grip but not to the point of distorting the hardware and in no case shall the screws be hammered into place. New doorknobs shall be positioned at the height of the existing doorknobs in each building and the other hardware shall be uniformly positioned. EXTERIOR DOORS Special Instructions: All exterior doors, except service doors for unheated garages and other outbuildings, shall be fully weather-stripped. Hinges for an exterior door swinging out shall have a setscrew in the barrel to prevent the removal of the pin when the door is closed. Hinges shall be galvanized under plating to prevent rusting. All doors between a carport or garage and the house shall be solid core fire rated, or equivalent, and have self -closing hardware. Hardware and Stops for Exterior Doors: New entrance lockset shall be polished brass or brushed aluminum finish. Cylindrical lock shall key outside with turn or push button on the inside; lock shall have dead pin. Contractor shall furnish 2 keys with new hardware. Double cylinder deadbolts are not allowed. New escutcheon plates shall be installed to cover unsightly marks when replacing existing hardware. Floor, base or hinge door stops shall be installed for all exterior doors. Weather-stripping: Package shall include new weather-strip and door sweep installed to stop all air infiltration around entire perimeter of door. New weather-stripping shall be cushion bronze, interlocking aluminum, or compression -type vinyl. It shall be installed continuous around door casing to prevent infiltration of dust, water, and wind. Thresholds and Jambs: New threshold shall be metal, water return type, with integral weather- stripping and shall fit watertight with door. Caulk at exterior edge. New jambs and stops shall be clear fir, pine, or mahogany. Thresholds shall be fully supported. Wood Exterior doors: Type of new door shall be mahogany, solid core. Door shall be installed with new entrance lockset hardware, deadbolt lock, self -closing hardware where required and weather-strip package. Door shall be hung with three brass or brushed aluminum finish 4-inch butt hinges. When door is to be painted, it may be paint grade. All exterior wood doors shall be sealed upon installation. This shall include sealing the interior, exterior and all edges of the door. Finish shall be of owner's choice. Pre -Hung Wood Exterior doors: New pre -hung door package shall include solid core wood door, jamb, casing, stops, trim, weather-stripping, threshold, all hardware and deadbolt lock. Opening shall be trimmed. Unless specified differently, door will be mahogany. Follow instruction for wood exterior doors. Thresholds shall be fully supported. Pre -Hung Steel or Fiberglass Exterior Door Package: New pre -hung door package shall include steel -clad or fiberglass door with wood or polyurethane core, wood jamb, casing, stops, trim, weather-stripping and aluminum threshold, all hardware, and deadbolt lock. Opening shall be trimmed. Door shall be hung with three brass or brushed aluminum finished 4-inch butt hinges. Thresholds shall be fully supported. INTERIOR DOORS Hardware, Jambs and Stops for Interior Doors: New passage set hardware shall be polished brass or brushed aluminum finish. Doors to bathrooms or toilet rooms shall have privacy lock, push button or turn button on the inside. Escutcheon plates shall be installed to cover unsightly marks when replacing existing hardware. New jambs and stops shall be clear fir or mahogany. Finger jointed material is unacceptable. Moisture content shall not be above 19%. Wood Interior doors: Type of new door shall be as scheduled. Replacement panel doors shall match existing as closely as possible. Louvered doors shall be ventilating type. Door shall be installed with new passage set hardware and shall be hung with two brass or brushed aluminum finish 3 1/2 inch butt hinges. When door is to be natural finish, it shall be stain grade wood or it may be pre -finished. When door is to be painted, it may by paint grade. Finish shall be of owner's choice. WOOD PRE -HUNG INTERIOR DOORS: New pre -hung door package shall include wood door, jamb, casing, stops, trim and all hardware. Type of door shall be as scheduled. Opening shall be trimmed. Finger jointed material is unacceptable. See also descriptions above. Finish shall be of owner's choice. BI-FOLD, SLIDING AND MISCELLANEOUS DOOR HARDWARE: When scheduled to be repaired or replaced, finger pulls, knobs, push plates, door tracks, door stops, etc., found to be worn, defective or missing shall be installed new. New hardware shall be polished brass or brushed aluminum finish. All hardware within a room shall be similar in style and finish. Mixing painted with unpainted hardware is unacceptable. WOOD BI-FOLD DOORS: Type of new doors shall be as scheduled. Door shall be installed with new hardware. When two pairs of doors are being installed, a door aligner shall be provided where the center panels meet. Package shall include wood bi-fold doors, jambs, casing, stops, trim and all hardware. Finish shall be of owner's choice. WINDOWS SPECIAL INSTRUCTIONS: A new window assembly shall include sash, jamb, casing, mullions, frame, sill, stool, apron and all trim as appropriate to the particular type. Finger jointed material is unacceptable when wood is to be natural finish. Window assemblies shall be installed with all operating hardware and all sashes shall fit tightly in frames. All opening windows shall have screens. All sashes shall be weather-stripped. All sashes shall operate smoothly and easily. Replacement sash shall match existing as closely as possible. Install new sash as per manufacturer's recommendations, complete with new operating hardware. Operable sash shall have some means of being secured. Sash shall fit tightly in frame to prevent infiltration of dust, water and wind. New sash shall operate smoothly and easily. New windows shall meet all requirements regarding light and ventilation and emergency exit according to Sections 1204 and 1205 of the Uniform Building Code. CHECKING, FITTING AND FREEING WINDOWS: A sash that is painted shut shall be freed and the sash and its operating hardware shall be readjusted for smooth and easy operation. Sash locks that are not scheduled to be replaced shall be repaired and realigned as needed to firmly secure windows. When existing weights or counter -balances for double -hung windows are found to be inoperative and cannot be easily repaired, new "quickie" or "jiffy" type spring window controls shall be installed. Spring shall be fastened securely. HARDWARE: All window hardware within a room shall be uniform in style and finish. New hardware shall not be painted. Locking window hardware shall be cast metal type; stamped metal type shall not be used. When locking hardware is scheduled to be replaced, finger lifts and pulls shall also be replaced. New hardware shall be polished brass or brushed aluminum finish. STOPS, STOOLS AND APRONS: New wood trim shall be clear fir, hemlock, or mahogany. Finger jointed material is unacceptable when wood is to be natural finish. ALUMINUM WINDOW SASH: New sash shall be anodized aluminum. Sections shall be extruded aluminum alloy 6063-T5. Minimum nominal wall thickness shall be 0.062 inch. Construction shall be in accordance with Architectural Aluminum Manufacturers Association (AAMA) specifications. All operating sashes shall be fully weather-stripped. All sashes shall be able to be easily removed from the inside for maintenance and re -glazing. After installation, aluminum shall be thoroughly cleaned with plain water or a petroleum product such as white gasoline, kerosene or distillate. No abrasive cleaning agents shall be used. ALUMINUM WINDOW: New window frame shall be anodized aluminum. Sections shall be extruded aluminum alloy 6063-T5. Minimum nominal wall thickness shall be 0.062 inch. Construction of frame shall be in accordance with AAMA specifications and shall form neat weather -tight connections. All operating sashes shall be fully weather-stripped. Weep holes shall be provided at the factory. All sashes shall be able to be easily removed from the inside for maintenance and re -glazing. When appropriate to the installation, new aluminum assemblies shall have an anodized aluminum exterior "surround" designed to form an integral union with the existing frame and be joined in a manner as to prevent any water or air infiltration. Surround shall be the same construction as aluminum section described above. Surround shall be sized to cover all exposed exterior wood trim and shall fit neatly into openings. All opening windows shall have screens. After installation, aluminum shall be thoroughly cleaned as listed above. ALUMINUM REPLACEMENT WINDOWS: Replacement windows shall be anodized aluminum and shall meet requirements as above except the minimum nominal wall thickness shall be 0.050 inch. Sections shall be extruded aluminum alloy 6063-T5. WOOD WINDOW SASH: One -over -one type: New sash shall have spring or tension counter- balances. "Quickie" or "jiffy" spring window controls are acceptable only when the existing operating mechanism is unusable in the new installation. Window lifts and locking hardware shall be polished brass or brushed aluminum finish. VINYL REPLACEMENT WINDOWS AND VINYL STORM WINDOWS: New replacement windows and storm windows shall be constructed of PVC vinyl. All meeting rails shall be interlocking and weather -tight. Unit for double -hung storm window shall consist of self -storing insect screen and two storms. Sash and screens shall be easily removed from the inside for maintenance and re -glazing or repair. Storm doors and screens for all other types of windows shall be compatible with their operation so that they can be removed with a minimum of effort. Replacement inserts shall fit tightly in existing tracks. All operating windows shall have insect screens; wherever possible, self -storing units shall be installed. Glass shall be Grade B or better. Replacement screening shall match existing. New screening shall be anodized aluminum or fiberglass screen cloth. Weep holes in the sill shall be provided at the factory. Frame shall fit weather -tight in existing masonry or wood frame. Caulk at frame with sealant, if needed. The bead shall be at least 3/8 inch across surface. FINISHES PLASTER PLASTERING: When patching plaster, all broken or damaged plaster shall be cut out to straight lines with clean, sharp edges. New lath and reinforcing strips shall be installed if needed. Use plaster bond material for proper adhesion of new plaster to existing. The areas to be patched shall be filled with base material and then given a finish coat of the same material as adjoining plaster. Patched areas shall match the adjacent work in finish and texture and be free of bulges. Jointing shall be flush and smooth so that the joints between the existing and the new plaster are undetectable. Cracks shall be V-jointed and bonded with fiberglass tape and joint compound, in the same manner as a drywall joint. Prior to application of new plaster, all bulging, loose or otherwise defective plaster shall be removed. New expanded metal lath, plaster stops, grounds, corner and casing beads and corner reinforcement shall be installed as needed. Support and fasten lathe to provide true lines and surfaces for new plaster. Use flat reinforcing strips where existing and new plaster surfaces butt together. Install reinforcing at all points where surfaces change or where cracking is likely to occur. All metal shall be galvanized or coated with rust inhibiting paint. New applications shall be three coat wet plaster over metal lath, two coat wet plaster over gypsum "rock lath" or two coat veneer plaster system. Apply plaster with minimum thickness as established by industry standards for the type of bases being used. EXTERIOR STUCCO PLASTER: Remove all damaged stucco. Repair metal lath or wire fabric. Over wood frame construction, apply new three coat finish and over masonry surfaces apply new two coat finish. Scratch coat shall be uniformly roughed to provide a sound base for brown or top coats. Top coats shall match existing in texture and finish. Do not apply stucco plaster when the temperature is above 90 degrees F. or below 40 degrees F., or when the temperature is not expected to remain above 40 degrees F. until initial set. Stucco plaster shall be kept damp until initial set. DRYWALL: Drywall installed over framing members shall be 1/2 inch on walls and 5/8 inch on ceilings, except that for installations requiring a one hour fire rating it shall be 5/8 inch Type X. Drywall installed over existing surfaces shall be no less than 3/8 inch on walls and 1/2 inch on ceilings. New drywall shall be tapered gypsum wallboard. When going over existing surfaces, first remove all damaged material and fur walls or ceilings so that the finished product is properly aligned. Edges and ends of wallboard shall occur on framing members, except those edges and ends that are perpendicular to the framing members. To minimize end joints, use wallboard of maximum lengths. Wallboard shall be first applied to ceilings, then to walls. When both sides of partitions are to receive wallboard, stagger joints on opposite sides. Protect all vertical exterior corners with corrosion resistant metal corner bead. When butting up to existing trim, cut drywall carefully and use casing beads for all exposed edges. Where surfaces are to be painted or wallpapered, joints shall be taped and both joints and nail depressions shall have three coats of joint cement applied as per manufacturer's recommendations. All edges shall be feathered. Finish surfaces shall be sanded smooth and left straight and well aligned. Texture spray finish is not to be used on ceilings unless specified otherwise. When used, texture spray shall be medium texture, hard finish only --no course, polystyrene or other soft finish will be allowed. Before application, prime ceilings with a vinyl primer or equivalent. Any existing surfaces to receive texture spray must also be properly prepared for complete adhesion and non -burn through. Application shall be as per manufacturer's recommendations. No finishing or drywall shall be done unless inside temperature is at least 55 degrees F. This temperature shall be maintained during and up to completion of finishing, including drying. Moisture resistant drywall or concrete wallboard shall be used in areas subject to moisture and in bathrooms. CERAMIC WALL AND FLOOR TILE AND CERAMIC TILE COUNTERTOPS: When repairing existing tile, first remove all cracked, loose, chipped or otherwise defective tile. Then repair setting bed or wallboard to provide a level surface for installation of new tile. When repairing floor tile, wash adjacent areas with a solution to remove all oil film present. New tile being installed next to existing tile shall match existing as closely as possible in size, color, texture and glaze. When replacement tile does not match existing, replace complete rows or areas. Carry rows and areas into corners. New tile shall be installed in the following manner. Base surface shall be smooth and plumb or level. Prior to application of adhesive, surface to receive tile shall be sealed with a water resistant sealer compatible with the adhesive to be used. Sealer shall provide a firm and durable bond to the base material. Tile adhesive may be used as the sealer when designed for this purpose, but must be applied in a separate coat. Apply adhesive to entire surface to be tiled with a notched spreader blade. New wall tile shall be standard grade, glazed ceramic tile. New floor tile shall be glazed ceramic mosaic or ceramic tile as indicated in work list. Color of tile shall be owner's choice. All tile installations shall be properly trimmed using caps, bases, etc. Tile shall be set by "floating method". Allow at least 24 hours for evaporation of volatiles from adhesive prior to grouting. Joints shall be thoroughly saturated and washed out with clean water before grouting. All tile joints shall be filled with pointing grout. Joints between tub and tile and joints between tile and any dissimilar material shall also be grouted and caulked with a silicone sealant. Force grout into joints taking care that no open joints are left. Joints shall then be sponged and tooled. New tile and any surrounding surfaces soiled during the repair work shall be cleaned immediately. All exposed tile edges shall be bull -nose tile. (See Material Allowances, Appendix A) TUB/SHOWER SURROUND Type of materials shall be as specified. All tub wraps shall be a minimum of 6 feet above finished floor unless specified otherwise. All tub wraps shall include flush mount soap and grab accessories. All tub wrap installation to include new water resistant drywall or concrete wallboard unless otherwise specified. The owner's choice of color and design will be from standard available products. HARDWOOD FLOORING: When repairing or replacing hardwood flooring, all defective hardwood flooring shall be taken up from the sub -floor, using care not to rip or break the tongues from the flooring strips of pieces that are intended for reuse. Flooring shall be shimmed where necessary and be properly secured at points of bearing. The entire floor, both existing and repaired, shall then be inspected for protruding nails, and nails found to have popped out shall be countersunk. Replacement flooring shall match existing as closely as possible. ASPHALT TILE, VINYL COMPOSITION TILE (VCT) AND SHEET VINYL: Replacement tile shall match existing in type, size, pattern and texture. New tiles shall be residential grade. Asphalt tile shall be 1/8 inch thick; VAT shall be 1/16 inch thick. Tiles shall be 9 inch by 9 inch or 12 inch by 12 inch. Colors and patterns shall be homogeneous throughout the full thickness of tiles. Color and pattern shall be owner's choice. Self-adhesive tiles will not be allowed. New sheet vinyl shall have a wearing surface no less than 0.010 (10 Mils). Color shall be owner's choice. It shall be installed full size with a minimum of seams. Seams will not be allowed in doorways or other high traffic areas. When installed in areas of high moisture, bathrooms and utility rooms, it shall be seamless. All floor coverings shall meet or exceed FHA requirements and must be labeled as such. All sheet vinyl floor covering shall be installed according to manufacturer's recommendations. All surfaces to receive resilient flooring shall be clean, dry and level. All cracks, depressions and voids shall be filled or repaired. Concrete floors shall not vary from a level surface more than 1/8 inch in 10 feet in any direction. Where leveling is required, leveling latex for concrete shall be used. Prime concrete slabs on grade or below grade with a cut back before applying adhesive. For all installations, use the adhesive recommended by the resilient flooring manufacturer and apply as per instructions. All flooring shall extend under the base shoe molding. Resilient flooring shall be laid with tight joints at all points of contact. Tile stops shall be installed at all exposed edges and changes of material, and stair treads shall have edges as described below. New rubber or vinyl cove base shall be considered a part of a new floor covering unless the owner wishes to reuse existing wood base. New underlayment shall be underlayment grade plywood, or suitable materials approved by sheet vinyl manufacturer, developed for use under resilient flooring. Masonite or tempered hardboard will not be allowed. Underlayment shall be 3/8 inch except that 1/4 inch underlayment may be used over plywood sub -flooring or T&G boards not more that 3 inches wide. 1/4 inch underlayment shall be securely screwed every 3 inches on center at the perimeter and every 6 inches on center at intermediate supports; 3/8 inch underlayment shall be securely screwed every 6 inches on center at the perimeter and every 8 inches on center at intermediate supports. Nailing or pneumatic stapling will not be allowed for underlayment installation. In all cases floors receiving new underlayment shall be smooth and free from any uneven joints, bulges and depressions. When resilient flooring is to be installed directly over sub -flooring, the sub -flooring shall be combination sub-floor/under-layment plywood (void free). Types and grades shall be the same as for plywood underlayment. Thickness shall be determined by span and spacing of floor joints. CARPET OR TILE STOP: New divider edge shall be aluminum, approximately 1 inch wide. It shall be attached with countersunk aluminum screws. STAIR EDGING: New stair tread nosing shall be aluminum or rubber or vinyl. Nosing shall be installed on each tread and landing. Installation shall be per manufacturer's recommendations. COVE BASE: New base shall be minimum 2-1/2 inch rubber or vinyl cove base unless matching existing base of a different height or otherwise specified. Use preformed inside and outside corner pieces and an adhesive recommended by the manufacturer. Base shall be neatly installed and be firmly cemented to walls and floor. Joints where bathroom floors meet walls shall be watertight. All corner pieces shall be neatly cut and tight fitting; wrap around corners will not be allowed. Use adhesive recommended by the manufacturer on all cove base. Color shall match new or be compatible with existing resilient flooring. Pre -finished wood base will be allowed and specified for certain applications. CARPETING AND CUSHIONING: New carpeting and cushioning shall, as a minimum, conform to those specifications contained in HUD UM-44C. Type, color and pattern of carpeting shall be owner's choice. Bonded urethane cushion shall conform to HUD UM-47. Carpet shall be installed according to the best standards of the trade. The contractor shall provide a certificate to the owner stating the carpet installed is FHA approved or meets the minimum standards required for FHA approval. When carpet is installed in a specific room, all closets shall be considered as part of the room. See Material Allowance Attachment for cost details. APPLIANCES EXHAUST FANS AND DUCTED RANGE HOODS: Ventilation equipment shall bear the label of approval of a nationally recognized testing agency, and a Home Ventilation Institute or manufacturer's label showing capacity. Duct work shall be ridged metal and designed for the shortest practical run to the exterior. Installation of duct work shall comply with current mechanical code requirements . Discharge openings through roofs and walls shall be protected against entrance of rain, snow and wind. Exhaust fan units shall be installed complete with louvers and back draft dampers which will automatically close to prevent a reverse flow of air when the fan is not in operation. Duct ends shall be sealed and mechanically fastened. When replacing an existing fan, existing ductwork and related accessories may be reused if they are in good condition and appear to have a remaining life equal to that of the fan. Existing ductwork shall be inspected for obstructions and continuity. Ductless range hoods shall not be installed. When a bathroom fan is installed, it shall be installed complete with switch (of specified type), ductwork and all accessories unless specified otherwise. Fan motor shall be moisture proof and UL listed. Fan shall be wall switched; switch may be separate from light switch. Fan shall be rated for insulation cover. Size of fan will be specified in the Invitation to Bid. Grille shall be anodized aluminum or plastic. Undercut door if necessary for air movement. When a kitchen exhaust fan is to be installed new, it shall be installed complete with switch, ductwork and all accessories. Fan motor shall be UL listed. Fan shall be wall switched; switch shall be separate from light switch. Fan shall provide a minimum of 15 air changes per hour. Grille shall be anodized aluminum or plastic. Range hood shall be installed complete with ductwork and all accessories. Unit shall include recessed light and removable, washable grease filter. Color shall be owner's choice. All venting and ducting practices and materials must meet NCRRP Specifications and 2007 California HVAC Code Standards and 2008 California Title 24 standards at a minimum. PLUMBING GENERAL INSTRUCTIONS All materials, piping, fittings, fixtures, etc., shall conform to the latest ANSI (American National Standards Institute), ASTM (American Society for Testing and Materials), CS (Commercial Standards) and FS (Federal Specifications) standards. All equipment and materials used shall be new and clearly marked to permit identification of manufacturer, model and type. Installation and materials of fixtures specified for the handicapped must comply with the provisions of the Fair Housing Act, Fair Housing for HOME Program Participants, Fair Housing Act Design Manual and all other federal, state and local requirements. The contractor shall furnish all instruments, gauges and equipment required for testing and shall perform those tests required by the related authorities. Equipment, materials or work found to be defective during testing shall be replaced by new work and be retested until proven satisfactory. All replacement sewer, water or gas systems shall be installed complete and, if necessary, final connections shall be made to the sewer main, gas meter, or water meter. All equipment and items installed under this section shall operate safely, without leakage, undue noise, vibration, corrosion or water hammer. All fixtures shall be securely supported so that no strain is placed on the connected piping. All work, fixtures and materials, shall be protected at all times. All service and supply lines installed in a location where freezing may occur shall be insulated with closed cell foam insulation, or wrapped with fiberglass bait insulation without vapor barrier. If pipe insulation is to be done by the insulation contractor, notice will be given in the Invitation to Bid. All excavation and backfill necessary for the installation of new underground piping shall be part of the work of this section. The trenches shall be backfilled evenly and be thoroughly compacted using acceptable fill materials. In no case shall the excavation for the trenches undermine or disturb the building foundation. When a rough -in for new equipment requires connections to the existing plumbing system, the contractor shall obtain necessary data on locations, sizes, connections, fittings, and arrangements needed to ensure proper installation of that equipment. All drilling, cutting, and patching necessary for a proper installation of work under this section shall be done by the contractor. All patching shall be of the same materials, workmanship and finish as the original work and shall accurately match all surrounding work. Fixtures and equipment furnished by others which require plumbing connections to waste, water, vent or gas piping shall be connected by the contractor. All work shall be done without damage to structural members. Sleeves shall be provided where required and upon completion of rough -in work, sleeves shall be made sound and fire tight. Penetration of stud and masonry walls, floors, and ceilings shall be fire stopped. All joints and connections in the plumbing and drainage systems shall be gas and water tight for the pressures required by the test of the system, with the exception of those portions of piping which are installed for the purpose of leading ground or seepage water to the underground storm drains. The contractor shall be required to wet test all plumbing systems at the expected working pressure of the system after repair and/or replacements have been made. Existing plumbing systems, or portions thereof, including building sewers (side sewers), to remain in use shall operate free of fouling and clogging, and shall not have cross -connections which may cause contamination of the water supply by back -siphoning. Gas lines shall be blown clean with compressed air, and all valves and filters shall be checked. All remaining plumbing fixtures and piping not in use shall be disconnected and removed by the contractor. All escutcheon plates shall be installed tight, caulked if necessary. The entire new and existing installation shall be left in a neat, clean, and usable condition. WATER, SEWER, FUEL AND VENT PIPING GENERAL INSTRUCTIONS: New piping at the exterior of a building shall be at least 18 inches below grade. Piping shall run parallel to the building construction and be neat and workmanlike. Piping shall be concealed in walls, below the floor, above the ceiling or in furred spaces. Piping shall be properly supported and be pitched to drain. Water and gas piping shall be run level without pockets and as straight as possible. New hot and cold water supply lines shall be at least 6 inches apart where parallel. Expansion and contraction shall be provided for by swing joints. New soil, waste, vent and drainage piping shall be run at a uniform grade of at least 1/4 inch per foot (2% grade). Lines under slabs shall have as short a run as possible and the run shall be as straight as possible. Copper lines shall be wrapped with plastic tape where they come in contact with any metal other than brass or lead. All connections between copper or brass and steel piping shall be made with dielectric couplings. All metallic piping shall be bonded together. Screwed pipe joints shall have threads cut the full thickness with new, clean dies. The joints shall be carefully reamed and pipe joint compound shall be applied smoothly to the male threads and to the threads left exposed after fabrication. REPLUMBING HOUSE TO CODE: This is an instruction to the contractor and means that all water distribution piping, soil, waste and vent piping shall be installed new. Only the installation or repair of individual plumbing fixtures shall be listed in the work specifications. WATER SERVICE: New water service shall be of sufficient size to permit a continuous and ample flow of water to all fixtures at all times. Frictional losses due to piping, meter, valves, fittings and faucets shall be considered when piping size is being determined. The water service pipe shall be installed in such a manner and shall possess the necessary strength and durability to prevent leakage under all likely adverse conditions, such as corrosion or strains due to temperature changes, settlement, vibrations and superimposed Toads. The contractor shall be responsible for providing the meter and all necessary piping to complete the installation and to coordinate installation of the meter with the Water Department. GATE VALVES: The water piping on the discharges side of the water meter shall have a full way gate valve with bleeder screw. Gate valves shall be readily accessible, whether located in the basement, crawl space or within the living space itself. WATER SUPPLY (DISTRIBUTION) PIPING: New distribution service lines shall be hard temper type M copper tubing or galvanized steel. New branch service lines shall be no less than 1/2 inch. Rodent proof penetrations shall be made through floors. HOSE BIBBS: Hose bibs shall be located according to work specifications to provide an outside source of water. Hose bibs shall be frost proof type or have separate accessible stop and waste valve or readily accessible inside shut off. BUILDING SEWER (SIDE SEWER): All sanitary plumbing outlets shall be connected to combined or sanitary sewer systems when they are available. A new building sewer shall be constructed of case iron, vitrified clay, concrete or plastic. The sewer shall be constructed with watertight joints, be on a grade not less than 1/8 inch per foot, be laid on a firm bed, and be at a depth not less than 18 inches below grade. No tees of 90 degree ells shall be used. Cleanouts shall be installed as required by Uniform Plumbing Code. All abandoned septic tanks shall have sewage pumped and be filled with gravel or sand. SEPTIC SYSTEM INSTALLATION: New septic systems shall be installed in compliance with approved design and inspected and approval by a county health official. SOIL AND WASTE PIPING (INCLUDES DRAINS AND STACKS): Soil and waste piping and fitting shall be extra heavy or service weight cast iron, galvanized steel pipe, copper pipe or hard temper type K,L,M, or DWV copper tubing, or plastic approved under City and/or County codes. Soil stacks shall rest solidly at the base on masonry piers or heavy iron posts and be supported at intervals of no more 10 feet by stout wall hangers or brackets or on beams at each floor. No new soil or waste pipe shall be installed or permitted outside a building or be in any place where it may be subjected to freezing temperatures, unless adequate provisions is made to protect it from frost. FLOOR DRAINS: No floor drains shall be installed in any location or manner which will interfere with proper functioning. The drain shall connect to the sanitary drainage system with an approved trap having a minimum 3 inch depth of seal. Drain shall have a backwater valve if the drain is below the elevation of the curb or property line. See also description for piping. SUMP PUMPS: New sump pumps shall be submersible type. When connected to the sanitary system discharge line piping shall have an accessible backwater valve and gate valve. The connection from the discharge line to any horizontal sanitary drainage piping shall be made from top through a wye branch fitting. All installations shall be done in accordance with Section 409 of the Uniform Plumbing Code. ROUTING DRAINS AND BUILDING OR SIDE SEWER: Drains scheduled to be routed shall be cleaned with a power driven rotary clean -out apparatus similar to the roto-rooter device. Cleaning area drains shall include either replacing or re -caulking the drainage strainers. Building sewers and side sewers scheduled to be routed shall be cleaned all the way to the main sewer connection(s). Drains, when routed, shall be free of all miscellaneous debris so as to allow the free and unobstructed flow of liquids and solids. VENT PIPING: New vent piping shall be schedule 40 galvanized steel pipe with standard black cast iron screwed fittings, DWV copper tubing or plastic approved under code. Vent piping shall extent at least 6 inches above finish roof surfaces. Re -vent piping shall be at least 1/2 of the diameter of the drain to which it is connected or be a minimum of 1-1/4 inch in diameter. Re - vent shall tie into soil stack or waste stack at a point at least 6 inches above the last fixture connected to the stack. No new vent piping shall be installed on the exterior of the building. All new vents shall be concealed in the wall. New piping passing through the roof shall be flashed with a not lighter than 26 gauge galvanized metal flashing assembly or plastic flashing. Flashing shall be set in waterproof mastic compound and be caulked around the vent. Flat roof flashing shall be the commercial type with a horizontal leg equal all around the base. FUEL PIPING: New fuel piping shall be black pipe. Pipe shall not be bent and offsets shall be made with fittings. Installation shall comply with all requirements of the applicable codes noted above. PLUMBING FIXTURES GENERAL INSTRUCTIONS: New plumbing fixtures shall be standard builder's models unless otherwise specified. Unless otherwise indicated, color of new fixtures shall match existing or be white. Fixtures shall be installed complete and ready to use. Appropriate grounds and supports shall be provided for each fixture and equipment item. Arrangements shall be made with other trades for the installation of built in items, blocking or necessary supports. Coordinate installation of plumbing fixtures with floor contractor. All new exposed trim, fittings and pipe in finished spaces shall be chrome plated brass or be covered with chrome plated brass sleeves. WATER HEATER: Package shall include a new glass lined, quick recovery water heater, size as specified. Heater shall be equipped with a shut off valve on the incoming waterline, a pressure/temperature relief valve, (150 # and 210 degree rating) with a discharge tube to the outside of the dwelling or to 24 to 6 inches of a garage or basement floor having drainage. Heater shall be installed with wiring, or fuel piping, draft diverter and vent, as appropriate to type. Heater shall have a 5 year warranty on the tank, and shall be U.L. listed or American Gas Association certified. When new water heaters are to be relocated, they shall be installed to provide the shortest run possible from the new water heater to all fixtures. Flue pipe for gas water heaters shall be at least 28 gauge galvanized sheet metal. It shall have a minimum slope of 1/2 inch per foot with no horizontal lengths of pipe exceeding 75 % of the height of the chimney or vent. Flue or vent connections shall have a diameter not less than the vent outlet on the heater. The flue pipe shall extend beyond the fire clay lining, but no flue pipe shall be vented into a chimney which is used for a fireplace or has a wood stove or wood furnace connected. Flue pipe can be vented into Class B vent. KITCHEN SINK: Package shall include new porcelain enameled or heavy duty stainless steel countertop sink, swing faucet with spray attachment and hose, removable cup strainers, fixture stops and supplies, and waste with trap. Sink shall have ledge unless space restrictions require otherwise. Entire unit shall be connected to service and waste lines. It shall be the responsibility of the plumbing contractor to cut the hole for the sink. LAVATORY: Wall mounted package shall include new porcelain enameled steel or cast iron lavatory, faucets with trip waste, fixture stops and supplies, trap, and wall hanger and legs. VANITY: Package shall include new vanity base, countertop with back splash, porcelain enameled steel lavatory, center set faucets with trip waste, fixture stops and supplies, and trap. Lavatory may be one piece basin or countertop. Quality of vanity sink base and countertop shall equal that of new kitchen cabinets and countertops. New vanity base to be a minimum 24 inch width unless specified otherwise. TOILET: Package shall include new vitreous china bowl (siphon jet action type) with close coupled tank and cover, plastic seat, new flange and wax ring, bolts and caps, fixture stop and supply, float -less valve and trip lever. Plastic tanks are not acceptable. When installing or re- installing a toilet they shall be caulked around their base with silicone caulk. BATHTUBS: Package shall include new porcelain enameled steel bathtub, pop-up waste and overflow with trap, concealed shower divider with trim and fittings. Tub will be recess type 5 feet by 30 inches, unless otherwise specified. SHOWER STALL: Package shall include new fiberglass base, size as specified, with trap, vent and concealed faucet and shower leg with all trim and fittings. Shower stall wrap shall either be plastic laminate, or three piece rigid molded fiberglass unit over new water resistant drywall or concrete wallboard. (Type of wrap will be specified in work list.) Free standing shower stall and shower stalls designed for corner installation will not be allowed unless specified. ELECTRICAL GENERAL INSTRUCTIONS All materials and equipment used shall conform to the latest UL and ANSI and FS standards, as well as to all other applicable standards. All materials and equipment used shall be clearly marked to permit identification of manufacturer, model and type. The contractor shall furnish all instruments, gauges and equipment required for testing and shall perform those tests required by the related authorities. Equipment, materials or work found to be defective during testing shall be replaced by new work and be retested until proven satisfactory. All new materials shall be in good condition. Each type of material shall be of the same quality throughout the project. All finished parts of the equipment and equipment for the work of this section shall be protected against damage from whatever cause during the progress of the work and until final completion. All electrical materials and equipment in storage and during construction shall be covered in such a manner that no finished surfaces will be damaged or marred. All wiring, fixtures, switches, receptacles, etc., shall be installed with all accessories. Fixtures, equipment and materials furnished by others which require electrical wiring, connection, or related electrical work shall be connected by the electrical contractor. The contractor shall in no case install permanent electrical equipment that may be damaged by the rough in for heating, ventilation, or plumbing equipment. The contractor shall do all drilling, cutting and patching required for the installation of the work under this section. All patching shall be of the same materials, workmanship and finish as the original work and shall match all surrounding work, painting excluded. All electrical equipment and exposed wiring not in use shall be disconnected and removed. The contractor shall keep all parts of the building and site free from accumulation of rubbish and waste materials caused by work under this section and shall remove such accumulation from the site. All parts of the electrical apparatus and equipment shall be thoroughly cleaned of cement, plaster and other foreign materials and be left smooth and clean. When a new service is installed it shall be the electrical contractors' responsibility to insure that all obstructions to the service drop are removed. The electrical contractor is responsible for disconnect and reconnect fees from the utility. WIRING: All conductors shall be plainly marked or tagged as follows: 1) Underwriter's Laboratories, Inc. label; 2) Size, kind and insulation of the wire 3) Name of the manufacturing company and the trade name of the wire; Month and year when manufactured (date shall not exceed 8 months prior to the date of delivery to the site, except for feeders). Hot water heater circuit shall be #10 copper AWG., 30 amp circuit. Range circuit shall be #6 copper AWG, 50 amp circuit. Branch circuit wiring for 20 amp circuits shall be #12 copper AWG and all other branch circuit wiring shall be no smaller than #14 copper AWG. Unless otherwise required by code, all new wiring shall be sheathed cable. New 15 and 20 amp circuits shall be 2 wire with ground. Outlet boxes shall be the pressed steel knockout type or be cast iron with drills, tapped and plugged holes and be hot dipped galvanized. Outlet boxes may also be approved non-metallic type. All boxes shall be of the proper size for the number of wires or conduits passing through or terminating in the box. Approved factory made knockout seals shall be used in all boxes where knockouts are not intact. All outlet boxes shall be accurately placed and securely fastened to the structure independently of the conductor. The plastic rings shall be set flush with the surface of the ceiling or wall. The hangers for the light outlets shall have adjustable studs. Surface mounted boxes and "Wire Mold" are acceptable only if areas for new circuits are not accessible in any manner without doing severe damage to walls and ceilings. When work is completed, the wiring and connections shall be tested for continuity, short circuit, proper grounding and GFCI function. REWIRE HOUSE TO CODE: New electrical service and all branch circuit wiring, fixtures, switches, receptacles, cover plates, etc., shall be installed new according to the National Electric Code. Only minimums will be required, and only special additional work such as wiring to detached garages, additional fixtures, special devices, etc., shall be listed in the Invitation to Bid. GARAGE CIRCUIT: New circuit to the garage shall be an independent branch circuit of 20 amp capacity. Circuit shall include new conductor, a keyless (switched) fixture for each parking space and at least one GFCI protected receptacle. Service shall be installed complete with all wiring and accessories. FURNACE CIRCUIT: New circuit shall be an independent branch circuit of 15 amp capacity. Contractor shall wire the circuit from the junction box located near the heating unit. LAUNDRY CIRCUIT: New circuit shall be an independent branch circuit of 20 amp capacity. Receptacle for the washing machine shall be a 20 amp, 120 volt, duplex grounding type, mounted on the wall behind or adjacent to the laundry area. When installed new, the wall receptacle shall not be higher than 48 inches above the floor. SMALL APPLIANCE CIRCUITS: New circuits shall be 20 amp capacity with two duplex grounding type outlets. When two new circuits are to be installed, a minimum of four grounded receptacles shall be provided and wired to these circuits. When these circuits also serve a pantry, dinette, breakfast room and dining area, the receptacles for these areas shall be equally divided between the extended circuits. All new kitchen circuits/outlets shall be GFCI protected in accordance with the National Electric Code. SPLITTING CIRCUITS: Splitting circuits shall include providing dedicated circuits for the following: 1 small appliances (kitchen), 2 washing machine, 3 freezer, 4 furnace, 5 dishwasher, 6 microwave oven. DRYER CIRCUIT: New circuit shall be a dedicated branch circuit of 30 amp capacity (#10 AWG). Receptacle shall not be higher than 48 inches from the floor. REPLACING WIRING: When existing wiring is to be replaced, all exposed wiring (wiring not concealed behind finished surfaces) shall be removed back to the panel box. Then new sheathed cable shall be installed for all branch circuit wiring in the basement, attic and crawl space. Installation shall be complete, including all wiring and accessories. ELECTRICAL SERVICE Size of new service shall be as indicated in the Invitation to Bid. Service package shall include new service entrance and meter base, new panel box and ground, and new service mast or service knob with support. Service shall be underground where required. Contact the utility company prior to installing service equipment to verify location of new service drop. All existing panels and sub -panels shall be taken out of service. Contractor is responsible for disconnect and reconnect fees. Panel installed with new service shall be main breaker panel with room for at least 20 circuits (main breaker and panel shall be consistent with the size of the service entrance). Panel box shall be flush or surface mounted as required. Panel shall be installed in a convenient and protected location. Service equipment shall not be located in stairwells, bathrooms, clothes closets, attics, above plumbing fixtures or above laundry and kitchen appliances. Sufficient clearance and accessibility shall be provided when installed in basement near laundry trays, oil tanks or other permanent obstructions. Prior approval will be required if panel is to be located on the exterior of the building; this panel shall be weatherproof type. After installation, each lighting panel shall be tested with mains disconnected from the feeder, the branch connected, and wall switches closed and the fixtures permanently connected but without lamps. Each individual power circuit shall be tested at the panel with the power equipment connected for proper operation. All circuits in the panel shall be clearly identified. FIXTURES AND WIRING DEVICES: When an item is installed, a new fixture, switch or receptacle shall be installed complete with all wiring accessories. When an item is to be replaced, the existing device shall be removed and a new fixture, switch or receptacle shall be installed and connected to existing wiring. When an item is to be relocated, it shall be removed completely, (or when the existing outlet box and wiring cannot be removed, a blank cover plate shall be installed) and a new fixture, switch or receptacle shall be installed complete in the specified location. An item to be removed shall be removed completely, or when existing wiring or box cannot be removes a blank cover plate shall be installed. CONVENIENCE RECEPTACLES: Outlets to be relocated, installed new or replaced shall be complete with new cover plates. When all switches and receptacles in a room are new they shall be off white or ivory. New convenience receptacles shall be flush duplex grounded type, and shall be grounded. Surface mounted boxes and "Wire Mold" are acceptable only if areas for the new circuit are not accessible in any other manner without doing severe damage to walls or ceilings. Replacement receptacles for the kitchen (except refrigerator) and bathroom shall be GFCI protected duplex outlets; all others shall be flush duplex type. New receptacles shall not be located in a baseboard or floor. SWITCHES: When relocating or installing new switches they shall be installed complete with new cover plate. New switches shall be toggle type switches and either single pole, 3-way or 4- way as specified. LIGHTING FIXTURES: Each lighting fixture shall be furnished with a lamp bulb or bulbs of appropriate type and wattage. New lighting fixtures shall bear either a UL or ETL label. Unless otherwise specified lighting fixtures shall be as follows: New exterior fixtures shall be wet location type; style shall be owner' choice. New keyless and pull chain fixtures shall be porcelain. All pull chain fixtures shall have a single convenience outlet. Ceiling or wall mount fixtures for the living room, dining room, bathroom, hall, kitchen and bathroom shall be owner's choice, unless otherwise specified. Fixtures in basement, second floor and attic stairways shall be located directly over the stairway section at the head or foot of the stairs. Any fixture specifically called for on the Invitation to Bid shall not be included in the retail allowance per fixture, but shall be provided by the contractor as part of the contract. ELECTRIC BASEBOARD UNITS: Existing sections of baseboard shall be cleaned and tested for proper operation. New baseboard shall be able to maintain a temperature of 70 degrees F. at a point three feet above the floor in all habitable rooms when the outside temperature is -10 degrees F., without overloading or scorching walls. New heaters shall be medium density type, limited to 250 watts per foot of baseboard. Where possible, install on outside walls and under windows. Each room or air circulation area shall have only one thermostat. Bathroom heaters can be manual switch operation. Thermostats shall be baseboard mounted unless otherwise specified. In bathrooms, baseboard heaters shall not be within reach of the bathtub. Wall or ceiling type heaters are acceptable substitutes. HEATING, VENTILATING, AIR CONDITIONING GENERAL INSTRUCTIONS: (Note: Please review NCRRP Specifications and the California Title 24 2008 Residential Compliance Manual for California Energy Efficiency Standards and consult with NCRRP Staff concerning required Energy Efficiency Ratings (EER) for program - installed heating systems and installation methods.) All materials, equipment, piping, fittings, fixtures, etc., shall conform to the latest ANSI, ASTM, ASME and FS standards. All equipment used shall be new and clearly marked to permit identification of manufacturer, model and type. The contractor shall furnish all instruments, gauges and equipment required for testing and shall perform those tests required by the related authorities. Equipment, materials or work found to be defective during testing shall be replaced by new work and be retested until proven satisfactory. Except as modified herein, the construction and installation of all equipment, accessories and appurtenances shall comply with the published standards, requirements and recommendations of the National Fire protection Association and National Board of Fire Underwriters. All equipment and items installed under this section shall operate safely and without leakage, undue wear, noise vibration or corrosion. All drilling, patching and cutting necessary for the proper installation of work under this section shall be done by the contractor. All patching shall be of the same materials, quality of workmanship and finished as the original work and shall accurately match all surrounding work (painting excluded). Equipment and materials furnished by others which require connection to the heating system, shall be connected by the contractor. All piping, ductwork and equipment shall be installed without critical damage to structural members. The contractor shall provide sleeving as required and upon completion of rough in work, sleeves shall be made sound and fire tight. Metal chimneys shall not be installed as exposed piping in habitable areas, closets, or stairways. They shall be enclosed with fireproof material to provide a minimum of 2 inch air space and meet local code requirements. The contractor shall install chrome plated escutcheons where exposed piping passes through floors, walls and ceilings. All heating and ventilation equipment and fuel storage tanks not required to remain shall be removed by the contractor. The entire new and existing installation shall be left neat, clean and in usable condition. HEATING EQUIPMENT AND REPAIRS FORCED AIR SYSTEMS: New installations shall be complete and shall include new furnace, ductwork and registers. Provide hot air supplies and cold air returns throughout the house. Duct insulation shall meet current CTED specifications. HEATING UNITS: New heating units shall be installed complete with new disconnect switch, electrical circuit, flue pipe and all controls, wiring, accessories, thermostat, and valves. Thoroughly clean the, oil tank, fittings, and lines. Chimney cleaning shall be performed by a licensed chimney sweep when applicable Note that the electrical contractor will wire a separate circuit (if one does not already exist) from the panel box to a junction box located near the heating unit. It is the heating contractor's responsibility to coordinate installation of the circuit unless otherwise specified. New units shall have ratings sufficient to ensure proper heating of all habitable rooms within the living unit they intend to serve. Such determinations shall be made in accordance with the best practices of the National Warm Air Heating and Air Conditioning Association, the "Guide" of the American Society of Heating. This shall include heat loss calculations if required by local authorities. Furnace shall be able to maintain a room temperature of 70 degrees at a point three feet above the floor in all habitable rooms, when outside temperature is 0 degrees F. Heating system shall be designed, installed, balanced and adjusted to provide for the distribution of heat to all habitable rooms and other spaces in accordance with the calculated heat loss of the spaces to be heated. No heating unit shall be more than 15% oversized for its particular installation. New units must have an efficiency rating of 81% or greater. All work performed in the installation of heating equipment shall be in accordance with the manufacturer's recommendations. Mechanical equipment shall be so installed and located that inspection, routine maintenance and/or repair is possible without removing item of permanent construction. Listed furnaces shall be installed in accordance with their listings. Unlisted warm air furnaces shall be installed with a minimum clearance of 6 inches between the top bonnet plenum (or between the top of an extended plenum or duct within 3 feet of such furnace) and combustible material. All approved gas or oil burners shall bear the manufacturer's identification marks, the burner trade name and the model number or size installed. HEATING UNIT CONTROLS: When heating unit controls are to be replaced or repaired, the contractor shall examine all controls for that particular unit, including the thermostat, and repair and replace those controls found to be defective. Operating and limit or safety