Stradling Yocca Carlson & Rauth
Draft dated April 10, 2025
4932-0952-4780/022620-0118
Recording Requested By and
When Recorded Mail To:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Bradley R. Neal, Esq.
[Space above for recorder.]
This document is exempt from the
payment of a recording fee pursuant to
Government Code Section 27383.
REGULATORY AGREEMENT
AND DECLARATION OF RESTRICTIVE COVENANTS
By and Between
ANAHEIM HOUSING AUTHORITY,
And
CENTER HOUSING PARTNERS LP,
a California limited partnership
____________________
Dated as of _________ 1, 2025
____________________
Relating to
ANAHEIM HOUSING AUTHORITY
MULTIFAMILY HOUSING REVENUE NOTE
(TAMPICO MOTEL CONVERSION),
SERIES 2025A
Table of Contents
Page
i
4932-0952-4780/022620-0118
Section 1. Definitions and Interpretation ....................................................................................... 2 Section 2. Acquisition, Rehabilitation, Equipping and Completion of the Project ....................... 7 Section 3. Residential Rental Property .......................................................................................... 8 Section 4. Low and Very Low Income Units................................................................................. 9 Section 5. Selection of Tenants .................................................................................................... 13 Section 6. Marketing and Tenant Selection Plan ......................................................................... 14 Section 7. Maintenance ................................................................................................................ 15 Section 8. Management of the Apartment Complex .................................................................... 16 Section 9. Tax Status of the Note ................................................................................................. 19 Section 10. Modification of Special Tax Covenants...................................................................... 19 Section 11. Indemnification ........................................................................................................... 20 Section 12. Consideration .............................................................................................................. 22 Section 13. Reliance ....................................................................................................................... 22 Section 14. Sale or Transfer of the Project; Syndication ............................................................... 22 Section 15. Foreclosure .................................................................................................................. 23 Section 16. Term ............................................................................................................................ 23 Section 17. Covenants to Run With the Land ................................................................................ 24 Section 18. Burden and Benefit ..................................................................................................... 24 Section 19. Uniformity; Common Plan ......................................................................................... 24 Section 20. Enforcement ................................................................................................................ 25 Section 21. Recording and Filing ................................................................................................... 26 Section 22. Payment of Fees .......................................................................................................... 26 Section 23. Governing Law ........................................................................................................... 27 Section 24. Amendments ............................................................................................................... 27 Section 25. Notice .......................................................................................................................... 27 Section 26. Severability ................................................................................................................. 28 Section 27. Multiple Counterparts ................................................................................................. 28 Section 28. Compliance by Borrower ............................................................................................ 28 Section 29. Obligation of Borrower; Limitations on Recourse to Borrower ................................. 28 Section 30. CDLAC Requirements ................................................................................................ 29 Section 31. Damage, Destruction or Condemnation of the Property ............................................. 31 Section 32. Third-Party Beneficiary .............................................................................................. 31
EXHIBIT A LEGAL DESCRIPTION .......................................................................................... A-1 EXHIBIT B CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE ......................... B-1 EXHIBIT C INCOME COMPUTATION AND CERTIFICATION ............................................ C-1 EXHIBIT D CDLAC RESOLUTION ........................................................................................... D-1 EXHIBIT E CDLAC COMPLIANCE CERTIFICATE................................................................ E-1 EXHIBIT F CDLAC COMPLETION CERTIFICATE ................................................................ F-1
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REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (the “Regulatory Agreement”), dated as of ___________ 1, 2025, by and between the Anaheim Housing Authority, a public body corporate and politic is duly organized and existing under the Constitution and the laws of the State of California (together with any successor to its rights, duties and obligations, the “ Governmental Lender”) and Center Housing Partners LP , a California limited partnership (the “Borrower”).
W I T N E S S E T H
WHEREAS, the Legislature of the State of California enacted Chapter 1 of Part 2 of Division 24 of the Health and Safety Code (the “Act”) to authorize housing authorities to issue bonds or notes to finance the acquisition, rehabilitation, equipping and development of multifamily rental housing for families and individuals of lower income; and WHEREAS, the Governmental Lender is a political subdivision (within the meaning of that term in the Regulations of the Department of Treasury and the rulings of the Internal Revenue Service prescribed and promulgated pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”)); and
WHEREAS, on __________, 2025, the governing board of the Governmental Lender adopted a resolution (the “Resolution”) authorizing the execution and delivery of notes in connection with financing the acquisition, rehabilitation and equipping of a 31 unit plus one manager’s unit multifamily rental housing development, known generally as the “Tampico Motel Conversion ,” located at 151 South Cenpla Way, in the City of Anaheim, California, County of Orange, California (the “Project”); and
WHEREAS, in furtherance of the purposes of the Act and the Resolution and as a part of the Governmental Lender’s plan of financing residential rental housing, pursuant to the Funding Loan Agreement, by and among the Governmental Lender, CN Financing, Inc. , a _____________ (the “Funding Lender”) and Wilmington Trust, National Association, as fiscal agent (the “Fiscal Agent”), dated as of ___________ 1, 2025 (the “Funding Loan Agreement”), the Governmental Lender has agreed to execute and deliver its Anaheim Housing Authority Multifamily Housing Revenue Note (Tampico Motel Conversion), Series 2025A in the aggregate principal amount of $______________ (the “Tax-Exempt Funding Note” or “Note”);
WHEREAS, pursuant to a Borrower Loan Agreement, by and among the Governmental Lender, the Funding Lender and Borrower, dated as of ___________ 1, 2025 (the “Borrower Loan Agreement”), the proceeds of the Note will be loaned to the Borrower which will use the proceeds of the Note to finance the acquisition, rehabilitation and equipping of the Project for the public purpose of providing decent, safe and sanitary housing for families and individuals of low and very low income; and
WHEREAS, all things necessary to make the Note, when executed and delivered pursuant to the Funding Loan Agreement, the valid, binding, and limited obligation of the Governmental Lender according to the import thereof, and to constitute the Funding Loan Agreement a valid assignment of
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the amounts pledged to the payment of the principal of, and premium, if any, and interest on the Note have been done and performed, and the creation, execution, and delivery of the Funding Loan Agreement and the execution and delivery of the Note, subject to the terms thereof, in all respects have been duly authorized; and
WHEREAS, the Governmental Lender has obtained an allocation for the Project of a portion of the State of California’s private activity volume cap, within the meaning of Section 146 of the Code, in accordance with the procedures established by the California Debt Limit Allocation Committee; and
WHEREAS, the Code and the regulations and rulings promulgated with respect thereto and the Act prescribe that the use and operation of the Project be restricted in certain respects and in order to ensure that the Project will be owned and operated in accordance with the Code and the Act, the Governmental Lender and the Borrower have determined to enter into