devices shall be AGA approved or UL listed. If specified install a programmable thermostat. CLEANING AND ADJUSTING HEATING SYSTEMS: After servicing, the mechanical contractor shall leave a certificate on the furnace indicating his/her name, the work or repairs completed, and the date. When heating units are cleaned and adjusted, the contractor shall thoroughly clean and adjust the system for proper operation. When necessary or specified replace thermostat. On forced air systems, this shall include cleaning the blower motor and fan assembly, installing new air filters and replacing blower motor drive belts and testing of combustion regulators. On oil fired systems, this shall include cleaning the oil tank (removing condensation and sediment), fittings and lines and replacing fuel filters and testing of combustion regulators. On all fossil fuel heating appliances, the heat exchangers, vent connectors and vents shall be inspected for damage or deterioration. Vent connectors and vents shall be cleaned. Ductwork shall be cleaned only when specified on the Invitation to Bid. When specified, clean and vacuum at all accessible openings. Special attention shall be paid to duct runs with floor registers. DUCTWORK AND REGISTERS: Sheet metal shall be not lighter than 28 gauge galvanized sheet metal. The sheet metal work shall be accurately formed, be fitted snugly, have exposed edges folded at least 1/2 inch and leave no sharp corners exposed. Fiberglass duct which is UL listed and meets NFPA standards is also acceptable. New flex duct is allowed if it has at least R-8 rated insulation and meets UL, NFPA and ASTM standards. All ductwork shall be properly supported with hangers or floor rest channels. Special care shall be taken in supporting flex duct to avoid any sagging or kinks. No new duct work shall be installed in finished rooms, including closets. Balance dampers shall be installed and/or ductwork shall be sized to control the flow of air to all supply registers. Dampers shall be labeled, indicating the rooms served and the system shall be balanced. New supply outlets may be installed in floors and walls. When installed in the floor, outlets shall be no closer than 6 inches to any wall. Supply outlets installed in outside walls shall be located in front of windows. Basements need not have a separate supply outlet unless specified. All supply registers shall be equipped with shut off dampers. Return air inlets shall be located in walls or floors, as is appropriate to their size and function. Supply and return ducts in unheated space shall be insulated to a minimum R-19. Insulation level and installation shall comply with current State of California or utility company specifications. These specifications shall be included in the Invitation to Bid. Where ducts are used for cooling, insulation shall be covered with a sealed joint vapor barrier. All forced air heating ducts shall be sealed according to CA Title 24 current duct sealing procedures using acceptable materials. PAINTING GENERAL INSTRUCTIONS: The quality of paints and related materials shall equal or exceed those first grade and related materials manufactured by: Olympic Stain Glidden Dunn Edwards "or equal" Benjamin Moore Frazee's Sherwin Edwards All paints, primers, solvents, glues, mastics, etc. must qualify as low-VOC unless unavailable in the market place for the specific work specified. Paint shall be understood to include not only paints but also primers, enamels, sealers, stains and other coatings, plus all paint accessory materials. The addition of thinners, quick drying additives, or other adulterants of any kind shall not be permitted, except as specifically recommended by the manufacturer. The use of splatter -dash technique for appearance purposes on interior surfaces shall be limited to "orange peel "or other fine -medium texture only. Texture shall not be applied to any trim, woodwork or metalwork. Any atypical paint applications and color schemes shall be paid for by the owner. Certain finish coats are formulated to serve as primers and may be so used when applied in accordance with manufacturer's recommendations. Paint shall not be applied until surfaces are thoroughly dry, excepting certain masonry paints formulated for application to wet surfaces. Contractor shall assume responsibility for such conditions and shall make good any work executed prematurely. Any work which is damaged by the contractor or his/her employees, or for any reason is unacceptable, shall be repaired or redone to match surrounding areas. All touch up painting shall match surrounding areas. No exterior painting shall be done unless the temperature is between 50 degrees F. and 100 degrees F. and is expected to remain above freezing (32 degrees F.) for at least 24 hours. Items or surfaces for which colors or finishes are not selected shall be painted or finished to match the adjacent background or adjacent finish colors or stains. Such items shall include, but not limited to, roof vents (color of roof), covers, housings, brackets, piping, duct work, drain pipes, conduit, access panels, unfinished or prime coated hardware, grills, registers, louvers, cabinets, electrical panels and similar items. New and previously unpainted hardware accessories and electrical equipment are not to be painted. Switches and their cover plates shall not be painted. Painter shall remove these items as necessary, reinstalling them when his/her work is completed. Square foot coverage per gallon shall be as recommended by the manufacturer. Paint shall have easy brushing properties. Paint shall be kept well stirred during painting and be screened free from skim, lumps and foreign matter. No paint, nor the residue thereof, shall be used after it is caked or hardened. Paint shall be worked into all corners, voids and joints. All surfaces other than those of metal items shall receive two coats of paint and all coats shall be thoroughly dry prior to application of next. Initial primer coat may be counted as one coat of the two required coats of paint, provided adequate hiding has been obtained. Tinted primer coats are acceptable. Additional coats may be required if the finish does not provide acceptable coverage or hiding. Finished work shall be uniform, free of runs and sags, smooth, free from brush marks and of uniform color. Where paint adjoins other materials or where different colors meet, the edges of the paint shall be sharp and clean. Upon completion, the entire area shall be cleaned and left in a neat condition, including removal of all overspray. All paint shall carry a minimum manufacturer's durability warranty of 10 years, and the contractor will fully guarantee the job for one year. At least 1/2 gallon of each color used shall be left with the owner, with label attached. Colors of all paint are the owners' choice, subject to the Secretary of the Interior's guidelines in the case of historic buildings. EXTERIOR PAINTING GENERAL INSTRUCTIONS: All surfaces to be painted shall have all loose, blistered, scaling, alligatored and crazed coatings removed and shall be thoroughly cleansed to receive new paint. Paint may be applied by any of the following: brush, roller, air compressor, or airless sprayer, unless otherwise specified in the Invitation to Bid. When exterior paint is applied to correct a lead base paint problem, it shall be the contractor's responsibility to insure that the old paint that has been removed from the exterior of the house is removed from the premises according to state and local laws and guidelines. PREPARATION: Secure loose material and reset nails as needed. Caulk at all joints where caulking has deteriorated and/or is missing. Remove all miscellaneous nails, hooks, screws, tacks, etc. Remaining holes, those no larger than a dime, shall be properly filled depending on the surrounding surface material. All patches shall be sanded smooth. All windows, doors and other openings shall be re -caulked. All dried out or otherwise deteriorated glazing compound shall be replaced. If any area to be painted shows signs of mildew, those areas shall be cleaned, sanded and sealed before painting. Exterior preparation work must be inspected by NCRRP Staff prior to application of primer. After notification by the contractor, preparation work will be inspected in a timely manner. WOOD TRIM, MILLWORK AND SIDING: Sandpaper new millwork prior to application of primer or stain. Reset all loose nails and putty all nail holes and minor cracks in wood with putty after spot priming these areas with exterior oil base primer. Scuff sand all trim to remove gloss and provide tooth for adhesion of new paint. Prime coat all knots and resinous wood with a prepared knot sealer or aluminum paint (which is not considered a primer coat). Apply one coat of exterior oil base primer to all new and bare wood surfaces. Then apply two coats of exterior, non -chalking, oil base or latex paint to all wood surfaces. Doors and sash and their trim shall be gloss finish. Wherever encountered, do not paint natural finish ceiling surfaces unless specified in the Invitation to Bid. First prepare these surfaces to be refinished. Then apply at least two coats of spar varnish or polyurethane varnish formulated for exterior use. Likewise, do not paint natural finish wood shingles, shakes, or rough sawn siding unless painting of this siding is specified. Instead, apply two coats of oil or pigmented oil stain. When necessary, stain new sections of siding to match existing. WOOD DOORS: Wood doors are to be natural finished unless otherwise specified. Prepare door for new finish. All door edges are to be eased. Edges, including the top and bottom, shall receive the same finish as the faces. Natural finish for new doors shall be one coat of stain (owner's choice of color) and at least two coats of clear sealer formulated for exterior use. Paint for new doors and existing doors shall be one coat of exterior oil base primer and one coat of exterior oil base paint. WOOD STEPS AND DECKS: Caulk all joints between wood surfaces and walls. Reset all loose nails. Apply at least two coats of oil base exterior floor or deck enamel in accordance with manufacturer's recommendations. CONCRETE AND MASONRY SURFACES: Whether specifically scheduled or not, if exterior foundation walls are badly stained or splattered with paint during painting, they shall be painted to be in harmony with the siding. Apply at least two coats of resin -emulsion paint, solvent rubber paint or floor and deck enamel to horizontal surfaces. If oil base paint is used, neutralize surface before painting. Walls shall receive at least two coats of polyvinyl acetate emulsion paint. Surfaces which have been waterproofed shall be treated as per manufacturer's instructions prior to painting. GUTTERS AND DOWNSPOUTS: Gutters and downspouts shall match trim color on house if being repainted. INTERIOR PAINT GENERAL INSTRUCTIONS: All surfaces to be painted shall have all loose, blistered, scaling, and alligator coating removed and shall be thoroughly cleansed to receive new paint. When painting wallpapered surfaces the wall paper must be tight and edges or joints feathered where necessary. Secure loose material and reset nails. Remove all miscellaneous nails, hooks, screws, and tacks from walls and wood work. Patch all holes with spackle or oil base putty depending on the surface material. All patches shall be smoothly done and all rough edges sanded smooth. Seal all un-removable grease spots or stains with sealers and/or primers designed for that purpose. Kill stain or seal all varnished wood surfaces before painting so that desired coverage is obtained. If any area to be painted shows signs of mildew, those areas shall be cleaned, sanded and sealed before painting is done. Painting by room shall include walls, ceiling, doors, windows (including those surfaces exposed by opening), trim, cabinet work, miscellaneous shelving, shall be painted and/or refinished as specified. A closet is considered a part of the room in which it is located, as well as closet rods and shelves and bracing and drawers. Natural finished items are not to be painted unless specified. Interior of cabinets will not be included unless specified. DRYWALL OR PLASTER WALLS AND CEILINGS: Hairline cracks and scraper dents shall be spackled and sanded. Open cracks shall be raked out and damaged plaster shall be removed. Apply new plaster in coats thin enough to prevent shrinkage. All repair work, when completed, shall match existing surfaces, present a neat appearance and be free of hairline cracks and bulges. All surfaces shall be washed or sanded prior to painting. Previously painted surfaces shall receive at least two coats of interior latex or oil base paint. New plaster or drywall shall receive a first coat of interior primer and at least two additional coats of paint. Paint for kitchens, bathrooms and utility rooms shall be semi -gloss enamel. Surfaces shall be painted with a roller and/or brush except that certain types of texture finish ceilings cannot be satisfactorily painted with roller or brush. These surfaces only may be spray painted. WOOD WINDOWS AND DOORS: All door edges shall be eased. If new wood is open grain type, fill or seal surface to prevent grain rising. Apply one coat of suitable oil base primer to all new and bare wood surfaces. Then apply at least two coats of interior semi -gloss enamel (oil base or latex) to all surfaces. Edges - top sides and bottom shall be painted the same as the door faces. Color shall match adjacent wall surfaces. Painting shall be done with brush only. For natural finish, all door edges shall be eased. Apply one coat of penetrating sealer to all trimmed door edges. All interior doors, if not pre -finished, shall receive at least two coats of spar varnish or polyurethane varnish. Edges - top, bottom and sides shall be finished the same as door faces. Varnish shall be applied with brush only. WOOD TRIM, MILLWORK, PANELING, CABINET WORK AND SHELVING: It is not intended that cabinet work and other wood surfaces scheduled for refinishing or painting be completely stripped down to bare wood. Rather, it is intended that scratches and other surface blemishes be treated so as to make them unnoticeable. Gloss shall be removed from all enamel surfaces to be painted. Stain or prime and finish as necessary. If interior of cabinets are to be refinished, it will be scheduled separately. For painting, sandpaper new millwork prior to application of primer. Reset loose nails. All nail holes shall be filled and sanded prior to painting. If new wood is open grain type, fill or seal surfaces to prevent grain rising. Apply one coat of a suitable primer to all new and bare wood surfaces. Then apply at least two coats of interior semi -gloss enamel (oil base) to all surfaces. Color shall match adjacent wall surfaces, unless scheduled otherwise. Painting shall be with brush only. For natural finish, sandpaper new millwork prior to application of finish. All wood to be refinished shall be first prepared as necessary to receive new finishes. Loose nails shall be reset and all holes shall be filled with linseed oil putty. If new wood is open grain type, surfaces shall be filled or sealed to prevent grain rising. New or bare wood shall be stained to match existing as closely as possible. All natural finish wood shall receive at least two coats of varnish, shellac, lacquer or polyurethane coating as appropriate to its intended use. Application shall be with brush only. LEAD BASED PAINT ABATEMENT If a painting instruction is rioted in the Invitation to Bid as a "Lead based abatement project "the following procedures must be followed. EXTERIOR: All loose, blistered, scaling, and alligator paint coatings shall be removed by hand scraping with appropriate containment based on the EPA Lead Renovation, Repair and Painting Program effective April 22, 2010. Machine sanding and the use of propane torches are not allowed. All paint film that has been removed from the house must be captured on drop cloths, removed from the premises, and disposed of in accordance with local and state regulations. INTERIOR: Interior lead based paint can be abated either by removal and repainting or by covering with fiberglass cloth, sheetrock, or non -strippable wallpaper. In areas of paint removal, disposal shall be the same as exterior described above. NOTICE: Contractors participating in the NCRRP are ultimately responsible for full compliance with Federal, State and Local regulations regarding lead based paint abatement, disposal and worker protection. Exhibit I: First -Time Homebuyer Assistance Program Manual SAN DIEGO HABITAT FOR HUMANITY FIRST-TIME HOMEBUYER ASSISTANCE PROGRAM MANUAL City of National City Housing and Grants 1243 National City Blvd. National City, CA 91910 (619) 336-4391 (619) 336-4286 Fax EFFECTIVE: October 17, 2012 (Subject to change) EQUAL HOUSING OPPORTUNITY Exhibit I: First -Time Homebuyer Assistance Program Manual TABLE OF CONTENTS Effective October 17, 2012 PURPOSE OF THE PROGRAM MANUAL GENERAL DEFINITIONS SECTION I -BORROWER ELIGIBILITY REQUIRMENTS A. ELIGIBLE BORROWER B. INCOME CRITERIA C. HOUSEHOLD ELIGIBILITY REQUIREMENTS D. ELIGIBLE PROPERTIES E. MAXIMUM PURCHASE PRICE F. LOAN PROCEDURES AND TERMS APPENDIX A- INCOME APPENDIX B- SHARED EQUITY EXAMPLE APPENDIX C- HOME REGULATORY AGREEMENT APPENDIX D- DEED OF TRUST APPENDIX E- PROMISSORY NOTE 2 Exhibit I: First -Time Homebuyer Assistance Program Manual PURPOSE OF THE PROGRAM MANUAL The purpose of this Program Manual is to describe the program and delineate the role of the City, San Diego Habitat for Humanity Community Housing Corporation ("SD-HFH"), the applicant/borrower and the lenders. This document contains a description of the City of National City First -Time Homebuyer Program requirements. Loan documents are attached in the Appendix. GENERAL DEFINITIONS AFFIDAVIT: A deposition filed in connection with the program made under oath and subject to penalties of perjury. APPLICANT: Any person who applies for City loan assistance. ASSETS: Cash or a non -cash item that can be converted to cash. Assets exclude necessary personal property. CITY: The City of National City. COMMITMENT: A document, which is originated and issued by the SD-HFH, based on review and approval of the application package and lender's certification that the requirements necessary for issuance of a City loan have been met. San Diego Habitat for Humanity Community Housing Corporation, Inc. ("SD-HFH"): City selected HOME CHDO subrecipient that will process, underwrite, close, and package, and service the loan. ELIGIBLE BORROWER: Any person meeting the criteria as set forth in this manual. ELIGIBLE DWELLING: Real property located within the City of National City. This may include a residential unit to be built, a new unit, or an existing. The unit must be designed as a residence for one household and must meet property standards and criteria as set forth in this manual. EQUITY: The dollar amount that constitutes the difference between the sales price of the Property and the sum of the following amounts; 1) principal on the First Note and Deed of Trust; 2) principal on the Second Note and Deed of Trust to the City of National City; 3) all costs of sale, including costs of brokers' commissions, escrow fees, title costs and fees, recording costs, etc.; 4) current year taxes, including all real estate taxes calculated to the date of sale; 5) borrower's down payment not including the loan from the City to Borrower; 6) costs of any capital improvements to the Property, provided such improvements were approved by the City prior to construction and provided that such improvements have been documented to the satisfaction of the City. EQUITY SHARE: The equity share starts at 50%/50% between the Borrower and the City. The amount of the Borrower's share in the Equity of the Property shall increase by five percent (5%) per year, measured on the anniversary date of the Deed of Trust. Correspondingly, the City's share in the equity of the Property shall decrease by five percent (5%) per year. In the event that no Equity exists at the time of transfer or sale, the City loan (HOME funds) will still be due and payable. In the event that a negative Equity situation exists, and the full amount of the City loan is not available to be recaptured, the amount of the loan required to be repaid to 3 Exhibit I: First -Time Homebuyer Assistance Program Manual the City will be set forth in the HOME agreement between the Borrower and the City. A Shared Equity example is attached as Appendix B. EXISTING HOME (RESALE HOME): A dwelling unit that has been previously occupied. HOME FUNDS/HOME INVESTMENT: Funds received pursuant to the HOME Investment Partnership program under the Department of Housing and Urban Development (HUD), codified at 42.U.S.C. Section 12701, et seq., 24 CFR Part 92, to provide funds for affordable housing HOMEOWNER INVESTMENT: Homeowner's down payment and any capital improvement investment made by the owner since purchase INCOME: The gross amount of all taxable income for all mortgagors and adult household members that is anticipated to be received during the coming twelve (12) months. All income derived from any source, including income from wages (gross pay,) overtime, pensions, veteran's compensation, bonuses, public assistance, alimony, net rental income, dividends and interest, etc. must be included. Non-taxable income must be listed, but bracketed, in order to exclude this income from the annual family income calculation; verification of non-taxable status may be required. ISSUER: The City of National City. LENDER: A financial institution, whether broker, retail, or wholesale, licensed to provide mortgage loans in the State of California. The institution must meet all the requirements established by the City in order to participate as a lender in the City program LOAN: An extension of credit provided to an Eligible Borrower to finance the purchase of an Eligible Dwelling LOW-INCOME: A household with income at or below 80% of the Area Median Income as established by the U.S. Department of Housing and Urban Development. Every 12-18 months, the U.S. Department of Housing and Urban Development updates these figures NEW HOME: A dwelling unit that is proposed to be constructed, is currently under construction, or exists but has not been previously occupied. NET PROCEEDS: Sales price minus loan repayment and closing costs. OWNERSHIP: Any of the following interests in residential property: fee simple interest; joint tenancy; tenancy in common; interest of a tenant -shareholder in a cooperative; life estate; interest held in trust for the Applicant that would constitute a present ownership interest if held by the Applicant. PRINCIPAL RESIDENCE: Residence must be occupied as the primary home of the buyer and be defined as one of the following types of residences: 1) single-family house; 2) condominium unit; 3) town home unit PROHIBITED MORTGAGE: Subordinate mortgages and any liens superior to the City First - Time Homebuyer loan, other than the new first Trust Deed. PROPERTY VALUE: Value of the eligible property as determined by a certified appraisal 4 Exhibit I: First -Time Homebuyer Assistance Program Manual PURCHASE PRICE: Cost of acquiring the residence, excluding usual and reasonable settlement or finance costs, and the value of services performed by mortgagor in completing the acquisition. RELATED PERSON: Any party(ies) who may have a beneficial interest in the sale or financing of the subject property, other than a qualified lender SINGLE-FAMILY RESIDENCE: Housing unit intended and used for occupancy by one household 5 Exhibit l: First -Time Homebuyer Assistance Program Manual BORROWER ELIGIBILITY REQUIREMENTS Both federal and state law sets borrower eligibility requirements. Income guidelines are modified based on federal directives every twelve to eighteen months. The City will notify the Lenders when those changes take place, including the effective date of each change. A. ELIGIBLE BORROWERS 1. Qualified applicants must be first-time homebuvers. The Applicant may not have held an ownership interest in his/her Principal Residence within the past thee years. This timeframe includes those 36 months before the date the mortgage is executed. In the case of a married couple, both parties must meet this requirement. The buyer, spouse and any other parties who will be listed on title must meet this requirement. The Lender must verify this through his/her examination of the Applicant's federal tax returns for the preceding three years. The Applicant(s) cannot have claimed a deduction for mortgage interest or taxes on real property claimed as a Principal Residence. 2. To demonstrate compliance with this requirement, Applicants must complete and sign the First-time Homebuyer Application and Affidavit and provide copies of their last three (3) years signed federal tax returns (or acceptable alternative exhibits). a) The Applicant(s) can provide the signed 1040A 1040EZ or 1040 federal income tax forms for the preceding years, including all schedules. These forms shall be submitted to the Lender and forwarded to the City with the completed loan application. The tax returns must be signed and dated in blue ink by the Applicants. b) If the Applicant(s) has/have filed the short form, 1040A or 1040EZ for the last three (3) years, completes and signs the required affidavits, but is unable to produce copies of the signed returns, the City will accept a completed copy of IRS Letter Form 1722 in lieu of actual returns. The Applicant may request this letter, free of charge, from the local IRS Office. The Letter 1722 must include the signature of a representative of the IRS. Letter Form 1722 should include the following information: Name and social security number ii. Type of return filed Marital status iv. Tax shown on return v. Adjusted gross income vi. Taxable income vii. Self-employment tax viii. Number of exemptions c) In the event the Applicant(s) was not obligated to file federal income tax returns for any of the preceding three (3) years, it will be necessary for the Lender to obtain a completed and signed Income Tax Affidavit from the Applicant, which is required in place of the above. This document is to be forwarded to the City with the application package. d) If either copies of the required tax returns or the 1722 Form cannot be obtained, the Lender may be able to help the Applicant establish first-time homebuyer status with copies of utility bills and a signed and notarized statement from the Applicants landlords for the previous three years. e) When the Commitment is issued during the period between January 1 and February 15 and the Applicant has not yet filed his/her/their Federal Income Tax Return for the preceding year, the City may rely on an affidavit. The affidavit must affirm that the Applicant is not entitled to claim deductions for taxes or interest on a principal residence for the preceding year. After February 15, a tax return will be required. 3. Upon close of escrow, the buyer must occupy the home as their Principal Residence. 6 Exhibit I: First -Time Homebuyer Assistance Program Manual 4. Applicant(s) need not be a U.S. citizen. Legal resident aliens are eligible to apply but must show proof of status. 5. City of National City employees are eligible to participate. B. INCOME CRITERIA 1. Income must be at or below 80% of the currently published San Diego County median income, adjusted for household size. Income limits have been established by the U.S. Department of Housing and Urban Development and are adjusted annually. In accordance with this requirement, applicants may not obtain "stated income" loans. The true income must be a qualifying factor in loan approval. Household Size Annual Income 1 person $ 45,000 2 people $ 51,400 3 people $ 57,850 4 people $ 64,250 5 people $ 69,400 6 people $ 74,550 7 people $ 79,700 8 people s 84,850 Effective December 2011 2. Gross income is calculated by taking the Applicant's anticipated adjusted gross monthly income, at the time of application, and multiplying it by twelve. Adjusted gross income includes the gross amount of all taxable income, before payroll deductions of: wages, salaries, commissions, fees, tips and bonuses, alimony, public assistance, etc. The adjusted gross income also includes the income earned on assets, such as dividends earned on stock and interest earned on savings and checking. The adjusted gross income qualification is pursuant to the 24 CFR 92.203(b)(3) for reporting under the IRS Form 1040 series for individual federal annual income tax purposes. Gross income includes the combined taxable adjusted gross income of all mortgagors and all other adult members of the household. a. Self-Emploved or Seasonal Employees: The formula that the Lender uses to determine the anticipated gross monthly income of self-employed and/or seasonal workers is acceptable provided that all income as described in this manual is included in the calculation. b. Co-Borrower/Co-Mortgagor: If a co -borrower or co -mortgagor will be on both the title and the deed of trust, his/her income must be included in determining eligibility for the program. The IRS regulation states "income to be taken into account in determining gross income is income of the mortgagor(s) and any other person who is expected to both live in the residence being financed and to be secondarily liable on the mortgage." c. Spouses: Married couples are treated as co -applicants, whether: 1) they are separated; 2) either spouse is applying for the loan; or 3) either spouse plans to be named on title. d. Computing Income i. Program Computation vs. Mortgage Underwriter's Computation: The City loan figure represents ANTICIPATED income, while the Lender's figure represents income AVERAGED over the last few years and the City program requires that every source of taxable and non-taxable income be listed on the Income Computation Worksheet, however, non-taxable income should be bracketed and not added into the maximum annual family income calculation. 7 Exhibit I: First -Time Homebuyer Assistance Program Manual ii. Income Parameters: See Appendix A of this manual for examples of sources of income, which must be considered in computing buyer income. iii. Military Pay: See Appendix A of this manual for Military Pay explanations. iv. Self -Employed: Year-to-date profit and loss statement and three prior year's tax returns are required. v. Other Income: Sources of income other than wages must be documented by third party verifications. In cases where the third party fails to respond, acceptable alternative sources of documentation can be determined on a case -by -case basis and should follow standard FNMA income verification guidelines. vi. Documentation: In cases where the Applicant is employed, acceptable sources of documentation used to verify income include a recent pay stub with year-to-date earnings and an employer Verification of Earnings statement (VOE). If the application is taking place during the first four months of the year, a year-to-date total may be insufficient. The Lender must supplement the pay stub information with the prior year W-2 statement and/or tax returns. On some pay stubs, the year-to-date earnings include pay from the last part of the prior year. If this is determined to be the case, request that the employer submit a signed statement of verification of exact year-to-date income. Miscalculation can result in the determination of excess income and disqualification of the buyer. vii. Income Verification: The Lender bears the burden of proving that the Buyer's income is within the program guidelines. The computation should be clear, complete, and documented by third party verifications, to the greatest extent possible. viii. No Income: Adult members, 18 years and older, of the household who have no income must complete and sign the Declaration of No Income form. C. HOUSEHOLD ELIGIBILITY REQUIREMENTS 1. Households shall have sufficient income and credit -worthiness to qualify for primary financing from a participating lender. 2. Maximum liquid assets after down payment and closing cost contribution may not exceed $25,000. D. ELIGIBLE PROPERTIES Properties acquired and rehabilitated by SD-HFH that have met local code inspection standards and complied with lead -based paint regulations as prescribed by the City. The program may also be used on new construction projects SD-HFH. E. MAXIMUM PURCHASE PRICE The maximum purchase price cannot exceed 95 percent (95%) of the median purchase price for the area, as determined by the U.S. Department of Housing and Urban Development (1 unit-$394,250, effective 12/2011). F. LOAN PROCEDURES AND TERMS 1. The loan amount shall be the difference between the sales price, less any down payment, and the amount of the first mortgage for which the Eligible Household has been provided a bona fide lender approval. 2. The maximum CLTV (combined loan to value) of the City and the new 1st Trust Deed loans shall not exceed the maximum approved CLTV required by the 1st mortgage lender. 3. Non -occupant co -borrowers shall not be allowed. 8 Exhibit I: First -Time Homebuyer Assistance Program Manual 4. Total housing ratio (PITI) cannot exceed 36% of Applicant(s) gross monthly income. The City may make exceptions if less than twenty percent payment shock is involved. 5. Total debt -to -income ratio may not exceed 45% or 41% if obtaining an FHA loan. 6. No prepayment penalty allowed. 7. Maximum fees to the Applicant of 1.25% origination, discount points for below par pricing only, and $350 processing are acceptable for the purchase transaction. No other Broker or Admin type fees allowed. Other third party fees that are reasonable and customary are allowable. 8. The terms of the City's second trust deed are designed to encourage long-term residency in the program -assisted home. No interest is charged on the loan (except in the case of default). Instead, the program is based on an equity share. The amount of equity due to the City is based upon the number of years after the date of execution of the City's loan. It begins at 50% of the equity and decreases by 5% each year. After 10 full years of owner occupancy, there is no equity share. Only the principal remains due and payable. See shared equity example in Appendix B. 9. The loan shall become due and payable at the time of the property's transfer of title, refinance (except as earlier defined), rental or sale. 10. The loan shall also become due and payable when the acceleration clause is triggered. The acceleration clause will be in effect when the property is no longer the principal place of residency of the eligible homebuyer, or upon discovery of willful misrepresentation or fraud in connection with the program. Rental of the property is prohibited and will cause the loan to be accelerated. 11. Second and subsequent mortgages to the new First Trust Deed, except for this City Loan, are not permitted. 12. The loan is not assumable. 13.A Promissory Note and Deed of Trust will secure the loan. 14. The City Loan can be used with conventional, FHA, VA, and other loans issued be a qualified lender, except adjustable rate mortgages with Tess than five years fixed, negative amortization and stated income mortgages. 15. Lenders will process the underlying mortgages (first loan) using standard procedures, with adjustments to those procedures to conform to the City loan guidelines. 9 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX A INCOME GROSS ANNUAL INCOME Gross annual income is defined as the anticipated annualized gross taxable income of a mortgagor (or mortgagors) and adult members of the household. Annualized income is the sum of monthly gross taxable income multiplied by twelve (12). Gross monthly income includes all taxable sources of income derived from: gross pay, overtime compensation, part- time employment earning, bonuses, dividends, interest, royalties, pensions, Veterans Administration (VA) compensation, net rental income, alimony, public assistance payments, sick pay, social security benefits, unemployment compensation, income received from trusts, income received from business activities or investments, and any other source of taxable income not listed above. Information regarding income must be current within the most recent 30-day period preceding loan closing. Income not included by the Lender, but listed above, must be added to the Lender's income total on the "Income Computation Worksheet" income eligibility calculation for the City loan program. Income of the mortgagor (or mortgagors) and any other adult who is expected to live in the residence being financed must also be included in the household income calculation. All non-taxable income must be listed and bracketed on the "Income Computation Worksheet", but not counted when calculating the annual gross family income. In summary, income of all mortgagors (on both title and deed of trust) shall be included in the gross income calculation for the program. Additionally, the income of any adult who will live in the residence should be included. For married couples, income includes the income of both spouses, whether or not on title. MILITARY PAY For purposes of computing the buyer's gross monthly income, the monthly income is the "total entitlement" shown on the applicant's most recent monthly Leave and Earnings Statement and includes all regular pay, special pay and allowances. Non -taxed income, such as a housing allowance is not counted as income, but must be listed and bracketed. Certain categories of pay, which may be received only sporadically, may need to be considered on a case -by -case basis. 10 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX B SHARED EQUITY EXAMPLE NOTE: The following example assumes an initial (a) Gross Sales Price of $150,000 (b), Net Sales Price of $135,000 ($150,000 minus 10% seller fees), (c) 15t mortgage balance of $100,000 and City 2"d of $25,000 (d), Total Equity of $10,000 (b-c), and a City loan of $25,000.00 at a 0% interest rate, with an APR of 0%. The table is for the purpose of illustration only. Actual sales price and net sales price will vary. The principal amount of the loan remains due. # Months After Date Of Agreement Gross Sales Price (a) Net Sales Price (b) (a-10% fee) Mortgage Balances ( c ) (1st $100k & 2nd $25K) Total Equity ( d ) ( b-c) Buyer's Equity Share Increases 5% Per year City of Chula Vista's Equity Decreases 5% per year 0-12 $150,000 $135,000 $125,000 $10,000 $5,000 (50%) $5,000 (500/o) 13-24 $155,000 $139,500 $125,000 $14,500 $7,975 (55%) $6,525 (45%) 25-36 $155,000 $139,500 $125,000 $14,500 $8,700 (60%) $5,800 (40%) 37-48 $160,000 $140,000 $125,000 $15,000 $9,750 (65%) $5,250 (35%) 49-60 $160,000 $140,000 $125,000 $15,000 $10,500 (70%) $4,500 (30%) 61-72 $165,000 $148,500 $125,000 $23,500 $17,625 (75%) $5,875 (25%) 73-84 $165,000 $148,500 $125,000 $23,500 $18,800 (80%) $4,700 (20%) 85-96 $170,000 $153,000 $125,000 $28,000 $23,800 (85%) $4,200 (25%) 97-108 $170,000 $153,000 $125,000 $28,000 $25,200 (90%) $2,800 (10%) 109-120 $175,000 $157,500 $125,000 $32,500 $30,875 (95°/o) $1,625 (5%) Thereafter $175,000 $157,500 $125,000 $32,500 $32,500 (100%) $0 (0%) In this examp e, the finance charge could vary between $1,625 and $6,525. Your amount will differ, depend ng upon gross sales price, net sales price, the amount of equity, and the number of months after the date of agreement that the sales occurs. If the Property is sold in the first year of the term of the Note secured by this Deed of Trust, Borrower shall receive fifty percent (50%) of the Equity in the Property and the City shall receive fifty percent (50%) of the Equity. "Equity" is defined as the dollar amount that constitutes the difference between the sales price of the Property and the sum of the following amounts: 1. Principal on the First Note and the Deed Trust; and 2. Principal on this Second Note and Deed of Trust to the City of National City; and 3. All costs of sales, including cost of brokers' commissions, escrow fees, title costs and fees, recording cost, etc.; and 4. Current year taxes, including all real estate taxes calculated to the date of sale; and 5. Borrower's down payment not including the loan from the City to Borrower; and 6. All principal paid down on the First Note and Deed of Trust; and 7. Costs of any improvements to the Property provided such improvements were approved by the City prior to construction and provided that such improvements have been documented to the satisfaction of the City. 11 Exhibit I: First -Time Homebuyer Assistance Program Manual The amount of the Borrower's share in the equity of the Property shall increase by five percent (5%) per year, measured on the anniversary date of this Deed of Trust. Correspondingly, the City's share in the equity of the Property shall decrease by five percent (5%) per annum. For the sake of example, if the Property is sold more than (5) but less than six (6) years after the date of this Deed of Trust, the City would have a twenty-five percent (25%) share in the Equity and the Borrower would have a seventy five percent (75%) share in the Equity of the Property. In the event that no Equity exists at the time of transfer or sale, the balance of the Note will be due and payable. In the event that a negative Equity situation exists, i.e., the proceeds from the sale of the Property are less than the balance of the Note, all net proceeds from the transfer or sale shall be paid to the City, as beneficiary in full satisfaction of the Note. When the HOME recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the home investment due, the participating jurisdiction can only recapture the net proceeds, if any. The net proceeds are the sales price minus superior Loan repayment (other than HOME funds) and any closing costs. 12 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX C HOME REGULATORY AGREEMENT FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 WHEN RECORDED PLEASE MAIL TO: Office of the City Clerk City of National City 1243 National City Boulevard National City, CA 91950-4397 (SPACE ABOVE FOR RECORDER'S USE ONLY) APN: XXX-XXX-XX FTHB #XXXX HOMEOWNER'S REGULATORY AGREEMENT FOR HOME PROGRAM PARTICIPATION THIS REGULATORY AGREEMENT ("Regulatory Agreement" or "Agreement") is entered into as of this 18th day of January, 2011 between the City of National City ("City"), and a Qualifying Household, on behalf of itself and Borrower's Name ("Owner"). PREFACE WHEREAS, the City of National City receives a formula HOME Investment Partnerships ("HOME") Program allocation from the Federal Department of Housing and Urban Development to carry out eligible activities in accordance with program requirements; and WHEREAS, the Owner is interested in participating in City's HOME -funded First -Time Homebuyer Program, and will comply with all program regulations and requirements; and WHEREAS, concurrently with the recordation of this Regulatory Agreement the City is funding a loan ("Loan") secured by a deed of trust ("Deed of Trust") to aid Owner, who is a first-time homebuyer, in acquiring the Property described below. The Trust Deed and Loan by the City was conditioned in part upon the recordation of a document setting forth certain restrictions upon the use and sale of the Property; and WHEREAS, Owner will use the proceeds of such Loan for the acquisition of the real property with the street address of 1111 A Avenue, National City, California, 91950 more particularly described in Exhibit A attached and incorporated by this reference ("Property"); and WHEREAS, as further consideration for the Loan and to further the interests of the City, the Owner has agreed to enter into and record this Agreement. The covenants in this Agreement are intended to run with the land and be binding on the Owner for the full term of this Agreement. NOW, THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWS; 13 Exhibit I: First -Time Homebuyer Assistance Program Manual The Owner shall receive HOME Investment Partnership funds for investment in real property owned by the Owner, as evidenced by legal title or a valid contract of sale. Acting in this capacity, the Owner will comply with all aspects of HOME regulations 24 CFR §92.504 including the following: A. DEFINITIONS The following terms have the meanings and content set forth in this Section A where used in this Agreement or attached exhibits. 1. "AREA MEDIAN INCOME" means the median income for the San Diego County Primary Metropolitan Statistical Area (PMSA), with adjustments for household size, as adjusted from time to time by the U.S. Dept. of Housing and Urban Development (HUD). 2. "CITY" is of the City of National City, California, a public body corporate and politic. 3. "DEED OF TRUST" means any deed of trust, assignment of rents, and security agreement placed on the Property or any part thereof as security for any Loan and other obligations with Owner as trustor and City as beneficiary, as well as any amendments to, modification of, and restatements of said deed (s) of trust. 4. "EFFECTIVE PERIOD" means the period commencing on the date of this agreement and ending on the repayment of the Loan from the City, including the repayment of any required Equity as defined in Section E of the Agreement. 5. "EIGHTY PERCENT OF AREA MEDIAN INCOME" means annual income, which does not exceed eighty percent (80%) of the Area Median Income. 6. "HUD" means the United States Department of Housing and Urban Development. 7. "HOME FUNDS/HOME INVESTMENT": funds received pursuant to the HOME Investment Partnership Program under the Department of Housing and Urban Development (HUD), codified at 42 U.S.C. Section 12701, et seq., 24 CFR Part 92, to provide funds for affordable housing. 8. "HOMEOWNER INVESTMENT": homeowner's down payment and any capital improvement investment made by the owner since purchase. 9. "HOUSE" means the residential dwelling unit that is located on the Property. 10. "LOAN" is any Loan of funds provided by the City to any Owner for the purchase of the Property. 11. "LOAN DOCUMENTS" are collectively the Deed of Trust, Note, Note Rider, this Regulatory Agreement and any loan agreement, deed of trust, or promissory note entered into between City and Owner with respect to any of the Property, as they may be amended, modified or restated from time to time, along with all exhibits and attachments to these documents. 12. "NOTE" means the promissory note and note rider executed by Owner in favor of City evidencing any part of a Loan, which is secured by a Deed of Trust, as well as any amendments to, modifications or, or restatements of said promissory note. The Note will be on file with the City. 13. "OWNER" or "OWNERS" is the Qualifying Household that is the purchaser of the Property. 14. "PROPERTY" means the real property located at:1111 A Avenue, National City, California, 91950 and described in the attached Exhibit A, which is hereby incorporated into this Agreement by this reference, and any buildings or improvements now or hereafter situated on said real property. 15. "QUALIFYING HOUSEHOLD" means a household whose income is Eighty Percent of Area Median Income, as determined periodically by HUD, with adjustments in accordance with 24 CFR 92.252, and who is otherwise eligible to purchase the Property. 14 Exhibit I: First -Time Homebuyer Assistance Program Manual 16. "QUALIFYING SALES PRICE" means a sales price that does not exceed 95 percent (95%) of the median purchase price for the area, as determined by the U.S. Department of Housing and Urban Development. B. TERM OF AGREEMENT The term of this Agreement shall remain in full force and effect during the Effective Period regardless of any expiration of the term of any Loan, any payment or prepayment of any Loan, any assignment of a Note, any reconveyance of a Deed of Trust, or any sale, assignment, transfer, or conveyance of the Property, unless terminated earlier by the City in writing or extended by the mutual consent of the parties. However, failure to record this Agreement by the City shall not relieve Owner of any of the obligations specified herein. The covenants in this Agreement will run with the land for the benefit of the City and its heirs, assigns and successors and be binding on Owner and Owner's heirs, assigns and successors for the full term of this Agreement. C. USE OF FUNDS The Loan will be used to acquire the Property by the Owner who is a member of a Qualifying Household. D. AFFORDABILITY 1. The House will qualify as affordable housing and will have: (a) an initial purchase price that is a Qualifying Sales Price; and (b) an estimated appraised value at acquisition that does not exceed Qualifying Sales Price. 2. The House must be the principal residence of the Owner at all times during the Effective Period. 3. The deferred Loan for the HOME -assisted House is $ 40,000.00. E. RECAPTURE OF HOME FUNDS Pursuant to 24 CFR 92.254(a) (ii), the City requires that HOME funds be recaptured if the housing does not continue to be the principal residence of the family. If there is a "transfer," the principal amount of the Note, together with a share of the "Equity" (if any), as hereafter defined, shall be immediately due and payable to the City. A "transfer" means (i) all or any part of the Property or any interest in the Property that is sold, conveyed or transferred; (ii) Owner is not a natural person and a beneficial interest in Owner is sold, conveyed or transferred; (iii) all or any part of the Property is refinanced, except as otherwise allowed by law; (iv) Owner does not occupy the Property as his, her, or their, primary residence; (v) the leasing of all or any part of the Property; (vi) any material breach of the Note, Deed of Trust or this Agreement; or (vii) the filing of bankruptcy by the Owner. The Equity in the Property shall be calculated and shared between the Owner and City on the following basis: # Months After Date of Agreement Buyer's Equity Share (Increases 5% per year) City Equity Share (Decreases 5% per year) 0-12 (50%) (50%) 13-24 (55%) (45%) 25-36 (60%) (40%) 37-48 (65%) (35%) 49-60 (70%) (30%) 61-72 (75%) (25%) 73-84 (80%) (20%) 85-96 (85%) (15%) 97-108 (90%) (10%) 109-120 (95%) (5%) Thereafter (100%) (0%) If, for examp e, the Property is sold, rented, refinanced, conveyed, or transferred in the first year of the term of the Note secured by this Deed of Trust, Owner shall receive fifty percent (50%) of the Equity in the 15 Exhibit I: First -Time Homebuyer Assistance Program Manual Property and the City shall receive fifty percent (50%) of the Equity. "Equity" is defined as the dollar amount that constitutes the difference between the sales price of the Property (or in the event of a sale of the Property for an amount other than its fair market value or where there is no price established for the Property (i.e., rental or refinancing the Property, Borrower's failure to occupy the Property, material breach of the Note, Deed of Trust or this Agreement; or the filing of bankruptcy by the Borrower, the fair market value of the Property determined by an appraiser chosen by the Beneficiary in its sole discretion) and the sum of the following amounts: (a) principal on the First Note and the Deed of Trust, along with any interest and fees due thereon; and (b) principal on the Note and Deed of Trust, along with any interest and fees due thereon; and (c) all costs of sale, including costs of brokers' commissions, escrow fees, title costs and fees, recording costs, etc.; and (d) current year taxes, including all pro-rata real estate taxes calculated to the date of sale; and (e) borrower's down payment not including the Loan from the City to the Owner; and (f) all principal paid down on the First Note and Deed of Trust; and (g) costs of any improvements to the Property, provided such improvements were approved by the City prior to construction and provided that such improvements have been documented to the satisfaction of the City. The amount of the Owner's share in the Equity of the Property shall increase by five percent (5%) per year, measured on the anniversary of the date of the Deed of Trust is recorded against the Property. Correspondingly, the City's share in the equity of the Property shall decrease by five percent (5%) per annum. For the sake of example, if the Property is sold more than five (5) but less than six (6) years after the date of the Deed of Trust is recorded against the Property, the City would have a twenty five percent (25%) share in the Equity and the Owner would have a seventy five percent (75%) share in the Equity of the Property. In the event that no Equity exists at the time of transfer or sale, the balance of the Note (item E.1.b above) will be due and payable as provided herein. In the event that a negative Equity situation exists, i.e., the proceeds from the sale of the Property are less than the balance of the Note, all net proceeds from the transfer or sale shall be paid to the City, as beneficiary in full satisfaction of the Note. When the HOME recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the home investment due, the participating jurisdiction can only recapture the net proceeds, if any. The net proceeds are the sales price minus superior Loan repayment (other than HOME funds) and any closing costs. F. PROPERTY MAINTENANCE AND SECURITY During the Effective Period, Owner shall at his or her own expense maintain the Property in good condition, in good repair, and in decent, safe, sanitary and habitable living conditions for the benefit of that Owner's household. Owner shall maintain the Property in conformance with all applicable state, federal and local laws, ordinances, codes and regulations. In the event that Owner fails to maintain the Property in accordance with these standards and after at least thirty (30) business days prior notice to Owner, the City or the City's contractor or agent may, but shall be under no obligation to, enter upon the Property, make such repairs or replacements as are deemed necessary in the City's discretion, and provide for payment thereof. Any amount advanced by the City to make such repairs, together with interest thereon from the date of such advance at the rate of seven percent (7%) per annum (unless payment of such an interest rate would be contrary to applicable law, in which event such sums shall bear interest at the highest rate then allowable by applicable law), shall become an additional obligation of the Owner to the City and shall be secured by any Deed of Trust, if not previously reconveyed. 16 Exhibit I: First -Time Homebuyer Assistance Program Manual G. REPAYMENTS HOME Funds that are loaned to the Owner are to be remitted (principal and interest, as warranted) to the City to be retained and used as program income to originate additional Loans to First -Time Homebuyers. H. PROPERTY REQUIREMENTS Compliance with the following requirements is required as follows: 1. Maximum per -unit subsidy amount. The amount of HOME funds that a participating jurisdiction may invest on a per -unit basis in affordable housing will not exceed the per -unit dollar limits established by HUD. 2. Property Standards. Housing that is assisted with HOME funds, at a minimum, must meet Section 8 Housing Quality Standards. 3. Property Cost Limits. The value of acquisition and development of the housing unit, located in the City of National City must not exceed 95 percent (95%) of the median price for the area, as determined by the U.S. Department of Housing and Urban Development. 4. Occupancy Requirements. The HOME Program requires that occupancy standards must be maintained for the Effective Period for each of the assisted Houses as follows: (a) The prospective purchaser must be low income; that is, the purchaser must have an annual (gross) income that does not exceed Eighty Percent (80%) of Area Median Income, which will be determined at either the time the household initially occupies the property or at the time the HOME funds are invested; whichever is later. (b) Each Owner must occupy the property as a principal residence. Only Loan default and subsequent foreclosure negates the principal residence limitation. 5. Ownership Interest. The purchaser must have fee simple title upon sale of a HOME -assisted unit or cooperative ownership interest upon sale of a HOME -assisted unit. 6. Refinance. The City will subordinate to the following refinance situations only, subject to City approval and additional documentation is required: (a) FHA streamline refinance, with a reduction in total PITI and no cash out. (b) VA rate reduction refinance, with a reduction in total PITI and no cash out. (c) Conventional rate and term refinance, with a reduction in total PITI and no cash out. I. REVERSION OF ASSETS Owner must transfer to the City any HOME funds remaining in the Property after the time of expiration of the Effective Period when there is a change to title on the Property or any sale, rental, refinance, conveyance or transfer of Property. Any funds received as a result of this reversion of assets shall be used for additional HOME -eligible activities. J. DEFAULTS AND REMEDIES In the event of any breach or violation of any agreement or obligation under this Agreement, the City may proceed with any or all of the remedies as described in paragraph 18 of the Deed of Trust. K. NON -LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS No officer, official, director, employee, agent or representative of the City shall be personally liable to Owner for any obligation created under the terms of this Agreement except in the case of actual fraud or willful misconduct by such person. L. INDEMNITY 17 Exhibit I: First -Time Homebuyer Assistance Program Manual Notwithstanding the insurance coverage required herein, Owner shall indemnify and hold City and its officers, officials, directors, employees, agents and authorized representatives (each, an "Indemnified Party," and collectively, "Indemnified Parties"), free and harmless against any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including attorney's fees) which any Indemnified Party may incur as a direct or indirect consequence of (1) Owner's failure to perform any obligations as and when required by this Agreement; (2) any failure of any of Owner's representations or warranties to be true and complete; or (3) any act or omission by Owner or any contractor, subcontractor, management agent, or supplier with respect the Property, except where such losses are caused by the sole negligence or willful misconduct of Indemnified Parties. Owner shall pay immediately upon the City's demand any amounts owing under this indemnity. The duty of the Owner to indemnify includes the duty to defend Indemnified Parties in any court action, administrative action, or other proceeding brought by any third party arising from the Property. Owner's duty to indemnify Indemnified Parties shall survive the term of this Agreement. M. SUBORDINATION This Agreement shall be subordinated in priority only to the liens and encumbrances approved in writing by the City in its sole and absolute discretion. N. GENERAL PROVISIONS 1. Governing Law. This Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law. 2. This Agreement Controls. In the event that any provisions of this Agreement and any Loan Documents conflict, the terms of this Agreement shall control. 3. Time. Time is of the essence in this Agreement. 4. Consents and Approvals. For those provisions of this agreement which are expressly subject to consent or approval of the City, said consent or approval shall not be unreasonably withheld. Any approval must be in writing and executed by an authorized representative of the City. 5. Notices, Demands and Communications. Formal notices, demands and communications between Owner and the City shall be sufficiently given and shall not be deemed given unless dispatched by mailing it first class mail or by certified mail, return receipt requested, to the principal offices of Owner and City as follows: Housing and Grants City of National City 1243 National City Boulevard National City, CA 91950-4397 New Owner: Borrower Address: 1111 A Ave National City, CA 91950 Any such written communications by mail shall be conclusively deemed to have been received by the addressee five days after the deposit thereof in the United States Mail, postage prepaid and properly addressed as noted above. 6. Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 7. Attorney's Fees. in the event of any litigation over the performance of this Agreement, the prevailing party shall be entitled to attorney's fees and costs incurred during the course of litigation. 18 Exhibit I: First -Time Homebuyer Assistance Program Manual IN WITNESS HEREOF, the City and the Owner have executed this Agreement as of the date first hereinafter set forth. City of National City By: Leslie Deese, City Manager Owner: By: Buyer 19 Exhibit I: First -Time Homebuyer Assistance Program Manual "Exhibit A" Legal Description (must be attached prior to recordation) The land referred to herein is situated in the State of CALIFORNIA, County of SAN DIEGO, and described as follows: 20 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX D DEED OF TRUST FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 WHEN RECORDED PLEASE MAIL TO: Office of the City Clerk City of National City 1243 National City Boulevard National City, CA 91950-4397 (SPACE ABOVE FOR RECORDERS USE ONLY) APN: XXX-XXX-XX FTHB #XXXX HOMEOWNER'S REGULATORY AGREEMENT FOR HOME PROGRAM PARTICIPATION THIS REGULATORY AGREEMENT ("Regulatory Agreement" or "Agreement") is entered into as of this 18th day of January, 2011 between the City of National City ("City"), and a Qualifying Household, on behalf of itself and Borrower Name ("Owner"). PREFACE WHEREAS, the City of National City receives a formula HOME Investment Partnerships ("HOME") Program allocation from the Federal Department of Housing and Urban Development to carry out eligible activities in accordance with program requirements; and WHEREAS, the Owner is interested in participating in City's HOME -funded First -Time Homebuyer Program, and will comply with all program regulations and requirements; and WHEREAS, concurrently with the recordation of this Regulatory Agreement the City is funding a loan ("Loan") secured by a deed of trust ("Deed of Trust") to aid Owner, who is a first-time homebuyer, in acquiring the Property described below. The Trust Deed and Loan by the City was conditioned in part upon the recordation of a document setting forth certain restrictions upon the use and sale of the Property; and WHEREAS, Owner will use the proceeds of such Loan for the acquisition of the real property with the street address of 1111 A Avenue, National City, California, 91950 more particularly described in Exhibit A attached and incorporated by this reference ("Property"); and WHEREAS, as further consideration for the Loan and to further the interests of the City, the Owner has agreed to enter into and record this Agreement. The covenants in this Agreement are intended to run with the land and be binding on the Owner for the full term of this Agreement. NOW, THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWSi The Owner shall receive HOME Investment Partnership funds for investment in real property owned by the Owner, as evidenced by legal title or a valid contract of sale. Acting in this capacity, the Owner will comply with all aspects of HOME regulations 24 CFR §92.504 including the following: 21 Exhibit I: First -Time Homebuyer Assistance Program Manual D. DEFINITIONS The following terms have the meanings and content set forth in this Section A where used in this Agreement or attached exhibits. 17. "AREA MEDIAN INCOME" means the median income for the San Diego County Primary Metropolitan Statistical Area (PMSA), with adjustments for household size, as adjusted from time to time by the U.S. Dept. of Housing and Urban Development (HUD). 18. "CITY" is of the City of National City, California, a public body corporate and politic. 19. "DEED OF TRUST" means any deed of trust, assignment of rents, and security agreement placed on the Property or any part thereof as security for any Loan and other obligations with Owner as trustor and City as beneficiary, as well as any amendments to, modification of, and restatements of said deed (s) of trust. 20. "EFFECTIVE PERIOD" means the period commencing on the date of this agreement and ending on the repayment of the Loan from the City, including the repayment of any required Equity as defined in Section E of the Agreement. 21. "EIGHTY PERCENT OF AREA MEDIAN INCOME" means annual income, which does not exceed eighty percent (80%) of the Area Median Income. 22. "HUD" means the United States Department of Housing and Urban Development. 23. "HOME FUNDS/HOME INVESTMENT": funds received pursuant to the HOME Investment Partnership Program under the Department of Housing and Urban Development (HUD), codified at 42 U.S.C. Section 12701, et seq., 24 CFR Part 92, to provide funds for affordable housing. 24. "HOMEOWNER INVESTMENT": homeowner's down payment and any capital improvement investment made by the owner since purchase. 25. "HOUSE" means the residential dwelling unit that is located on the Property. 26. "LOAN" is any Loan of funds provided by the City to any Owner for the purchase of the Property. 27. "LOAN DOCUMENTS" are collectively the Deed of Trust, Note, Note Rider, this Regulatory Agreement and any loan agreement, deed of trust, or promissory note entered into between City and Owner with respect to any of the Property, as they may be amended, modified or restated from time to time, along with all exhibits and attachments to these documents. 28. "NOTE" means the promissory note and note rider executed by Owner in favor of City evidencing any part of a Loan, which is secured by a Deed of Trust, as well as any amendments to, modifications or, or restatements of said promissory note. The Note will be on file with the City. 29. "OWNER" or "OWNERS" is the Qualifying Household that is the purchaser of the Property. 30. "PROPERTY" means the real property located at: 2825 J Street, National City , California, 91950 and described in the attached Exhibit A, which is hereby incorporated into this Agreement by this reference, and any buildings or improvements now or hereafter situated on said real property. 31. "QUALIFYING HOUSEHOLD" means a household whose income is Eighty Percent of Area Median Income, as determined periodically by HUD, with adjustments in accordance with 24 CFR 92.252, and who is otherwise eligible to purchase the Property. 32. "QUALIFYING SALES PRICE" means a sales price that does not exceed 95 percent (95%) of the median purchase price for the area, as determined by the U.S. Department of Housing and Urban Development. 22 Exhibit I: First -Time Homebuyer Assistance Program Manual E. TERM OF AGREEMENT The term of this Agreement shall remain in full force and effect during the Effective Period regardless of any expiration of the term of any Loan, any payment or prepayment of any Loan, any assignment of a Note, any reconveyance of a Deed of Trust, or any sale, assignment, transfer, or conveyance of the Property, unless terminated earlier by the City in writing or extended by the mutual consent of the parties. However, failure to record this Agreement by the City shall not relieve Owner of any of the obligations specified herein. The covenants in this Agreement will run with the land for the benefit of the City and its heirs, assigns and successors and be binding on Owner and Owner's heirs, assigns and successors for the full term of this Agreement. F. USE OF FUNDS The Loan will be used to acquire the Property by the Owner who is a member of a Qualifying Household. F. AFFORDABILITY 4. The House will qualify as affordable housing and will have: (a) an initial purchase price that is a Qualifying Sales Price; and (b) an estimated appraised value at acquisition that does not exceed Qualifying Sales Price. 5. The House must be the principal residence of the Owner at all times during the Effective Period. 6. The deferred Loan for the HOME -assisted House is $ 40,000.00. G. RECAPTURE OF HOME FUNDS Pursuant to 24 CFR 92.254(a) (ii), the City requires that HOME funds be recaptured if the housing does not continue to be the principal residence of the family. If there is a "transfer," the principal amount of the Note, together with a share of the "Equity" (if any), as hereafter defined, shall be immediately due and payable to the City. A "transfer" means (i) all or any part of the Property or any interest in the Property that is sold, conveyed or transferred; (ii) Owner is not a natural person and a beneficial interest in Owner is sold, conveyed or transferred; (iii) all or any part of the Property is refinanced, except as otherwise allowed by law; (iv) Owner does not occupy the Property as his, her, or their, primary residence; (v) the leasing of all or any part of the Property; (vi) any material breach of the Note, Deed of Trust or this Agreement; or (vii) the filing of bankruptcy by the Owner. The Equity in the Property shall be calculated and shared between the Owner and City on the following basis: # Months After Date of Agreement Buyer's Equity Share (Increases 5% per year) City Equity Share (Decreases 5% per year) 0-12 (50%) (50%) 13-24 (55%) (45%) 25-36 (60%) (40%) 37-48 (65%) (35%) 49-60 (70%) (30%) 61-72 (75%) (25%) 73-84 (80%) (20%) 85-96 (85%) (15%) 97-108 (90%) (10%) 109-120 (95%) (5%) Thereafter (100%) (0%) If, for examp e, the Property is sold, rented, refinanced, conveyed, or transferred in the first year of the term of the Note secured by this Deed of Trust, Owner shall receive fifty percent (50%) of the Equity in the Property and the City shall receive fifty percent (50%) of the Equity. "Equity" is defined as the dollar amount that constitutes the difference between the sales price of the Property (or in the event of a sale of the Property for an amount other than its fair market value or where there is no price established for the 23 Exhibit I: First -Time Homebuyer Assistance Program Manual Property (i.e., rental or refinancing the Property, Borrower's failure to occupy the Property, material breach of the Note, Deed of Trust or this Agreement; or the filing of bankruptcy by the Borrower, the fair market value of the Property determined by an appraiser chosen by the Beneficiary in its sole discretion) and the sum of the following amounts: (h) principal on the First Note and the Deed of Trust, along with any interest and fees due thereon; and (i) principal on the Note and Deed of Trust, along with any interest and fees clue thereon; and Q) all costs of sale, including costs of brokers' commissions, escrow fees, title costs and fees, recording costs, etc.; and (k) current year taxes, including all pro-rata real estate taxes calculated to the date of sale; and (I) borrower's down payment not including the Loan from the City to the Owner; and (m) all principal paid down on the First Note and Deed of Trust; and (n) costs of any improvements to the Property, provided such improvements were approved by the City prior to construction and provided that such improvements have been documented to the satisfaction of the City. The amount of the Owner's share in the Equity of the Property shall increase by five percent (5%) per year, measured on the anniversary of the date of the Deed of Trust is recorded against the Property. Correspondingly, the City's share in the equity of the Property shall decrease by five percent (5%) per annum. For the sake of example, if the Property is sold more than five (5) but less than six (6) years after the date of the Deed of Trust is recorded against the Property, the City would have a twenty five percent (25%) share in the Equity and the Owner would have a seventy five percent (75%) share in the Equity of the Property. In the event that no Equity exists at the time of transfer or sale, the balance of the Note (item E.1.b above) will be due and payable as provided herein. In the event that a negative Equity situation exists, i.e., the proceeds from the sale of the Property are less than the balance of the Note, all net proceeds from the transfer or sale shall be paid to the City, as beneficiary in full satisfaction of the Note. When the HOME recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the home investment due, the participating jurisdiction can only recapture the net proceeds, if any. The net proceeds are the sales price minus superior Loan repayment (other than HOME funds) and any closing costs. F. PROPERTY MAINTENANCE AND SECURITY During the Effective Period, Owner shall at his or her own expense maintain the Property in good condition, in good repair, and in decent, safe, sanitary and habitable living conditions for the benefit of that Owner's household. Owner shall maintain the Property in conformance with all applicable state, federal and local laws, ordinances, codes and regulations. In the event that Owner fails to maintain the Property in accordance with these standards and after at least thirty (30) business days prior notice to Owner, the City or the City's contractor or agent may, but shall be under no obligation to, enter upon the Property, make such repairs or replacements as are deemed necessary in the City's discretion, and provide for payment thereof. Any amount advanced by the City to make such repairs, together with interest thereon from the date of such advance at the rate of seven percent (7%) per annum (unless payment of such an interest rate would be contrary to applicable law, in which event such sums shall bear interest at the highest rate then allowable by applicable law), shall become an additional obligation of the Owner to the City and shall be secured by any Deed of Trust, if not previously reconveyed. 24 Exhibit 1: First -Time Homebuyer Assistance Program Manual G. REPAYMENTS HOME Funds that are loaned to the Owner are to be remitted (principal and interest, as warranted) to the City to be retained and used as program income to originate additional Loans to First -Time Homebuyers. H. PROPERTY REQUIREMENTS Compliance with the following requirements is required as follows: 1. Maximum per -unit subsidy amount. The amount of HOME funds that a participating jurisdiction may invest on a per -unit basis in affordable housing will not exceed the per -unit dollar limits established by HUD. 2. Property Standards. Housing that is assisted with HOME funds, at a minimum, must meet Section 8 Housing Quality Standards. 3. Property Cost Limits. The value of acquisition and development of the housing unit, located in the City of National City must not exceed 95 percent (95%) of the median price for the area, as determined by the U.S. Department of Housing and Urban Development. 4. Occupancy Requirements. The HOME Program requires that occupancy standards must be maintained for the Effective Period for each of the assisted Houses as follows: (c) The prospective purchaser must be low income; that is, the purchaser must have an annual (gross) income that does not exceed Eighty Percent (80%) of Area Median Income, which will be determined at either the time the household initially occupies the property or at the time the HOME funds are invested; whichever is later. (d) Each Owner must occupy the property as a principal residence. Only Loan default and subsequent foreclosure negates the principal residence limitation. 5. Ownership Interest. The purchaser must have fee simple title upon sale of a HOME -assisted unit or cooperative ownership interest upon sale of a HOME -assisted unit. 6. Refinance. The City will subordinate to the following refinance situations only, subject to City approval and additional documentation is required: (d) FHA streamline refinance, with a reduction in total PITI and no cash out. (e) VA rate reduction refinance, with a reduction in total PITI and no cash out. (f)Conventional rate and term refinance, with a reduction in total PITI and no cash out. I. REVERSION OF ASSETS Owner must transfer to the City any HOME funds remaining in the Property after the time of expiration of the Effective Period when there is a change to title on the Property or any sale, rental, refinance, conveyance or transfer of Property. Any funds received as a result of this reversion of assets shall be used for additional HOME -eligible activities. J. DEFAULTS AND REMEDIES In the event of any breach or violation of any agreement or obligation under this Agreement, the City may proceed with any or all of the remedies as described in paragraph 18 of the Deed of Trust. K. NON -LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS No officer, official, director, employee, agent or representative of the City shall be personally liable to Owner for any obligation created under the terms of this Agreement except in the case of actual fraud or willful misconduct by such person. L. INDEMNITY Notwithstanding the insurance coverage required herein, Owner shall indemnify and hold City and its officers, officials, directors, employees, agents and authorized representatives (each, an "Indemnified Party," and collectively, "Indemnified Parties"), free and harmless against any losses, damages, liabilities, claims, 25 Exhibit I: First -Time Homebuyer Assistance Program Manual demands, judgments, actions, court costs, and legal or other expenses (including attorney's fees) which any Indemnified Party may incur as a direct or indirect consequence of (1) Owner's failure to perform any obligations as and when required by this Agreement; (2) any failure of any of Owner's representations or warranties to be true and complete; or (3) any act or omission by Owner or any contractor, subcontractor, management agent, or supplier with respect the Property, except where such losses are caused by the sole negligence or willful misconduct of Indemnified Parties. Owner shall pay immediately upon the City's demand any amounts owing under this indemnity. The duty of the Owner to indemnify includes the duty to defend Indemnified Parties in any court action, administrative action, or other proceeding brought by any third party arising from the Property. Owner's duty to indemnify Indemnified Parties shall survive the term of this Agreement. M. SUBORDINATION This Agreement shall be subordinated in priority only to the liens and encumbrances approved in writing by the City in its sole and absolute discretion. N. GENERAL PROVISIONS 8. Governing Law. This Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law. 9. This Agreement Controls. In the event that any provisions of this Agreement and any Loan Documents conflict, the terms of this Agreement shall control. 10. Time. Time is of the essence in this Agreement. 11. Consents and Approvals. For those provisions of this agreement which are expressly subject to consent or approval of the City, said consent or approval shall not be unreasonably withheld. Any approval must be in writing and executed by an authorized representative of the City. 12. Notices, Demands and Communications. Formal notices, demands and communications between Owner and the City shall be sufficiently given and shall not be deemed given unless dispatched by mailing it first class mail or by certified mail, return receipt requested, to the principal offices of Owner and City as follows: City of National City Housing and Grants 1243 National City Boulevard National City, CA 91950-4397 New Owner: Borrower Name Address: 1111 A Avenue National City, CA 91950 Any such written communications by mail shall be conclusively deemed to have been received by the addressee five days after the deposit thereof in the United States Mail, postage prepaid and properly addressed as noted above. 13. Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 14. Attorney's Fees. In the event of any litigation over the performance of this Agreement, the prevailing party shall be entitled to attorney's fees and costs incurred during the course of litigation. IN WITNESS HEREOF, the City and the Owner have executed this Agreement as of the date first hereinafter set forth. City of National City 26 Exhibit I: First -Time Homebuyer Assistance Program Manual By: Leslie Deese, City Manager Owner: By: Borrower XXXXX 27 Exhibit I: First -Time Homebuyer Assistance Program Manual "Exhibit A" Legal Description (must be attached prior to recordation) The land referred to herein is situated in the State of CALIFORNIA, County of SAN DIEGO, and described as follows: 28 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX E PROMISSORY NOTE APN: XXX-XXX-XX-XX FTHB # XXXX-XXXX NOTICE: THIS NOTE MAY REQUIRE PAYMENT OF PRINCIPAL AND INTEREST UPON THE SALE OR TRANSFER OF THE PROPERTY OR UPON A PREPAYMENT. FURTHER, THIS NOTE IS A SHARED APPRECIATION NOTE AS DEFINED IN SECTION 1917, ET SEQ. OF THE CALIFORNIA CIVIL CODE. $ 00,000.00 Amount PROMISSORY NOTE SECURED BY DEED OF TRUST , 2009 Date 000 XXXX, National City, California 91950 [Property Address] 1. Borrower's Promise to Pay. For value received, the undersigned, XXXXX XXXXX ("Borrower"), promises to pay to the City of National City ("City"), or order, the sum of XXXXX Thousand Dollars and 00ICents ($00,000.00) with interest accruing thereon as hereinafter provided, and payable as set forth below. It is understood that the City may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note will be called the "Note Holder". 2. No Interest. This Note will bear no interest unless the Borrower defaults under the terms of this Note, the Deed of Trust securing it and/or the Homeowner's Regulatory Agreement for Home Program Participation ("Home Agreement") affecting the Property. In the event of default, interest from the Date of this Note shall be calculated at the greater of the following amounts: a) The rate equal to the interest rate of the senior trust deed or, in the event of no senior trust deed; or b) ten percent (10%) per annum. 3. Payments and Term. The term of this Note extends until the earlier of default by Borrower under the terms of this Note, the Deed of Trust or the Home Agreement, or the day Borrower sells, rents, refinances, transfers or changes the title of the property ("Property") described in the Deed of Trust. Sale, rental, refinance, conveyance, transfer or change in title of the property prior to the tenth (10th) anniversary date of the Deed of Trust will trigger the shared equity in addition to the principal, as described in the accompanying Deed of Trust. A "transfer" means (i) all or any part of the Property or any interest in the Property is sold, conveyed or transferred; (ii) Borrower is not a natural person and a beneficial interest in Borrower is sold, conveyed or transferred; (iii) all or any part of the Property is refinanced, except as otherwise allowed by law; (iv) Borrower does not occupy the Property as his, her, or their, primary residence; (v) the leasing of all or any part of the Property; (vi) any material breach of this Note (including, without limitation, the Note Rider), the Home Agreement or the Deed of Trust; or (vii) the filing of bankruptcy by the Borrower. No delay or omission on the part of the City shall operate as a waiver of such right of repayment or of any other right under this Note. Upon a 29 Exhibit I: First -Time Homebuyer Assistance Program Manual Transfer, the principal amount of this Note, together with a share of the Equity (if any) as set forth in the Note Rider attached hereto, shall be immediately due and payable to the City. The City shall riot exercise this right of acceleration if prohibited by federal law as of the date of the Deed of Trust or if the City has executed a separate written waiver of this option. The following shall not constitute a Transfer: (a) A transfer of the Property from a deceased Borrower to the surviving spouse of the Borrower if the surviving spouse is also named as a Borrower; (b) A transfer of the Property by a Borrower to his/her spouse pursuant to which the spouse becomes a co-owner of the Property; (c) A transfer of the Property resulting from a decree of dissolution of the marriage or legal separation or from a property settlement agreement incidental to such a decree which requires the Borrower to continue to make payments on the Note and by which a spouse who is already a Borrower becomes the sole owner of the Property; (d) A transfer of the Property to a Borrower to an inter-vivos trust in which the Borrower is the sole beneficiary; (e) A transfer by means of encumbering the Property with a lien that is a junior lien to the lien securing the loan to Borrower evidenced by the Deed of Trust. All payments made under this Note shall be paid in lawful money of the United States to the City of National City at 1243 National City Boulevard, National City, CA 91950. 4. Prepayment. Borrower has the right to prepay the principal without incurring any penalty, apart from any interest that may be due under default provisions above. In the event that Borrower chooses to prepay the Note, Borrower must notify Note Holder in writing. All payments received on account of this Note shall be first applied to accrued interest, if any, and the remainder shall be applied to the reduction of principal. PAYMENT OF THE NOTE SHALL NOT AFFECT THE OBLIGATION TO SHARE EQUITY WITH THE City AS PROVIDED IN THE NOTE RIDER ATTACHED HERETO. 5. Relinquishment of Equity. Provided that Borrower is not in default under the terms of this Note, the Deed of Trust or the Home Agreement and Borrower has continually occupied the Property as Borrower's principal residence, the City's interest in the equity of the property shall be relinquished by City ten (10) years from the date of the execution of the Note. Nothing contained in this paragraph 5 shall be construed as a promise by City to forgive or relinquish the right to seek repayment of the principal of the Note. 6. Default Under Deed of Trust or Home Agreement. Notwithstanding any other provisions of the Note, if default occurs in any of the covenants or agreements contained in the Deed of Trust or the Home Agreement, the principal amount of this Note, together with a share of the Equity (if any) or default interest as set forth in Section 2, above (whichever is greater), shall be immediately become due and payable in full at the option of City. 7. Attorneys' Fees. Should suit be commenced to collect on this Note, or any portion thereof, such sum as the court may deem reasonable shall be added hereto as attorneys' fees. 8. Time. Time is of the essence herein. 9. Amendments. This Note may not be modified or amended except by an instrument in writing expressing such intention and signed by an authorized representative of City and Borrower. 30 Exhibit I: First -Time Homebuyer Assistance Program Manual 10. Severabilitv. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity and binding effect of the remainder of this Note upon the parties. 11. Borrower's Waivers. Borrower waives any rights to require City to perform certain acts. Those acts are: (a) To demand payment of amounts due (known as "presentment"). (b) To give notice that amounts due have not been paid (known as "notice of dishonor"). (c) To obtain an official certification of non-payment (known as "protest"). 12. Giving of Notices. Any notice that must be given to Borrower under this Note will be given by delivering it or by mailing it first class mail or by certified mail, return receipt requested, addressed to Borrower at the address set forth above. A notice that must be given to City under this Note will be given by mailing it certified mail, return receipt request, to City at the address stated in Section 3 above. Any party may change its address by a notice given to the other party in the manner set forth in this Section. 13. Joint and Several Responsibility. If more than one person executes this Note, each is fully and personally obligated to pay the full amount owed and to keep all promises in this Note. Date: NOTICE TO BORROWER Do not sign this Note if it contains blank spaces. All spaces should be completed before you sign. Borrower XXXXX Borrower XXXXX 31 RESOLUTION NO. 2012 — 217 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY APPROVING THE TERMS AND CONDITIONS OF THE SAN DIEGO HABITAT FOR HUMANITY ACQUISITION -REHABILITATION FOR HOMEOWNERSHIP PROGRAM, AND AUTHORIZING THE MAYOR TO EXECUTE A HOME COMMUNITY HOUSING DEVELOPMENT ORGANIZATION ("CHDO") FUNDING AGREEMENT BETWEEN THE CITY OF NATIONAL CITY AND SAN DIEGO HABITAT FOR HUMANITY COMMUNITY HOUSING CORPORATION, INC. FOR THE CONSTRUCTION AND/ OR REHABILITATION OF SINGLE-FAMILY RESIDENTIAL HOUSING IN THE CITY OF NATIONAL CITY WHEREAS, the City of National City is a recipient of funds from the United States Department of Housing and Urban Development ("HUD"), pursuant to Title II of the National Affordable Housing Act of 1990 (42 U.S.C. 12701 et seq.) as amended; and WHEREAS, the City desires to plan for the new construction or rehabilitation of existing housing to create affordable residential developments for the benefit of low- and moderate- households, including certain pre -development activities as allowed under HOME regulations; and WHEREAS, San Diego Habitat for Humanity Community Housing Corporation, Inc. ("SD-HFH"), has demonstrated development experience in National City and is qualified to develop or rehabilitate and subsequently sell affordable single-family residential housing and perform the other services as specified in HOME Community Housing Development Organization ("CHDO") Funding Agreement ("Agreement"); and WHEREAS, SD-HFH has been certified by the City as an eligible CHDO pursuant to the definition of such organizations contained in 24 CFR 92.2; and WHEREAS, both parties to this Agreement, SD-HFH and the City, agree that they are subject to the federal restrictions and qualifications listed in Title 24 of the Code of Federal Regulations, Part 92 ("24 CFR 92"); and WHEREAS, the CITY allocated $650,000 of federal HOME funds on May 2, 2012, that may be used for the construction and/or substantial rehabilitation of as yet not identified six single-family (6) HOME assisted housing units ("Assisted Units") for Eligible Households earning 80% of the Area Median Income for San Diego County or less; and WHEREAS, in an effort to establish a continuous source of housing development funding capacity for SD-HFH, the City has elected to permit SD-HFH to retain all net proceeds from the sale of the rehabilitated units ("CHDO Proceeds"). As a further condition of the Agreement, SD-HFH must use and restrict any and all CHDO Proceeds for the production of additional units until six (6) Assisted Units are completed and sold and the balance of CHDO Proceeds remaining after the completion of six units is committed to developing affordable housing in National City. Upon cycling the balance once, any other CHDO Proceeds will be unrestricted and not subject to HOME requirements; and WHEREAS, the CITY has also elected for SD-HFH to income qualify households, originate and process second mortgages for each qualifying household and prepare loan documents including but not limited to a HOME regulatory agreement, deed of trust, and promissory note to be executed with the City as the Beneficiary of each mortgage. Resolution No. 2012 — 217 Page Two NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby approves the terms and conditions of the San Diego Habitat for Humanity Acquisition -Rehabilitation for Homeownership Program as specified in the HOME CHDO Funding Agreement. BE IT FURTHER RESOLVED that the City Council of the City of National City authorizes the Mayor to execute a HOME Community Housing Development Organization Funding Agreement between the City of National City and San Diego Habitat for Humanity, Inc., for the construction and/or rehabilitation of single family residential housing in the City of National City. BE IT FURTHER RESOLVED that the City Council of the City of National City authorizes the City Manager of the City of National City to execute in the name of the City of National City any loan document or agreement required for the full implementation of the activities specified under said Agreement. PASSED and ADOPTED this 30th day of October 012. ATTEST: Mich: el R. Dal a, ('ity Clerk PROVED AS TO FORM: Claudia Ga City Attorne on Morrison, Mayor Passed and adopted by the Council of the City of National City, California, on October 30, 2012 by the following vote, to -wit: Ayes: Councilmembers Morrison, Natividad, Rios, Sotelo-Solis, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California City lerk of the City f National City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2012-217 of the City of National City, California, passed and adopted by the Council of said City on October 30, 2012. City Clerk of the City of National City, California By: Deputy CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT MEETING DATE: October 30, 2012 AGENDA ITEM NO. 9 *TEM TITLE: Resolution of the City Council of the City of National City approving the terms and conditions of the San Diego Habitat for Humanity Acquisition -Rehabilitation for Homeownership Program and authorizing the Mayor to execute a HOME Community Housing Development Organization Funding Agreement between the City of National City and San Diego Habitat for Humanity Community Housing Corporation, Inc. for the construction and/or rehabilitation of single-family residential housing in the City of National City PREPARED BY: Carlos Aguirre DEPARTMENT: Housing and Grants PHONE: (619) 336-4391 APPROVED EXPLANATION: The purpose for the City of National City's investment of $650,000 in HUD HOME Investment Partnership funds with San Diego Habitat for Humanity Community Housing Corporation, Inc. (SD-HFH) is to assist SD-HFH to purchase, rehabilitate and re -sell, as a goal, a minimum of six (6) single family homes within the city limits of the City of National City to first-time homebuyers earning 80% or less of the HUD determined Median Area Income by June 30, 2014. This investment partnership will turn vacant (foreclosed on or otherwise) single-family homes into lead-free/asbestos-free rehabilitated, quality affordable homeownership opportunities. To achieve these ends the City, through its certified Housing Inspectors, will provide a lead -based paint assessment and inspect each potential home purchase for existing health and safety and building code violations (un-permitted additions, garage conversions, electrical/plumbing upgrades, etc.) and SD-HFH will provide an asbestos assessment and then incorporate all that information into its overall rehabilitation plan for the house. FINANCIAL STATEMENT: APPROVED: 74J Finance ACCOUNT NO. APPROVED: MIS City Council allocated $650,000 in HOME funds to Habitat for Humanity in FY2013. Upon execution of the an agreement, said funds will be budgeted in account 505-409-462-650-9023 ENVIRONMENTAL REVIEW: Individual housing units constructed or rehabilitated under the CHDO Funding Agreement will be subject to NEPA review. ORDINANCE: INTRODUCTION: FINAL ADOPTION: STAFF RECOMMENDATION: Adopt the resolution. BOARD / COMMISSION RECOMMENDATION: Not applicable to this report. ATTACHMENTS: attachment No. 1 HOME CHDO Funding Agreement • • • RESOLUTION NO. 2012 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY APPROVING THE TERMS AND CONDITIONS OF THE SAN DIEGO HABITAT FOR HUMANITY ACQUISITION -REHABILITATION FOR HOMEOWNERSHIP PROGRAM, AND AUTHORIZING THE MAYOR TO EXECUTE A HOME COMMUNITY HOUSING DEVELOPMENT ORGANIZATION ("CHDO") FUNDING AGREEMENT BETWEEN THE CITY OF NATIONAL CITY AND SAN DIEGO HABITAT FOR HUMANITY COMMUNITY HOUSING CORPORATION, INC. FOR THE CONSTRUCTION AND/ OR REHABILITATION OF SINGLE-FAMILY RESIDENTIAL HOUSING IN THE CITY OF NATIONAL CITY WHEREAS, the City of National City is a recipient of funds from the United States Department of Housing and Urban Development ("HUD"), pursuant to Title II of the National Affordable Housing Act of 1990 (42 U.S.C. 12701 et seq.) as amended; and WHEREAS, the City desires to plan for the new construction or rehabilitation of existing housing to create affordable residential developments for the benefit of low- and moderate- households, including certain pre -development activities as allowed under HOME regulations; and WHEREAS, San Diego Habitat for Humanity Community Housing Corporation, Inc. ("SD-HFH"), has demonstrated development experience in National City and is qualified to develop or rehabilitate and subsequently sell affordable single-family residential housing and perform the other services as specified in HOME Community Housing Development Organization ("CHDO") Funding Agreement ("Agreement"); and WHEREAS, SD-HFH has been certified by the City as an eligible CHDO pursuant to the definition of such organizations contained in 24 CFR 92.2; and WHEREAS, both parties to this Agreement, SD-HFH and the City, agree that they are subject to the federal restrictions and qualifications listed in Title 24 of the Code of Federal Regulations, Part 92 ("24 CFR 92"); and WHEREAS, the CITY allocated $650,000 of federal HOME funds on May 2, 2012, that may be used for the construction and/or substantial rehabilitation of as yet not identified six single-family (6) HOME assisted housing units ("Assisted Units") for Eligible Households earning 80% of the Area Median Income for San Diego County or less; and WHEREAS, in an effort to establish a continuous source of housing development funding capacity for SD-HFH, the City has elected to permit SD-HFH to retain all net proceeds from the sale of the rehabilitated units ("CHDO Proceeds"). As a further condition of the Agreement, SD-HFH must use and restrict any and all CHDO Proceeds for the production of additional units until six (6) Assisted Units are completed and sold and the balance of CHDO Proceeds remaining after the completion of six units is committed to developing affordable housing in National City. Upon cycling the balance once, any other CHDO Proceeds will be unrestricted and not subject to HOME requirements; and WHEREAS, the CITY has also elected for SD-HFH to income qualify households, originate and process second mortgages for each qualifying household and prepare loan documents including but not limited to a HOME regulatory agreement, deed of trust, and promissory note to be executed with the City as the Beneficiary of each mortgage. Resolution No. 2012 — Page Two NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby approves the terms and conditions of the San Diego Habitat for Humanity Acquisition -Rehabilitation for Homeownership Program as specified in the HOME CHDO Funding Agreement. BE IT FURTHER RESOLVED that the City Council of the City of National City authorizes the Mayor to execute a HOME Community Housing Development Organization Funding Agreement between the City of National City and San Diego Habitat for Humanity, Inc., for the construction and/or rehabilitation of single family residential housing in the City of National City. BE IT FURTHER RESOLVED that the City Council of the City of National City authorizes the City Manager of the City of National City to execute in the name of the City of National City any loan document or agreement required for the full implementation of the activities specified under said Agreement. PASSED and ADOPTED this 30th day of October, 2012. ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: Claudia Gacitua Silva City Attorney Ron Morrison, Mayor • • • Attachment No. 1 HOME CHDO FUNDING AGREEMENT BETWEEN THE CITY OF NATIONAL CITY AND SAN DIEGO HABITAT FOR HUMANITY COMMUNITY HOUSING CORPORATION, INC. FOR CONSTRUCTION AND/OR REHABILITATION OF SINGLE FAMILY RESIDENTIAL HOUSING IN THE CITY OF NATIONAL CITY This Agreement is entered into this 30th day of October, 2012, by and between the City of National City ("CITY") and San Diego Habitat for Humanity Community Housing Corporation, Inc, a California non-profit public benefit corporation ("SD-HFH"). RECITALS A. WHEREAS, City of National City ("CITY") is a recipient of funds from the United States Department of Housing and Urban Development (hereinafter "HUD"), pursuant to Title I1 of the National Affordable Housing Act of 1990 (42 U.S.0 12701 et seq.) as amended (hereinafter "ACT"): and B. WHEREAS, CITY desires to plan for the new construction or rehabilitation of existing housing to create affordable residential developments for the benefit of low- and moderate- households, including certain pre -development activities as allowed under HOME regulations; and C. WHEREAS, SD-HFH has demonstrated development experience in National City and is qualified to develop or rehabilitate and subsequently sell affordable single-family residential housing and perform the other services as specified in this Agreement; and D. WHEREAS, SD-HFH has been certified by CITY as an eligible Community Housing Development Organization (hereinafter "CHDO") pursuant to the definition of such organizations contained in 24 CFR 92.2; and E. WHEREAS, both parties to this Agreement, SD-HFH and CITY, agree that they are subject to the federal restrictions and qualifications listed in Title 24 of the Code of Federal Regulations, Part 92 ("24 CFR 92"); and F. WHEREAS, CITY allocated $650,000 of federal HOME funds on May 2, 2012 that may be used for the construction and/or substantial rehabilitation of as yet not identified six single-family (6) HOME assisted housing units ("Assisted Units") for Eligible Households earning 80% of the Area Median Income for San Diego County or less; and G. WHEREAS, in an effort to establish a continuous source of housing development funding capacity for SD-HFH, CITY has elected to permit SDHFH to retain all net proceeds from the sale of the rehabilitated units ("CHDO Proceeds"). As a further HOME CHDO Funding Agreement Page 1 of 21 Attachment No. 1 condition of this Agreement, SD-HFH must use and restrict any and all CHDO Proceeds for the production of additional units until six (6) Assisted Units are completed and sold and the balance of CHDO Proceeds remaining after the completion of six units is committed to developing affordable housing in National City. Upon cycling the balance once, any other CHDO Proceeds will be unrestricted and not subject to HOME requirements; and H. WHEREAS, CITY has also elected for SD-HFH to income qualify households, originate and process second mortgages for each qualifying household and prepare loan documents including but not limited to a HOME regulatory agreement, deed of trust, and promissory note to be by executed with the CITY as Beneficiary of each mortgage. NOW, THEREFORE, in consideration of the mutual benefit to be derived therefrom, CITY and SD-HFH agree to the following: 1. SD-HFH shall furnish all of the services as described in this Agreement and all attachments incorporated by this reference. 2. CITY shall advance payment or reimburse eligible costs expended by SD-HFH in the amount and pursuant to the conditions contained in this Agreement and all subsequent/supplementary documents. 3. SD-HFH shall be responsible for the professional quality, technical accuracy, timely completion and coordination of all reports and other services furnished by SD-HFH under this Agreement, except that SD-HFH shall not be responsible for the accuracy of information supplied by CITY. 4. Work to be Performed A. SD-HFH agrees to fully perform the Work and develop the Project as described in the Work Plan, attached hereto as Exhibit A and incorporated herein by reference (the "Work"). CITY reserves the right to review and approve in advance all Work to be performed by SD-HFH in relation to this Agreement. Any changes to the Work Plan described in Exhibit A proposed by SD-HFH must be approved in advance by the CITY, in writing, which approval shall not be unreasonably withheld, delayed or conditioned. B. After rehabilitation has been completed on each unit, the HOME Assisted Units will be sold to an Eligible Household at the agreed upon sales price supported by a certified appraisal at the time of sale. CITY will be the Beneficiary of a silent loan in second lien position equal to the difference between the sales price, less any down payment, and the amount of the first mortgage for which the Eligible Household has been provided a bona fide lender approval. SD-HFH will be responsible for complying with the loan guidelines and requirements under Exhibit I. SD-HFH will prepare, process, and deliver to escrow a fully executed HOME Regulatory • • HOME CHDO Funding Agreement Page 2 of 21 Attachment No. 1 Agreement, Deed of Trust, and Promissory under Exhibit I for each assisted unit sold to an Eligible Household. 5. Use of Funds The CITY agrees to provide to SD-HFH S650,000 for work as specified in this Agreement. In no instance shall the CITY be liable for any costs for the Work in excess of this amount, nor for any unauthorized or ineligible costs. The CITY will administer this allocation in accordance with the provisions of the HOME Final Rule, 24 CFR Part 92 and the Consolidated and Further Continuing Appropriations Act of 2012, P.L. 112- 55. 6. Conditions SD-HFH agrees to comply with all conditions of this Agreement. SD-HFH's failure to comply with these conditions may result in cancellation of this Agreement as expressly provided for in this Agreement. 7. Method of Disbursement A. SD-HFH agrees that it shall expend the funds for eligible costs within the time limits specified by 24 CFR 92.502(c)(2) and this Agreement. B. Project set-up and disbursement requirements for HOME Projects will be in conformance with 24 CFR 95.502(b) and 24 CFR 92.502(c). C. Project completion requirements for HOME projects will be in conformance with 24 CFR 92.502(d). Upon submittal of the final project drawdown request to CITY, SD- HFH must provide to CITY a project completion report in a form and content to be prescribed by CITY. In the event that the project completion report is not received by CITY, CITY may suspend all project drawdowns not yet paid until the project completion report is received and accepted. D. In the event CITY determines funds were used for ineligible expenses, further payments shall be withheld until the findings are resolved to the satisfaction of the CITY. 8. Commencement and Term This Agreement is effective upon execution by all parties. SD-HFH agrees that Work will not commence, nor will any HOME related costs be incurred or obligated before CITY executes this Agreement, SD-HFH completes all required environmental clearances, and SD-HFH complies with the applicable conditions of this Agreement. SD-HFH agrees that the Work will be completed by the date(s) specified in the Project Timeline, Exhibit B, unless a written request for an extension is approved in advance of this date and in writing by CITY; extensions will automatically be granted for circumstances outside the control of SD-HFH, but in no case will extensions be permitted that will cause the project not to be completed by June 30, 2014. Failure to complete the Work on time without a written extension from CITY constitutes a material default of this Agreement by SD- HFH. 9. Termination HOME CHDO Funding Agreement Page 3 of 21 Attachment No. 1 A. CITY may terminate this Agreement for cause by giving fourteen (14) days written notice to SD-HFH following the time allotted to cure violations per the provisions of section 10 (B) of this Agreement. Cause shall consist of any violation of the requirements of HOME or of any terms and/or conditions of this Agreement or upon violation of any local, state or federal law or regulation, or upon the request of HUD. Unless otherwise approved by the CITY, upon termination of this Agreement, SD- HFH must complete all Work in progress and terminate any other activities that were to be paid for with HOME funds. Any unexpended funds received by SD-HFH must be returned to the CITY within fourteen (14) days of the Notice of Termination. A rate of interest of six percent (6%) may be added to all funds due but not paid within fourteen (14) days of the Notice of Termination. In the event of such termination, CITY may proceed with the Work in any manner reasonably deemed proper by CITY. The actual costs reasonably and actually incurred by CITY to perform the remaining Work shall be deducted from any sum due SD-HFH under this Agreement, and the balance, if any, will be paid by SD-HFH upon demand. B. In the event that CITY notifies SD-HFH of its intention to terminate this Agreement pursuant to 10 (A) above, CITY will allow SD-HFH a time period of 30 days. to be specified in the notice of termination, for SD-HFH to cure or continence to cure the violation to CITY's satisfaction provided that if the violation is as such that it cannot be fully cured within said 30-day period, SD-HFH shall have such additional time as may be reasonably necessary to cure such violation so long as SD-HFH proceeds promptly after receipt of CITY's notification and proceeds diligently at all times to complete said cure. C. This Agreement is valid and enforceable only if sufficient funds are made available to CITY by HUD for the purposes of this program. It is mutually agreed that if Congress does not appropriate sufficient funds for the HOME Program, this Agreement will be amended to reflect any reductions in funds. In addition, this Agreement is subject to any additional restrictions, limitations, or conditions enacted by the Congress, promulgated in federal regulations or any federal statute or federal regulation which may affect the provisions, terms, or funding of this Agreement in any manner. The CITY has the option to terminate this Agreement under the fourteen (14) day cancellation clause or to amend the Agreement to reflect any reduction of funds. 10. Contractors and Subcontractors A. SD-HFH may not enter into any agreement, written or oral, with any contractor which has been deemed to be not eligible to receive HOME funds. A construction contractor or subcontractor is not eligible to receive HOME funds if the construction contractor is not properly licensed and in good standing with the State of California, Contractors State License Board, is listed on the Federal Consolidated List of Debarred, Suspended, and Ineligible Contractors, or is deemed an ineligible contractor by CITY. HOME CHDO Funding Agreement Page 4 of 21 Attachment No. 1 B. CITY reserves the right to review and disapprove any contracts or agreements executed by SD-HFH related to the Work over S25,000. Approval will be assumed unless disapproval has been made within a one week period. C. The agreement between SD-HFH and any construction contractor shall require the construction contractor and its subcontractors, if any, to: 1. Perform the Work in accordance with federal, state, and local housing and building codes as applicable. 2. Comply with applicable Labor Standards described in Paragraph 20 of this Agreement. In addition to these requirements, all contractors and subcontractors must comply with the applicable provisions of the California Labor Code; 3. Comply with the applicable Equal Opportunity Requirements described in Paragraph 21 of this agreement; 4. SD-HFH shall comply with all of the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California, the applicable provisions of Division 4 and 5 of the California Government Code and all amendments thereto; and all similar State or federal acts or laws applicable; and shall indemnify, and hold harmless CITY and its officers, and employees from and against all claims, demands, payments, suits, actions, proceedings, and judgments of' every nature and description, including reasonable attorney's fees and defense costs presented, brought or recovered against CITY or its officers, employees, or volunteers, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by the SD-HFH under this Agreement 5. Maintain, if so required by law, unemployment insurance, disability insurance and liability insurance in an amount to be determined by CITY (maximum requirements in Paragraph 11 of this Agreement) which is reasonable to compensate any person, firm, or corporation who may be injured or damaged by the contractor or any subcontractor in performing the Work or any part of it. I1.Insurance SD-HFH, at its sole cost and expense, shall purchase and maintain, and shall require its subcontractor(s), when applicable, to purchase and maintain throughout the term of this Agreement, the following checked insurance policies: A. ❑ If checked, Professional Liability Insurance (errors and omissions) with minimum limits of $1,000,000 per occurrence. B. Automobile Insurance covering all bodily injury and property damage incurred during the performance of this Agreement, with a minimum coverage of $1,000,000 combined single limit per accident. Such automobile insurance shall HOME CHDO Funding Agreement Page 5 of 21 Attachment No. 1 include owned, non -owned, and hired vehicles ("any auto"). The policy shall name CITY and its officers, agents and employees as additional insureds, and a separate additional insured endorsement shall be provided. C. Commercial General Liability Insurance. with minimum limits of $2,000,000 per occurrence and S4,000,000 aggregate, covering all bodily injury and property damage arising out of its operations under this Agreement. The policy shall name the City and its officers, agents and employees as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location". D. Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of SD-HFH'S employees and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of CITY. Said endorsement shall be provided prior to commencement of work under this Agreement. If SD-HFH has no employees subject to the California Workers' Compensation and Labor laws, SD-HFH shall execute a Declaration to that effect. Said Declaration shall be provided to SD-HFH by CITY. E. The aforesaid policies shall constitute primary insurance as to CITY, its officers, employees, and volunteers, so that any other policies held by CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to CITY of cancellation or material change. F. If required insurance coverage is provided on a "claims made" rather than "occurrence" form, SHDFH shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. G. Insurance shall be written with only California admitted companies that hold a current policy holder's alphabetic and financial size category rating of not less than A VIII according to the current Best's Key Rating Guide, or a company equal financial stability that is approved by CITY's Risk Manager. In the event coverage is provided by non -admitted "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. H. This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, are filed with and approved by CITY's Risk Manager. If does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. HOME CHDO Funding Agreement Page 6 of 21 Attachment No. 1 All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by CITY. 13. Inspections A. CITY may inspect any Work performed hereunder to ensure that the Work is being and has been performed in accordance with the applicable federal, state and/or total requirements, the construction contract, and this Agreement. SD-HFH agrees to require that all Work found by such inspections not to conform to the applicable requirements be corrected, and to withhold payment to the construction contractor or subcontractor until it is so corrected. B. CITY reserves the right to inspect the property at any reasonable time during normal business hours during the period of construction and throughout the period of affordability. 14. Records A. SD-HFH must maintain the following general program records for inspection by CITY, and must upon request provide to CITY copies of: 1. Records of the efforts to maximize participation by the private sector, including nonprofit corporations and for -profit corporations in all phases of the HOME program (financing, development, construction, and management) as required by 24 CFR Section 92.200; 2. Records which demonstrate that 100 percent (100%) of the homeownership assisted units are occupied by households that qualify as low-income families, as required by 24 CFR Sections 92.217 and CITY's first time homebuyer program as may be used for this project; and 3. Any other records necessary to determine that expenditures were made in accordance with this agreement. B. SD-HFH must maintain and provide copies to the CITY of the project -specific records listed below for inspection by the CITY: 1. Records which demonstrate that the combination of governmental assistance to the project is not any more than is necessary to provide affordable housing as specified in 24 CFR Section 92.250(b); 2. Records which demonstrate that the project meets the property standards specified in 24 CFR Section 92.251 and the CITY's first time homebuyer program as may be used for this project; and 3. Records which demonstrate that the homeownership requirements of 24 CFR Section HOME CHDO Funding Agreement Page 7 of 21 Attachment No. 1 92.254 for the applicable period of affordability. Records must be maintained for each family assisted. C. SD-HFH must maintain the following federal overlay records for inspection by CITY: 1. Records which demonstrate compliance with the Equal Opportunity and Fair Housing requirements outlined in Paragraph 22 of this Agreement, including: a. Data on the extent to which each racial and ethnic group and single head of household (by gender of head of household) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with HOME funds as required by 24 CFR Section 92. 508( a)(7)(i)(A); b. Documentation of actions required by 24 CFR Section 92.508(a)(7)(i)(S) undertaken to meet the requirements of 24 CFR Part 135 which implements Section 3 of the Housing Development Act of 1968 (economic opportunities for low -and very low-income persons), as amended (12 U.S.C. 1701u); c. Documentation and data on the steps taken to implement outreach programs to minority -owned and female -owned businesses, as required by 24 CFR Section 92.508(a)(7)(ii), including data indicating the racial/ethnic or gender character of each business entity receiving a contract or subcontract of $25,000 or more paid, or to be paid, with HOME funds, the amount of the contract or subcontract, and documentation of SD-HFH's affirmative steps to assure that minority business and women's business enterprises have an equal opportunity to obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction, and services; and d. Documentation of the actions SD-HFH has taken to affirmatively further fair housing as required by 24 CFR Section 92.508(a)(7)(i). 2. Records indicating compliance with the affirmative marketing procedures and requirements of 24 CFR Section 92.351; 3. Records which demonstrate compliance with environmental review requirements outlined in 24 CFR Section 92.352 and 24 CFR Part 58; 4. Records which demonstrate compliance with the requirements for minimizing displacement of persons, when utilizing HOME funds, as described in 24 CFR Section 92.353 and Paragraph 23(1) of this Agreement. At a minimum, these shall include project occupancy lists identifying the name and address' of all persons occupying or moving into the real property on (a) the date the Application for funding was submitted to the City if SD-HFH has site control, the date the City approves the applicable site, and the name and address of all persons who have the right to return to the project upon completion of rehabilitation; HOME CHDO Funding Agreement Page 8 of 21 Attachment No. 1 5. Records which demonstrate compliance with Labor Standards, as stated in Paragraph 21 of this Agreement and 24 CFR Section 92.354, including contract provisions and payroll records; 6. Records concerning lead -based paint in accordance with Paragraph 23(8) of this Agreement and 24 CFR Section 92.355; 7. If applicable, records which support any requests for waivers of the conflict of interest prohibition as stated in 24 CFR Section 92.356; 8. Records of certifications of contractor qualifications as they relate to the licensing and debarment and suspension requirement as stated in 24 CFR 92.350; and 9. Records which demonstrate compliance with flood insurance requirements discussed in Paragraph 23(A) of this Agreement and 24 CFR Section 92.508 (a)(7)(1 ii). D. SD-HFH must maintain the following financial records for inspection by the CITY in conformance with separate instructions: 1. Records of all account transactions, including deposits, disbursements, and balances; 2. Records supporting requests for disbursements of HOME funds and other information required under 24 CFR Section 92.502; 3. Records of written agreements and monitoring required by 24 CFR Section 92.504; 4. Financial and related records as specified in 24 CFR Section 92.508; and 5. Records of all audits and resolution of audit findings. E. If so directed by CITY upon termination of this Agreement, SD-HFH agrees to deliver all records, accounts, documentation and all other materials relevant to the Work to CITY. 15. Outreach and Marketing Marketing and outreach efforts will include the use of informational mailings, providing information at City facilities, community organizations, places of worship, employment centers, and fair housing groups, and providing periodic information sessions on the program. Outreach will include notification of program availability. Marketing brochures and pamphlets will at a minimum include the following information: 1. basic eligibility criteria, i.e. income restriction, owner occupancy, etc. 2. the statement "the program is provided without regards to race, color, religion, sex, national origin, handicap, or familial status." 3. include the use of the Equal Housing Opportunity logotype 4. program description HOME CHDO Funding Agreement Page 9 of 21 Attachment No. 1 5. loan teens During the period of the Work, the CITY may place on the property signs stating that the HOME Program is providing financing. If SD-HFH places any signs, it must indicate in typeface and size commensurate with its funding that the CITY and HUD are a source of financing through the HOME Program. Failure to do so is a material default of this Agreement. 16. Reporting Requirements Commencing with the effective date of this Agreement and continuing through the acceptance of the project completion report, no later than thirty (30) days after the end of each calendar quarter SD-HFH must submit a performance report to CITY on letterhead of the SD-HFH and describing the progress during the previous quarter and outlining anticipated upcoming key steps. 17. Audit Retention and Inspection of Records A. All records, accounts, documentation and other materials deemed relevant to the Work by CITY must be accessible at any reasonable time during normal business hours to the authorized representatives of CITY or federal government, on reasonable prior notice for the purpose of examination or audit. B. An expenditure which is not authorized by this Agreement or which cannot be adequately documented must be disallowed, and funds must be reimbursed within thirty (30) days of the discovery to the CITY by SD-HFH, unless CITY approves in writing an alternative repayment plan. C. The determination by CITY of the allowability of any expenditure will be final. D. Pursuant to 24 CFR Part 44 and OMS Circular A-133, SD-HFH must perform an annual audit at the close of each fiscal year in which this Agreement is in effect. The audit should be performed following generally accepted government auditing standards (GAGAS). The audit reports shall be made up of at least the following three parts: 1. The financial statements and a schedule of federal awards and the auditor's report on the statements and the schedule; 2. A written report of the independent auditor's understanding of the internal control structure and the assessment of control risk; and 3. The auditor's report on compliance. F. The audit must be performed by a qualified independent auditor. SD-HFH shall notify CITY of the auditor's name and address immediately after the selection has been made. F. SD-HFH must submit one copy of all required audit reports to CITY within seven • • • HOME CHDO Funding Agreement Page ID of 21 Attachment No. 1 months from the close of the required audit period addressed to: City of National City Housing and Grants Attn.: Jim Ridley 1243 National City Blvd. National City, CA 92139 G. SD-HFH is responsible for the completion of audits and all costs of preparing audits. H. If there are audit findings, SD-HFH must submit a detailed response for each audit finding to CITY. The CITY will review the response and, if in agreement, the audit process will end and CITY will notify SD-HFH in writing. If CITY is not in agreement, SD-HFH will be contacted in writing and told what corrective actions must be taken. This action could include the repayment of disallowed costs or other remediation. I. SD-HFH must retain all books and records relevant to this Agreement for a minimum of five (5) years after the expiration of the Agreement and any and all amendments hereto, or for three years after the conclusion or resolution of any and all audits or litigation relevant to this Agreement, whichever is later. The CITY and HUD and/or their representatives must have unrestricted access to all locations, books and records for the purpose of monitoring, auditing or otherwise examining said locations, books and records, with or without prior notice. 18. Compliance with State Law and Regulations SD-HFH agrees to comply with all state laws and regulations that pertain to the sale of real estate, construction, health and safety, hazardous substances, labor, fair employment practices, equal opportunity and all other matters applicable to SD-HFH, its subrecipients, contractors, or subcontractors, or the Work. 19. Compliance with Federal Laws and Regulations SD-HFH agrees to comply with all federal laws and regulations applicable to HOME and to the Work, and with the required federal provisions set forth in this Agreement. 20. Environmental Requirements This Agreement is subject to the provisions of the National Environmental Policy Act (NEPA) as contained in 24 CFR Part 58. As this project is refined and proceeds, and prior to the acquisition of any property for development or rehabilitation, SD-HFH shall cooperate with the CITY in the preparation and completion of all appropriate environmental documents, to include the research and, compilation of documentation, maintaining environmental files, performing site reviews, and publishing of legal notices. The CITY shall be responsible for review and approval of the environmental documents and process and making the determination whether the information HOME CHDO Funding Agreement Page 11 of 21 Attachment No. 1 is in compliance with NEPA environmental requirements. The approval of the project set-up report and release of program funds by HUD is expressly conditioned upon performance of the NEPA review work performed by SD-HFH and the CITY in a manner which is deemed satisfactory and acceptable by HUD. 21. Labor Standards All new construction or rehabilitation projects with 12 or more units assisted with HOME funds shall comply with HUD requirements pertaining to such contracts and the applicable requirements of the regulations of the Department of Labor under 29 CFR Parts 3 and 5, governing the payment of wages and the ratio of apprentices and trainees to journey persons, provided that if wage rates higher than those required under such regulations are imposed by State or local law, nothing hereunder is intended- to relieve SD-HFH or any contractor/subcontractor of their obligation, if any, to require payment of the higher rates. This project will be a self-help project with all applicable restrictions. When applicable, SD- HFH shall cause or require to be inserted in full, in all such contracts in excess of $2,000 and subject to such regulations, provisions meeting the requirements of 29 CFR Section 5.5. 22. Equal Opportunity Requirements A. The Civil Rights, State, and Age Discrimination Acts Assurances: During the performance of this Agreement SD-HFH assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, national origin, sex, age, handicap, religion, or religious preference, under any program or activity funded by this Agreement, as required by Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. B. Rehabilitation Act of 1973 and the "504 Coordinator": SD-HFH further agrees to implement the Rehabilitation Act of 1973, as amended, and its regulations, 24 CFR Part 8, including but not limited to, ensuring that no otherwise qualified individual shall, solely by reason of his or her handicap, be excluded from participation (including employment), denied program benefits, or subjected to discrimination under any program or activity receiving federal funds. SOHFH shall designate a specific person charged with local enforcement of this Act, as the "504 Coordinator," if SD-HFH has fifteen (15) or more permanent full -or part time employees. Notices may be sent to: Section 504 Coordinator San Diego Habitat for Humanity Community Housing Corporation, Inc. 10222 San Diego Mission Road San Diego, California 92108 HOME CH DO Funding Agreement Page 12 of 21 Attachment No. 1 E. Training, Employment, and Contracting Opportunities for Business and Lower Income Persons Assurance of Compliance: 1. The Work to be performed under this Agreement is on a project or projects assisted under a program providing direct federal financial assistance from HUD and are subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u. Section 3 requires that to the greatest extent feasible, opportunities for training and employment be given to lower income residents of the project area and contracts for Work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in the area of the project. 2. The parties to this Agreement will comply with the provisions of said Section 3 and the regulations issued pursuant thereto by the Secretary of HUD set forth in 24 CFR Part 135, and all applicable rules and orders of the State issued thereunder prior to the execution of this Agreement. The parties to this Agreement certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements. 3. SD-HFH will send to each labor organization or representative of workers with which it has a collective bargaining agreement or other contract or understanding, if any, a notice informing the said labor organization or worker's representative of SD-HFH's commitments under the Section 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training. 4. SD-HFH will include these Section 3 clauses in every contract and subcontract for Work in connection with the project over 825,000 and will. at the direction of the CITY, take appropriate action pursuant to the contract upon a finding that SD-HFH or any contractor or subcontractor is in violation of regulations issued by the Secretary of HUD, 24 CFR Part 135, and will not let any contract unless SD-HFH or contractor or subcontractor has first provided it with a preliminary statement of ability to comply with the requirements of these regulations. 5. Compliance with the provisions of Section 3, the regulations set forth in 24 CFR Part 135, and all applicable rules and orders of the CITY issued thereunder prior to the execution of the Agreement shall be a condition of the federal financial assistance provided to the project, binding upon SD-HFH, its successors, and assigns. Failure to fulfill these requirements shall subject SD-HFH, its contractors and subcontractors, its successors, and assigns to those sanctions specified by the Agreement through which federal assistance is provided, and to such sanctions as are specified by 24 CFR Part 135. D. State Nondiscrimination Clause: 1. During the performance of this Agreement, SD-HFH and its subcontractors shall not unlawfully discriminate, harass, or allow harassment against any employee or HOME CHDO Funding Agreement Page 13 of 21 Attachment No. 1 applicant for employment because of sex, race, color, ancestry, religious creed, national origin. physical disability (including HIV and AIDS), medical condition (cancer), age, or marital status. SD-HFH and subcontractors must ensure that the evaluation and treatment of their employees and applicants for employment are tree from such discrimination and harassment. SD-HFH and Subcontractors must comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12990 (a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full. SD-HFH and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. 2. SD-HFH must include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform Work under the Agreement. 3. Americans with Disabilities Act (ADA) of 1990 By signing this Agreement, SD-HFH assures CITY that it complies with the Americans with Disabilities Act (ADA) of 1990 (42 U.S.C. 12101 et seq.), which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. E. Assurance of Compliance with Requirements Placed on Construction Contracts of $10,000 or more: SD-HFH hereby agrees to place in every contract and subcontract for construction exceeding $10,000 a copy of Executive Order 11246, including the "Standard Equal Employment Opportunity Construction Contract Specifications." SD-HFH furthermore agrees to insert the appropriate goals and timetables issued by the U.S. Department of Labor in such contracts and subcontracts as required by Executive Order 11246. 23. Other Required Federal Provisions A. Flood Disaster Protection: This Agreement is subject to the requirements of the Flood Disaster Protection Act of 1973 (P. L. 93-234). No portion of the assistance provided under this Agreement is approved for acquisition, rehabilitation, or construction purposes as defined under Section 3(a) of said Act, for use in an area identified by the Secretary as having special flood hazards which is located in a community not then in compliance with the requirements for participation in the National Flood Insurance Program pursuant to Section 201(d) of said Act. The use of any assistance provided under this Agreement for such acquisition, rehabilitation,• or construction in such identified areas in communities then participating in the National Flood Insurance Program shall be subject to the HOME CHDO Funding Agreement Page 14 of 21 Attachment No. 1 mandatory purchase of flood insurance requirements of Section 102(a) of said Act. Any contract or agreement for the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this Agreement shall contain, if such land is located in an area identified by the Secretary as having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4001 et seq., provisions obligating the transferee and its successors or assigns to obtain and maintain, during the ownership of such land, such flood insurance as required with respect to financial assistance for acquisition or construction purposes under Section 102(s) of the Flood Disaster Protection Act of 1973. Such provisions shall be required notwithstanding the fact that the construction on such land is not itself funded with assistance provided under this Agreement. B. Lead -Based Paint Hazards: Assistance provided under this Agreement is subject to 24 CFR Part 92 as well as subject to the HUD Lead -Based Paint regulations, 24 CFR Part 35. Funding commitments made by the CITY or SD-HFH shall be made subject to these provisions for HOME -assisted housing constructed prior to 1978. SD-HFH shall be responsible for notification, testing, abatement activities and project clearance. C. Compliance with Air and Water Acts: This Agreement is subject to the requirements of the Clean Air Act, as amended, 42 USC 1857 et seq., the Federal Water Pollution Control Act, as amended, 33 USC 1251 et seq., and the regulations of the Environmental Protection Agency (hereinafter "EPA") with respect thereto, at 40 CFR Part 15, as amended from time to time. SD-HFH shall insert or cause to be inserted in full in all contracts and subcontracts with respect to any nonexempt transaction under this Agreement, the following requirements: 1. A stipulation by the contractor or subcontractor that any facility to be utilized in the performance of any nonexempt contract or subcontract is not included on the List of Violating Facilities issued by the EPA pursuant to 40 CFR Section 15.20; 2. A stipulation that the contractor comply with all the requirements of Section 114 of the Clean Air Act, as amended (42 USC 1857c-8), and Section 308 of the Federal Water Pollution Control Act, as amended (33 USC 1318), and all regulations and guidelines issued thereunder relating to inspection, monitoring, entry, reports, and information; 3. A stipulation that as a condition for the award of the contract, prompt notice will be given of any notification received from the Director, Office of Federal Activities, EPA, indicating that a facility utilized or to be utilized for the contract is under consideration to be listed on the EPA List of Violating Facilities; and HOME CHDO Funding Agreement Page 15 of 21 Attachment No. 1 4. A stipulation that all contractors will include or cause to be included the criteria and requirements in paragraphs (a) through (c) of this section in every nonexempt subcontract and that the contractor will take such action as the government may direct as a means of enforcing such provisions. In no event shall any assistance provided under this Agreement be utilized with respect to a facility which has given rise to a conviction under Section 113(c)(1) of the Clean Air Act or Section 309(c) of the Federal Water Pollution Control Act. D. Obligations of SD-HFH with Respect to Certain Third Party Relationships: SD-HFH shall remain fully obligated under the provisions of the Agreement notwithstanding its designation of any third party or parties for the undertaking of all or any part of the program for which assistance is being provided under this Agreement. SD-HFH shall comply with all lawful requirements of the National Environmental Policy Act of 1969 (NEPA) necessary to ensure that the program is carried out in accordance with the environmental responsibilities under 24 CFR Section 92.352. E. Interest of Certain Federal Officials: No member of or delegate to the Congress of the United States and no resident commissioner, shall be admitted to any share or part of this Agreement or to any benefit to arise from the same. F. Interest of Members, Officers, or Employees of CITY, Members of Local Governing Body, or other Public Officials: No member, officer, or employee of the CITY and/or SD-HFH, or their designees or agents, no member of the governing body of the locality in which the program is situated, and no other public official of such locality or localities who exercise any functions or responsibilities with respect to the program during his/her tenure or for one year thereafter, may have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for Work to be performed in connection with the program assisted under the Agreement SD-HFH shall incorporate, or cause to be incorporated, in all such contracts or subcontracts a provision prohibiting such interest pursuant to the purposes of this section. Fulfillment of sweat equity obligations as defined in Section 8201 of the HOME regulations will not be considered a violation of this prohibition. G. Certification Regarding Lobbying SD-HFH will require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. HOME CHDO Funding Agreement Page 16 of 21 Attachment No. 1 This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and no more than $100,000 for such failure. "The undersigned certifies, to the best of his or her knowledge and belief, that: 1. No federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement; and 2. If any funds other than federally appropriated funds have been paid or will he paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress-, or an employee of a Member of Congress in connection with this federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form- LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions." H. Prohibition Against Payments of Bonus or Commission: The assistance provided under this Agreement shall not be used in the payment of any bonus or commission for the purpose of obtaining State or CITY approval of ,the application for such assistance, or State or CITY approval of the applications for additional assistance, or any other approval or concurrence of the State required under this Agreement, Title II of the Cranston -Gonzalez National Affordable Housing Act of 1990, or state regulations with respect thereto; provided, however, that reasonable fees for bona fide technical, consultant, managerial or other such services, other than actual solicitation, are not hereby prohibited if otherwise eligible as program costs. I. Federal Relocation, Displacement and Acquisition: If applicable, prior to project set-up, SD-HFH shall provide the CITY with a project specific relocation plan and a certification that it will comply or has complied with the federal relocation, displacement and acquisition rules governing the HOME program, which are contained in the Uniform Relocation Act, 49 CFR Part 24, and applicable program regulations. 24 CFR Section 92.353 requires that tenants who are displaced from housing units demolished or converted as a result of HOME funded activities be provided with relocation assistance. J. Drug -Free Workplace: HOME CHDO Funding Agreement Page 17 of 21 Attachment No. 1 By signing this Agreement, SD-HFH hereby certifies under penalty of perjury under the laws of the State of California that SD-HFH will comply with the requirements of the Drug -Free Workplace Act of 1990 (Government Code, Section 8350 et seq.) and will provide a drug -free workplace by taking the following actions: 1. Publish a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the workplace and specifying the actions that will be taken against employees for violation of such prohibition; 2. Establish an ongoing drug -free awareness program to inform employees about: a. the dangers of drug abuse in the workplace; b. the policy of maintaining a drug -free workplace; c. any available drug counseling, rehabilitation, and employee assistance programs; and d. the penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; 3. Make it a requirement that each employee to be engaged in the performance of the HOME award be given a copy of the statement required by paragraph (1); 4. Notify the employee in the statement required by paragraph (1) that, as a condition of employment under the HOME award, the employee will: a. abide by the terms of the statement; and b. notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction; 5. Notify the City in writing, within five (5) calendar days after receiving notice under paragraph (4 )(b) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to the loan officer or other designee on whose project the convicted employee was working, unless the CITY has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected project; 6. Take one of the following actions. within thirty (30) calendar days of receiving notice under paragraph (4)(b), with respect to any employee who is so convicted: • HOME CHDO Funding Agreement Page 18 of 21 Attachment No. 1 a. Take appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or b. Require such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health. law enforcement, or other appropriate agency; 7. Make a good faith effort to continue to maintain a drug -free workplace through implementation of this section. Failure to comply with these requirements may result in suspension of payments under the Agreement or termination of the Agreement or both and SD-HFH may be ineligible for award of any future CITY contracts if CITY reasonably determines that any of the following has occurred: SD-HFH 1) had knowingly made a false certification, or 2) knowingly violated the certification by intentionally failing to carry out the requirements as noted above. 24. City Coordinator The coordinator of this Agreement for the CITY is Jim Ridley, Community Development Specialist or his/her designee. Unless otherwise informed, any notice, report, or other communication required by this Agreement shall be mailed by first class mail to the City HOME Coordinator at the following address; City of National City Housing and Grants Attn.: Jim Ridley 1243 National City Blvd. National City, CA 91950 25. Waivers No waiver of any breach of this Agreement will be held to be a waiver of any other prior or subsequent breach. The failure of the CITY to enforce at any time the provisions of this Agreement or to require at any time performance by SD-HFH of these provisions shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of the CITY to enforce these provisions. 26. Litigation A. If any provision of this Agreement, or underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, will not affect any other provision of this Agreement and the remainder of this Agreement shall remain in full force and effect Therefore, the provisions of this Agreement are deemed severable. HOME CHDO Funding Agreement Page 19 of 21 Attachment No. 1 B. SD-HFH must notify the CITY immediately of any claim or action undertaken by or against it which affects or may affect this Agreement or the CITY, and shall take such action with respect to the claim or action as is consistent with the terms of this Agreement. 27. NLRB Certification SD-HFH warrants by execution of this Agreement and does swear under penalty of perjury that no more than one final unappealable finding of contempt of court by a Federal Court has been issued against SD-HFH within the immediately preceding two - year period because of SD-HFH's failure to comply with an order of a Federal Court which orders SD-HFH to comply with an order of the National Labor Relations Board. 29. Miscellaneous A. Time is of the essence in this Agreement. B. If any date or time period provided for in the Agreement is or ends on a Saturday, Sunday, or federal, state, or legal holiday, then such date shall automatically be extended until 5:00 pm Standard Pacific Time of the next day which is not a Saturday, Sunday, or federal, state, or legal holiday. B. SD-HFH agrees to indemnify, defend and save harmless the City, its officers, agents and employees from any and all liability or claim of liability or claims and losses, including attorney fees accruing or resulting to any and all contractors, subcontractors, suppliers, laborers and any other person, firm or corporation furnishing or supplying work services, materials or supplies in connection with the performance of this Agreement, and from any and all liability or claim of liability or claims and losses, including attorney fees, accruing or resulting to any person, firm or corporation who may be injured or damaged by the negligent, reckless, or intentional acts, errors or omissions of SD-HFH in the performance of this Agreement. C. Without the written consent of the City, this agreement is not assignable by SD-HFH either in whole or in part D. No alteration or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties hereto, and no oral understanding or agreement not incorporated herein, shall be binding on any of the parties hereto. E. SD-HFH, and the agents and employees of SD-HFH, in the performance of this Agreement, will act in an independent capacity and not as officers or employees or agents of the City. F. This Agreement will be construed in accordance with, and governed by, the laws of the State of California. All disputes requiring the commencement of any judicial proceeding under this Agreement will have the place of venue as the South County Regional Judicial District of the County of San Diego, State of California. HOME CHDO Funding Agreement Page 20 of 21 Attachment No. 1 G. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the rest of the Agreement will remain in full force and effect and shall in no way be affected, impaired or invalidated. H. The Exhibits attached hereto are hereby incorporated herein by this reference for all purposes. Exhibits A. Purchase -Rehabilitation -Resale Workplan B. Production Timeline and Development Calendar C. Purchase -Rehabilitation -Resale Budget Worksheet D. CHDO Proceeds Agreement E. Unsecured Environmental Indemnity F. Construction Requirements G. Housing Quality Standards H. Specifications and Technical Standards I. First -Time Homebuyer Assistance Program Manual IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first herein set forth. CITY OF NATIONAL CITY SAN DIEGO HABITAT FOR HUMANITY COMMUNITY HOUSING CORPORATION, INC. By: By: Ron Morrison, Mayor Lori Holt Pfeiler Its: Mayor Its: Executive Director By: Randy C. Frisch Its: Board of Directors Chairman APPROVED AS TO FORM: Claudia G. Silva City Attorney HOME CHDO Funding Agreement Page 21 of 21 Attachment No. 1 EXHIBIT A PURCHASE AND REHABILITATION WORK PLAN The purpose for the City of National City's investment of $650,000 in HUD HOME Investment Partnership funds with Habitat for Humanity -San Diego (HFH-SD) is to assist HFH-SD to purchase, rehabilitate and re -sell, as a goal, a minimum of six (6) single family homes within the city limits of the City of National City to first-time homebuyers earning 80% or less of the HUD determined Median Area Income by June 30, 2014. This investment partnership will turn vacant (foreclosed on or otherwise) single-family homes into lead-free/asbestos-free rehabilitated, quality affordable homeownership opportunities. To achieve these ends the City, through its certified Housing Inspectors, will provide a lead -based paint assessment and inspect each potential home purchase for existing health and safety and building code violations (un-permitted additions, garage conversions, electrical/plumbing upgrades, etc.) and HFH-San Diego will provide an asbestos assessment and then incorporate all that information into its overall rehabilitation plan for the house. This will ensure that the future buyer(s) will have a home free of problems for the long term and intervene in many of the unscrupulous practices that assisted lower income buyers to purchase inadequate housing during the last housing market boom/bust. Specific tasks related to achieving a completed purchase/rehabilitation/re-sale project are as follows: • It must be acknowledged that in order for the City to distribute the $650,000 in HOME funds pledged to the project in a timely manner to avoid the risk of paying back or returning funds to HUD the program must start out with the purchase of two homes within an approximately 30 day time frame of each other. • HFH- SD will access any and all means available to it to identify potential houses to buy. The projected cumulative budget to purchase/rehabilitate/resell a single property is $230,000 with the difference between the affordable first loan and the appraised value being rolled over into second loan at the time of re -sale. The flexibility will allow multiple permutations of purchase versus rehabilitation expenditures such as purchasing properties in good condition needing only upgrades to purchasing homes with potential for resale which need major rehabilitation work. The latter scenario provides the overall best • • • Attachment No. 1 • • • return to the City, from a community development perspective, by removing problem properties from the housing stock and returning them to viability. • For project expediency, once a house has been selected HFH-SD should contact the City and arrange for an inspection and record review as soon as possible to best facilitate determining the scope of work to be pursued. Seller permission is required if such inspection occurs before escrow has been entered into and/or escrow instructions must indicate that such an inspection will occur. The City at this time will also facilitate submission of the HOME Program required historic structures review and perform the rest of the required HUD environmental documentation. • HFH-SD will, during this time (or immediately after the close of escrow), provide a rehabilitation Scope of Work for the City's review and approval incorporating the City's Health & Safety report into the overall rehabilitation plan. The Scope of Work will include a budget with a 10% contingency. The rehabilitation budget can include the cost of an after -rehabilitation market appraisal to establish the final sales price. • Prior to the close of escrow for the initial purchase, the City will deposit the required funds to facilitate the transaction. • When the Scope of Work has been finalized the City, immediately after the close of escrow, will deposit the rehabilitation budget amount plus the flat rate of $30,000 per unit Developer's Fee into a Dixieline Fund Control account to fund the rehabilitation activities on the house. Any unused construction funds will be left in the Fund Control until such time as they can be rolled over into the Fund Control for the next house. Up to $20,000 of the flat rate Developer's Fee can be extracted during the rehabilitation process with the remaining $10,000 to be paid when the sale to the new owner has been completed. • HFH-SD must establish a separate bank account to deposit sales proceeds from each house it sells. Co -mingling of funds is unacceptable. A copy of the bank statement should be provided to the City each month. • HFH-SD can use prior sales proceeds to enter into the next home purchase and the City will continue to fund the rehabilitation and project management costs as detailed above until the entire $650,000 in HOME funds have been distributed. HAZARDOUS MATERIALS NOTIFICATION Asbestos • Materials containing asbestos (ACM) that are to be removed as a condition of contract shall be removed and disposed of in a proper and safe manner by a Attachment No. 1 certified asbestos abatement contractor or in accordance with locally - approved disposal standards. • See California Code of Regulations, Title 8, Section 1529 for laws and regulation detailing asbestos removal and disposal. • See California Asbestos Consultants and Certified Site Technicians • Database from the California Department of Occupational Safety • and Health to make sure the testing consultants and demolition • technicians are certified by the State of California. • See www.sdasbestos.orq for San Diego County asbestos information • and resource site. • No asbestos containing materials shall be used for repair, replacement or • new installation. • Assessment of the need to test for asbestos will be made by the City inspector prior to issuing the bidding specifications. Lead -Based Paint • Every unit constructed before 1978 which is or may become occupied by children under the age of seven must be tested for the presence of lead (exceeding Federal Standards) in paint. Testing and assessment services will be provided by the City Lead Inspector/Assessor at no cost. • Lead based paint must be abated in accordance with federal regulations. The HUD regulation requires that lead -based paint must be abated (completely removed or encapsulated in such a way that it is rendered harmless for a minimum of 20 years.) • Lead waste can be very hazardous to human health and must be disposed of in accordance with applicable laws and regulations. This Guidance is intended to help property owners and contractors understand how to correctly dispose of lead waste when performing lead abatement activities or renovation work that disturbs old paint. Please Note: When the painted surfaces of pre-1979 structures are scraped, sanded, or demolished, You must assume that the paint debris created by this work is hazardous waste. If a certified laboratory confirms otherwise, documentation is required. Separate the paint debris and any other lead - contaminated waste from the rest of your trash and follow the disposal procedures detailed below. Lead -contaminated waste that must be properly disposed of includes rags that were used to wipe away lead -contaminated dust and vacuum cleaner bags that contain lead paint chips. These are common examples of lead waste that must be disposed of correctly. • • • Attachment No. 1 • • • EXHIBIT B PRODUCTION TIMELINE AND DEVELOPMENT CALENDAR Proiect Timeline Assumptions: • Assume close to parallel purchase of two homes to start program once agreement is fully executed • Assume 120 day construction schedule once construction funds are in place for each project • Assume buyer solicitation starts at close of escrow of first two houses purchased for rehabilitation and resale Estimated Individual Project Development Timeline: • 30 days to find house(s) after agreement is fully executed • HFH enters 30 day escrow • City sends historic properties to SHPO to get 30 day clearance and completes HUD environmental review • Preliminary inspection by City for Health & Safety/Lead- based paint within 20 days of closing (or sooner if there is seller permission in place)- SD-HFH checks for asbestos at earliest opportunity • Rehabilitation Plan and Budget to City within 20 days of receiving City inspection report • City reviews Plan/Budget and agreement is reached within 20 days of receiving proposed Plan/Budget • Once purchase escrow has closed City deposits funds in Dixieline Fund Control within 20 days of Plan/Budget agreement (rehab + project costs) or within five days of closing if agreement is reached during the escrow term • Construction term is approximately 120 days from the deposit of construction funds • Sale to new owner is approximately 165 days from start of construction • HFH establishes "escrow" account to keep 1st mortgage proceeds from home sales to establish fund account for future purchases. Estimated Lona Term Calendar • 1st house completion- April 15, 2013 • 2nd house completion- July 15, 2013 • 3rd house completion- October 15, 2013 • 4th house completion- February 15, 2014 • 5th house completion- May 15, 2014 • 6th house completion- to be determined Attachment No. 1 EXHIBIT C HFH PURCHASE/REHAB/RE-SALE BUDGET PROJECTION $ 650,000.00 BEGINNING PROJECT BALANCE $ (380,000.00) $ (80,000.00) $ (60,000.00) PURCHASE OF HOUSE #1 & HOUSE #2 Rehab cost/2nd loan HFH project payment $ 190,000.00 $ (190,000.00) $ (40,000.00) $ (30,000.00) from House #1 PURCHASE OF HOUSE #3 rehab cost/2nd loan HFH project payment $ 190,000.00 $ (190,000.00) $ (40,000.00) $ (30,000.00) from house #2 PURCHASE OF HOUSE #4 rehab cost/2nd loan HFH project payment $ 190,000.00 $ (190,000.00) $ (40,000.00) $ (30,000.00) from house #3 PURCHASE OF HOUSE #5 rehab cost/2nd loan HFH project payment $ 190,000.00 CHDO Proceeds from house #4 $ 190,000.00 CHDO Proceeds from house #5 $ 380,000.00 HFH CHDO PROCEEDS BALANCE AFTER HOUSE #5 $ (190,000.00) $ (40,000.00) $ (30,000.00) PURCHASE OF HOUSE #6 rehab cost/second loan HFH project payment $ 190,000.00 CHDO Proceeds from House #6 • • • Attachment No. 1 • $ 310,000.00 RESTRICTED HFH CHDO PROCEEDS BALANCE AFTER HOUSE #6 TO BE USED FOR ADDITIONAL AFFORDABLE HOUSING DEVELOPMENT IN NATIONAL CITY. NOTE: ONCE THESE FUNDS HAVE BEEN CYCLED THROUGH HOUSING DEVELOPMENT ACTIVITIES THEY BECOME UNRESTRICTED CHDO PROCEEDS NOT SUBJECT TO HOME REQUIREMENTS. $ 180,000.00 TOTAL PROJECT DEVELOPMENT PAYMENTS TO HFH AFTER THE PURCHASE/REHAB/RESALE OF SIX SINGLE FAMILY HOMES • Attachment No. 1 Exhibit D CHDO Proceeds Agreement This Agreement between the City of National City and San Diego Habitat for Humanity ("the CHDO") for the use, allocation, accounting, and monitoring of proceeds realized by the CHDO in the performance of the CHDO's contractual obligations to the Jurisdiction. 1. Definitions a. Project i. A project is any single address. b. Proceeds: i. Proceeds result from the sale of a single family property financed by the Jurisdiction through the HOME program. 1. Proceeds include both HOME funds and any other funds from any source which are realized by the sale of property assisted in any form or fashion with HOME funds. ii. The total HOME funds provided by the Jurisdiction to the CHDO for any specific project under this contract, less the actual expenses for the project, the buyer's down payment, the buyer's contribution, the project fee to the developer and any non -HOME or non-CDBG mortgages are defined as CHDO Proceeds, or Proceeds. c. Allowable Use: i. An eligible activity defined by either the HOME program regulations or this agreement that directly supports the creation of affordable housing in CITY shall be collectively known as an "allowable use." Allowable uses are further defined and limited by this agreement. d. Governing Law and Regulation i. Final HOME Rule: 24 CFR Parts 91 and 92 ii. CPD Notice 97-9 2. Allowable Uses of Proceeds a. Any eligible use of HOME funds, as defined in 24 CFR Parts 91 and 92 of the Final HOME Rule shall be an allowable use under this contract, so long as the allowable use results in or supports the creation of new units of affordable single family housing for purchase by HOME qualified buyers. 3. Prohibited Uses of Proceeds a. Proceeds may not be used to fund, finance or pay for a loan counseling, debt counseling or homebuyer counseling programs or efforts as long as the Jurisdiction provides funding to any other organization or entity to provide these services. Attachment No. 1 • • b. Proceeds may not be used to fund any operating reserves of the CHDO. c. Proceeds may not be utilized to make repairs, reconstruct, or rebuild any unit previously financed with HOME funds without the express written permission of the Jurisdiction. 4. Accounting a. The CHDO shall retain proceeds in a separate bank account and shall provide an accounting of the use of proceeds to the Jurisdiction on a quarterly basis. i. The accounting shall designate the project and show the flow of funds into and out of the project account until all funds in the account are expended in accordance with this agreement. b. To facilitate proper accounting for the proceeds, the CHDO shall utilize the spreadsheet designated by the Jurisdiction and included here by reference. c. The auditor of the CHDO shall, at each annual audit, review the CHDO proceeds account of the CHDO and shall include in the annual audit specific language stating whether or not th CHDO has complied with the terms of this agreement. 5. Allocation and Use of Proceeds a. Under the CHDO's contract with the Jurisdiction, the Jurisdiction provides the CHDO with a development subsidy to assist in the development of single family housing within the Jurisdiction. b. The development subsidy is expended by the CHDO to build the home. c. Proceeds are realized upon the sale of the completed home to a qualified buyer per the definition provided above. i. Proceeds are realized on the date of the close of the property with the homebuyer. d. To facilitate the quick rollover and expenditure of proceeds, the CHDO will invest proceeds in the next available project as soon as the proceeds are realized, and before a request for additional funds for development activity from the Jurisdiction. 6. Draw Requests a. Requests to the Jurisdiction for disbursement of funds for land acquisition, site development and/or construction financing on any subsequent project under this contract, shall include the following: i. The full amount of the requested disbursement. 1. The amount drawn from proceeds a. Including the project name or names the amount is drawn from. Attachment No. 1 2. The net amount of the requested disbursement. 7. Monitoring and Compliance a. Each year, on or before the 31' of March, the CHDO shall deliver an audit by a certified public accountant to the Jurisdiction. i. The audit shall contain the provision noted under accounting. b. The Jurisdiction may request at any time, without prior notice, any file, financial record, or document related to any project that received any HOME funds or Proceeds. i. The CHDO agrees to comply with any request within five business days of the request. c. The Jurisdiction will monitor the CHDO's use of Proceeds based on a risk assessment. Typically, the Jurisdiction will notify the CHDO thirty days in advance of the monitoring. d. Failure by the CHDO to deliver the audit. to submit the required quarterly report, segregate the Proceeds in a separate account, or to properly account for the Proceeds to the standard provided shall by this agreement, shall be a breach of contract under the terms of this Agreement. i. The Jurisdiction, may, at the Jurisdiction's sole discretion, end all payments under the contract until the terms of this Agreement are met. • • • Attachment No. 1 • • • EXHIBIT E UNSECURED ENVIRONMENTAL INDEMNITY AGREEMENT THIS UNSECURED ENVIRONMENTAL INDEMNITY AGREEMENT ("Indemnity") is dated as of this day of , 20XX, by San Diego Habitat for Humanity, Inc., a California nonprofit corporation ("Indemnitor"), to and for the benefit of the City of National City ("CITY"), its successors and assigns and, to the extent not otherwise referenced, the Indemnified Parties (as hereinafter defined). RECITALS A. CITY has agreed to make a grant ("Grant") to Indemnitor as described in that certain CHDO Funding Agreement between CITY and Indemnitor, dated as of , 20XX ("Agreement"). B. It is a condition of CITY's making the Grant that this Indemnity be executed and delivered by Indemnitor. CITY is making the Grant in reliance upon this Indemnity. C. This Indemnity is unsecured. D. This Indemnity Agreement provides blanket indemnity for all properties purchased with Grant funds as described in the Agreement referenced above. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of CITY granting the Funds, and other valuable consideration, the receipt of which is hereby acknowledged, Indemnitor agrees as follows: 1. Indemnity. (a) Subject to Sections 2, 3 and 4 below, Indemnitor hereby agrees to defend, protect, indemnify and hold harmless CITY, CITY' s affiliates, directors, officers, shareholders, agents and employees, and CITY's participants, successors and assigns specified in Section 4 hereof (hereinafter, collectively, the "Indemnified Parties"), from and against, and shall reimburse the Indemnified Parties for, any and all actual out-of-pocket costs (including, without limitation, attorneys' fees, expenses and court costs), expenses or losses arising from any claim, liability, damage, injunctive relief, injury to person, property or natural resources, fine, penalty, action or cause of action (collectively, "Costs and Liabilities"), incurred by or asserted against any Indemnified Party and arising directly or indirectly, in whole or in part, out of the release, discharge, deposit or presence, or alleged or suspected release, discharge, deposit or presence, of any Hazardous Materials at, on, within, under, about or from the Property, or in or adjacent to any part of the Property, or in the soil, groundwater or soil vapor on or under the Property, or elsewhere in Attachment No. 1 connection with the transportation of Hazardous Materials to or from the Property in violation of any Hazardous Materials Laws, whether or not known to Indemnitor or Indemnified Parties, whether foreseeable or unforeseeable, regardless of the source of such release, discharge, deposit or presence or, except as expressly provided to the contrary in Sections 2 and 4 hereof, regardless of when such release, discharge, deposit or presence occurred or is discovered. Without limiting the generality of the foregoing indemnity, such Costs and Liabilities shall include, without limitation, all actual out- of-pocket costs incurred by Indemnified Parties in connection with (i) determining whether the Property is in compliance with this Indemnity and with all applicable Hazardous Materials Laws or the amount of money required to remediatc any environmental contamination, and causing the Property to be or become in compliance, with all applicable Hazardous Materials Laws, (ii) any removal or remediation of any kind and disposal of any Hazardous Materials present at, on, under or within the Property or released from the Property to the extent required by applicable Hazardous Materials Laws in effect at the time of such removal, remediation or disposal, and (iii) repair of any damage to the Property or any other property caused by any removal, remediation or disposal. (b) Upon demand by any Indemnified Party, Indemnitor shall defend any investigation, action or proceeding in connection with any claim or liability, or alleged claim or liability, that would, if determined adversely to such Indemnified Party, be covered by the foregoing indemnification provisions, such defense to be at lndemnitor's sole cost and expense and by counsel reasonably approved by such Indemnified Party, which counsel may, without limiting the rights of an Indemnified Party pursuant to the next succeeding sentence of this Section 1(b), also represent Indemnitor in such investigation, action or proceeding. If any Indemnified Party determines reasonably and in good faith that its defense by Indemnitor is being conducted in a manner which is prejudicial to its interests, such Indemnified Party may elect to conduct its own defense through counsel of its own choosing and at the expense of Indemnitor. (c) As used herein, the term "Hazardous Materials" means and includes any flammable, explosive, or radioactive materials or hazardous, toxic or dangerous wastes, substances or related materials or any other chemicals, materials or substances, exposure to which is prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, may or could pose a hazard to the health and safety of the occupants of the Property or of property adjacent to the Property, including. hut not limited to, asbestos, PCBs, petroleum products and byproducts, substances defined or listed as "hazardous substances" or "toxic substances" or similarly identified in, pursuant to, or for purposes of, the California Solid Waste Management, Resource Recovery and Recycling Act (California Government Code §66700 et seq.), the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.), Section 25117 or Section 25316 of the California Health & Safety Code; and any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material; or any substances or mixture regulated under the Toxic Substance Control Act of 1976, as now or hereafter amended (15 U.S.C. §2601 et seq.); and any "toxic pollutant" under the Clean Water Act, as now or hereafter amended (33 U.S.C. §1251 et seq.); and any hazardous air pollutant under the Clean Air Act, as now or hereafter amended (42 U.S.C. §7901 et seq.). Notwithstanding the above, the term "Hazardous Materials" shall not include small amounts of 2 Attachment No. 1 • • • chemicals, cleaning agents and the like commonly employed in routine household uses in a manner typical of occupants in other similar residential properties provided they are used in compliance with applicable laws. The term "Hazardous Materials Laws" means any federal, state or local law, code, statute, ordinance, rule, regulation, rule of common law or guideline relating to Hazardous Materials now or hereafter enacted or promulgated (collectively, and including, without limitation, any such laws which require notice of the use, presence, storage, generation, disposal or release of any Hazardous Materials to be provided to any party). 2. Time Limits on Claims. Notwithstanding the foregoing provisions: (a) No claim shall be made hereunder by any Indemnified Party unless and until the following event shall have occurred: vesting of title to the Property in CITY or any Indemnified Party through judicial or non judicial foreclosure or acceptance of a deed in lieu thereof. (b) Indemnitor shall not have any obligation under this Indemnity to an Indemnified Party with respect to any Costs and Liabilities that, prior to the first to occur of the events described in Section 2(a) above: (i) were actually known to CITY; (ii) were liquidated in amount, or were otherwise readily determinable in amount without undue delay; and (iii) would have been lawfully and properly includable as part of any breach of the Grant Agreement (c) If any Indemnified Party or any affiliate of any Indemnified Party has acquired ownership of the Property through foreclosure or deed in lieu of foreclosure, the obligations of Indemnitor hereunder shall apply, without limitation, to all Costs and Liabilities that arise out of or are attributable to, whether directly or indirectly, ownership of the Property or any part thereof by any Indemnified Party or any such affiliate, or to the position of such Indemnified Party or such affiliate as an owner in the chain of title to the Property or any part thereof. (d) If the requirements of the Grant Agreement has been completed in full the obligations of Indemnitor hereunder shall continue to apply, without limitation, to all Costs and Liabilities that arise out of or are attributable to, whether directly or indirectly, any claim or allegation against an Indemnified Party relating to any act or omission of such Indemnified Party in respect of the Loan or the Property, or in connection with any exercise of such Indemnified Party's rights under the Grant Agreement. 3. Acts of Indemnified Parties. (a) Notwithstanding anything to the contrary herein, Indemnitor shall not be liable hereunder to an Indemnified Party to the extent of that portion of any Costs and Liabilities which Indemnitor establishes is attributable to an affirmative act of such Indemnified Party, its agent or any successor in interest of an Indemnified Party at the Property which causes (i) the release, discharge, deposit or presence, or alleged or suspected release, discharge, deposit or presence of a Hazardous Material at the Property, or (ii) material aggravation of a then existing Hazardous Material condition or occurrence at the Property, if and only if, in either such case referred to in (i) or (ii) above, such act was in violation of any Hazardous Materials Laws or was carried out without reasonable care under the circumstances. Attachment No. 1 (b) In addition, lndemnitor shall not be liable hereunder for that portion of any Costs and Liabilities which Indemnitor establishes is attributable to the introduction and initial release, discharge or deposit, or alleged or suspected introduction, initial release, discharge or deposit of a Hazardous Material at the Property by any party, other than Indemnitor or an affiliate of Indemnitor, at any time after Indemnitor's ownership interest in the Property terminates. Notwithstanding the foregoing, but subject to Sections 2 and 3(a) above and Section 4 below, the liability of Indemnitor hereunder shall otherwise remain in full force and effect after CITY or such affiliate of CITY so acquires title to the Property, including without limitation with respect to any Hazardous Materials which are discovered at the Property after the date CITY or such affiliate of CITY acquires title but which were actually introduced to the Property prior to the date of such acquisition. 4. Indemnified Parties. This Indemnity and Indemnitor's obligations hereunder shall inure to the benefit of and be enforceable only by (a) CITY, CITY's directors, officers, shareholders, agents and employees, (b) any person or entities to which any CITY participates, assigns or sells all or any portion of its interest in the Loan, or which otherwise succeeds to the interest of CITY under the Agreement, whether by purchase or otherwise, and (c) any affiliate of CITY which acquires title to the Property at a foreclosure sale or by deed in lieu of foreclosure. 5. Unsecured Obligations. The obligations of Indemnitor hereunder are unsecured. This Indemnity is not intended to be, nor shall it be, secured by the Deed of Trust or any other instrument or agreement executed by Indemnitor or any other entity or person in favor of CITY or any Indem- nified Party relating to the Grant. The obligations of Indemnitor under this Indemnity are independent of any indemnification or other obligations of Indemnitor under the Grant Agreement with respect to any Hazardous Materials. The rights and remedies of the Indemnified Parties under this Indemnity shall be in addition to any other rights and remedies of such Indemnified Parties under the Agreement. In no event shall any provision of this Indemnity be deemed to be waiver of or to be in lieu of any right or claim, including without limitation any right of contribution or other right of recovery, that any person entitled to enforce this Indemnity might otherwise have against Indemnitor under any Hazardous Materials Laws. Any sums payable hereunder shall not he deemed to be based upon any diminution in or other impairment of the value of any collateral held by CITY to enforce the Grant requirements. 6. Interest on Unpaid Amounts. Any amount claimed hereunder by an Indemnified Party not paid by Indemnitor within thirty (30) days after written demand made by such Indemnified Party and accompanied by a reasonable summary of the amounts claimed, shall bear interest at the rate of ten percent (10%) per annum or the highest interest rate permitted by law, whichever is less. 7. Limitations on Liability. The liability of lndemnitor under this Indemnity shall in no way be limited or impaired by (a) any amendment or modification of the provisions of any of the Loan Documents; (b) except as set forth in Sections 2, 3 and 4, any participation in or sale or assignment of the Loan Documents or any sale or transfer of all or part of the Property; (c) the release of Indemnitor or any person or entity from performance or observance of any of the agreements, covenants, terms, or conditions contained in any of the Loan Documents by operation of law; and, in any such case, whether with or without notice to Indemnitor and with or without consideration. Except as provided in Sections 2, 3 and 4, lndemnitor's obligations hereunder shall in no way be impaired. reduced or released by reason of (i) an Indemnified Party's omission or delay in exercising 4 Attachment No. 1 • • any right described herein or (ii) any act or omission of an Indemnified Party in connection with any notice, demand, warning, or claim regarding violations of codes, laws or ordinances governing the Property. 8. Recourse Obligations. Notwithstanding anything to the contrary in the Loan Documents, Indemnitor shall be personally liable on a recourse basis for the obligations of Indemnitor set forth herein. 9. Successors and Assigns. This Indemnity shall be continuing, irrevocable and binding upon each of the persons and entities comprising Indemnitor and their respective heirs, successors, and assigns. 10. Inconsistencies. In the event of any inconsistencies or conflicts between the terms of this Indemnity and the terms of the Grant Agreement (including any exculpatory language contained therein), the terms of this Indemnity shall control. 11. Separate Causes of Action. A separate right of action hereunder shall arise each time an Indemnified Party acquires knowledge of any matter described herein. Separate and successive actions may be brought hereunder to enforce any of the provisions hereof at any time and from time to time. No action hereunder shall preclude any subsequent action. 12. Severability. If any provision of this Indemnity shall be determined to be unenforceable in any circumstances by a court of competent jurisdiction, then the balance of this Indemnity never- theless shall be enforceable, and the subject provision shall be enforceable in all other circumstan- ces. 13. Attorneys' Fees. In any action or proceeding brought by the Indemnified Parties to enforce any rights under this Indemnity, the prevailing party shall be entitled to all reasonable attorneys' fees and all costs, expenses and disbursements in connection with such action. 14. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and will be effectively served upon personal delivery or, if mailed, no later than 48 hours after deposit in first class or certified United States mail, postage prepaid, sent to: To CITY: To Developer: City of National City 1243 National City Boulevard National City, CA 91950-4397 San Diego Habitat for Humanity, Inc. 10222 San Diego Mission Road San Diego, CA 92108 which addresses may be changed by written notice. Attachment No. 1 15. Governing Law. This Indemnity shall be governed by and construed in accordance with the laws of the State of California. 16. Counterparts. This Indemnity may be executed in any number of counterparts and, as so executed, the counterparts shall constitute one and the same agreement. The parties agree that each such counterpart is an original and shall be binding upon all the parties, even though all of the parties are not signatories to the same counterpart. 17. Exhibits and Recitals Incorporated. All exhibits referred to in this Indemnity, if any, are hereby incorporated in this Indemnity by this reference, regardless of whether or not the exhibits are actually attached to this Indemnity. The Recitals to this Indemnity are hereby incorporated in this Indemnity by this reference. 18. Signature Authority. All individuals signing this Indemnity 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 CITY 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. 6 Attachment No. 1 • • • EXHIBIT F CONSTRUCTION REQUIREMENTS San Diego Habitat for Humanity's receipt of HOME funds for purposes of paying construction related costs in connection with the Project is conditioned upon the SD-HFH adherence to certain construction requirements imposed by the City in connection with the Project, including, without limitation, the requirements set forth in this EXHIBIT F. 1. Submittals and Review Procedure; Construction Monitoring (a) Submittal requirements shall include the following: (i) SD-HFH shall submit to the City a Project team -staffing plan ("Staffing Plan") for review and approval by the City. The Staffing Plan shall show all component functions and reporting relationships. (ii) SD-HFH shall submit to the City a Scope of Work with a corresponding line item budget as support for any request for funds. SD-HFH shall make sure they are familiar with the City of National City building permit requirements and apply for any and all permits as required. (iii) SD-HFH shall provide to the City a copy of the approved building permit and any construction drawings required to receive said permit. (b) The City will provide construction monitoring oversight of the Project. SD- HFH shall maintain at the job site adequate records and shall permit site access to the City at all reasonable times to accommodate the monitoring activities. The monitoring program may include, but is not limited to, the following: attendance at job site meetings; review of job correspondence; site inspections; pay request reviews and approvals; 2. Loan Disbursement and Requisitions. Requests to the City for construction progress payments ("Progress Payments") by the SD-HFH under the terms of this Agreement are to be made on the basis of percentage of work completed to the date of each such request. Dixieline Fund control will be contracted to distribute funds, obtain invoices, and require execution of appropriate lien releases from all contractors and material suppliers pursuant to California mechanics lien law. Requests will be made per Dixieline's adopted fund control format. If a site visit is required by the City, the City agrees to perform the Site Visit within two working days of receipt of the request. The Attachment No. 1 City shall have up to four business days to approve the request from the original date of the request. Time is of the essence in the processing of requests. 3. Insurance (a) The purpose of this Section is to establish insurance requirements. (b) SD-HFH shall require that any contractor working on a project shall procure and maintain at Contractor's expense the following insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work by such Contractor, its agents, representatives, or employees that the contractors shall otherwise meet the insurance requirements set forth below: (i) Comprehensive General Liability: $500,000 combined single limit for each occurrence ($1,000,000 General Aggregate) for bodily injury, personal injury and property damage, and products and completed operations coverage for all subcontractors. (ii) Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage covering owned, non -owned and hired vehicles. (iii) Workers Compensation as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident. (iv) SD-HFH shall furnish the City upon request, copies of certificates of insurance maintained by it (and all subcontractors and sub - subcontractors) with original endorsements affecting coverage as required above. 4. Construction Budget Changes. The line item construction budget may be subject to change from time to time based on possible change orders and/or changes in the scope of work. Provided there is adequate contingency remaining in the construction budget to cover such change, the Borrower may approve any changes in the line item construction budget up to the greater of $2,500 or 10% of the original line item amount without the approval of the City. The City shall have the right to approve any changes above the aforementioned limits. The Borrower agrees to provide the City with an updated construction budget within 10 days of any such change. • • • Attachment No. 1 • • • EXHIBIT G CALIFORNM; NATIONAL CITY INCORPORA?E9 - HOUSING QUALITY STANDARDS These housing rehabilitation/construction standards are intended as a guide for housing assisted with United States Department of Housing and Urban Development (HUD) HOME Investment Partnership Program (HOME) funds and/or any other public funding sources. All HOME and other publicly assisted housing must, upon completion, be affordable, decent, safe, and sanitary. As such, assisted housing must meet or exceed these standards and all local codes, zoning and ordinances. With the exception of locally adopted variations, all habitable structures assisted with HOME must meet these standards. New construction shall comply in full with all applicable codes and regulations. The City of National City reserves the right to insist on repair of any item which, in accordance with this standard: 1. renders a property unsafe and/or unsanitary; 2. constitutes a major building system in danger of failure; 3. fails to meet applicable codes. SUBSTANDARD CONDITIONS When substandard conditions are encountered in a unit to be rehabilitated with HOME Program funds, all substandard items must be addressed. Any building or portion thereof which is determined to be an unsafe building in accordance with the Building Code or Housing Quality Standards, or any building or portion thereof including any dwelling unit in which there exists any conditions that endangers life, limb, health, property, safety, or welfare of the public or occupants thereof shall be deemed to be substandard. • Structural Hazards. Buildings or portions thereof shall be deemed substandard when they are or contain structural hazards. Structural hazards shall include, but not be limited to, the following: • Deteriorated or inadequate foundations • Defective or deteriorated flooring or floor supports Attachment No. 1 • Flooring or floor supports of insufficient size to safely carry imposed loads • Members of walls, partitions or other vertical supports that split, lean, list, or buckle due to defective material or deterioration • Members of walls, partitions, or other vertical supports that are of insufficient size to carry imposed loads with safety • Members of ceilings, roofs, and supports or other horizontal members which sag, split or buckle due to defective material or deterioration • Members of ceilings, roofs, and supports or other horizontal members that are of insufficient size to carry the imposed loads with safety • Condition of stairs, railings and porches that are hazardous or not sound • Potential for collapse of the chimney or the chimney is not capable of safely carrying smoke, fumes and gasses from the unit to the outside • Hazardous Electrical Wiring. Electrical wiring which was installed in violation of code requirements in effect at the time of installation or electrical wiring not installed in accordance with generally accepted construction practices in areas where no codes were in effect or which has not been maintained in good condition or which is not being used in a safe manner shall be considered substandard. • Hazardous Plumbing. Plumbing which was installed in violation of code requirements in effect at the time of installation or plumbing not installed in accordance with generally accepted construction practices in areas where no codes were in effect or which has not been maintained in good condition or which is not free of cross -connections or siphoning between fixtures shall be considered substandard. • Hazardous Mechanical Equipment. Mechanical equipment which was installed in violation of code requirements in effect at the time of installation or mechanical equipment not installed in accordance with generally accepted construction practices in areas where no codes were in effect or which has not been maintained in good and safe condition or which is not being used in a safe manner shall be considered substandard. • Faulty Weather Protection. Buildings or portions thereof shall be considered substandard when they have faulty weather protection. This is defined as conditions that would allow significant amounts of water or air to enter the unit which would result in damage such as the following: • Deteriorated, crumbling or loose plaster or stucco • Deteriorated or ineffective waterproofing of exterior walls, roof, foundation or floors, including broken windows or doors • Attachment No. 1 • Broken, split, rotted or buckled exterior wall coverings or roof coverings • Visible internal water damage that indicates roofing failure • Faulty Materials of Construction. The use of construction materials which are not specifically allowed or approved by the Building Code, or the use of approved materials which have not been adequately maintained in a good and safe condition, shall cause a building to be substandard. • Hazardous or Unsanitary Premises. The accumulation of weeds, vegetation, junk, dead organic matter, debris, garbage, offal, rat harborages, stagnant water, combustible materials and similar materials or conditions on a premises shall constitute fire, health or safety hazards and shall be abated. • Improper Occupancy. All buildings or portions thereof occupied for living, sleeping, cooking or dining purposes which were not designed or intended to be used for such occupancies shall be deemed substandard. Structures with additions or modifications must comply with applicable budding codes. Substandard workmanship, unsafe items, or hazardous situations are not acceptable. If repair of these items is not cost effective, the addition or modification must be demolished. The requirements outlined in this document do not preempt local or state codes or ordinances, nor do they alter or affect a contractor's obligation to comply with local or state law or requirements. All new work must conform to local codes. Any work performed shall not cause existing buildings to become unsafe. Existing buildings legally constructed in the past shall be considered acceptable today unless they do not conform to specific local retroactive requirements as detailed in the locally enforced building codes. RESIDENTIAL HOUSING STANDARDS Structural Requirements • General. Residential structures may be of any type of construction that is permitted by the Building Code. Roofs, floors, walls, foundations, and all other structural components of the building shall be capable of resisting any and all forces and loads to which they may be subjected. All structural elements shall be proportioned and joined in accordance with the stress limitations and design criteria as specified in the appropriate sections of the Building Code. Buildings of every permitted type of construction shall comply with the applicable requirements of the Building Code. Attachment No. 1 • Shelter. Every building shall be weather protected as to provide shelter for the occupants against the elements and to exclude dampness. The roof covering shall be capable of accommodating required loads as specified in the Building Code. The roof shall provide a barrier against the weather to protect the supporting elements and the structure beneath. Roof covering materials shall be approved and installed in a manner consistent with the manufacturer's requirements and in accordance with the Building Code. • Protection of Materials. All wood shall be protected against termite damage and decay as provided for in the Building Code. • Foundations. The foundation and its' structural elements shall be capable of accommodating all superimposed live, dead, lateral, and all other loads in accordance with accepted foundation design practices. Lots shall be provided with adequate drainage and shall be graded as to drain surface water away from foundation walls. Finish grade shall be below floor grade as per the Building Code minimum requirements. Space and Occupancy Requirements • Location on Property. Newly constructed buildings shall be located with respect to property lines and to other buildings on the same property as required by the Building Code. • Light. Habitable rooms within a dwelling unit shall be provided with natural light by means of exterior glazed openings (i.e. windows, skylights) with a minimum opening area of 10 square feet. Habitable rooms include those for living, sleeping, cooking and eating. Bathrooms, closets, halls, storage or utility space are not considered habitable rooms. • Ventilation. Habitable rooms within a dwelling unit shall be provided with natural ventilation by means of operable exterior openings (i.e. windows, doors) with a minimum opening area of 5 square feet. Bathrooms, laundry rooms, and similar rooms shall be provided with natural ventilation by means of operable exterior openings with a minimum opening area of 1'/ square feet. In lieu of required exterior openings for natural ventilation, a mechanical ventilation system may be installed providing the number of air changes to meet code for the room being ventilated. Sanitation Requirements • Plumbing Systems. An acceptable plumbing system consists of three separate parts: an adequate potable water supply system; a safe, adequate drainage system; and ample fixtures and equipment. All installations shall be consistent with the Building Code. • Septic Systems. A septic tank with the field located away from the house is acceptable in rural areas. Documentation or certification is to be obtained • • • Attachment No. 1 • • • from the local health department or authorized local agency indicating that it is an approved sanitary system. • Bathrooms. Each unit must have a bathroom. The bathroom must be in a separate room with a flush toilet in operating condition. The unit must have a shower or a tub with hot and cold water in operating condition. These facilities must be connected to an approved disposal system. The facilities may be scattered within the unit (such as a toilet in one enclosure and washbasin in another area. The washbasin or sink must have a gas trap (drain trap). Floors of bathrooms shall be resistant to damage from water or dampness. • Kitchens. Each dwelling unit shall be provided with a kitchen which is defined as being a separate room or area of a larger room which is used primarily for preparation of meals and storage of food. A bedroom with a refrigerator in it cannot be defined as a kitchen. Defined by facilities contained, a kitchen or kitchen area must have a separate kitchen sink for preparing food and washing dishes, with piped hot and cold water which drains into an approved system, a stove for cooking food, a refrigerator for storing food and facilities for the sanitary disposal of food and refuse. The sink shall be of a nonabsorbent material. All appliances must be free of hazardous conditions including a damaged or broken stove, sink or refrigerator that endangers users. There must be no evidence of gas or water leakage that presents the danger of fire or electrical shock. The stove and refrigerator must be free of potential hazards due to improper hookup. • Fixtures. All plumbing fixtures shall be connected to a sanitary sewer or to an approved private sewage disposal system. All plumbing fixtures shall be connected to an approved system of water supply and be provided with hot and cold running water, except water closets may be provided with cold water only. All plumbing fixtures shall be of an approved nonabsorbent material. All sanitary facilities shall be installed and maintained in a safe and sanitary condition and in accordance with applicable requirements of the Building Code. Mechanical System(s) Requirements • Heating. Dwelling units shall be provided with heating facilities capable of maintaining a room temperature of 70° F. (21.1°C.) at a point 3 feet above the floor directly or indirectly in all rooms used for living. Such facilities shall be installed and maintained in a safe condition and in accordance with all applicable laws and requirements of the Building Code. Un-vented fuel - burning heaters are not permitted. Wood, wood pellet or similar heating devices must be installed according to the manufacturer's directions and according to applicable requirements of the Building Code. All heating devices and wood burning heaters shall be of an approved type. • Evaporative Cooling Systems. Evaporative cooling systems shall be installed according to the manufacturer's guidelines. Evaporative cooling systems Attachment No. 1 shall be installed so as to minimize the probability of damage from an external source. Every evaporative cooler shall be accessible for inspection, service and replacement without removing permanent construction. • Electrical Equipment. All dwelling units shall be connected to electrical power. Every habitable room shall contain at least one electrical convenience outlet and at least one electric light fixture. Every water closet compartment, bathroom, and laundry room shall contain at least one GFCI type electrical convenience outlet and one electric light fixture. Every kitchen shall have at least two GFCI type electrical convenience outlets and one electric light fixture. • Water Heaters. Gas water heaters may not be in bedrooms or other living areas unless safety dividers or shields are installed. Water heaters are to be properly installed and maintained with adequate venting, relief valves and discharge lines conforming to current Uniform Plumbing Codes. • Ventilation. Ventilation for rooms and areas and for fuel burning appliances shall be provided as required in the Building Code. Ventilation systems shall be maintained in good operational order. Safety Requirements • Attached Garages. Garages attached to dwelling units shall be completely separated from the residence and its' attic area by means in accordance with the Building Code. Openings from a private garage directly into a room used for sleeping purposes shall not be permitted. Other openings between a garage and residence shall be equipped with a properly fire rated self closing door as prescribed by the Building Code. Garage and carport floor surfaces shall be of approved noncombustible material. That area of floor used for parking vehicles shall be sloped to facilitate the movement of liquids toward the main vehicle entry doorway. • Exits. Dwelling units shall have access directly to the outside or to a public corridor. All buildings or portions thereof shall be provided with exits that meet the local Building Code, Fire Code or considered adequate by the appropriate local officials. Sleeping rooms shall have at least one operable window or exterior door approved for emergency egress, escape, or rescue. The unit must be operable from the inside to a full clear opening without the use of separate tools. • Smoke Detectors. Each unit must have at least one hardwired (with battery backup) smoke detector in proper operating condition on each level of the dwelling unit, including basements but excluding crawl spaces and unfinished attics. Smoke detectors are to be installed inside of each separate sleeping area or bedroom, in the corridor giving access to each separate sleeping area, and where there is a ceiling elevation change of two feet or more. Detectors must be installed in accordance with and meet the requirements of • • • Attachment No. 1 • • • National Fire Protection Association Standard (NFPA) 74. If the unit is occupied by any hearing -impaired person, smoke detectors must have an alarm system designed for hearing impaired persons as specified by NFPA. Attachment No. 1 EXHIBIT H CALLFORN1A NATIONAL CITY `-' •�TCt04R80RKTE1 HOUSING REHABILITATION PROGRAM SPECIFICATIONS AND TECHNICAL STANDARDS The specifications on the following pages are incorporated by reference into every rehabilitation contract entered into through the City of National City Residential Rehabilitation Program (NCRRP). The standard specifications are grouped by trade and include general and specific requirements for various rehabilitation tasks. All demolition, additions, alterations, modifications, repairs, or improvements to property(s) and/or structure(s) performed shall fully comply with the following regulations. The table below provides information on the regulatory components that are referred to collectively herein as "local building code". These various components, taken singularly or in total, provide the regulatory framework for the standards below and have precedence over the standards. KNOW THE CODES!!! City of National City Municipal Code Title 14 (Water and Sewer) City of National City Municipal Code Title 15 (Building and Construction) City of National City Municipal Code Title 18, Chapter 18.50 (Fences, Walls, Hedges) City of National City Municipal Code Title 18, Chapter 18.54 (Landscaping) City of National City Municipal Code Title 9, Chapter 9.12 (Fire Hazard Abatement) City of National City Municipal Code Title 9, Chapter 9.16 (Garbage) California Health and Safety Code Division 13- Housing Part 2.5 2010 California Building Code 2010 California Plumbing Code 2010 California Electrical Code 2010 California Mechanical Code Attachment No. 1 • • • 2010 California Fire Code 1997 Uniform Housing Code 2010 California Energy Code 2010 Green Building Standards • California Code of Regulations, Title 8, Section 1529 (Asbestos Regulations) Residential Lead -Based Paint Hazard Reduction Act of 1992 (Public Law 102-550) as amended through April 21, 2005. HUD Lead Safe Housing Rule HUD Title X, Sections 1012, 1013, 1018 EPA Lead Renovation, Repair and Painting Program- June 23, 2008 California Civil Code 1941.1 & California Health & Safety Code 17920.10, 17961, 17980, 10525 to 105257 (Lead Safe Housing and Lead Hazards) Fair Housing for HOME Program Participants- released 2005 Fair Housing Act Design Manual- amended 1998 NOTES: Substitutions: It is not desired of the Owner to exclude any product of quality equal to those specified herein or in the Invitation to Bid. Trade names are generally used only to establish the level of quality desired, but before any substitutes are made, the approval of the Owner and NCRRP Staff must be obtained. Measurements: All measurements and sizes stated or implied in the Invitation to Bid are approximate only, and shall be verified by the contractor on -site. Applicability: In the event of a conflict between these Standard Specifications and the Invitation to Bid, the latter shall govern. Not all tasks for which bids might be solicited can be specified in this Manual. Tasks for which methods and materials are not specified will be performed as indicated in the Invitation to Bid and in accordance with the best practices of the trade. SITE WORK DEMOLITION AND DEBRIS General Instructions: Demolition work shall conform to the requirements of all applicable codes, ordinances and utility company regulations. Existing shrubs and trees to remain shall be protected until demolition is complete and the site is cleared. Areas of grass killed by demolition or by storage of debris and other materials shall be raked clean, leveled, and re -seeded, unless Attachment No. 1 otherwise noted in the work list. All debris must be removed prior to final inspection and all areas be left in a neat condition. GRADING Yards: Yards scheduled to be graded will be filled and/or raked smooth to finish grade that ensures proper drainage of the lot. Backfill material shall be clean and free from debris, with no wood scraps. It will be placed according to acceptable practices. Where applicable, the top 4 inches shall be top soil suitable for plant growth. Rough grading shall establish a sub -grade parallel to and approximately 4 inches below the proposed finished grade. Finished grading shall ensure that surface and ground water does not collect either under slabs or at the outside face of basement and foundation walls. All surfaces adjacent to foundation or basement walls shall slope a minimum of 2% (1/4" inch per foot) to ensure adequate surface runoff. In no case shall surface waters be diverted into adjacent private property. Crawl Spaces: No wood surface shall be closer than 6 inches to any soil. If a moisture problem is evident in the crawl space, grading shall be done to take surface water to best outfall. When a furnace is installed in a crawl space, grading shall be done according to clearances defined in Chapter Seven of the 2007 California Mechanical Code. Grading shall be done to take water away from furnace location. All scrap wood and concrete forming materials shall be removed from crawl spaces. Site Drainage: All local ordinances regulating the disposal of storm water, including type of piping, shall be followed. Crushed Rock Surfaces.- Remove any large rocks or foreign material. Where substantial depressions exist, remove existing materials, fill with dense, well drained soil and grade to obtain a uniform surface. Top with crushed rock in sufficient amount to achieve a total depth of 4 inches. Crushed rock surfaces shall not be installed on grade in excess of 7% (7/8" per foot). The surface shall be crushed rock no less than 4 inches in depth. Borders shall be provided at all perimeter edges to retain rock. LANDSCAPE Shrubs: When shrubs are to be removed, they shall be removed complete with roots. Any depressions shall be filled with topsoil and the entire area raked smooth and clean. New Planting: Type and size of new shrubs shall be as indicated in the work list. Trees: When trees are scheduled to be removed, they shall be cut to a point as close to the finish grade as possible. The NCHPP/owner may elect to have the stump(s) ground to ground level. All debris shall be removed and the entire area shall be raked and/or broom swept clean. • • • Attachment No. 1 • • CONCRETE GENERAL INSTRUCTIONS When patching concrete, apply a bonding agent prior to application of flush patching material. New concrete shall not be placed on extremely wet or frozen ground, and no concrete shall be placed when temperature is less than 40 degrees F. or greater than 90 degrees F., unless it is properly protected and controlled in accordance with recommendations of the American Concrete and the Portland Cement Association. The type of footing, foundation or slab system used shall be determined by load bearing capacity of the soil. Soils of low bearing capacity necessitate provisions for greater load distribution. On fill material, footings shall extend to undisturbed soil unless the fill has been sufficiently compacted to insure against excessive differential or overall movement of the structure. PAVING Sidewalks: Sub -grade shall be well drained and uniformly graded 3-1/2 inches below finish grade. New concrete shall be at least 3-1/2 inches thick (@2,500 psi minimum). Finish surface of new sidewalks shall be approximately parallel with that of adjacent soil; sidewalks shall be constructed so as not to impede drainage of surface water away from the house and off the property. Contraction (control) joints shall be placed 4 to 5 feet apart, but never more than 2-1/2 times in feet the thickness of the slab in inches. Depth of joint shall be 1/4 to 1/5 the thickness of the slab. Width of new concrete sections shall be as indicated in the work list but will never be less than 36 inches wide. Wearing surfaces shall be floated with a wood float and receive a light broom finish. Concrete shall be properly sealed with a curing agent meeting ASTM standard 309 or kept moist for a period of three (3) days to ensure proper curing. FLATWORK Deck Slabs and Patios: New deck slabs and patios shall be a minimum of 3-1/2 inches thick (@ 2,500 psi minimum). Slab shall be reinforced as needed for each installation. Provide flashing between the slab and wood construction. Slope the deck slab to drain away from the foundation wall. Wearing surfaces shall be troweled and have non-skid texture. Control joints shall be provided for all flatwork in accordance with industry standards. Floor Slabs at or Below grade: Base for slab shall be well -compacted 4 inch sand -gravel sub - grade. New slab shall be a minimum of 4 inches thick (@ 2,500 psi minimum). When available, slope concrete to floor drains. Surfaces shall be troweled smooth. FOOTINGS Pier Blocks: New pier blocks shall be pre -cast or poured units. Block shall extend a minimum 4 inches above finished floor elevation or 6 inches above earth. They shall have the same or larger top dimensions as the wood posts. Bottom dimension will be a minimum of 12 inches square. Pier blocks shall have steel anchoring pins or recessed pockets. Attachment No. 1 Post and Pier Footings (@2,500 psi minimum): Footings supporting wood piers shall extend from a point at least 12 inches below grade to a point 6 inches above grade. They shall have the same or larger top dimension as the piers. Bottom dimensions will vary with the footing design. Pier blocks shall have steel anchoring pins or recessed post pockets. Footings supporting masonry piers shall extend at least 12 inches below grade and have the same top dimensions as the piers or a minimum of 12 inches by 12 inches. Footings supporting a second floor load must meet requirement FOR STRUCTURAL CALCULATIONS DETAILING SOIL CONDITION, LOAD CALCULATIONS, EARTHQUAKE STANDARDS, and ETC. AS PER CURRENT BUILDING CODE REQUIREMENTS. Footings for wood posts shall extend from a point at least 12 inches below finished floor elevations to a point at least 4 inches above; footing shall have the same top dimension as the post. When necessary to remove a section of existing floor slab, cut out a 12 inch by 12 inch section using a masonry saw or chisel. Dovetail edges so that the opening at the bottom of the slab is larger than the opening at the top. Remove enough earth to pour new concrete. Footing shall sit on a 4 inch sand gravel base. Provide steel anchoring pin or galvanized brackets. Finish concrete to match adjacent surfaces. WALLS Retaining Walls: New walls shall be gravity or cantilever type. They shall be structurally sound and durable. Design walls to resist the lateral pressure exerted by the earth behind the wall, including that material above the top of the wall. Retaining walls shall extend at least 12 inches below grade and have a 6 inch wide layer of gravel, crushed rock or sand between the earth and the wall, extending the full height of the wall. Provide reinforcement as needed and construction joints at 30 foot intervals. Place weep holes 10 feet on center and at the lowest point possible above grade. All weep holes shall be screened. All retaining walls constructed adjacent to the public way shall have the design approved by the local planning/public works department prior to commencement of work. Foundation Walls: New walls shall be no less than 6 inches wide for wood frame and 8 inches for masonry or masonry veneer and shall extend below finish grade as required for the particular installation. Footing dimensions shall be determined by the thickness of the wall. Provide reinforcement where needed. Concrete shall be poured continuously and vibrated to remove air pockets. Where continuous pouring is not possible, provide construction joints with reinforcement for transfer of stress. All wall openings shall be properly reinforced. Any existing walls, intersecting walls, porch or entrance slabs, or areaways shall be anchored to the new wall. One half (1/2) inch diameter anchor bolts shall be set no more than 8 inches into the concrete at 8 foot intervals, or 6 foot intervals in earthquake design areas. The top of the foundation wall shall be carefully finished and leveled for the sill plate. For foundation walls on basement houses or where conditions warrant, the exterior face of the wall shall have at least one coat of bituminous damp proofing material from footing to finish grade. New 4 inch drain piping shall be placed at the perimeter of the footing, if required by ground conditions, and connected to a storm sewer system or natural outlet. Backfill material shall be an appropriate • • • Attachment No. 1 • • sand gravel mixture for proper soil drainage, and the top 3 inches be topsoil suitable for plant growth. Replace sod or install new sod. STEPS Poured Steps: New steps shall be as wide as the sidewalk and at least 6 inches to each side of the entry door. The treads shall be a minimum of 9 inches, the risers a maximum of 7 1/2 inches and a minimum of 4 inches. Rise and run shall have a variance of no more than 3/8 inch throughout flight. Provide 1/8 inch pitch for drainage. Wearing surfaces shall be troweled and have a non-skid texture. Porch and steps will be poured a minimum of 2 inches below grade. MISCELLANEOUS FORM WORK Sump Pump Wells: New wells shall have at least 8 cubic feet capacity. Wells in crawl spaces shall have 4 inches of gravel in the bottom. The crawl area shall be trenched to the well and gravel installed where specified. Discharge from a well in a crawl space shall be to a code approved outlet. A sump well in a basement discharging to the sanitary sewer shall be vented as required by Section 409 of the Uniform Plumbing Code. MIX DESIGN Footings, foundations, etc., shall be 2,500 psi minimum. Outside slabs, porches, stairs, driveways, sidewalks and patios shall be 2,500 psi or 5.5 sack minimum with 5% ± 1.5% air entrainment. Concrete pours should not exceed 3" - 4" slump. Calcium chloride is not to be used as a curing accelerator. MASONRY GENERAL INSTRUCTIONS Existing masonry units may be reused if undamaged and cleaned. New masonry units shall be true to size without cracks, chips, or other defects. New masonry units shall match existing as closely as possible. Repair and replace as specified in work write up. Where fresh masonry joins existing, the exposed surface of the set masonry shall be clean and lightly wetted so as to obtain the best possible bond with the new work. Lay masonry units plumb, square and properly anchor by keying units or utilizing manufactured ties. Lay all courses with a full mortar bed and tool all exposed joins. All grouted cells shall be vibrated twice. The color of mortar shall match existing as closely as possible. Where applicable, back parge masonry below grade. Mortar shall be protected from freezing until it has set. Thoroughly clean all exposed new masonry and all repair areas. All new and repaired masonry installed below grade shall be sealed. REPOINTING -- TUCKPOINTING Rake out all old mortar to a depth equal to the width of the joint or 1/2 inch, whichever is greater. All deteriorated and loose mortar shall be removed, regardless of depth. Re -mortaring shall be Attachment No. 1 done as specified under general instructions above. Trowel all mortar joints to a hard, smooth, water tight surface, matching the shape of the original joint. Remove all excess mortar and thoroughly clean all repaired areas. PARGING: Parging is applying a smooth coat of mortar on a foundation wall. The end result shall be a uniform smooth finish completely covering all exposed surfaces. Parging shall also include raking out old mortar to depth 1/2 inch. Deteriorated and loose mortar shall be removed regardless of depth. CHIMNEY REPAIRS When a chimney is to be repaired, this shall include re -pointing, replacing damaged or missing masonry and installing a new cap or flue extension • New chimney cap shall be at least 4 inches thick at the outside edge and shall slope away from the flue. • New flue extension shall be 5/8 inch fire clay. Joints shall be close fitting and left smooth on the inside. The top of the flue lining shall be at least 4 inches above the top of the chimney. CHIMNEY RELINE Chimney relines, stainless steel or inflatable form fire clay, shall be done in accordance with all applicable building and fire codes. WALLS Retaining Walls: New walls shall be structurally sound and durable. Walls shall be designed to resist the lateral pressure exerted by the earth behind the wall, including the material above the top of the wall. Masonry walls shall be constructed in accordance with the recommendations of the National Concrete Masonry Association. They shall have a 6 inch wide layer of gravel, crushed rock or sand between the earth and the wall, extending the full height of the wall. Block shall be set in full mortar beds with joints tooled smooth, except where the exposed surface is to be parged. Reinforce block laterally and vertically where needed and fill cavities containing reinforcement with mortar. Place weep holes 10 feet on center, and at the lowest point possible above grade. All weep holes shall be screened. The top course shall contain a bond beam or be capped to provide a finished surface. All retaining walls constructed adjacent to the public way shall have the design approved by the local planning/public works department prior to commencement of work. Block Foundation Walls: New walls shall be a minimum of 8 inches thick and shall have poured in place concrete footings not less than 6 inches thick that extend below finish grade as require by the particular installation. Block face shells shall provide a 1-1/2 inch wide mortar bed. The first course shall be set in a full mortar bed. Joints shall not exceed 3/4 inch and shall be tooled smooth, except those on an exterior face being parged. The joints between wall and footing shall be tight and have a cove of elastic caulking compound on the exterior side. Stack bond shall be laterally reinforced every second course. Provide other reinforcement where needed, • • • Attachment No. 1 • • or specified. Location of control joints shall be determined by the height of the wall. The top course shall be filled or capped with at least 4 inches of solid masonry or wire mesh reinforced concrete, unless the sill plate board rests on both inner and outer face shells. Anchor bolts shall be placed no more than 6 feet on center and extend through sill and cap and two filled courses. Walls shall be bonded, keyed, or anchored to existing and intersecting walls. Porch and entrance slabs and areaways shall be anchored to the wall. All openings in the wall shall be covered with at least one coat of Portland Cement parging no less than 3/8 inch thick. Walls shall have at least one coat of bituminous damp proofing material from the footing to finish grade. New 4 inch drain piping shall be placed at the perimeter of the footing if required by ground conditions, and connected to a storm sewer or natural outlet. Backfill material shall be an appropriate sand gravel mixture for proper soil drainage. The top 3 inches shall be topsoil suitable for plant growth. Replace sod or install new sod unless otherwise specified. MISCELLANEOUS METAL WORK Ornamental Metal Handrails, Railing and Columns: New handrails, railings and columns shall be installed complete with all posts, rails, pickets, base plates, rail supports, etc. Posts shall be 1 inch square heavy gauge steel tubing. Metal shall be wrought iron. Railings shall be single - welded construction, railings welded t posts. Railings shall be securely anchored to porches, steps, retaining walls, etc., and when installed on new concrete, posts shall be embedded in concrete. Railing heights shall be as determined by code. Ornamental metal shall be factory primed or factory finished. Pickets shall be a minimum of 1/2 inch square tubing or solid bar. Scrolls shall be a minimum of 1/8 inch by 1/2 inch flat bar. Prefabricated chimneys & Vents: All prefabricated chimneys, vents, and vent connectors installed for use with any fuel burning appliance shall be installed in accordance with the manufacturer's specifications. CARPENTRY GENERAL INSTRUCTIONS Carpentry: All rough and finish carpentry shall be accomplished in such a manner as to provide true, straight, square, plumb, level and rigid assemblies. Framing Lumber: All softwood framing lumber shall be #2 or better fir except for non -bearing partitions. Good quality hemlock (hem/fir) may be used for non -bearing partitions. Framing lumber for girders, beams posts, columns and other structural members shall be of a species and grade which will provide sufficient strength and rigidity to support the design load without exceeding the allowable stresses consistent with good engineering practices, and shall conform to Chapter 25 of the Uniform Building Code. All framing lumber shall be identified by the grade mark of a recognized grading association. The moisture content of the lumber shall not exceed 19% at the time of installation. New lumber in contact with masonry shall be Attachment No. 1 pressure treated. All framing members shall be accurately fitted and securely connected to each other in accordance with Table 25-D, Chapter 25 of the Uniform Building Code. Board Lumber: The grade of board lumber shall be suitable for its intended use. In general, loose knots or knot holes shall not exceed 1/3 of the width of the piece. Splits are unacceptable. Boards with defects may be used if the defects are sawed out. Lumber shall bear the label of a recognized grading association. Moisture content shall not be above 19% at the time of installation. Plywood: Plywood shall bear the label of a recognized grading association as to grade and type. Type and grade shall be suitable for its intended use as designed and shall be installed in accordance with Chapter 25 of the Uniform Building Code. Finish Lumber: All finish lumber shall be dressed free of tool marks and other objectionable defects. Lumber for exterior trim and millwork shall be kiln -dried or otherwise seasoned; moisture content shall not be above 19%. All wood for interior wood trim shall be thoroughly kiln -dried to withstand dry artificial heat; it shall not be installed until all plaster is thoroughly dried out. Exterior wood trim and millwork shall be at least #2 or "D" cedar, except that casing for doors and windows may be of clear pine or fir. New wood for interior trim shall match existing as closely as possible in shape, size, and species. If not available, select pine or fir may be used to manufacture trim of the same style and shape. ROUGH CARPENTRY Wood Porches: When a new porch is scheduled to be built complete, it shall include piers, footings, beams, joists, 5/4 x 4 tight knot cedar decking, or other decking material as specified, railings if specified, 3 foot wide steps and a roof if specified. The size of the porch shall be as indicated on the worklist. Treads shall be treated (outdoor wood) unless otherwise specified. Non-skid strips shall be installed when specified. Rise and run shall be according to Chapter 33 of the Uniform Building Code. Wood Steps: When new steps are scheduled to be installed with rise and run the same as existing, they shall include new stair jacks, treads and risers. Treads and risers shall all be even but exceed requirements of Chapter 33 of the Uniform Building Code to maintain limited headroom to a non -living or storage area. FINISH CARPENTRY Instructions for Wood Trim and Millwork: Exterior wood trim which cannot be repaired by re - nailing shall be replaced. Existing interior trim which is broken, splintered, cracked, chipped, warped or otherwise defective shall be replaced with new material. When drywall is being installed over existing wall finish and cannot be butted up to existing trim, room shall be re - trimmed (including door and window casings). All trim within a room shall be similar. Insofar as practical, new trim and millwork shall be delivered ready to be put in place. Moldings shall be clean cut and sharp. Single lengths of wood shall be used whenever practical. Splicing or piecing of finish work shall be done with mitered joints over a solid backing. Finger jointed • • i Attachment No. 1 • • • material is unacceptable for natural finish wood trim. Tooled materials shall be planed or sanded smooth. The woodwork shall be installed level and plumb, be scribed neatly to the walls and be secured firmly in place. Exposed nails used in fabrication and installation shall be finishing nails, set 1/8 inch deep. The scribing, mitering and jointing shall be secured to prevent separation. External corners shall be mitered. Protect finish woodwork until time of painting. Cabinet Hardware: Hardware to be replaced shall include various knobs, catches, drawer slides, drawer rollers, etc., necessary when building a cabinet. When scheduled to be installed, all of the above found to be worn, defective or missing shall be replaced. New hardware shall be brass or aluminum finish. All miscellaneous hardware within a room shall be similar in style and finish. Mixing painted with unpainted hardware is unacceptable. Repairing Kitchen Cabinets: All damaged or missing doors, drawers and shelving shall be repaired or replaced as indicated in the worklist. Doors shall be properly aligned and shall operate freely. Drawer guides or slides shall be repaired or replaced as scheduled so that drawers slide or roll easily. Kitchen and Bath Cabinets: Contractor shall verify in the field all cabinets and countertop dimensions listed in the Invitation to Bid or shown on the drawings. Cabinet style and finish shall be indicated in the contractor's bid as per specifications and/or related cost allowances. Should new cabinets adjoin existing acceptable cabinets, the new cabinets shall match existing cabinets as closely as possible. Both wall and base cabinet assemblies shall be custom built on the job or consist of individual units joined into continuous section, and with the exception of drawer cabinets, all units shall be fully enclosed with backs, bottoms and panels, including tops for wall cabinets. Face framed, when used, shall be of necessary thickness to provide rigid construction. Corner and lineal bracing shall be provided where needed to insure rigidity and proper jointing of components. Adjustable shelves shall be supported on ends and every 18 inches front and back. All shelves shall be solid wood, edge banded plywood or fiber board type material. Cabinets shall have all wood frames with face frames constructed of solid hardwood. Drawer and door fronts may be constructed of plywood or fiberboard type material faced with birch, oak, or similar hardwoods. Drawer and door front shall match cabinet fronts. Cabinet backs and sides may be particle board with a plastic or wood veneer covering. Base cabinets that are designed to rest directly on the floor shall provide a toe space at least 2 inches deep and 3 inches high. All exposed construction joints shall be fitted in a workmanlike manner, nails shall be set and holes shall be filled. Swinging doors shall have a device sufficient to hold doors closed. The device may be spring catch, magnetic catch, self -closing hinges or equivalent. Doors shall be properly aligned and operate freely. Drawers shall have drawer guides with nylon glides and shall slide easily. Cabinet finish shall be clean and free from scratches and other defects. All wood surfaces, inside and out, shall be finished and sealed. Cabinet units shall be installed level, plumb and true to line. They shall be fastened to suitable grounds as per manufacturer's instructions. New upper cabinets shall be attached with wood screws; nailing cabinets is not acceptable. Use closers, filler strips and finish moldings when needed for sanitary and appearance purposes. Upper cabinets shall be set 16-18 inches above Attachment No. 1 the countertop and 24 inches at sink. At the range there shall a 30 inch clearance to the bottom of the upper cabinet and 24 inches to the bottom of the range hood. Cabinets at the refrigerator shall be set to clear existing refrigerator. Countertops: Top materials shall be high pressure plastic laminate, at least 1/16 inch thick, securely bonded to the base material. Countertops made on site shall use void free exterior grade plywood or high density particle board for base material. Provide 1-1/2 inch front edges and, unless specified otherwise, 4 inch back splash and end splashes. Color and pattern shall be chosen by the owner. Should new countertop adjoin existing, the new material shall match existing as closely as possible. If a new sink is not scheduled to be installed, re -installing the existing sink shall be part of the countertop installation. Metal Bathroom Accessories: All bath accessories shall be chrome plated unless otherwise specified. All locations shall be checked with owner prior to installation. Bath accessories specified for handicapped must comply with any and all California and Federal requirements (Fair Housing, ADA, etc.) THERMAL AND MOISTURE PROTECTION Insulation: Insulation work shall comply with specifications on the Invitation to Bid and current California Title 24 Energy Efficiency Standards. A certificate of insulation shall be posted on site and a copy sent to the NCRRP. SIDING General Instructions: Remove all damaged sections before repairing existing siding. Sheathing and framing behind siding must be solid. New siding shall match existing as closely as possible. Apply siding with corrosion resistant nails long enough to penetrate into studs, blocking and wood sheathing. Head lap and coursing shall be required to prevent entrance of moisture into walls. Stagger joints in adjacent pieces of horizontal siding. Replace all trim incidental to this repair and caulk all joints, paying particular attention to where siding abuts trim or other material. Porch Skirting: New skirting shall be as specified in the Invitation to Bid. When new skirting is scheduled to be installed, existing skirting is to be removed completely. Install sufficient framing or backing for new skirting. All wood shall be at least 6 inches above grade. Vinyl Siding: Prior to starting work, the contractor shall examine the exterior of the house, including the fascia and soffited areas, to determine if any additional repairs need to be completed that will affect the proper installation of the siding. If any unforeseen repairs are needed, the contractor will contact NCRRP Staff and request a change order. New vinyl siding shall also include, unless otherwise specified, the following: window and door wraps, fascia and soffited wraps, belly bands, porch trim and all exposed beams, posts and/or columns. • • • Attachment No. 1 • • New vinyl siding shall have a lifetime manufacturer's warranty. Use aluminum or galvanized steel nails with 5/16 inch to 3/16 inch diameter head and avoid face nailing where possible. All nails should penetrate solid lumber a minimum of 3/4 inch excluding point. When going over 1/2 inch plywood sheathing, use screw shank nails with full penetration of the sheathing. The contractor shall provide manufacturer's warranty information to the homeowner upon completion of the work. ROOFING AND SHEATHING General Instructions: Prior to starting work, the contractor shall examine the roof to determine that all repairs affecting roofing have been completed as scheduled. When new metal chimney, vent stack, roof vent, etc. are scheduled to be installed, the contractor shall cooperate with other contractors in installing flashing and counter flashing. This contractor shall also install new flashing in place of all damaged, deteriorated or missing flashing incidental to the repair or new installation. New flashing shall be installed in all valleys. The contractor shall seal all roof openings and exposed roof edges, chimneys, porch roofs, dormers, skylights and vents, with plastic asphalt cement as needed to insure water tight joints. Roofing shall be applied in accordance with the recommendations of the manufacturer. Once it has been started, the roof application shall not be delayed, except when absolutely necessary due to inclement weather. Each layer of roofing felt shall have been surfaced or glazed by the end of the working day. Should inclement weather arise it is the responsibility of the contractor to provide adequate protection of the structure and is contents. When a new roof is installed, roof vents shall be installed to provide adequate ventilation in all attic areas as per current building codes. New roofing installation shall conform to the requirements for the Underwriter's Laboratories, Inc. Class C label or better; a copy of the guaranteed fire classification shall be provided to the owner. New roofing material shall have a minimum 25 year manufacturer's guarantee. When existing roofing is brittle, badly cupped, or rotted, new material shall not be placed over existing. Final determination will be made by NCRRP staff. The quality of materials and workmanship for repairs shall meet the same standards as new installation. The contractor shall make repairs or replacements needed to roofing, flashing, drip edges, cant strips, gravel stops, etc. to provide a water proof installation. When removing damaged sections of existing roofing, replace asphalt saturated felt. Color, size and texture and type of new roofing material shall match existing as closely as possible. Asphalt or Fiberglass Roofing: For repair, since new shingles shall match existing in type, repair procedure may vary from that for re -roofing with new seal downs. Therefore, install new shingles as per manufacturer's recommendation to provide a watertight Class C label roof. For new installations, when going over existing roofing, exposed edges shall be cut back to the edge of the eaves and new metal drip edge installed. New roof shingles shall provide at least double coverage at all points, including both eaves and rake edges. All new roof installations shall have metal drip edges. If the gable end has no overhang, additional wood trim piece shall Attachment No. 1 be installed so roofing projects at least 1-1/2 inches beyond the face of the siding. Metal drip edge shall not be installed over new roofing material. New roof underlay shall be one layer #15 asphalt saturated felt and shall be double thickness from the eaves to a point not less than 24 inches beyond the inside face of the exterior wall. Seal double underlay lap to a point 24 inches beyond the inside face of the exterior wall with a continuous layer of plastic asphalt cement. Roof valleys shall be flashed with corrosion resistant sheet metal. New shingles shall be seal down asphalt or fiberglass 3-tab, with a 25 year manufacturer's warranty. Minimum exposure shall be 5 inches; minimum head -lap shall be 2 inches. Exposure shall be not less than that required for U.L. Class C label. The starter course of shingles and rake shingles shall project over eaves and rake edges approximately 1 inch. Nails or staples shall be corrosion resistant roofing nails or staples and shall be long enough to penetrate sheathing or roof boards. Color of roofing shall be owner's choice of standard readily available products. Torch down Roofing Material: Torch down roofing material shall not be installed over existing roofing. Remove existing roofing to wood deck or sheathing. Repair sheathing as needed or specified. Install metal starter edge on all edges. Install torch down roofing as per manufacturer's specifications. Supply the owner with a copy of manufacturer's warranty. Apply a full coat of reflective top coat if specified. Built -Up Roofing: For repair, remove existing gravel and broom clean roof area. Cut and repair all blisters with hot asphalt. Reinforce low spots. Apply one ply of 40# asphalt -saturated felt. Minimum end lap shall be 4 inches; minimum side lap shall be 8 inches. Cover felt with two mop coatings of asphalt. Average mopping coats shall be 25# asphalt. Replace gravel stops at exposed edges of built-up roofing where needed. All stops shall be properly secured and lapped sections shall be sealed with plastic roofing cement. Mop all edges thoroughly. Where roof drains occur in built-up roofing, the roofing for a distance of approximately 18 inches in all directions from the drain shall be pitched towards the drain. Pitch shall be uniform. Contractor shall repair roof drains to working order. For new installations, remove old roofing down to sheathing. Nail base sheet according to manufacturer's specifications. Base sheet to be 40# felt or equivalent nailed to decking. Then embed 3 layers of 15# felt, mopping between layers with 25# asphalt. Flood coat surface with 30# asphalt and embed gravel or crushed rock. Gravel or crushed rock shall be included with all new roof installations. Asphalt Roll Roofing: New roofing shall be mineral surface asphalt roll roofing, with a minimum weight of 90# per square. Coverage and underlay shall be the same as for asphalt shingle roofing described above. End -lap shall be 19 inches minimum for a 3 foot wide roll. Starter strip and edges of roofing shall project over eaves or rake edge approximately 1 inch. Nails shall be corrosion -resistant roofing nails and shall be long enough to penetrate sheathing or roof boards. Roll roofing used for low slope applications shall be selvage type or other product specified by the manufacturer for low slope installations. Color of roofing shall be owner's choice. • • • Attachment No. 1 • • • Metal Roofing: New metal roofing shall be installed in accordance with the manufacturer's recommendations. Maximum eaves overhang shall be 2 inches and roofing shall lap away from prevailing winds. Full length sheets are to be used when possible. All roofing materials shall carry a minimum 20 year manufacturer's warranty. For new installations with a 4:12 pitch or greater, end lap of roofing panels shall be a minimum of 6 inches; for roofs pitched under 4:12, end lap of the roofing panels shall be a minimum of 12 inches. All metal roofing installations shall include ridge vents and/or gable vents unless otherwise specified. All new metal roof installations shall include valley flashing, gable and eaves trim, foam ridge and eaves closure, plumbing vent flashing and eaves and sidewall flashing. Roofing panels shall be fastened to the base with metal screws with rubber washers; nailing is not acceptable. Color of roofing shall be owner's choice of available colors, however, galvanized and aluminum roofing will not be allowed. Caulking: All loose, cracked, rotted and broken caulking shall be removed. Apply new caulking at all roof openings and exposed roof edges. New caulking shall be plastic asphalt cement. Clean immediately all brick, concrete or woodwork soiled during caulking. Roof Flashing: When roofing or roof flashing is installed, new flashing shall be galvanized sheet metal, .024 inch thick. Piping passing through the roof shall be flashed with one piece metal flashing and cover or two piece flange and sleeve flashing. Nails shall be corrosion -resistant nails and be long enough to penetrate sheathing. All openings through the roof shall be flashed regardless of whether they were flashed previously. Roof Sheathing: The repair of portions of existing sheathing shall result in the sheathing for that entire area being on the same plane, so that when new roofing material is applied, the finish surface is even. The quality of materials and workmanship shall meet the same standards as new installation described below. New sheathing shall be exterior grade 1/2 inch plywood, 3/8 inch exterior grade plywood may be used over skip sheathing unless specified otherwise. Plywood sheets shall be installed in a staggered pattern. If sheet edges do not meet on skip sheathing, H-clips shall be used between each rafter run. Nails or staples shall be galvanized. Nailing Instructions: For new roof installations over sheathing and felt only, stapling of shingles is acceptable. Staples must be 16 gauge. zinc coated with a minimum crown of 15/16 inch, and a minimum length sufficient to penetrate 3/4 inch into the sheathing. Staples must be driven parallel to shingles length by pneumatic stapler, assuring that the crown bears tightly and flush against the shingle without cutting the shingle surface. When re -roofing over existing roofing, nailing of shingles is the only acceptable means of anchoring the new roof, unless another method is designated by the manufacturer. Use 4-6 nails per shingle for composition or fiberglass shingles. Nails shall be galvanized, 11 or 12 Attachment No. 1 gauge with a head diameter of 3/8 inch. Nails shall be sufficient length to penetrate at least 3/4 inch in sheathing. GUTTERS AND DOWNSPOUTS Galvanized metal Gutters and Downspouts: Galvanized metal shall have corrosion preventative coating on the inside surfaces. Gutters and downspouts may be baked enamel finish. Minimum thickness of metal shall be 26 gauge. Only seamless gutters shall be installed. No joints will be allowed except at corners and where downspouts attach. New gutters shall be 5 inch OG ("K style) or half round type. Gutters shall be attached with aprons and hangers or combination hangers every 24 inches on center. No exposed strap hangers shall be used. Metal gutter installed over fascia boards on a house with no roof overhang shall be attached to spacer blocks 24 inches on center on wood framing to get gutter at least 3-1/2 inches away from siding and shall be properly flashed. Gutters shall be installed with proper pitch to downspouts so that no water overflow can get back into framing members. New downspouts shall be 2 inch by 3 inch corrugated rectangular or 3 inch corrugated round. Downspouts shall be attached to gutters and be securely fastened with strap or cast hangers at top and bottom. Provide at least one additional hanger for every 6 feet of downspout. Downspouts shall be provided with extension pieces (elbows) located not more than 6 inches above the splash block and pointed in the direction of flow. Splash blocks shall be installed with all new gutter installations unless otherwise specified. Aluminum Gutters and Downspouts: New gutters shall be 5 inch OG ("K type"). Aluminum shall be baked enamel finish with corrosion preventative coating on inside surfaced. Minimum thickness of gutters shall be 0.027 inch; minimum thickness of downspouts shall be 0.019 inch. Only seamless gutters shall be used. No joints will be allowed except at corners and where downspouts attach. Installation shall be the same as for galvanized gutters and downspouts. Cleaning and Tightening Gutters and downspouts: When cleaning and tightening of gutter and downspouts is scheduled, all joints shall be made watertight. All gutters and downspouts shall be securely connected and firmly supported and fastened. Splash Blocks: New splash blocks shall be either fiberglass or cast concrete and be installed in such a manner as to direct water away from the building. DOORS AND WINDOWS GENERAL INSTRUCTIONS Whenever a window assembly, sash or doors are being replaced, frames, headers and sills shall be repaired to provide a true, straight, square, plumb, level and rigid enclosure for the new installation. Flashing shall be replaced as needed. All openings between wood, masonry, and metal shall be caulked. Should the openings be deeper than 1/4 inch, they shall be first packed with a backing (flexible polyurethane, polyethylene, polyvinyl chloride, cured polysulfide, sponge rubber, neoprene or butyl rod) manufactured for this purpose to within 1/4 inch of the face • • • Attachment No. 1 • • • surface and then caulked. All new sash or doors shall fit tightly in their frames and shall operate smoothly and easily. Contractor shall repair all trim supplementary to the operation of the sash or doors. When windows are to be glazed, new glass shall be dual pane insulating glass, unless otherwise specified. When storm doors are to be re -glazed, sheet plastic ("Plexiglas") may be used in place of tempered safety glass. All hardware within a room shall be similar in style and finish. New finish hardware shall be furnished with the necessary screws, bolts, or other fastenings of a suitable size and type to anchor the hardware in position for heavy use and long life. These fastenings shall harmonize with the hardware as to material and finish. The finish hardware shall be securely fitted on properly prepared surfaces in conformity with the hardware manufacturer's instructions and templates. Carpentry cuts for the finish hardware shall be carefully and accurately made. Screws shall be turned to a firm grip but not to the point of distorting the hardware and in no case shall the screws be hammered into place. New doorknobs shall be positioned at the height of the existing doorknobs in each building and the other hardware shall be uniformly positioned. EXTERIOR DOORS Special Instructions: All exterior doors, except service doors for unheated garages and other outbuildings, shall be fully weather-stripped. Hinges for an exterior door swinging out shall have a setscrew in the barrel to prevent the removal of the pin when the door is closed. Hinges shall be galvanized under plating to prevent rusting. All doors between a carport or garage and the house shall be solid core fire rated, or equivalent, and have self -closing hardware. Hardware and Stops for Exterior Doors: New entrance lockset shall be polished brass or brushed aluminum finish. Cylindrical lock shall key outside with turn or push button on the inside; lock shall have dead pin. Contractor shall furnish 2 keys with new hardware. Double cylinder deadbolts are not allowed. New escutcheon plates shall be installed to cover unsightly marks when replacing existing hardware. Floor, base or hinge door stops shall be installed for all exterior doors. Weather-stripping: Package shall include new weather-strip and door sweep installed to stop all air infiltration around entire perimeter of door. New weather-stripping shall be cushion bronze, interlocking aluminum, or compression -type vinyl. It shall be installed continuous around door casing to prevent infiltration of dust, water, and wind. Attachment No. 1 Thresholds and Jambs: New threshold shall be metal, water return type, with integral weather- stripping and shall fit watertight with door. Caulk at exterior edge. New jambs and stops shall be clear fir, pine, or mahogany. Thresholds shall be fully supported. Wood Exterior doors: Type of new door shall be mahogany, solid core. Door shall be installed with new entrance lockset hardware, deadbolt lock, self -closing hardware where required and weather-strip package. Door shall be hung with three brass or brushed aluminum finish 4-inch butt hinges. When door is to be painted, it may be paint grade. All exterior wood doors shall be sealed upon installation. This shall include sealing the interior, exterior and all edges of the door. Finish shall be of owner's choice. Pre -Hung Wood Exterior doors: New pre -hung door package shall include solid core wood door, jamb, casing, stops, trim, weather-stripping, threshold, all hardware and deadbolt lock. Opening shall be trimmed. Unless specified differently, door will be mahogany. Follow instruction for wood exterior doors. Thresholds shall be fully supported. Pre -Hung Steel or Fiberglass Exterior Door Package: New pre -hung door package shall include steel -clad or fiberglass door with wood or polyurethane core, wood jamb, casing, stops, trim, weather-stripping and aluminum threshold, all hardware, and deadbolt lock. Opening shall be trimmed. Door shall be hung with three brass or brushed aluminum finished 4-inch butt hinges. Thresholds shall be fully supported. INTERIOR DOORS Hardware, Jambs and Stops for Interior Doors: New passage set hardware shall be polished brass or brushed aluminum finish. Doors to bathrooms or toilet rooms shall have privacy lock, push button or turn button on the inside. Escutcheon plates shall be installed to cover unsightly marks when replacing existing hardware. New jambs and stops shall be clear fir or mahogany. Finger jointed material is unacceptable. Moisture content shall not be above 19%. Wood Interior doors: Type of new door shall be as scheduled. Replacement panel doors shall match existing as closely as possible. Louvered doors shall be ventilating type. Door shall be installed with new passage set hardware and shall be hung with two brass or brushed aluminum finish 3 1/2 inch butt hinges. When door is to be natural finish, it shall be stain grade wood or it may be pre -finished. When door is to be painted, it may by paint grade. Finish shall be of owner's choice. WOOD PRE -HUNG INTERIOR DOORS: New pre -hung door package shall include wood door, jamb, casing, stops, trim and all hardware. Type of door shall be as scheduled. Opening shall be trimmed. Finger jointed material is unacceptable. See also descriptions above. Finish shall be of owner's choice. • • • Attachment No. 1 BI-FOLD, SLIDING AND MISCELLANEOUS DOOR HARDWARE: When scheduled to be repaired or replaced, finger pulls, knobs, push plates, door tracks, door stops, etc., found to be worn, defective or missing shall be installed new. New hardware shall be polished brass or brushed aluminum finish. All hardware within a room shall be similar in style and finish. Mixing painted with unpainted hardware is unacceptable. WOOD BI-FOLD DOORS: Type of new doors shall be as scheduled. Door shall be installed with new hardware. When two pairs of doors are being installed, a door aligner shall be provided where the center panels meet. Package shall include wood bi-fold doors, jambs, casing, stops, trim and all hardware. Finish shall be of owner's choice. WINDOWS SPECIAL INSTRUCTIONS: A new window assembly shall include sash, jamb, casing, mullions, frame, sill, stool, apron and all trim as appropriate to the particular type. Finger jointed material is unacceptable when wood is to be natural finish. Window assemblies shall be installed with all operating hardware and all sashes shall fit tightly in frames. All opening windows shall have screens. All sashes shall be weather-stripped. All sashes shall operate smoothly and easily. Replacement sash shall match existing as closely as possible. Install new sash as per manufacturer's recommendations, complete with new operating hardware. Operable sash shall have some means of being secured. Sash shall fit tightly in frame to prevent infiltration of dust, water and wind. New sash shall operate smoothly and easily. New windows shall meet all requirements regarding light and ventilation and emergency exit according to Sections 1204 and 1205 of the Uniform Building Code. CHECKING, FITTING AND FREEING WINDOWS: A sash that is painted shut shall be freed and the sash and its operating hardware shall be readjusted for smooth and easy operation. Sash locks that are not scheduled to be replaced shall be repaired and realigned as needed to firmly secure windows. When existing weights or counter -balances for double -hung windows are found to be inoperative and cannot be easily repaired, new "quickie" or "jiffy" type spring window controls shall be installed. Spring shall be fastened securely. HARDWARE: All window hardware within a room shall be uniform in style and finish. New hardware shall not be painted. Locking window hardware shall be cast metal type; stamped metal type shall not be used. When locking hardware is scheduled to be replaced, finger lifts and pulls shall also be replaced. New hardware shall be polished brass or brushed aluminum finish. STOPS, STOOLS AND APRONS: New wood trim shall be clear fir, hemlock, or mahogany. Finger jointed material is unacceptable when wood is to be natural finish. Attachment No. 1 ALUMINUM WINDOW SASH: New sash shall be anodized aluminum. Sections shall be extruded aluminum alloy 6063-T5. Minimum nominal wall thickness shall be 0.062 inch. Construction shall be in accordance with Architectural Aluminum Manufacturers Association (AAMA) specifications. All operating sashes shall be fully weather-stripped. All sashes shall be able to be easily removed from the inside for maintenance and re -glazing. After installation, aluminum shall be thoroughly cleaned with plain water or a petroleum product such as white gasoline, kerosene or distillate. No abrasive cleaning agents shall be used. ALUMINUM WINDOW: New window frame shall be anodized aluminum. Sections shall be extruded aluminum alloy 6063-T5. Minimum nominal wall thickness shall be 0.062 inch. Construction of frame shall be in accordance with AAMA specifications and shall form neat weather -tight connections. All operating sashes shall be fully weather-stripped. Weep holes shall be provided at the factory. All sashes shall be able to be easily removed from the inside for maintenance and re -glazing. When appropriate to the installation, new aluminum assemblies shall have an anodized aluminum exterior "surround" designed to form an integral union with the existing frame and be joined in a manner as to prevent any water or air infiltration. Surround shall be the same construction as aluminum section described above. Surround shall be sized to cover all exposed exterior wood trim and shall fit neatly into openings. All opening windows shall have screens. After installation, aluminum shall be thoroughly cleaned as listed above. ALUMINUM REPLACEMENT WINDOWS: Replacement windows shall be anodized aluminum and shall meet requirements as above except the minimum nominal wall thickness shall be 0.050 inch. Sections shall be extruded aluminum alloy 6063-T5. WOOD WINDOW SASH: One -over -one type: New sash shall have spring or tension counter- balances. "Quickie" or "jiffy" spring window controls are acceptable only when the existing operating mechanism is unusable in the new installation. Window lifts and locking hardware shall be polished brass or brushed aluminum finish. VINYL REPLACEMENT WINDOWS AND VINYL STORM WINDOWS: New replacement windows and storm windows shall be constructed of PVC vinyl. All meeting rails shall be interlocking and weather -tight. Unit for double -hung storm window shall consist of self -storing insect screen and two storms. Sash and screens shall be easily removed from the inside for maintenance and re -glazing or repair. Storm doors and screens for all other types of windows shall be compatible with their operation so that they can be removed with a minimum of effort. Replacement inserts shall fit tightly in existing tracks. All operating windows shall have insect screens; wherever possible, self -storing units shall be installed. Glass shall be Grade B or better. Replacement screening shall match existing. New screening shall be anodized aluminum or fiberglass screen cloth. Weep holes in the sill shall be provided at the factory. Frame shall fit weather -tight in existing masonry or wood frame. Caulk at frame with sealant, if needed. The bead shall be at least 3/8 inch across surface. • • • Attachment No. 1 FINISHES PLASTER PLASTERING: When patching plaster, all broken or damaged plaster shall be cut out to straight lines with clean, sharp edges. New lath and reinforcing strips shall be installed if needed. Use plaster bond material for proper adhesion of new plaster to existing. The areas to be patched shall be filled with base material and then given a finish coat of the same material as adjoining plaster. Patched areas shall match the adjacent work in finish and texture and be free of bulges. Jointing shall be flush and smooth so that the joints between the existing and the new plaster are undetectable. Cracks shall be V-jointed and bonded with fiberglass tape and joint compound, in the same manner as a drywall joint. Prior to application of new plaster, all bulging, loose or otherwise defective plaster shall be removed. New expanded metal lath, plaster stops, grounds, corner and casing beads and corner reinforcement shall be installed as needed. Support and fasten lathe to provide true lines and surfaces for new plaster. Use flat reinforcing strips where existing and new plaster surfaces butt together. Install reinforcing at all points where surfaces change or where cracking is likely to occur. All metal shall be galvanized or coated with rust inhibiting paint. New applications shall be three coat wet plaster over metal lath, two coat wet plaster over gypsum "rock lath" or two coat veneer plaster system. Apply plaster with minimum thickness as established by industry standards for the type of bases being used. EXTERIOR STUCCO PLASTER: Remove all damaged stucco. Repair metal lath or wire fabric. Over wood frame construction, apply new three coat finish and over masonry surfaces apply new two coat finish. Scratch coat shall be uniformly roughed to provide a sound base for brown or top coats. Top coats shall match existing in texture and finish. Do not apply stucco plaster when the temperature is above 90 degrees F. or below 40 degrees F., or when the temperature is not expected to remain above 40 degrees F. until initial set. Stucco plaster shall be kept damp until initial set. DRYWALL: Drywall installed over framing members shall be 1/2 inch on walls and 5/8 inch on ceilings, except that for installations requiring a one hour fire rating it shall be 5/8 inch Type X. Drywall installed over existing surfaces shall be no less than 3/8 inch on walls and 1/2 inch on ceilings. New drywall shall be tapered gypsum wallboard. When going over existing surfaces, first remove all damaged material and fur walls or ceilings so that the finished product is properly aligned. Edges and ends of wallboard shall occur on framing members, except those edges and ends that are perpendicular to the framing members. To minimize end joints, use wallboard of maximum lengths. Wallboard shall be first applied to ceilings, then to walls. When both sides of partitions are to receive wallboard, stagger joints on opposite sides. Protect all vertical exterior corners with corrosion resistant metal corner bead. When butting up to existing trim, cut drywall carefully and use casing beads for all exposed edges. Where surfaces are to be painted or wallpapered, joints shall be taped and both joints and nail depressions shall have three coats of joint cement applied as per manufacturer's recommendations. All edges shall be feathered. Attachment No. 1 Finish surfaces shall be sanded smooth and left straight and well aligned. Texture spray finish is not to be used on ceilings unless specified otherwise. When used, texture spray shall be medium texture, hard finish only --no course, polystyrene or other soft finish will be allowed. Before application, prime ceilings with a vinyl primer or equivalent. Any existing surfaces to receive texture spray must also be properly prepared for complete adhesion and non -burn through. Application shall be as per manufacturer's recommendations. No finishing or drywall shall be done unless inside temperature is at least 55 degrees F. This temperature shall be maintained during and up to completion of finishing, including drying. Moisture resistant drywall or concrete wallboard shall be used in areas subject to moisture and in bathrooms. CERAMIC WALL AND FLOOR TILE AND CERAMIC TILE COUNTERTOPS: When repairing existing tile, first remove all cracked, loose, chipped or otherwise defective tile. Then repair setting bed or wallboard to provide a level surface for installation of new tile. When repairing floor tile, wash adjacent areas with a solution to remove all oil film present. New tile being installed next to existing tile shall match existing as closely as possible in size, color, texture and glaze. When replacement tile does not match existing, replace complete rows or areas. Carry rows and areas into corners. New tile shall be installed in the following manner. Base surface shall be smooth and plumb or level. Prior to application of adhesive, surface to receive tile shall be sealed with a water resistant sealer compatible with the adhesive to be used. Sealer shall provide a firm and durable bond to the base material. Tile adhesive may be used as the sealer when designed for this purpose, but must be applied in a separate coat. Apply adhesive to entire surface to be tiled with a notched spreader blade. New wall tile shall be standard grade, glazed ceramic tile. New floor tile shall be glazed ceramic mosaic or ceramic tile as indicated in work list. Color of tile shall be owner's choice. All tile installations shall be properly trimmed using caps, bases, etc. Tile shall be set by "floating method". Allow at least 24 hours for evaporation of volatiles from adhesive prior to grouting. Joints shall be thoroughly saturated and washed out with clean water before grouting. All tile joints shall be filled with pointing grout. Joints between tub and tile and joints between tile and any dissimilar material shall also be grouted and caulked with a silicone sealant. Force grout into joints taking care that no open joints are left. Joints shall then be sponged and tooled. New tile and any surrounding surfaces soiled during the repair work shall be cleaned immediately. All exposed tile edges shall be bull -nose tile. (See Material Allowances, Appendix A) TUB/SHOWER SURROUND Type of materials shall be as specified. All tub wraps shall be a minimum of 6 feet above finished floor unless specified otherwise. All tub wraps shall include flush mount soap and grab accessories. All tub wrap installation to include new water resistant drywall or concrete wallboard unless otherwise specified. The owner's choice of color and design will be from standard available products. • • • Attachment No. 1 • • • HARDWOOD FLOORING: When repairing or replacing hardwood flooring, all defective hardwood flooring shall be taken up from the sub -floor, using care not to rip or break the tongues from the flooring strips of pieces that are intended for reuse. Flooring shall be shimmed where necessary and be properly secured at points of bearing. The entire floor, both existing and repaired, shall then be inspected for protruding nails, and nails found to have popped out shall be countersunk. Replacement flooring shall match existing as closely as possible. ASPHALT TILE, VINYL COMPOSITION TILE (VCT) AND SHEET VINYL: Replacement tile shall match existing in type, size, pattern and texture. New tiles shall be residential grade. Asphalt tile shall be 1/8 inch thick; VAT shall be 1/16 inch thick. Tiles shall be 9 inch by 9 inch or 12 inch by 12 inch. Colors and patterns shall be homogeneous throughout the full thickness of tiles. Color and pattern shall be owner's choice. Self-adhesive tiles will not be allowed. New sheet vinyl shall have a wearing surface no less than 0.010 (10 Mils). Color shall be owner's choice. It shall be installed full size with a minimum of seams. Seams will not be allowed in doorways or other high traffic areas. When installed in areas of high moisture, bathrooms and utility rooms, it shall be seamless. All floor coverings shall meet or exceed FHA requirements and must be labeled as such. All sheet vinyl floor covering shall be installed according to manufacturer's recommendations. All surfaces to receive resilient flooring shall be clean, dry and level. All cracks, depressions and voids shall be filled or repaired. Concrete floors shall not vary from a level surface more than 1/8 inch in 10 feet in any direction. Where leveling is required, leveling latex for concrete shall be used. Prime concrete slabs on grade or below grade with a cut back before applying adhesive. For all installations, use the adhesive recommended by the resilient flooring manufacturer and apply as per instructions. All flooring shall extend under the base shoe molding. Resilient flooring shall be laid with tight joints at all points of contact. Tile stops shall be installed at all exposed edges and changes of material, and stair treads shall have edges as described below. New rubber or vinyl cove base shall be considered a part of a new floor covering unless the owner wishes to reuse existing wood base. New underlayment shall be underlayment grade plywood, or suitable materials approved by sheet vinyl manufacturer, developed for use under resilient flooring. Masonite or tempered hardboard will not be allowed. Underlayment shall be 3/8 inch except that 1/4 inch underlayment may be used over plywood sub -flooring or T&G boards not more that 3 inches wide. 1/4 inch underlayment shall be securely screwed every 3 inches on center at the perimeter and every 6 inches on center at intermediate supports; 3/8 inch underlayment shall be securely screwed every 6 inches on center at the perimeter and every 8 inches on center at intermediate supports. Nailing or pneumatic stapling will not be allowed for underlayment installation. In all cases floors receiving new underlayment shall be smooth and free from any uneven joints, bulges and depressions. When resilient flooring is to be installed directly over sub -flooring, the sub -flooring shall be combination sub-floor/under-layment plywood (void free). Types and grades shall be the same as for plywood underlayment. Thickness shall be determined by span and spacing of floor joints. Attachment No. 1 CARPET OR TILE STOP: New divider edge shall be aluminum, approximately 1 inch wide. It shall be attached with countersunk aluminum screws. STAIR EDGING: New stair tread nosing shall be aluminum or rubber or vinyl. Nosing shall be installed on each tread and landing. Installation shall be per manufacturer's recommendations. COVE BASE: New base shall be minimum 2-1/2 inch rubber or vinyl cove base unless matching existing base of a different height or otherwise specified. Use preformed inside and outside corner pieces and an adhesive recommended by the manufacturer. Base shall be neatly installed and be firmly cemented to walls and floor. Joints where bathroom floors meet walls shall be watertight. All corner pieces shall be neatly cut and tight fitting; wrap around corners will not be allowed. Use adhesive recommended by the manufacturer on all cove base. Color shall match new or be compatible with existing resilient flooring. Pre -finished wood base will be allowed and specified for certain applications. CARPETING AND CUSHIONING: New carpeting and cushioning shall, as a minimum, conform to those specifications contained in HUD UM-44C. Type, color and pattern of carpeting shall be owner's choice. Bonded urethane cushion shall conform to HUD UM-47. Carpet shall be installed according to the best standards of the trade. The contractor shall provide a certificate to the owner stating the carpet installed is FHA approved or meets the minimum standards required for FHA approval. When carpet is installed in a specific room, all closets shall be considered as part of the room. See Material Allowance Attachment for cost details. APPLIANCES EXHAUST FANS AND DUCTED RANGE HOODS: Ventilation equipment shall bear the label of approval of a nationally recognized testing agency, and a Home Ventilation Institute or manufacturer's label showing capacity. Duct work shall be ridged metal and designed for the shortest practical run to the exterior. Installation of duct work shall comply with current mechanical code requirements . Discharge openings through roofs and walls shall be protected against entrance of rain, snow and wind. Exhaust fan units shall be installed complete with louvers and back draft dampers which will automatically close to prevent a reverse flow of air when the fan is not in operation. Duct ends shall be sealed and mechanically fastened. When replacing an existing fan, existing ductwork and related accessories may be reused if they are in good condition and appear to have a remaining life equal to that of the fan. Existing ductwork shall be inspected for obstructions and continuity. Ductless range hoods shall not be installed. When a bathroom fan is installed, it shall be installed complete with switch (of specified type), ductwork and all accessories unless specified otherwise. Fan motor shall be moisture proof and UL listed. Fan shall be wall switched; switch may be separate from light switch. Fan shall be rated for insulation cover. Size of fan will be specified in the Invitation to Bid. Grille shall be anodized aluminum or plastic. Undercut door if necessary for air movement. When a kitchen exhaust fan is to be installed new, it shall be installed complete with switch, ductwork and all accessories. Fan motor shall be UL listed. Fan shall be wall switched; switch • • • Attachment No. 1 • • • shall be separate from light switch. Fan shall provide a minimum of 15 air changes per hour. Grille shall be anodized aluminum or plastic. Range hood shall be installed complete with ductwork and all accessories. Unit shall include recessed light and removable, washable grease filter. Color shall be owner's choice. All venting and ducting practices and materials must meet NCRRP Specifications and 2007 California HVAC Code Standards and 2008 California Title 24 standards at a minimum. PLUMBING GENERAL INSTRUCTIONS All materials, piping, fittings, fixtures, etc., shall conform to the latest ANSI (American National Standards Institute), ASTM (American Society for Testing and Materials), CS (Commercial Standards) and FS (Federal Specifications) standards. All equipment and materials used shall be new and clearly marked to permit identification of manufacturer, model and type. Installation and materials of fixtures specified for the handicapped must comply with the provisions of the Fair Housing Act, Fair Housing for HOME Program Participants, Fair Housing Act Design Manual and all other federal, state and local requirements. The contractor shall furnish all instruments, gauges and equipment required for testing and shall perform those tests required by the related authorities. Equipment, materials or work found to be defective during testing shall be replaced by new work and be retested until proven satisfactory. All replacement sewer, water or gas systems shall be installed complete and, if necessary, final connections shall be made to the sewer main, gas meter, or water meter. All equipment and items installed under this section shall operate safely, without leakage, undue noise, vibration, corrosion or water hammer. All fixtures shall be securely supported so that no strain is placed on the connected piping. All work, fixtures and materials, shall be protected at all times. All service and supply lines installed in a location where freezing may occur shall be insulated with closed cell foam insulation, or wrapped with fiberglass batt insulation without vapor barrier. If pipe insulation is to be done by the insulation contractor, notice will be given in the Invitation to Bid. All excavation and backfill necessary for the installation of new underground piping shall be part of the work of this section. The trenches shall be backfilled evenly and be thoroughly compacted using acceptable fill materials. In no case shall the excavation for the trenches undermine or disturb the building foundation. When a rough -in for new equipment requires connections to the existing plumbing system, the contractor shall obtain necessary data on locations, sizes, connections, fittings, and arrangements needed to ensure proper installation of that equipment. Attachment No. 1 All drilling, cutting, and patching necessary for a proper installation of work under this section shall be done by the contractor. All patching shall be of the same materials, workmanship and finish as the original work and shall accurately match all surrounding work. Fixtures and equipment furnished by others which require plumbing connections to waste, water, vent or gas piping shall be connected by the contractor. All work shall be done without damage to structural members. Sleeves shall be provided where required and upon completion of rough -in work, sleeves shall be made sound and fire tight. Penetration of stud and masonry walls, floors, and ceilings shall be fire stopped. All joints and connections in the plumbing and drainage systems shall be gas and water tight for the pressures required by the test of the system, with the exception of those portions of piping which are installed for the purpose of leading ground or seepage water to the underground storm drains. The contractor shall be required to wet test all plumbing systems at the expected working pressure of the system after repair and/or replacements have been made. Existing plumbing systems, or portions thereof, including building sewers (side sewers), to remain in use shall operate free of fouling and clogging, and shall not have cross -connections which may cause contamination of the water supply by back -siphoning. Gas lines shall be blown clean with compressed air, and all valves and filters shall be checked. All remaining plumbing fixtures and piping not in use shall be disconnected and removed by the contractor. All escutcheon plates shall be installed tight, caulked if necessary. The entire new and existing installation shall be left in a neat, clean, and usable condition. WATER, SEWER, FUEL AND VENT PIPING GENERAL INSTRUCTIONS: New piping at the exterior of a building shall be at least 18 inches below grade. Piping shall run parallel to the building construction and be neat and workmanlike. Piping shall be concealed in walls, below the floor, above the ceiling or in furred spaces. Piping shall be properly supported and be pitched to drain. Water and gas piping shall be run level without pockets and as straight as possible. New hot and cold water supply lines shall be at least 6 inches apart where parallel. Expansion and contraction shall be provided for by swing joints. New soil, waste, vent and drainage piping shall be run at a uniform grade of at least 1/4 inch per foot (2% grade). Lines under slabs shall have as short a run as possible and the run shall be as straight as possible. Copper lines shall be wrapped with plastic tape where they come in contact with any metal other than brass or lead. All connections between copper or brass and steel piping shall be made with dielectric couplings. All metallic piping shall be bonded together. Screwed pipe joints shall have threads cut the full thickness with new, clean • • Attachment No. 1 • • • dies. The joints shall be carefully reamed and pipe joint compound shall be applied smoothly to the male threads and to the threads left exposed after fabrication. REPLUMBING HOUSE TO CODE: This is an instruction to the contractor and means that all water distribution piping, soil, waste and vent piping shall be installed new. Only the installation or repair of individual plumbing fixtures shall be listed in the work specifications. WATER SERVICE: New water service shall be of sufficient size to permit a continuous and ample flow of water to all fixtures at all times. Frictional losses due to piping, meter, valves, fittings and faucets shall be considered when piping size is being determined. The water service pipe shall be installed in such a manner and shall possess the necessary strength and durability to prevent leakage under all likely adverse conditions, such as corrosion or strains due to temperature changes, settlement, vibrations and superimposed loads. The contractor shall be responsible for providing the meter and all necessary piping to complete the installation and to coordinate installation of the meter with the Water Department. GATE VALVES: The water piping on the discharges side of the water meter shall have a full way gate valve with bleeder screw. Gate valves shall be readily accessible, whether located in the basement, crawl space or within the living space itself. WATER SUPPLY (DISTRIBUTION) PIPING: New distribution service lines shall be hard temper type M copper tubing or galvanized steel. New branch service lines shall be no less than 1/2 inch. Rodent proof penetrations shall be made through floors. HOSE BIBBS: Hose bibs shall be located according to work specifications to provide an outside source of water. Hose bibs shall be frost proof type or have separate accessible stop and waste valve or readily accessible inside shut off. BUILDING SEWER (SIDE SEWER): All sanitary plumbing outlets shall be connected to combined or sanitary sewer systems when they are available. A new building sewer shall be constructed of case iron, vitrified clay, concrete or plastic. The sewer shall be constructed with watertight joints, be on a grade not less than 1/8 inch per foot, be laid on a firm bed, and be at a depth not less than 18 inches below grade. No tees of 90 degree ells shall be used. Cleanouts shall be installed as required by Uniform Plumbing Code. All abandoned septic tanks shall have sewage pumped and be filled with gravel or sand. SEPTIC SYSTEM INSTALLATION: New septic systems shall be installed in compliance with approved design and inspected and approval by a county health official. SOIL AND WASTE PIPING (INCLUDES DRAINS AND STACKS): Soil and waste piping and fitting shall be extra heavy or service weight cast iron, galvanized steel pipe, copper pipe or hard temper type K,L,M, or DWV copper tubing, or plastic approved under City and/or County codes. Soil stacks shall rest solidly at the base on masonry piers or heavy iron posts and be supported at intervals of no more 10 feet by stout wall hangers or brackets or on beams at each floor. No new soil or waste pipe shall be installed or permitted outside a building or be in any place where it may be subjected to freezing temperatures, unless adequate provisions is made to protect it from frost. Attachment No. 1 FLOOR DRAINS: No floor drains shall be installed in any location or manner which will interfere with proper functioning. The drain shall connect to the sanitary drainage system with an approved trap having a minimum 3 inch depth of seal. Drain shall have a backwater valve if the drain is below the elevation of the curb or property line. See also description for piping. SUMP PUMPS: New sump pumps shall be submersible type. When connected to the sanitary system discharge line piping shall have an accessible backwater valve and gate valve. The connection from the discharge line to any horizontal sanitary drainage piping shall be made from top through a wye branch fitting. All installations shall be done in accordance with Section 409 of the Uniform Plumbing Code. ROUTING DRAINS AND BUILDING OR SIDE SEWER: Drains scheduled to be routed shall be cleaned with a power driven rotary clean -out apparatus similar to the roto-rooter device. Cleaning area drains shall include either replacing or re -caulking the drainage strainers. Building sewers and side sewers scheduled to be routed shall be cleaned all the way to the main sewer connection(s). Drains, when routed, shall be free of all miscellaneous debris so as to allow the free and unobstructed flow of liquids and solids. VENT PIPING: New vent piping shall be schedule 40 galvanized steel pipe with standard black cast iron screwed fittings, DWV copper tubing or plastic approved under code. Vent piping shall extent at least 6 inches above finish roof surfaces. Re -vent piping shall be at least 1/2 of the diameter of the drain to which it is connected or be a minimum of 1-1/4 inch in diameter. Re - vent shall tie into soil stack or waste stack at a point at least 6 inches above the last fixture connected to the stack. No new vent piping shall be installed on the exterior of the building. All new vents shall be concealed in the wall. New piping passing through the roof shall be flashed with a not lighter than 26 gauge galvanized metal flashing assembly or plastic flashing. Flashing shall be set in waterproof mastic compound and be caulked around the vent. Flat roof flashing shall be the commercial type with a horizontal leg equal all around the base. FUEL PIPING: New fuel piping shall be black pipe. Pipe shall not be bent and offsets shall be made with fittings. Installation shall comply with all requirements of the applicable codes noted above. PLUMBING FIXTURES GENERAL INSTRUCTIONS: New plumbing fixtures shall be standard builder's models unless otherwise specified. Unless otherwise indicated, color of new fixtures shall match existing or be white. Fixtures shall be installed complete and ready to use. Appropriate grounds and supports shall be provided for each fixture and equipment item. Arrangements shall be made with other trades for the installation of built in items, blocking or necessary supports. Coordinate installation of plumbing fixtures with floor contractor. Attachment No. 1 • • • All new exposed trim, fittings and pipe in finished spaces shall be chrome plated brass or be covered with chrome plated brass sleeves. WATER HEATER: Package shall include a new glass lined, quick recovery water heater, size as specified. Heater shall be equipped with a shut off valve on the incoming waterline, a pressure/temperature relief valve, (150 # and 210 degree rating) with a discharge tube to the outside of the dwelling or to 24 to 6 inches of a garage or basement floor having drainage. Heater shall be installed with wiring, or fuel piping, draft diverter and vent, as appropriate to type. Heater shall have a 5 year warranty on the tank, and shall be U.L. listed or American Gas Association certified. When new water heaters are to be relocated, they shall be installed to provide the shortest run possible from the new water heater to all fixtures. Flue pipe for gas water heaters shall be at least 28 gauge galvanized sheet metal. It shall have a minimum slope of 1/2 inch per foot with no horizontal lengths of pipe exceeding 75 % of the height of the chimney or vent. Flue or vent connections shall have a diameter not less than the vent outlet on the heater. The flue pipe shall extend beyond the fire clay lining, but no flue pipe shall be vented into a chimney which is used for a fireplace or has a wood stove or wood furnace connected. Flue pipe can be vented into Class B vent. KITCHEN SINK: Package shall include new porcelain enameled or heavy duty stainless steel countertop sink, swing faucet with spray attachment and hose, removable cup strainers, fixture stops and supplies, and waste with trap. Sink shall have ledge unless space restrictions require otherwise. Entire unit shall be connected to service and waste lines. It shall be the responsibility of the plumbing contractor to cut the hole for the sink. LAVATORY: Wall mounted package shall include new porcelain enameled steel or cast iron lavatory, faucets with trip waste, fixture stops and supplies, trap, and wall hanger and legs. VANITY: Package shall include new vanity base, countertop with back splash, porcelain enameled steel lavatory, center set faucets with trip waste, fixture stops and supplies, and trap. Lavatory may be one piece basin or countertop. Quality of vanity sink base and countertop shall equal that of new kitchen cabinets and countertops. New vanity base to be a minimum 24 inch width unless specified otherwise. TOILET: Package shall include new vitreous china bowl (siphon jet action type) with close coupled tank and cover, plastic seat, new flange and wax ring, bolts and caps, fixture stop and supply, float -less valve and trip lever. Plastic tanks are not acceptable. When installing or re- installing a toilet they shall be caulked around their base with silicone caulk. BATHTUBS: Package shall include new porcelain enameled steel bathtub, pop-up waste and overflow with trap, concealed shower divider with trim and fittings. Tub will be recess type 5 feet by 30 inches, unless otherwise specified. SHOWER STALL: Package shall include new fiberglass base, size as specified, with trap, vent and concealed faucet and shower leg with all trim and fittings. Shower stall wrap shall either be plastic laminate, or three piece rigid molded fiberglass unit over new water resistant drywall or Attachment No. 1 concrete wallboard. (Type of wrap will be specified in work list.) Free standing shower stall and shower stalls designed for corner installation will not be allowed unless specified. ELECTRICAL GENERAL INSTRUCTIONS All materials and equipment used shall conform to the latest UL and ANSI and FS standards, as well as to all other applicable standards. All materials and equipment used shall be clearly marked to permit identification of manufacturer, model and type. The contractor shall furnish all instruments, gauges and equipment required for testing and shall perform those tests required by the related authorities. Equipment, materials or work found to be defective during testing shall be replaced by new work and be retested until proven satisfactory. All new materials shall be in good condition. Each type of material shall be of the same quality throughout the project. All finished parts of the equipment and equipment for the work of this section shall be protected against damage from whatever cause during the progress of the work and until final completion. All electrical materials and equipment in storage and during construction shall be covered in such a manner that no finished surfaces will be damaged or marred. All wiring, fixtures, switches, receptacles, etc., shall be installed with all accessories. Fixtures, equipment and materials furnished by others which require electrical wiring, connection, or related electrical work shall be connected by the electrical contractor. The contractor shall in no case install permanent electrical equipment that may be damaged by the rough in for heating, ventilation, or plumbing equipment. The contractor shall do all drilling, cutting and patching required for the installation of the work under this section. All patching shall be of the same materials, workmanship and finish as the original work and shall match all surrounding work, painting excluded. All electrical equipment and exposed wiring not in use shall be disconnected and removed. The contractor shall keep all parts of the building and site free from accumulation of rubbish and waste materials caused by work under this section and shall remove such accumulation from the site. All parts of the electrical apparatus and equipment shall be thoroughly cleaned of cement, plaster and other foreign materials and be left smooth and clean. When a new service is installed it shall be the electrical contractors' responsibility to insure that all obstructions to the service drop are removed. The electrical contractor is responsible for disconnect and reconnect fees from the utility. • • • Attachment No. 1 • • WIRING: All conductors shall be plainly marked or tagged as follows: 1) Underwriter's Laboratories, Inc. label; 2) Size, kind and insulation of the wire 3) Name of the manufacturing company and the trade name of the wire; Month and year when manufactured (date shall not exceed 8 months prior to the date of delivery to the site, except for feeders). Hot water heater circuit shall be #10 copper AWG., 30 amp circuit. Range circuit shall be #6 copper AWG, 50 amp circuit. Branch circuit wiring for 20 amp circuits shall be #12 copper AWG and all other branch circuit wiring shall be no smaller than #14 copper AWG. Unless otherwise required by code, all new wiring shall be sheathed cable. New 15 and 20 amp circuits shall be 2 wire with ground. Outlet boxes shall be the pressed steel knockout type or be cast iron with drills, tapped and plugged holes and be hot dipped galvanized. Outlet boxes may also be approved non-metallic type. All boxes shall be of the proper size for the number of wires or conduits passing through or terminating in the box. Approved factory made knockout seals shall be used in all boxes where knockouts are not intact. All outlet boxes shall be accurately placed and securely fastened to the structure independently of the conductor. The plastic rings shall be set flush with the surface of the ceiling or wall. The hangers for the light outlets shall have adjustable studs. Surface mounted boxes and "Wire Mold" are acceptable only if areas for new circuits are not accessible in any manner without doing severe damage to walls and ceilings. When work is completed, the wiring and connections shall be tested for continuity, short circuit, proper grounding and GFCI function. REWIRE HOUSE TO CODE: New electrical service and all branch circuit wiring, fixtures, switches, receptacles, cover plates, etc., shall be installed new according to the National Electric Code. Only minimums will be required, and only special additional work such as wiring to detached garages, additional fixtures, special devices, etc., shall be listed in the Invitation to Bid. GARAGE CIRCUIT: New circuit to the garage shall be an independent branch circuit of 20 amp capacity. Circuit shall include new conductor, a keyless (switched) fixture for each parking space and at least one GFCI protected receptacle. Service shall be installed complete with all wiring and accessories. FURNACE CIRCUIT: New circuit shall be an independent branch circuit of 15 amp capacity. Contractor shall wire the circuit from the junction box located near the heating unit. LAUNDRY CIRCUIT: New circuit shall be an independent branch circuit of 20 amp capacity. Receptacle for the washing machine shall be a 20 amp, 120 volt, duplex grounding type, mounted on the wall behind or adjacent to the laundry area. When installed new, the wall receptacle shall not be higher than 48 inches above the floor. Attachment No. 1 SMALL APPLIANCE CIRCUITS: New circuits shall be 20 amp capacity with two duplex grounding type outlets. When two new circuits are to be installed, a minimum of four grounded receptacles shall be provided and wired to these circuits. When these circuits also serve a pantry, dinette, breakfast room and dining area, the receptacles for these areas shall be equally divided between the extended circuits. All new kitchen circuits/outlets shall be GFCI protected in accordance with the National Electric Code. SPLITTING CIRCUITS: Splitting circuits shall include providing dedicated circuits for the following: 1 small appliances (kitchen), 2 washing machine, 3 freezer, 4 furnace, 5 dishwasher, 6 microwave oven. DRYER CIRCUIT: New circuit shall be a dedicated branch circuit of 30 amp capacity (#10 AWG). Receptacle shall not be higher than 48 inches from the floor. REPLACING WIRING: When existing wiring is to be replaced, all exposed wiring (wiring not concealed behind finished surfaces) shall be removed back to the panel box. Then new sheathed cable shall be installed for all branch circuit wiring in the basement, attic and crawl space. Installation shall be complete, including all wiring and accessories. ELECTRICAL SERVICE Size of new service shall be as indicated in the Invitation to Bid. Service package shall include new service entrance and meter base, new panel box and ground, and new service mast or service knob with support. Service shall be underground where required. Contact the utility company prior to installing service equipment to verify location of new service drop. All existing panels and sub -panels shall be taken out of service. Contractor is responsible for disconnect and reconnect fees. Panel installed with new service shall be main breaker panel with room for at least 20 circuits (main breaker and panel shall be consistent with the size of the service entrance). Panel box shall be flush or surface mounted as required. Panel shall be installed in a convenient and protected location. Service equipment shall not be located in stairwells, bathrooms, clothes closets, attics, above plumbing fixtures or above laundry and kitchen appliances. Sufficient clearance and accessibility shall be provided when installed in basement near laundry trays, oil tanks or other permanent obstructions. Prior approval will be required if panel is to be located on the exterior of the building; this panel shall be weatherproof type. After installation, each lighting panel shall be tested with mains disconnected from the feeder, the branch connected, and wall switches closed and the fixtures permanently connected but without lamps. Each individual power circuit shall be tested at the panel with the power equipment connected for proper operation. All circuits in the panel shall be clearly identified. • • Attachment No. 1 FIXTURES AND WIRING DEVICES: When an item is installed, a new fixture, switch or receptacle shall be installed complete with all wiring accessories. When an item is to be replaced, the existing device shall be removed and a new fixture, switch or receptacle shall be installed and connected to existing wiring. When an item is to be relocated, it shall be removed completely, (or when the existing outlet box and wiring cannot be removed, a blank cover plate shall be installed) and a new fixture, switch or receptacle shall be installed complete in the specified location. An item to be removed shall be removed completely, or when existing wiring or box cannot be removes a blank cover plate shall be installed. CONVENIENCE RECEPTACLES: Outlets to be relocated, installed new or replaced shall be complete with new cover plates. When all switches and receptacles in a room are new they shall be off white or ivory. New convenience receptacles shall be flush duplex grounded type, and shall be grounded. Surface mounted boxes and "Wire Mold" are acceptable only if areas for the new circuit are not accessible in any other manner without doing severe damage to walls or ceilings. Replacement receptacles for the kitchen (except refrigerator) and bathroom shall be GFCI protected duplex outlets; all others shall be flush duplex type. New receptacles shall not be located in a baseboard or floor. SWITCHES: When relocating or installing new switches they shall be installed complete with new cover plate. New switches shall be toggle type switches and either single pole, 3-way or 4- way as specified. LIGHTING FIXTURES: Each lighting fixture shall be furnished with a lamp bulb or bulbs of appropriate type and wattage. New lighting fixtures shall bear either a UL or ETL label. Unless otherwise specified lighting fixtures shall be as follows: New exterior fixtures shall be wet location type; style shall be owner' choice. New keyless and pull chain fixtures shall be porcelain. All pull chain fixtures shall have a single convenience outlet. Ceiling or wall mount fixtures for the living room, dining room, bathroom, hall, kitchen and bathroom shall be owner's choice, unless otherwise specified. Fixtures in basement, second floor and attic stairways shall be located directly over the stairway section at the head or foot of the stairs. Any fixture specifically called for on the Invitation to Bid shall not be included in the retail allowance per fixture, but shall be provided by the contractor as part of the contract. ELECTRIC BASEBOARD UNITS: Existing sections of baseboard shall be cleaned and tested for proper operation. New baseboard shall be able to maintain a temperature of 70 degrees F. at a point three feet above the floor in all habitable rooms when the outside temperature is -10 degrees F., without overloading or scorching walls. New heaters shall be medium density type, limited to 250 watts per foot of baseboard. Where possible, install on outside walls and under windows. Each room or air circulation area shall have only one thermostat. Bathroom heaters can be manual switch operation. Thermostats shall be baseboard mounted unless otherwise specified. Attachment No. 1 In bathrooms, baseboard heaters shall not be within reach of the bathtub. Wall or ceiling type heaters are acceptable substitutes. HEATING, VENTILATING, AIR CONDITIONING GENERAL INSTRUCTIONS: (Note: Please review NCRRP Specifications and the California Title 24 2008 Residential Compliance Manual for California Energy Efficiency Standards and consult with NCRRP Staff concerning required Energy Efficiency Ratings (EER) for program - installed heating systems and installation methods.) All materials, equipment, piping, fittings, fixtures, etc., shall conform to the latest ANSI, ASTM, ASME and FS standards. All equipment used shall be new and clearly marked to permit identification of manufacturer, model and type. The contractor shall furnish all instruments, gauges and equipment required for testing and shall perform those tests required by the related authorities. Equipment, materials or work found to be defective during testing shall be replaced by new work and be retested until proven satisfactory. Except as modified herein, the construction and installation of all equipment, accessories and appurtenances shall comply with the published standards, requirements and recommendations of the National Fire protection Association and National Board of Fire Underwriters. All equipment and items installed under this section shall operate safely and without leakage, undue wear, noise vibration or corrosion. All drilling, patching and cutting necessary for the proper installation of work under this section shall be done by the contractor. All patching shall be of the same materials, quality of workmanship and finished as the original work and shall accurately match all surrounding work (painting excluded). Equipment and materials furnished by others which require connection to the heating system, shall be connected by the contractor. All piping, ductwork and equipment shall be installed without critical damage to structural members. The contractor shall provide sleeving as required and upon completion of rough in work, sleeves shall be made sound and fire tight. Metal chimneys shall not be installed as exposed piping in habitable areas, closets, or stairways. They shall be enclosed with fireproof material to provide a minimum of 2 inch air space and meet local code requirements. The contractor shall install chrome plated escutcheons where exposed piping passes through floors, walls and ceilings. All heating and ventilation equipment and fuel storage tanks not required to remain shall be removed by the contractor. Attachment No. 1 • • The entire new and existing installation shall be left neat, clean and in usable condition. HEATING EQUIPMENT AND REPAIRS FORCED AIR SYSTEMS: New installations shall be complete and shall include new furnace, ductwork and registers. Provide hot air supplies and cold air returns throughout the house. Duct insulation shall meet current CTED specifications. HEATING UNITS: New heating units shall be installed complete with new disconnect switch, electrical circuit, flue pipe and all controls, wiring, accessories, thermostat, and valves. Thoroughly clean the, oil tank, fittings, and lines. Chimney cleaning shall be performed by a licensed chimney sweep when applicable Note that the electrical contractor will wire a separate circuit (if one does not already exist) from the panel box to a junction box located near the heating unit. It is the heating contractor's responsibility to coordinate installation of the circuit unless otherwise specified. New units shall have ratings sufficient to ensure proper heating of all habitable rooms within the living unit they intend to serve. Such determinations shall be made in accordance with the best practices of the National Warm Air Heating and Air Conditioning Association, the "Guide" of the American Society of Heating. This shall include heat loss calculations if required by local authorities. Furnace shall be able to maintain a room temperature of 70 degrees at a point three feet above the floor in all habitable rooms, when outside temperature is 0 degrees F. Heating system shall be designed, installed, balanced and adjusted to provide for the distribution of heat to all habitable rooms and other spaces in accordance with the calculated heat loss of the spaces to be heated. No heating unit shall be more than 15% oversized for its particular installation. New units must have an efficiency rating of 81% or greater. All work performed in the installation of heating equipment shall be in accordance with the manufacturer's recommendations. Mechanical equipment shall be so installed and located that inspection, routine maintenance and/or repair is possible without removing item of permanent construction. Listed furnaces shall be installed in accordance with their listings. Unlisted warm air furnaces shall be installed with a minimum clearance of 6 inches between the top bonnet plenum (or between the top of an extended plenum or duct within 3 feet of such furnace) and combustible material. All approved gas or oil burners shall bear the manufacturer's identification marks, the burner trade name and the model number or size installed. HEATING UNIT CONTROLS: When heating unit controls are to be replaced or repaired, the contractor shall examine all controls for that particular unit, including the thermostat, and repair and replace those controls found to be defective. Operating and limit or safety devices shall be AGA approved or UL listed. If specified install a programmable thermostat. CLEANING AND ADJUSTING HEATING SYSTEMS: After servicing, the mechanical contractor shall leave a certificate on the furnace indicating his/her name, the work or repairs completed, and the date. Attachment No. 1 When heating units are cleaned and adjusted, the contractor shall thoroughly clean and adjust the system for proper operation. When necessary or specified replace thermostat. On forced air systems, this shall include cleaning the blower motor and fan assembly, installing new air filters and replacing blower motor drive belts and testing of combustion regulators. On oil fired systems, this shall include cleaning the oil tank (removing condensation and sediment), fittings and lines and replacing fuel filters and testing of combustion regulators. On all fossil fuel heating appliances, the heat exchangers, vent connectors and vents shall be inspected for damage or deterioration. Vent connectors and vents shall be cleaned. Ductwork shall be cleaned only when specified on the Invitation to Bid. When specified, clean and vacuum at all accessible openings. Special attention shall be paid to duct runs with floor registers. DUCTWORK AND REGISTERS: Sheet metal shall be not lighter than 28 gauge galvanized sheet metal. The sheet metal work shall be accurately formed, be fitted snugly, have exposed edges folded at least 1/2 inch and leave no sharp corners exposed. Fiberglass duct which is UL listed and meets NFPA standards is also acceptable. New flex duct is allowed if it has at least R-8 rated insulation and meets UL, NFPA and ASTM standards. All ductwork shall be properly supported with hangers or floor rest channels. Special care shall be taken in supporting flex duct to avoid any sagging or kinks. No new duct work shall be installed in finished rooms, including closets. Balance dampers shall be installed and/or ductwork shall be sized to control the flow of air to all supply registers. Dampers shall be labeled, indicating the rooms served and the system shall be balanced. New supply outlets may be installed in floors and walls. When installed in the floor, outlets shall be no closer than 6 inches to any wall. Supply outlets installed in outside walls shall be located in front of windows. Basements need not have a separate supply outlet unless specified. All supply registers shall be equipped with shut off dampers. Return air inlets shall be located in walls or floors, as is appropriate to their size and function. Supply and return ducts in unheated space shall be insulated to a minimum R-19. Insulation level and installation shall comply with current State of California or utility company specifications. These specifications shall be included in the Invitation to Bid. Where ducts are used for cooling, insulation shall be covered with a sealed joint vapor barrier. All forced air heating ducts shall be sealed according to CA Title 24 current duct sealing procedures using acceptable materials. PAINTING GENERAL INSTRUCTIONS: The quality of paints and related materials shall equal or exceed those first grade and related materials manufactured by: Olympic Stain Glidden Dunn Edwards "or equal" Benjamin Moore Frazee's Sherwin Edwards • • • Attachment No. 1 • • • All paints, primers, solvents, glues, mastics, etc. must qualify as low-VOC unless unavailable in the market place for the specific work specified. Paint shall be understood to include not only paints but also primers, enamels, sealers, stains and other coatings, plus all paint accessory materials. The addition of thinners, quick drying additives, or other adulterants of any kind shall not be permitted, except as specifically recommended by the manufacturer. The use of splatter -dash technique for appearance purposes on interior surfaces shall be limited to "orange peel "or other fine -medium texture only. Texture shall not be applied to any trim, woodwork or metalwork. Any atypical paint applications and color schemes shall be paid for by the owner. Certain finish coats are formulated to serve as primers and may be so used when applied in accordance with manufacturer's recommendations. Paint shall not be applied until surfaces are thoroughly dry, excepting certain masonry paints formulated for application to wet surfaces. Contractor shall assume responsibility for such conditions and shall make good any work executed prematurely. Any work which is damaged by the contractor or his/her employees, or for any reason is unacceptable, shall be repaired or redone to match surrounding areas. All touch up painting shall match surrounding areas. No exterior painting shall be done unless the temperature is between 50 degrees F. and 100 degrees F. and is expected to remain above freezing (32 degrees F.) for at least 24 hours. Items or surfaces for which colors or finishes are not selected shall be painted or finished to match the adjacent background or adjacent finish colors or stains. Such items shall include, but not limited to, roof vents (color of roof), covers, housings, brackets, piping, duct work, drain pipes, conduit, access panels, unfinished or prime coated hardware, grills, registers, louvers, cabinets, electrical panels and similar items. New and previously unpainted hardware accessories and electrical equipment are not to be painted. Switches and their cover plates shall not be painted. Painter shall remove these items as necessary, reinstalling them when his/her work is completed. Square foot coverage per gallon shall be as recommended by the manufacturer. Paint shall have easy brushing properties. Paint shall be kept well stirred during painting and be screened free from skim, lumps and foreign matter. No paint, nor the residue thereof, shall be used after it is caked or hardened. Paint shall be worked into all corners, voids and joints. All surfaces other than those of metal items shall receive two coats of paint and all coats shall be thoroughly dry prior to application of next. Initial primer coat may be counted as one coat of the two required coats of paint, provided adequate hiding has been obtained. Tinted primer coats are acceptable. Additional coats may be required if the finish does not provide acceptable coverage or hiding. Finished work shall be uniform, free of runs and sags, smooth, free from brush marks and of Attachment No. 1 uniform color. Where paint adjoins other materials or where different colors meet, the edges of the paint shall be sharp and clean. Upon completion, the entire area shall be cleaned and left in a neat condition, including removal of all overspray. All paint shall carry a minimum manufacturer's durability warranty of 10 years, and the contractor will fully guarantee the job for one year. At least 1/2 gallon of each color used shall be left with the owner, with label attached. Colors of all paint are the owners' choice, subject to the Secretary of the Interior's guidelines in the case of historic buildings. EXTERIOR PAINTING GENERAL INSTRUCTIONS: All surfaces to be painted shall have all loose, blistered, scaling, alligatored and crazed coatings removed and shall be thoroughly cleansed to receive new paint. Paint may be applied by any of the following: brush, roller, air compressor, or airless sprayer, unless otherwise specified in the Invitation to Bid. When exterior paint is applied to correct a lead base paint problem, it shall be the contractor's responsibility to insure that the old paint that has been removed from the exterior of the house is removed from the premises according to state and local laws and guidelines. PREPARATION: Secure loose material and reset nails as needed. Caulk at all joints where caulking has deteriorated and/or is missing. Remove all miscellaneous nails, hooks, screws, tacks, etc. Remaining holes, those no larger than a dime, shall be properly filled depending on the surrounding surface material. All patches shall be sanded smooth. All windows, doors and other openings shall be re -caulked. All dried out or otherwise deteriorated glazing compound shall be replaced. If any area to be painted shows signs of mildew, those areas shall be cleaned, sanded and sealed before painting. Exterior preparation work must be inspected by NCRRP Staff prior to application of primer. After notification by the contractor, preparation work will be inspected in a timely manner. WOOD TRIM, MILLWORK AND SIDING: Sandpaper new millwork prior to application of primer or stain. Reset all loose nails and putty all nail holes and minor cracks in wood with putty after spot priming these areas with exterior oil base primer. Scuff sand all trim to remove gloss and provide tooth for adhesion of new paint. Prime coat all knots and resinous wood with a prepared knot sealer or aluminum paint (which is not considered a primer coat). Apply one coat of exterior oil base primer to all new and bare wood surfaces. Then apply two coats of exterior, non -chalking, oil base or latex paint to all wood surfaces. Doors and sash and their trim shall be gloss finish. Wherever encountered, do not paint natural finish ceiling surfaces unless specified in the Invitation to Bid. First prepare these surfaces to be refinished. Then apply at least two coats of spar varnish or polyurethane varnish formulated for exterior use. Likewise, do not paint natural finish wood shingles, shakes, or rough sawn siding unless painting of this siding is specified. Instead, apply two coats of oil or pigmented oil stain. When necessary, stain new sections of siding to match existing. • • • Attachment No. 1 • • • WOOD DOORS: Wood doors are to be natural finished unless otherwise specified. Prepare door for new finish. All door edges are to be eased. Edges, including the top and bottom, shall receive the same finish as the faces. Natural finish for new doors shall be one coat of stain (owner's choice of color) and at least two coats of clear sealer formulated for exterior use. Paint for new doors and existing doors shall be one coat of exterior oil base primer and one coat of exterior oil base paint. WOOD STEPS AND DECKS: Caulk all joints between wood surfaces and walls. Reset all loose nails. Apply at least two coats of oil base exterior floor or deck enamel in accordance with manufacturer's recommendations. CONCRETE AND MASONRY SURFACES: Whether specifically scheduled or not, if exterior foundation walls are badly stained or splattered with paint during painting, they shall be painted to be in harmony with the siding. Apply at least two coats of resin -emulsion paint, solvent rubber paint or floor and deck enamel to horizontal surfaces. If oil base paint is used, neutralize surface before painting. Walls shall receive at least two coats of polyvinyl acetate emulsion paint. Surfaces which have been waterproofed shall be treated as per manufacturer's instructions prior to painting. GUTTERS AND DOWNSPOUTS: Gutters and downspouts shall match trim color on house if being repainted. INTERIOR PAINT GENERAL INSTRUCTIONS: All surfaces to be painted shall have all loose, blistered, scaling, and alligator coating removed and shall be thoroughly cleansed to receive new paint. When painting wallpapered surfaces the wall paper must be tight and edges or joints feathered where necessary. Secure loose material and reset nails. Remove all miscellaneous nails, hooks, screws, and tacks from walls and wood work. Patch all holes with spackle or oil base putty depending on the surface material. All patches shall be smoothly done and all rough edges sanded smooth. Seal all un-removable grease spots or stains with sealers and/or primers designed for that purpose. Kill stain or seal all varnished wood surfaces before painting so that desired coverage is obtained. If any area to be painted shows signs of mildew, those areas shall be cleaned, sanded and sealed before painting is done. Painting by room shall include walls, ceiling, doors, windows (including those surfaces exposed by opening), trim, cabinet work, miscellaneous shelving, shall be painted and/or refinished as specified. A closet is considered a part of the room in which it is located, as well as closet rods and shelves and bracing and drawers. Natural finished items are not to be painted unless specified. Interior of cabinets will not be included unless specified. DRYWALL OR PLASTER WALLS AND CEILINGS: Hairline cracks and scraper dents shall be spackled and sanded. Open cracks shall be raked out and damaged plaster shall be removed. Apply new plaster in coats thin enough to prevent shrinkage. All repair work, when completed, shall match existing surfaces, present a neat appearance and be free of hairline cracks and Attachment No. 1 bulges. All surfaces shall be washed or sanded prior to painting. Previously painted surfaces shall receive at least two coats of interior latex or oil base paint. New plaster or drywall shall receive a first coat of interior primer and at least two additional coats of paint. Paint for kitchens, bathrooms and utility rooms shall be semi -gloss enamel. Surfaces shall be painted with a roller and/or brush except that certain types of texture finish ceilings cannot be satisfactorily painted with roller or brush. These surfaces only may be spray painted. WOOD WINDOWS AND DOORS: All door edges shall be eased. If new wood is open grain type, fill or seal surface to prevent grain rising. Apply one coat of suitable oil base primer to all new and bare wood surfaces. Then apply at least two coats of interior semi -gloss enamel (oil base or latex) to all surfaces. Edges - top sides and bottom shall be painted the same as the door faces. Color shall match adjacent wall surfaces. Painting shall be done with brush only. For natural finish, all door edges shall be eased. Apply one coat of penetrating sealer to all trimmed door edges. All interior doors, if not pre -finished, shall receive at least two coats of spar varnish or polyurethane varnish. Edges - top, bottom and sides shall be finished the same as door faces. Varnish shall be applied with brush only. WOOD TRIM, MILLWORK, PANELING, CABINET WORK AND SHELVING: It is not intended that cabinet work and other wood surfaces scheduled for refinishing or painting be completely stripped down to bare wood. Rather, it is intended that scratches and other surface blemishes be treated so as to make them unnoticeable. Gloss shall be removed from all enamel surfaces to be painted. Stain or prime and finish as necessary. If interior of cabinets are to be refinished, it will be scheduled separately. For painting, sandpaper new millwork prior to application of primer. Reset loose nails. All nail holes shall be filled and sanded prior to painting. If new wood is open grain type, fill or seal surfaces to prevent grain rising. Apply one coat of a suitable primer to all new and bare wood surfaces. Then apply at least two coats of interior semi -gloss enamel (oil base) to all surfaces. Color shall match adjacent wall surfaces, unless scheduled otherwise. Painting shall be with brush only. For natural finish, sandpaper new millwork prior to application of finish. All wood to be refinished shall be first prepared as necessary to receive new finishes. Loose nails shall be reset and all holes shall be filled with linseed oil putty. If new wood is open grain type, surfaces shall be filled or sealed to prevent grain rising. New or bare wood shall be stained to match existing as closely as possible. All natural finish wood shall receive at least two coats of varnish, shellac, lacquer or polyurethane coating as appropriate to its intended use. Application shall be with brush only. LEAD BASED PAINT ABATEMENT If a painting instruction is noted in the Invitation to Bid as a "Lead based abatement project "the following procedures must be followed. EXTERIOR: All loose, blistered, scaling, and alligator paint coatings shall be removed by hand scraping with appropriate containment based on the EPA Lead Renovation, Repair and Painting • • • Attachment No. 1 • • Program effective April 22, 2010. Machine sanding and the use of propane torches are not allowed. All paint film that has been removed from the house must be captured on drop cloths, removed from the premises, and disposed of in accordance with local and state regulations. INTERIOR: Interior lead based paint can be abated either by removal and repainting or by covering with fiberglass cloth, sheetrock, or non -strippable wallpaper. In areas of paint removal, disposal shall be the same as exterior described above. NOTICE: Contractors participating in the NCRRP are ultimately responsible for full compliance with Federal, State and Local regulations regarding lead based paint abatement, disposal and worker protection. Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual -• CALIFORNIA *- A ' `IO, a a a cti INCORPORATED SAN DIEGO HABITAT FOR HUMANITY FIRST-TIME HOMEBUYER ASSISTANCE PROGRAM MANUAL City of National City Housing and Grants 1243 National City Blvd. National City, CA 91910 (619) 336-4391 (619) 336-4286 Fax EFFECTIVE: October 17, 2012 (Subject to change) EQUAL HOUSING OPPORTUNITY • • • • • Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual TABLE OF CONTENTS Effective October 17, 2012 PURPOSE OF THE PROGRAM MANUAL GENERAL DEFINITIONS SECTION I -BORROWER ELIGIBILITY REQUIRMENTS A. ELIGIBLE BORROWER B. INCOME CRITERIA C. HOUSEHOLD ELIGIBILITY REQUIREMENTS D. ELIGIBLE PROPERTIES E. MAXIMUM PURCHASE PRICE F. LOAN PROCEDURES AND TERMS APPENDIX A- INCOME APPENDIX B- SHARED EQUITY EXAMPLE APPENDIX C- HOME REGULATORY AGREEMENT APPENDIX D- DEED OF TRUST APPENDIX E- PROMISSORY NOTE 2 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual PURPOSE OF THE PROGRAM MANUAL The purpose of this Program Manual is to describe the program and delineate the role of the City, San Diego Habitat for Humanity Community Housing Corporation ("SD-HFH"), the applicant/borrower and the lenders. This document contains a description of the City of National City First -Time Homebuyer Program requirements. Loan documents are attached in the Appendix. GENERAL DEFINITIONS AFFIDAVIT: A deposition filed in connection with the program made under oath and subject to penalties of perjury. APPLICANT: Any person who applies for City loan assistance. ASSETS: Cash or a non -cash item that can be converted to cash. Assets exclude necessary personal property. CITY: The City of National City. COMMITMENT: A document, which is originated and issued by the SD-HFH, based on review and approval of the application package and lender's certification that the requirements necessary for issuance of a City loan have been met. San Diego Habitat for Humanity Community Housing Corporation, Inc. ("SD-HFH"): City selected HOME CHDO subrecipient that will process, underwrite, close, and package, and service the loan. ELIGIBLE BORROWER: Any person meeting the criteria as set forth in this manual. ELIGIBLE DWELLING: Real property located within the City of National City. This may include a residential unit to be built, a new unit, or an existing. The unit must be designed as a residence for one household and must meet property standards and criteria as set forth in this manual. EQUITY: The dollar amount that constitutes the difference between the sales price of the Property and the sum of the following amounts; 1) principal on the First Note and Deed of Trust; 2) principal on the Second Note and Deed of Trust to the City of National City; 3) all costs of sale, including costs of brokers' commissions, escrow fees, title costs and fees, recording costs, etc.; 4) current year taxes, including all real estate taxes calculated to the date of sale; 5) borrower's down payment not including the loan from the City to Borrower; 6) costs of any capital improvements to the Property, provided such improvements were approved by the City prior to construction and provided that such improvements have been documented to the satisfaction of the City. EQUITY SHARE: The equity share starts at 50%/50% between the Borrower and the City. The amount of the Borrower's share in the Equity of the Property shall increase by five percent (5%) per year, measured on the anniversary date of the Deed of Trust. Correspondingly, the City's share in the equity of the Property shall decrease by five percent (5%) per year. In the event that no Equity exists at the time of transfer or sale, the City loan (HOME funds) will still be due and payable. In the event that a negative Equity situation exists, and the full amount of the City loan is not available to be recaptured, the amount of the loan required to be repaid to 3 • • • Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual the City will be set forth in the HOME agreement between the Borrower and the City. A Shared Equity example is attached as Appendix B. EXISTING HOME (RESALE HOME): A dwelling unit that has been previously occupied. HOME FUNDS/HOME INVESTMENT: Funds received pursuant to the HOME Investment Partnership program under the Department of Housing and Urban Development (HUD), codified at 42.U.S.C. Section 12701, et seq., 24 CFR Part 92, to provide funds for affordable housing HOMEOWNER INVESTMENT: Homeowner's down payment and any capital improvement investment made by the owner since purchase INCOME: The gross amount of all taxable income for all mortgagors and adult household members that is anticipated to be received during the coming twelve (12) months. All income derived from any source, including income from wages (gross pay,) overtime, pensions, veteran's compensation, bonuses, public assistance, alimony, net rental income, dividends and interest, etc. must be included. Non-taxable income must be listed, but bracketed, in order to exclude this income from the annual family income calculation; verification of non-taxable status may be required. ISSUER: The City of National City. LENDER: A financial institution, whether broker, retail, or wholesale, licensed to provide mortgage loans in the State of California. The institution must meet all the requirements established by the City in order to participate as a lender in the City program LOAN: An extension of credit provided to an Eligible Borrower to finance the purchase of an Eligible Dwelling LOW-INCOME: A household with income at or below 80% of the Area Median Income as established by the U.S. Department of Housing and Urban Development. Every 12-18 months, the U.S. Department of Housing and Urban Development updates these figures NEW HOME: A dwelling unit that is proposed to be constructed, is currently under construction, or exists but has not been previously occupied. NET PROCEEDS: Sales price minus loan repayment and closing costs. OWNERSHIP: Any of the following interests in residential property: fee simple interest; joint tenancy; tenancy in common; interest of a tenant -shareholder in a cooperative; life estate; interest held in trust for the Applicant that would constitute a present ownership interest if held by the Applicant. PRINCIPAL RESIDENCE: Residence must be occupied as the primary home of the buyer and be defined as one of the following types of residences: 1) single-family house; 2) condominium unit; 3) town home unit PROHIBITED MORTGAGE: Subordinate mortgages and any liens superior to the City First - Time Homebuyer loan, other than the new first Trust Deed. PROPERTY VALUE: Value of the eligible property as determined by a certified appraisal 4 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual PURCHASE PRICE: Cost of acquiring the residence, excluding usual and reasonable settlement or finance costs, and the value of services performed by mortgagor in completing the acquisition. RELATED PERSON: Any party(ies) who may have a beneficial interest in the sale or financing of the subject property, other than a qualified lender SINGLE-FAMILY RESIDENCE: Housing unit intended and used for occupancy by one household 5 • • • Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual BORROWER ELIGIBILITY REQUIREMENTS Both federal and state law sets borrower eligibility requirements. Income guidelines are modified based on federal directives every twelve to eighteen months. The City will notify the Lenders when those changes take place, including the effective date of each change. A. ELIGIBLE BORROWERS 1. Qualified applicants must be first-time homebuvers. The Applicant may not have held an ownership interest in his/her Principal Residence within the past thee years. This timeframe includes those 36 months before the date the mortgage is executed. In the case of a married couple, both parties must meet this requirement. The buyer, spouse and any other parties who will be listed on title must meet this requirement. The Lender must verify this through his/her examination of the Applicant's federal tax returns for the preceding three years. The Applicant(s) cannot have claimed a deduction for mortgage interest or taxes on real property claimed as a Principal Residence. 2. To demonstrate compliance with this requirement, Applicants must complete and sign the First-time Homebuyer Application and Affidavit and provide copies of their last three (3) years signed federal tax returns (or acceptable alternative exhibits). a) The Applicant(s) can provide the signed 1040A 1040EZ or 1040 federal income tax forms for the preceding years, including all schedules. These forms shall be submitted to the Lender and forwarded to the City with the completed loan application. The tax returns must be signed and dated in blue ink by the Applicants. b) If the Applicant(s) has/have filed the short form, 1040A or 1040EZ for the last three (3) years, completes and signs the required affidavits, but is unable to produce copies of the signed returns, the City will accept a completed copy of IRS Letter Form 1722 in lieu of actual returns. The Applicant may request this letter, free of charge, from the local IRS Office. The Letter 1722 must include the signature of a representative of the IRS. Letter Form 1722 should include the following information: Name and social security number ii. Type of return filed Marital status iv. Tax shown on return v. Adjusted gross income vi. Taxable income vii. Self-employment tax viii. Number of exemptions c) In the event the Applicant(s) was not obligated to file federal income tax returns for any of the preceding three (3) years, it will be necessary for the Lender to obtain a completed and signed Income Tax Affidavit from the Applicant, which is required in place of the above. This document is to be forwarded to the City with the application package. d) If either copies of the required tax returns or the 1722 Form cannot be obtained, the Lender may be able to help the Applicant establish first-time homebuyer status with copies of utility bills and a signed and notarized statement from the Applicants landlords for the previous three years. e) When the Commitment is issued during the period between January 1 and February 15 and the Applicant has not yet filed his/her/their Federal Income Tax Return for the preceding year, the City may rely on an affidavit. The affidavit must affirm that the Applicant is not entitled to claim deductions for taxes or interest on a principal residence for the preceding year. After February 15, a tax return will be required. 3. Upon close of escrow, the buyer must occupy the home as their Principal Residence. 6 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual 4. Applicant(s) need not be a U.S. citizen. Legal resident aliens are eligible to apply but must show proof of status. 5. City of National City employees are eligible to participate. B. INCOME CRITERIA 1. Income must be at or below 80% of the currently published San Diego County median income, adjusted for household size. Income limits have been established by the U.S. Department of Housing and Urban Development and are adjusted annually. In accordance with this requirement, applicants may not obtain "stated income" loans. The true income must be a qualifying factor in loan approval. Household Size Annual Income 1 person $ 45,000 2 people S 51,400 3 people S 57,850 4 people $ 64,250 5 people $ 69,400 6 people $ 74,550 7 people $ 79,700 8 people $ 84,850 Effective December 2011 2. Gross income is calculated by taking the Applicant's anticipated adjusted gross monthly income, at the time of application, and multiplying it by twelve. Adjusted gross income includes the gross amount of all taxable income, before payroll deductions of: wages, salaries, commissions, fees, tips and bonuses, alimony, public assistance, etc. The adjusted gross income also includes the income earned on assets, such as dividends earned on stock and interest earned on savings and checking. The adjusted gross income qualification is pursuant to the 24 CFR 92.203(b)(3) for reporting under the IRS Form 1040 series for individual federal annual income tax purposes. Gross income includes the combined taxable adjusted gross income of all mortgagors and all other adult members of the household. a. Self -Employed or Seasonal Employees: The formula that the Lender uses to determine the anticipated gross monthly income of self-employed and/or seasonal workers is acceptable provided that all income as described in this manual is included in the calculation. b. Co-Borrower/Co-Mortoador: If a co -borrower or co -mortgagor will be on both the title and the deed of trust, his/her income must be included in determining eligibility for the program. The IRS regulation states "income to be taken into account in determining gross income is income of the mortgagor(s) and any other person who is expected to both live in the residence being financed and to be secondarily liable on the mortgage." c. Spouses: Married couples are treated as co -applicants, whether: 1) they are separated; 2) either spouse is applying for the loan; or 3) either spouse plans to be named on title. d. Computing Income i. Program Computation vs. Mortgage Underwriter's Computation: The City loan figure represents ANTICIPATED income, while the Lender's figure represents income AVERAGED over the last few years and the City program requires that every source of taxable and non-taxable income be listed on the Income Computation Worksheet, however, non-taxable income should be bracketed and not added into the maximum annual family income calculation. 7 • • • Attachment No. 1 Exhibit 1: First -Time Homebuyer Assistance Program Manual ii. Income Parameters: See Appendix A of this manual for examples of sources of income, which must be considered in computing buyer income. iii. Military Pay: See Appendix A of this manual for Military Pay explanations. iv. Self -Employed: Year-to-date profit and loss statement and three prior year's tax returns are required. v. Other Income: Sources of income other than wages must be documented by third party verifications. In cases where the third party fails to respond, acceptable alternative sources of documentation can be determined on a case -by -case basis and should follow standard FNMA income verification guidelines. vi. Documentation: In cases where the Applicant is employed, acceptable sources of documentation used to verify income include a recent pay stub with year-to-date earnings and an employer Verification of Earnings statement (VOE). If the application is taking place during the first four months of the year, a year-to-date total may be insufficient. The Lender must supplement the pay stub information with the prior year W-2 statement and/or tax returns. On some pay stubs, the year-to-date earnings include pay from the last part of the prior year. If this is determined to be the case, request that the employer submit a signed statement of verification of exact year-to-date income. Miscalculation can result in the determination of excess income and disqualification of the buyer. vii. Income Verification: The Lender bears the burden of proving that the Buyer's income is within the program guidelines. The computation should be clear, complete, and documented by third party verifications, to the greatest extent possible. viii. No Income: Adult members, 18 years and older, of the household who have no income must complete and sign the Declaration of No Income form. C. HOUSEHOLD ELIGIBILITY REQUIREMENTS 1. Households shall have sufficient income and credit -worthiness to qualify for primary financing from a participating lender. 2. Maximum liquid assets after down payment and closing cost contribution may not exceed $25,000. D. ELIGIBLE PROPERTIES Properties acquired and rehabilitated by SD-HFH that have met local code inspection standards and complied with lead -based paint regulations as prescribed by the City. The program may also be used on new construction projects SD-HFH. E. MAXIMUM PURCHASE PRICE The maximum purchase price cannot exceed 95 percent (95%) of the median purchase price for the area, as determined by the U.S. Department of Housing and Urban Development (1 unit-$394,250, effective 12/2011). F. LOAN PROCEDURES AND TERMS 1. The loan amount shall be the difference between the sales price, Tess any down payment, and the amount of the first mortgage for which the Eligible Household has been provided a bona fide lender approval. 2. The maximum CLTV (combined loan to value) of the City and the new 1st Trust Deed loans shall not exceed the maximum approved CLTV required by the 1st mortgage lender. 3. Non -occupant co -borrowers shall not be allowed. 8 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual 4. Total housing ratio (PITI) cannot exceed 36% of Applicant(s) gross monthly income. The City may make exceptions if less than twenty percent payment shock is involved. 5. Total debt -to -income ratio may not exceed 45% or 41% if obtaining an FHA loan. 6. No prepayment penalty allowed. 7. Maximum fees to the Applicant of 1.25% origination, discount points for below par pricing only, and $350 processing are acceptable for the purchase transaction. No other Broker or Admin type fees allowed. Other third party fees that are reasonable and customary are allowable. 8. The terms of the City's second trust deed are designed to encourage long-term residency in the program -assisted home. No interest is charged on the loan (except in the case of default). Instead, the program is based on an equity share. The amount of equity due to the City is based upon the number of years after the date of execution of the City's loan. It begins at 50% of the equity and decreases by 5% each year. After 10 full years of owner occupancy, there is no equity share. Only the principal remains due and payable. See shared equity example in Appendix B. 9. The loan shall become due and payable at the time of the property's transfer of title, refinance (except as earlier defined), rental or sale. 10.The loan shall also become due and payable when the acceleration clause is triggered. The acceleration clause will be in effect when the property is no longer the principal place of residency of the eligible homebuyer, or upon discovery of willful misrepresentation or fraud in connection with the program. Rental of the property is prohibited and will cause the loan to be accelerated. 11.Second and subsequent mortgages to the new First Trust Deed, except for this City Loan, are not permitted. 12.The loan is not assumable. 13.A Promissory Note and Deed of Trust will secure the loan. 14.The City Loan can be used with conventional, FHA, VA, and other loans issued be a qualified lender, except adjustable rate mortgages with less than five years fixed, negative amortization and stated income mortgages. 15. Lenders will process the underlying mortgages (first loan) using standard procedures, with adjustments to those procedures to conform to the City loan guidelines. • • • Attachment No. 1 Exhibit I: First -Time Flomebuyer Assistance Program Manual APPENDIX A INCOME GROSS ANNUAL INCOME Gross annual income is defined as the anticipated annualized gross taxable income of a mortgagor (or mortgagors) and adult members of the household. Annualized income is the sum of monthly gross taxable income multiplied by twelve (12). Gross monthly income includes all taxable sources of income derived from: gross pay, overtime compensation, part- time employment earning, bonuses, dividends, interest, royalties, pensions, Veterans Administration (VA) compensation, net rental income, alimony, public assistance payments, sick pay, social security benefits, unemployment compensation, income received from trusts, income received from business activities or investments, and any other source of taxable income not listed above. Information regarding income must be current within the most recent 30-day period preceding loan closing. Income not included by the Lender, but listed above, must be added to the Lender's income total on the "Income Computation Worksheet" income eligibility calculation for the City loan program. Income of the mortgagor (or mortgagors) and any other adult who is expected to live in the residence being financed must also be included in the household income calculation. All non-taxable income must be listed and bracketed on the "Income Computation Worksheet", but not counted when calculating the annual gross family income. In summary, income of all mortgagors (on both title and deed of trust) shall be included in the gross income calculation for the program. Additionally, the income of any adult who will live in the residence should be included. For married couples, income includes the income of both spouses, whether or not on title. MILITARY PAY For purposes of computing the buyer's gross monthly income, the monthly income is the "total entitlement" shown on the applicant's most recent monthly Leave and Earnings Statement and includes all regular pay, special pay and allowances. Non -taxed income, such as a housing allowance is not counted as income, but must be listed and bracketed. Certain categories of pay, which may be received only sporadically, may need to be considered on a case -by -case basis. 10 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX B SHARED EQUITY EXAMPLE NOTE: The following example assumes an initial (a) Gross Sales Price of $150,000 (b), Net Sales Price of $135,000 ($150,000 minus 10% seller fees), (c) 1st mortgage balance of $100,000 and City 2nd of $25,000 (d), Total Equity of $10,000 (b-c), and a City loan of $25,000.00 at a 0% interest rate, with an APR of 0%. The table is for the purpose of illustration only. Actual sales price and net sales price will vary. The principal amount of the loan remains due. # Months After Date Of Agreement Gross Sales Price (a) Net Sales Price (b) (a-10% fee) Mortgage Balances ( c) (1st $100k & 2" $25K) Total Equity ( d ) ( b-c ) Buyer's Equity Share Increases 5% Per year City of Chula Vista's Equity Decreases 5% per year 0-12 $150,000 $135,000 $125,000 $10,000 $5,000 (500/o) $5,000 (50%) 13-24 $155,000 $139,500 $125,000 $14,500 $7,975 (55%) $6,525 (45%) 25-36 $155,000 $139,500 $125,000 $14,500 $8,700 (60%) $5,800 (40%) 37-48 $160,000 $140,000 $125,000 $15,000 $9,750 (65%) $5,250 (35%) 49-60 $160,000 $140,000 $125,000 $15,000 $10,500 (70%) $4,500 (30°/o) 61-72 $165,000 $148,500 $125,000 $23,500 $17,625 (75%) $5,875 (25%) 73-84 $165,000 $148,500 $125,000 $23,500 $18,800 (80%) $4,700 (20%) 85-96 $170,000 $153,000 $125,000 $28,000 $23,800 (85%) $4,200 (25%) 97-108 $170,000 $153,000 $125,000 $28,000 $25,200 (90%) $2,800 (10%) 109-120 $175,000 $157,500 $125,000 $32,500 $30,875 (95%) $1,625 (5%) Thereafter $175,000 $157,500 $125,000 $32,500 $32,500 (100%) $0 (0%) In this examp e, the finance charge could vary between $1,625 and $6,525. Your amount will differ, depend ng upon gross sales price, net sales price, the amount of equity, and the number of months after the date of agreement that the sales occurs. If the Property is sold in the first year of the term of the Note secured by this Deed of Trust, Borrower shall receive fifty percent (50%) of the Equity in the Property and the City shall receive fifty percent (500/0) of the Equity. "Equity" is defined as the dollar amount that constitutes the difference between the sales price of the Property and the sum of the following amounts: 1. Principal on the First Note and the Deed Trust; and 2. Principal on this Second Note and Deed of Trust to the City of National City; and 3. All costs of sales, including cost of brokers' commissions, escrow fees, title costs and fees, recording cost, etc.; and 4. Current year taxes, including all real estate taxes calculated to the date of sale; and 5. Borrower's down payment not including the loan from the City to Borrower; and 6. All principal paid down on the First Note and Deed of Trust; and 7. Costs of any improvements to the Property provided such improvements were approved by the City prior to construction and provided that such improvements have been documented to the satisfaction of the City. 11 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual The amount of the Borrower's share in the equity of the Property shall increase by five percent (5%) per year, measured on the anniversary date of this Deed of Trust. Correspondingly, the City's share in the equity of the Property shall decrease by five percent (5%) per annum. For the sake of example, if the Property is sold more than (5) but less than six (6) years after the date of this Deed of Trust, the City would have a twenty-five percent (250/0) share in the Equity and the Borrower would have a seventy five percent (75%) share in the Equity of the Property. In the event that no Equity exists at the time of transfer or sale, the balance of the Note will be due and payable. In the event that a negative Equity situation exists, i.e., the proceeds from the sale of the Property are less than the balance of the Note, all net proceeds from the transfer or sale shall be paid to the City, as beneficiary in full satisfaction of the Note. When the HOME recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the home investment due, the participating jurisdiction can only recapture the net proceeds, if any. The net proceeds are the sales price minus superior Loan repayment (other than HOME funds) and any closing costs. 12 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX C HOME REGULATORY AGREEMENT FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 WHEN RECORDED PLEASE MAIL TO: Office of the City Clerk City of National City 1243 National City Boulevard National City, CA 91950-4397 (SPACE ABOVE FOR RECORDER'S USE ONLY) APN: XXX-XXX-XX FTHB #XXXX HOMEOWNER'S REGULATORY AGREEMENT FOR HOME PROGRAM PARTICIPATION THIS REGULATORY AGREEMENT ("Regulatory Agreement" or "Agreement") is entered into as of this 18th day of January, 2011 between the City of National City ("City"), and a Qualifying Household, on behalf of itself and Borrower's Name ("Owner"). PREFACE WHEREAS, the City of National City receives a formula HOME Investment Partnerships (HOME") Program allocation from the Federal Department of Housing and Urban Development to carry out eligible activities in accordance with program requirements; and WHEREAS, the Owner is interested in participating in City 's HOME -funded First -Time Homebuyer Program, and will comply with all program regulations and requirements; and WHEREAS, concurrently with the recordation of this Regulatory Agreement the City is funding a loan ("Loan") secured by a deed of trust ("Deed of Trust") to aid Owner, who is a first-time homebuyer, in acquiring the Property described below. The Trust Deed and Loan by the City was conditioned in part upon the recordation of a document setting forth certain restrictions upon the use and sale of the Property; and WHEREAS, Owner will use the proceeds of such Loan for the acquisition of the real property with the street address of 1111 A Avenue, National City, California, 91950 more particularly described in Exhibit A attached and incorporated by this reference (Property"); and WHEREAS, as further consideration for the Loan and to further the interests of the City, the Owner has agreed to enter into and record this Agreement. The covenants in this Agreement are intended to run with the land and be binding on the Owner for the full term of this Agreement. NOW, THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWS; 13 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual The Owner shall receive HOME Investment Partnership funds for investment in real property owned by the Owner, as evidenced by legal title or a valid contract of sale. Acting in this capacity, the Owner will comply with all aspects of HOME regulations 24 CFR §92.504 including the following: A. DEFINITIONS The following terms have the meanings and content set forth in this Section A where used in this Agreement or attached exhibits. 1. "AREA MEDIAN INCOME" means the median income for the San Diego County Primary Metropolitan Statistical Area (PMSA), with adjustments for household size, as adjusted from time to time by the U.S. Dept. of Housing and Urban Development (HUD). 2. "CITY" is of the City of National City, California, a public body corporate and politic. 3. "DEED OF TRUST" means any deed of trust, assignment of rents, and security agreement placed on the Property or any part thereof as security for any Loan and other obligations with Owner as trustor and City as beneficiary, as well as any amendments to, modification of, and restatements of said deed (s) of trust. 4. "EFFECTIVE PERIOD" means the period commencing on the date of this agreement and ending on the repayment of the Loan from the City, including the repayment of any required Equity as defined in Section E of the Agreement. 5. "EIGHTY PERCENT OF AREA MEDIAN INCOME" means annual income, which does not exceed eighty percent (80%) of the Area Median Income. 6. "HUD" means the United States Department of Housing and Urban Development. 7. "HOME FUNDS/HOME INVESTMENT": funds received pursuant to the HOME Investment Partnership Program under the Department of Housing and Urban Development (HUD), codified at 42 U.S.C. Section 12701, et seq., 24 CFR Part 92, to provide funds for affordable housing. 8. "HOMEOWNER INVESTMENT": homeowner's down payment and any capital improvement investment made by the owner since purchase. 9. "HOUSE" means the residential dwelling unit that is located on the Property. 10. "LOAN" is any Loan of funds provided by the City to any Owner for the purchase of the Property. 11. "LOAN DOCUMENTS" are collectively the Deed of Trust, Note, Note Rider, this Regulatory Agreement and any loan agreement, deed of trust, or promissory note entered into between City and Owner with respect to any of the Property, as they may be amended, modified or restated from time to time, along with all exhibits and attachments to these documents. 12. "NOTE" means the promissory note and note rider executed by Owner in favor of City evidencing any part of a Loan, which is secured by a Deed of Trust, as well as any amendments to, modifications or, or restatements of said promissory note. The Note will be on file with the City. 13. "OWNER" or "OWNERS" is the Qualifying Household that is the purchaser of the Property. 14. "PROPERTY" means the real property located at:1111 A Avenue, National City, California, 91950 and described in the attached Exhibit A, which is hereby incorporated into this Agreement by this reference, and any buildings or improvements now or hereafter situated on said real property. 15. "QUALIFYING HOUSEHOLD" means a household whose income is Eighty Percent of Area Median Income, as determined periodically by HUD, with adjustments in accordance with 24 CFR 92.252, and who is otherwise eligible to purchase the Property. 14 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual 16. "QUALIFYING SALES PRICE" means a sales price that does not exceed 95 percent (95%) of the median purchase price for the area, as determined by the U.S. Department of Housing and Urban Development. B. TERM OF AGREEMENT The term of this Agreement shall remain in full force and effect during the Effective Period regardless of any expiration of the term of any Loan, any payment or prepayment of any Loan, any assignment of a Note, any reconveyance of a Deed of Trust, or any sale, assignment, transfer, or conveyance of the Property, unless terminated earlier by the City in writing or extended by the mutual consent of the parties. However, failure to record this Agreement by the City shall not relieve Owner of any of the obligations specified herein. The covenants in this Agreement will run with the land for the benefit of the City and its heirs, assigns and successors and be binding on Owner and Owner's heirs, assigns and successors for the full term of this Agreement. C. USE OF FUNDS The Loan will be used to acquire the Property by the Owner who is a member of a Qualifying Household. D. AFFORDABILITY 1. The House will qualify as affordable housing and will have: (a) an initial purchase price that is a Qualifying Sales Price; and (b) an estimated appraised value at acquisition that does not exceed Qualifying Sales Price. 2. The House must be the principal residence of the Owner at all times during the Effective Period. 3. The deferred Loan for the HOME -assisted House is $ 40,000.00. E. RECAPTURE OF HOME FUNDS Pursuant to 24 CFR 92.254(a) (ii), the City requires that HOME funds be recaptured if the housing does not continue to be the principal residence of the family. If there is a "transfer," the principal amount of the Note, together with a share of the "Equity" (if any), as hereafter defined, shall be immediately due and payable to the City. A "transfer" means (i) all or any part of the Property or any interest in the Property that is sold, conveyed or transferred; (ii) Owner is not a natural person and a beneficial interest in Owner is sold, conveyed or transferred; (iii) all or any part of the Property is refinanced, except as otherwise allowed by law; (iv) Owner does not occupy the Property as his, her, or their, primary residence; (v) the leasing of all or any part of the Property; (vi) any material breach of the Note, Deed of Trust or this Agreement; or (vii) the filing of bankruptcy by the Owner. The Equity in the Property shall be calculated and shared between the Owner and City on the following basis: # Months After Date of Agreement Buyer's Equity Share (Increases 5% per year) City Equity Share (Decreases 5% per year) 0-12 (50%) (50%) 13-24 (55%) (45%) 25-36 (60%) (40%) 37-48 (65%) (35%) 49-60 (70%) (30%) 61-72 (75%) (25%) 73-84 (80%) (20%) 85-96 (85%) (15%) 97-108 (90%) (10%) 109-120 (95%) (5%) Thereafter (100%) (0%) If, for examp e, the Property is sold, rented, refinanced, conveyed, or transferred in the first year of the term of the Note secured by this Deed of Trust, Owner shall receive fifty percent (50%) of the Equity in the 15 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual Property and the City shall receive fifty percent (50%) of the Equity. "Equity" is defined as the dollar amount that constitutes the difference between the sales price of the Property (or in the event of a sale of the Property for an amount other than its fair market value or where there is no price established for the Property (i.e., rental or refinancing the Property, Borrower's failure to occupy the Property, material breach of the Note, Deed of Trust or this Agreement; or the filing of bankruptcy by the Borrower, the fair market value of the Property determined by an appraiser chosen by the Beneficiary in its sole discretion) and the sum of the following amounts: (a) principal on the First Note and the Deed of Trust, along with any interest and fees due thereon; and (b) principal on the Note and Deed of Trust, along with any interest and fees due thereon; and (c) all costs of sale, including costs of brokers' commissions, escrow fees, title costs and fees, recording costs, etc.; and (d) current year taxes, including all pro-rata real estate taxes calculated to the date of sale; and (e) borrower's down payment not including the Loan from the City to the Owner; and (f) all principal paid down on the First Note and Deed of Trust; and (g) costs of any improvements to the Property, provided such improvements were approved by the City prior to construction and provided that such improvements have been documented to the satisfaction of the City. The amount of the Owner's share in the Equity of the Property shall increase by five percent (5%) per year, measured on the anniversary of the date of the Deed of Trust is recorded against the Property. Correspondingly, the City's share in the equity of the Property shall decrease by five percent (5%) per annum. For the sake of example, if the Property is sold more than five (5) but less than six (6) years after the date of the Deed of Trust is recorded against the Property, the City would have a twenty five percent (25%) share in the Equity and the Owner would have a seventy five percent (75%) share in the Equity of the Property. In the event that no Equity exists at the time of transfer or sale, the balance of the Note (item E.1.b above) will be due and payable as provided herein. In the event that a negative Equity situation exists, i.e., the proceeds from the sale of the Property are less than the balance of the Note, all net proceeds from the transfer or sale shall be paid to the City, as beneficiary in full satisfaction of the Note. When the HOME recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the home investment due, the participating jurisdiction can only recapture the net proceeds, if any. The net proceeds are the sales price minus superior Loan repayment (other than HOME funds) and any closing costs. F. PROPERTY MAINTENANCE AND SECURITY During the Effective Period, Owner shall at his or her own expense maintain the Property in good condition, in good repair, and in decent, safe, sanitary and habitable living conditions for the benefit of that Owner's household. Owner shall maintain the Property in conformance with all applicable state, federal and local laws, ordinances, codes and regulations. In the event that Owner fails to maintain the Property in accordance with these standards and after at least thirty (30) business days prior notice to Owner, the City or the City's contractor or agent may, but shall be under no obligation to, enter upon the Property, make such repairs or replacements as are deemed necessary in the City's discretion, and provide for payment thereof. Any amount advanced by the City to make such repairs, together with interest thereon from the date of such advance at the rate of seven percent (7%) per annum (unless payment of such an interest rate would be contrary to applicable law, in which event such sums shall bear interest at the highest rate then allowable by applicable law), shall become an additional obligation of the Owner to the City and shall be secured by any Deed of Trust, if not previously reconveyed. 16 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual G. REPAYMENTS HOME Funds that are loaned to the Owner are to be remitted (principal and interest, as warranted) to the City to be retained and used as program income to originate additional Loans to First -Time Homebuyers. H. PROPERTY REQUIREMENTS Compliance with the following requirements is required as follows: 1. Maximum per -unit subsidy amount. The amount of HOME funds that a participating jurisdiction may invest on a per -unit basis in affordable housing will not exceed the per -unit dollar limits established by HUD. 2. Property Standards. Housing that is assisted with HOME funds, at a minimum, must meet Section 8 Housing Quality Standards. 3. Property Cost Limits. The value of acquisition and development of the housing unit, located in the City of National City must not exceed 95 percent (95%) of the median price for the area, as determined by the U.S. Department of Housing and Urban Development. 4. Occupancy Requirements. The HOME Program requires that occupancy standards must be maintained for the Effective Period for each of the assisted Houses as follows: (a) The prospective purchaser must be low income; that is, the purchaser must have an annual (gross) income that does not exceed Eighty Percent (80%) of Area Median Income, which will be determined at either the time the household initially occupies the property or at the time the HOME funds are invested; whichever is later. (b) Each Owner must occupy the property as a principal residence. Only Loan default and subsequent foreclosure negates the principal residence limitation. 5. Ownership Interest. The purchaser must have fee simple title upon sale of a HOME -assisted unit or cooperative ownership interest upon sale of a HOME -assisted unit. 6. Refinance. The City will subordinate to the following refinance situations only, subject to City approval and additional documentation is required: (a) FHA streamline refinance, with a reduction in total PITI and no cash out. (b) VA rate reduction refinance, with a reduction in total PITI and no cash out. (c) Conventional rate and term refinance, with a reduction in total PITI and no cash out. I. REVERSION OF ASSETS Owner must transfer to the City any HOME funds remaining in the Property after the time of expiration of the Effective Period when there is a change to title on the Property or any sale, rental, refinance, conveyance or transfer of Property. Any funds received as a result of this reversion of assets shall be used for additional HOME -eligible activities. J. DEFAULTS AND REMEDIES In the event of any breach or violation of any agreement or obligation under this Agreement, the City may proceed with any or all of the remedies as described in paragraph 18 of the Deed of Trust. K. NON -LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS No officer, official, director, employee, agent or representative of the City shall be personally liable to Owner for any obligation created under the terms of this Agreement except in the case of actual fraud or willful misconduct by such person. L. INDEMNITY 17 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual Notwithstanding the insurance coverage required herein, Owner shall indemnify and hold City and its officers, officials, directors, employees, agents and authorized representatives (each, an "Indemnified Party," and collectively, "Indemnified Parties"), free and harmless against any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including attorney's fees) which any Indemnified Party may incur as a direct or indirect consequence of (1) Owner's failure to perform any obligations as and when required by this Agreement; (2) any failure of any of Owner's representations or warranties to be true and complete; or (3) any act or omission by Owner or any contractor, subcontractor, management agent, or supplier with respect the Property, except where such losses are caused by the sole negligence or willful misconduct of Indemnified Parties. Owner shall pay immediately upon the City's demand any amounts owing under this indemnity. The duty of the Owner to indemnify includes the duty to defend Indemnified Parties in any court action, administrative action, or other proceeding brought by any third party arising from the Property. Owner's duty to indemnify Indemnified Parties shall survive the term of this Agreement. M. SUBORDINATION This Agreement shall be subordinated in priority only to the liens and encumbrances approved in writing by the City in its sole and absolute discretion. N. GENERAL PROVISIONS 1. Governing Law. This Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law. 2. This Agreement Controls. In the event that any provisions of this Agreement and any Loan Documents conflict, the terms of this Agreement shall control. 3. Time. Time is of the essence in this Agreement. 4. Consents and Approvals. For those provisions of this agreement which are expressly subject to consent or approval of the City, said consent or approval shall not be unreasonably withheld. Any approval must be in writing and executed by an authorized representative of the City. 5. Notices, Demands and Communications. Formal notices, demands and communications between Owner and the City shall be sufficiently given and shall not be deemed given unless dispatched by mailing it first class mail or by certified mail, return receipt requested, to the principal offices of Owner and City as follows: Housing and Grants City of National City 1243 National City Boulevard National City, CA 91950-4397 New Owner: Borrower Address: 1111 A Ave National City, CA 91950 Any such written communications by mail shall be conclusively deemed to have been received by the addressee five days after the deposit thereof in the United States Mail, postage prepaid and properly addressed as noted above. 6. Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 7. Attorney's Fees. In the event of any litigation over the performance of this Agreement, the prevailing party shall be entitled to attomey's fees and costs incurred during the course of litigation. 18 Attachment No. 1 Exhibit l: First -Time Homebuyer Assistance Program Manual IN WITNESS HEREOF, the City and the Owner have executed this Agreement as of the date first hereinafter set forth. City of National City By: Leslie Deese, City Manager Owner: By: Buyer 19 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual "Exhibit A" Legal Description (must be attached prior to recordation) The land referred to herein is situated in the State of CALIFORNIA, County of SAN DIEGO, and described as follows: 20 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX D DEED OF TRUST FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 WHEN RECORDED PLEASE MAIL TO: Office of the City Clerk City of National City 1243 National City Boulevard National City, CA 91950-4397 (SPACE ABOVE FOR RECORDER'S USE ONLY) APN: XXX-XXX-XX FTHB #XXXX HOMEOWNER'S REGULATORY AGREEMENT FOR HOME PROGRAM PARTICIPATION THIS REGULATORY AGREEMENT ("Regulatory Agreement" or "Agreement") is entered into as of this 18th day of January, 2011 between the City of National City ("City"), and a Qualifying Household, on behalf of itself and Borrower Name ("Owner"). PREFACE WHEREAS, the City of National City receives a formula HOME Investment Partnerships ("HOME") Program allocation from the Federal Department of Housing and Urban Development to carry out eligible activities in accordance with program requirements; and WHEREAS, the Owner is interested in participating in City 's HOME -funded First -Time Homebuyer Program, and will comply with all program regulations and requirements; and WHEREAS, concurrently with the recordation of this Regulatory Agreement the City is funding a loan ("Loan") secured by a deed of trust ("Deed of Trust") to aid Owner, who is a first-time homebuyer, in acquiring the Property described below. The Trust Deed and Loan by the City was conditioned in part upon the recordation of a document setting forth certain restrictions upon the use and sale of the Property; and WHEREAS, Owner will use the proceeds of such Loan for the acquisition of the real property with the street address of 1111 A Avenue, National City, California, 91950 more particularly described in Exhibit A attached and incorporated by this reference ("Property"); and WHEREAS, as further consideration for the Loan and to further the interests of the City, the Owner has agreed to enter into and record this Agreement. The covenants in this Agreement are intended to run with the land and be binding on the Owner for the full term of this Agreement. NOW, THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWS; The Owner shall receive HOME Investment Partnership funds for investment in real property owned by the Owner, as evidenced by legal title or a valid contract of sale. Acting in this capacity, the Owner will comply with all aspects of HOME regulations 24 CFR §92.504 including the following: 21 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual D. DEFINITIONS The following terms have the meanings and content set forth in this Section A where used in this Agreement or attached exhibits. 17. "AREA MEDIAN INCOME" means the median income for the San Diego County Primary Metropolitan Statistical Area (PMSA), with adjustments for household size, as adjusted from time to time by the U.S. Dept. of Housing and Urban Development (HUD). 18. "CITY" is of the City of National City, California, a public body corporate and politic. 19. "DEED OF TRUST" means any deed of trust, assignment of rents, and security agreement placed on the Property or any part thereof as security for any Loan and other obligations with Owner as trustor and City as beneficiary, as well as any amendments to, modification of, and restatements of said deed (s) of trust. 20. "EFFECTIVE PERIOD" means the period commencing on the date of this agreement and ending on the repayment of the Loan from the City, including the repayment of any required Equity as defined in Section E of the Agreement. 21. "EIGHTY PERCENT OF AREA MEDIAN INCOME" means annual income, which does not exceed eighty percent (80%) of the Area Median Income. 22. "HUD" means the United States Department of Housing and Urban Development. 23. "HOME FUNDS/HOME INVESTMENT": funds received pursuant to the HOME Investment Partnership Program under the Department of Housing and Urban Development (HUD), codified at 42 U.S.C. Section 12701, et seq., 24 CFR Part 92, to provide funds for affordable housing. 24. "HOMEOWNER INVESTMENT": homeowner's down payment and any capital improvement investment made by the owner since purchase. 25. "HOUSE" means the residential dwelling unit that is located on the Property. 26. "LOAN" is any Loan of funds provided by the City to any Owner for the purchase of the Property. 27. "LOAN DOCUMENTS" are collectively the Deed of Trust, Note, Note Rider, this Regulatory Agreement and any loan agreement, deed of trust, or promissory note entered into between City and Owner with respect to any of the Property, as they may be amended, modified or restated from time to time, along with all exhibits and attachments to these documents. 28. "NOTE" means the promissory note and note rider executed by Owner in favor of City evidencing any part of a Loan, which is secured by a Deed of Trust, as well as any amendments to, modifications or, or restatements of said promissory note. The Note will be on file with the City. 29. "OWNER" or "OWNERS" is the Qualifying Household that is the purchaser of the Property. 30. "PROPERTY" means the real property located at: 2825 J Street, National City , California, 91950 and described in the attached Exhibit A, which is hereby incorporated into this Agreement by this reference, and any buildings or improvements now or hereafter situated on said real property. 31. "QUALIFYING HOUSEHOLD" means a household whose income is Eighty Percent of Area Median Income, as determined periodically by HUD, with adjustments in accordance with 24 CFR 92.252, and who is otherwise eligible to purchase the Property. 32. "QUALIFYING SALES PRICE" means a sales price that does not exceed 95 percent (95%) of the median purchase price for the area, as determined by the U.S. Department of Housing and Urban Development. 22 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual E. TERM OF AGREEMENT The term of this Agreement shall remain in full force and effect during the Effective Period regardless of any expiration of the term of any Loan, any payment or prepayment of any Loan, any assignment of a Note, any reconveyance of a Deed of Trust, or any sale, assignment, transfer, or conveyance of the Property, unless terminated earlier by the City in writing or extended by the mutual consent of the parties. However, failure to record this Agreement by the City shall not relieve Owner of any of the obligations specified herein. The covenants in this Agreement will run with the land for the benefit of the City and its heirs, assigns and successors and be binding on Owner and Owner's heirs, assigns and successors for the full term of this Agreement. F. USE OF FUNDS The Loan will be used to acquire the Property by the Owner who is a member of a Qualifying Household. F. AFFORDABILITY 4. The House will qualify as affordable housing and will have: (a) an initial purchase price that is a Qualifying Sales Price; and (b) an estimated appraised value at acquisition that does not exceed Qualifying Sales Price. 5. The House must be the principal residence of the Owner at all times during the Effective Period. 6. The deferred Loan for the HOME -assisted House is $ 40,000.00. G. RECAPTURE OF HOME FUNDS Pursuant to 24 CFR 92.254(a) (ii), the City requires that HOME funds be recaptured if the housing does not continue to be the principal residence of the family. If there is a "transfer," the principal amount of the Note, together with a share of the "Equity" (if any), as hereafter defined, shall be immediately due and payable to the City. A "transfer" means (i) all or any part of the Property or any interest in the Property that is sold, conveyed or transferred; (ii) Owner is not a natural person and a beneficial interest in Owner is sold, conveyed or transferred; (iii) all or any part of the Property is refinanced, except as otherwise allowed by law; (iv) Owner does not occupy the Property as his, her, or their, primary residence; (v) the leasing of all or any part of the Property; (vi) any material breach of the Note, Deed of Trust or this Agreement; or (vii) the filing of bankruptcy by the Owner. The Equity in the Property shall be calculated and shared between the Owner and City on the following basis: # Months After Date of Agreement Buyer's Equity Share (Increases 5% per year) City Equity Share (Decreases 5% per year) 0-12 (50%) (50%) 13-24 (55%) (45%) 25-36 (60%) (40%) 37-48 (65%) (35%) 49-60 (70%) (30%) 61-72 (75%) (25%) 73-84 (80%) (20%) 85-96 (85%) (15%) 97-108 (90%) (10%) 109-120 (95%) (5%) Thereafter (100%) (0%) If, for examp e, the Property is sold, rented, refinanced, conveyed, or transferred in the first year of the term of the Note secured by this Deed of Trust, Owner shall receive fifty percent (50%) of the Equity in the Property and the City shall receive fifty percent (50%) of the Equity. "Equity" is defined as the dollar amount that constitutes the difference between the sales price of the Property (or in the event of a sale of the Property for an amount other than its fair market value or where there is no price established for the 23 Attachment No. 1 Exhibit 1: First -Time Homebuyer Assistance Program Manual Property (i.e., rental or refinancing the Property, Borrower's failure to occupy the Property, material breach of the Note, Deed of Trust or this Agreement; or the filing of bankruptcy by the Borrower, the fair market value of the Property determined by an appraiser chosen by the Beneficiary in its sole discretion) and the sum of the following amounts: (h) principal on the First Note and the Deed of Trust, along with any interest and fees due thereon; and (I) principal on the Note and Deed of Trust, along with any interest and fees due thereon; and (i) all costs of sale, including costs of brokers' commissions, escrow fees, title costs and fees, recording costs, etc.; and (k) current year taxes, including all pro-rata real estate taxes calculated to the date of sale; and (I) borrower's down payment not including the Loan from the City to the Owner; and (m) all principal paid down on the First Note and Deed of Trust; and (n) costs of any improvements to the Property, provided such improvements were approved by the City prior to construction and provided that such improvements have been documented to the satisfaction of the City. The amount of the Owner's share in the Equity of the Property shall increase by five percent (5%) per year, measured on the anniversary of the date of the Deed of Trust is recorded against the Property. Correspondingly, the City's share in the equity of the Property shall decrease by five percent (5%) per annum. For the sake of example, if the Property is sold more than five (5) but less than six (6) years after the date of the Deed of Trust is recorded against the Property, the City would have a twenty five percent (25%) share in the Equity and the Owner would have a seventy five percent (75%) share in the Equity of the Property. In the event that no Equity exists at the time of transfer or sale, the balance of the Note (item E.1.b above) will be due and payable as provided herein. In the event that a negative Equity situation exists, i.e., the proceeds from the sale of the Property are less than the balance of the Note, all net proceeds from the transfer or sale shall be paid to the City, as beneficiary in full satisfaction of the Note. When the HOME recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the home investment due, the participating jurisdiction can only recapture the net proceeds, if any. The net proceeds are the sales price minus superior Loan repayment (other than HOME funds) and any closing costs. F. PROPERTY MAINTENANCE AND SECURITY During the Effective Period, Owner shall at his or her own expense maintain the Property in good condition, in good repair, and in decent, safe, sanitary and habitable living conditions for the benefit of that Owner's household. Owner shall maintain the Property in conformance with all applicable state, federal and local laws, ordinances, codes and regulations. In the event that Owner fails to maintain the Property in accordance with these standards and after at least thirty (30) business days prior notice to Owner, the City or the City's contractor or agent may, but shall be under no obligation to, enter upon the Property, make such repairs or replacements as are deemed necessary in the City's discretion, and provide for payment thereof. Any amount advanced by the City to make such repairs, together with interest thereon from the date of such advance at the rate of seven percent (7%) per annum (unless payment of such an interest rate would be contrary to applicable law, in which event such sums shall bear interest at the highest rate then allowable by applicable law), shall become an additional obligation of the Owner to the City and shall be secured by any Deed of Trust, if not previously reconveyed. 24 Attachment No. 1 Exhibit 1: First -Time Homebuyer Assistance Program Manual G. REPAYMENTS HOME Funds that are loaned to the Owner are to be remitted (principal and interest, as warranted) to the City to be retained and used as program income to originate additional Loans to First -Time Homebuyers. H. PROPERTY REQUIREMENTS Compliance with the following requirements is required as follows: 1. Maximum per -unit subsidy amount. The amount of HOME funds that a participating jurisdiction may invest on a per -unit basis in affordable housing will not exceed the per -unit dollar limits established by HUD. 2. Property Standards. Housing that is assisted with HOME funds, at a minimum, must meet Section 8 Housing Quality Standards. 3. Property Cost Limits. The value of acquisition and development of the housing unit, located in the City of National City must not exceed 95 percent (95%) of the median price for the area, as determined by the U.S. Department of Housing and Urban Development. 4. Occupancy Requirements. The HOME Program requires that occupancy standards must be maintained for the Effective Period for each of the assisted Houses as follows: (c) The prospective purchaser must be low income; that is, the purchaser must have an annual (gross) income that does not exceed Eighty Percent (80%) of Area Median Income, which will be determined at either the time the household initially occupies the property or at the time the HOME funds are invested; whichever is later. (d) Each Owner must occupy the property as a principal residence. Only Loan default and subsequent foreclosure negates the principal residence limitation. 5. Ownership Interest. The purchaser must have fee simple title upon sale of a HOME -assisted unit or cooperative ownership interest upon sale of a HOME -assisted unit. 6. Refinance. The City will subordinate to the following refinance situations only, subject to City approval and additional documentation is required: (d) FHA streamline refinance, with a reduction in total PITI and no cash out. (e) VA rate reduction refinance, with a reduction in total PITI and no cash out. (f)Conventional rate and term refinance, with a reduction in total PITI and no cash out. I. REVERSION OF ASSETS Owner must transfer to the City any HOME funds remaining in the Property after the time of expiration of the Effective Period when there is a change to title on the Property or any sale, rental, refinance, conveyance or transfer of Property. Any funds received as a result of this reversion of assets shall be used for additional HOME -eligible activities. J. DEFAULTS AND REMEDIES In the event of any breach or violation of any agreement or obligation under this Agreement, the City may proceed with any or all of the remedies as described in paragraph 18 of the Deed of Trust. K. NON -LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS No officer, official, director, employee, agent or representative of the City shall be personally liable to Owner for any obligation created under the terms of this Agreement except in the case of actual fraud or willful misconduct by such person. L. INDEMNITY Notwithstanding the insurance coverage required herein, Owner shall indemnify and hold City and its officers, officials, directors, employees, agents and authorized representatives (each, an "Indemnified Party," and collectively, "Indemnified Parties"), free and harmless against any losses, damages, liabilities, claims, 25 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual demands, judgments, actions, court costs, and legal or other expenses (including attorney's fees) which any Indemnified Party may incur as a direct or indirect consequence of (1) Owner's failure to perform any obligations as and when required by this Agreement; (2) any failure of any of Owner's representations or warranties to be true and complete; or (3) any act or omission by Owner or any contractor, subcontractor, management agent, or supplier with respect the Property, except where such losses are caused by the sole negligence or willful misconduct of Indemnified Parties. Owner shall pay immediately upon the City's demand any amounts owing under this indemnity. The duty of the Owner to indemnify includes the duty to defend Indemnified Parties in any court action, administrative action, or other proceeding brought by any third party arising from the Property. Owner's duty to indemnify Indemnified Parties shall survive the term of this Agreement. M. SUBORDINATION This Agreement shall be subordinated in priority only to the liens and encumbrances approved in writing by the City in its sole and absolute discretion. N. GENERAL PROVISIONS 8. Governing Law. This Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law. 9. This Agreement Controls. In the event that any provisions of this Agreement and any Loan Documents conflict, the terms of this Agreement shall control. 10. Time, Time is of the essence in this Agreement. 11. Consents and Approvals. For those provisions of this agreement which are expressly subject to consent or approval of the City, said consent or approval shall not be unreasonably withheld. Any approval must be in writing and executed by an authorized representative of the City. 12. Notices, Demands and Communications. Formal notices, demands and communications between Owner and the City shall be sufficiently given and shall not be deemed given unless dispatched by mailing it first class mail or by certified mail, return receipt requested, to the principal offices of Owner and City as follows: City of National City Housing and Grants 1243 National City Boulevard National City, CA 91950-4397 New Owner: Borrower Name Address: 1111 A Avenue National City, CA 91950 Any such written communications by mail shall be conclusively deemed to have been received by the addressee five days after the deposit thereof in the United States Mail, postage prepaid and properly addressed as noted above. 13. Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 14. Aftorney's Fees. In the event of any litigation over the performance of this Agreement, the prevailing party shall be entitled to attorney's fees and costs incurred during the course of litigation. IN WITNESS HEREOF, the City and the Owner have executed this Agreement as of the date first hereinafter set forth. City of National City 26 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual By: Leslie Deese, City Manager Owner: By: Borrower XXXXX 27 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual "Exhibit A" Legal Description (must be attached prior to recordation) The land referred to herein is situated in the State of CALIFORNIA, County of SAN DIEGO, and described as follows: 28 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual APPENDIX E PROMISSORY NOTE APN: XXX-XXX-XX-XX FTHB # XXXX-XXXX NOTICE: THIS NOTE MAY REQUIRE PAYMENT OF PRINCIPAL AND INTEREST UPON THE SALE OR TRANSFER OF THE PROPERTY OR UPON A PREPAYMENT. FURTHER, THIS NOTE IS A SHARED APPRECIATION NOTE AS DEFINED IN SECTION 1917, ET SEQ. OF THE CALIFORNIA CIVIL CODE. $ 00,000.00 Amount PROMISSORY NOTE SECURED BY DEED OF TRUST 000 XXXX, National City, California 91950 [Property Address] 2009 Date 1. Borrower's Promise to Pay. For value received, the undersigned, XXXXX XXXXX ("Borrower"), promises to pay to the City of National City ("City"), or order, the sum of XXXXX Thousand Dollars and 00ICents ($00,000.00) with interest accruing thereon as hereinafter provided, and payable as set forth below. It is understood that the City may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note will be called the "Note Holder". 2. No Interest. This Note will bear no interest unless the Borrower defaults under the terms of this Note, the Deed of Trust securing it and/or the Homeowner's Regulatory Agreement for Home Program Participation ("Home Agreement") affecting the Property. In the event of default, interest from the Date of this Note shall be calculated at the greater of the following amounts: a) The rate equal to the interest rate of the senior trust deed or, in the event of no senior trust deed; or b) ten percent (10%) per annum. 3. Payments and Term. The term of this Note extends until the earlier of default by Borrower under the terms of this Note, the Deed of Trust or the Home Agreement, or the day Borrower sells, rents, refinances, transfers or changes the title of the property ("Property") described in the Deed of Trust. Sale, rental, refinance, conveyance, transfer or change in title of the property prior to the tenth (10th) anniversary date of the Deed of Trust will trigger the shared equity in addition to the principal, as described in the accompanying Deed of Trust. A "transfer" means (i) all or any part of the Property or any interest in the Property is sold, conveyed or transferred; (ii) Borrower is not a natural person and a beneficial interest in Borrower is sold, conveyed or transferred; (iii) all or any part of the Property is refinanced, except as otherwise allowed by law; (iv) Borrower does not occupy the Property as his, her, or their, primary residence; (v) the leasing of all or any part of the Property; (vi) any material breach of this Note (including, without limitation, the Note Rider), the Home Agreement or the Deed of Trust; or (vii) the filing of bankruptcy by the Borrower. No delay or omission on the part of the City shall operate as a waiver of such right of repayment or of any other right under this Note. Upon a 29 Attachment No. 1 Exhibit 1: First -Time Homebuyer Assistance Program Manual Transfer, the principal amount of this Note, together with a share of the Equity (if any) as set forth in the Note Rider attached hereto, shall be immediately due and payable to the City. The City shall not exercise this right of acceleration if prohibited by federal law as of the date of the Deed of Trust or if the City has executed a separate written waiver of this option. The following shall not constitute a Transfer: (a) A transfer of the Property from a deceased Borrower to the surviving spouse of the Borrower if the surviving spouse is also named as a Borrower; (b) A transfer of the Property by a Borrower to his/her spouse pursuant to which the spouse becomes a co-owner of the Property; (c) A transfer of the Property resulting from a decree of dissolution of the marriage or legal separation or from a property settlement agreement incidental to such a decree which requires the Borrower to continue to make payments on the Note and by which a spouse who is already a Borrower becomes the sole owner of the Property; (d) A transfer of the Property to a Borrower to an inter-vivos trust in which the Borrower is the sole beneficiary; (e) A transfer by means of encumbering the Property with a lien that is a junior lien to the lien securing the loan to Borrower evidenced by the Deed of Trust. All payments made under this Note shall be paid in lawful money of the United States to the City of National City at 1243 National City Boulevard, National City, CA 91950. 4. Prepayment. Borrower has the right to prepay the principal without incurring any penalty, apart from any interest that may be due under default provisions above. In the event that Borrower chooses to prepay the Note, Borrower must notify Note Holder in writing. All payments received on account of this Note shall be first applied to accrued interest, if any, and the remainder shall be applied to the reduction of principal. PAYMENT OF THE NOTE SHALL NOT AFFECT THE OBLIGATION TO SHARE EQUITY WITH THE City AS PROVIDED IN THE NOTE RIDER ATTACHED HERETO. 5. Relinquishment of Equity. Provided that Borrower is not in default under the terms of this Note, the Deed of Trust or the Home Agreement and Borrower has continually occupied the Property as Borrower's principal residence, the City's interest in the equity of the property shall be relinquished by City ten (10) years from the date of the execution of the Note. Nothing contained in this paragraph 5 shall be construed as a promise by City to forgive or relinquish the right to seek repayment of the principal of the Note. 6. Default Under Deed of Trust or Home Agreement. Notwithstanding any other provisions of the Note, if default occurs in any of the covenants or agreements contained in the Deed of Trust or the Home Agreement, the principal amount of this Note, together with a share of the Equity (if any) or default interest as set forth in Section 2, above (whichever is greater), shall be immediately become due and payable in full at the option of City. 7. Attorneys' Fees. Should suit be commenced to collect on this Note, or any portion thereof, such sum as the court may deem reasonable shall be added hereto as attorneys' fees. 8. Time. Time is of the essence herein. 9. Amendments. This Note may not be modified or amended except by an instrument in writing expressing such intention and signed by an authorized representative of City and Borrower. 30 Attachment No. 1 Exhibit I: First -Time Homebuyer Assistance Program Manual 10. Severability. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity and binding effect of the remainder of this Note upon the parties. 11. Borrower's Waivers. Borrower waives any rights to require City to perform certain acts. Those acts are: (a) To demand payment of amounts due (known as "presentment'). (b) To give notice that amounts due have not been paid (known as "notice of dishonor"). (c) To obtain an official certification of non-payment (known as "protest"). 12. Giving of Notices. Any notice that must be given to Borrower under this Note will be given by delivering it or by mailing it first class mail or by certified mail, return receipt requested, addressed to Borrower at the address set forth above. A notice that must be given to City under this Note will be given by mailing it certified mail, return receipt request, to City at the address stated in Section 3 above. Any party may change its address by a notice given to the other party in the manner set forth in this Section. 13. Joint and Several Responsibility. If more than one person executes this Note, each is fully and personally obligated to pay the full amount owed and to keep all promises in this Note. Date: NOTICE TO BORROWER Do not sign this Note if it contains blank spaces. All spaces should be completed before you sign. Borrower XXXXX Borrower XXXXX 31 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 November 7, 2012 Section 504 Coordinator San Diego Habitat for Humanity Community Housing Corporation 10222 San Diego Mission Road San Diego, CA 92108 Dear Sir or Madam, On October 30th, 2012, Resolution No. 2012-217 was passed and adopted by the City Council of the City of National City, authorizing execution of an Agreement with the San Diego Habitat for Humanity Community Housing Corporation. We are enclosing for your records a certified copy of the above Resolution and a fully executed original Agreement. Sincerely, Michael R. Dalla, CMC City Clerk Enclosures cc: Housing & Grants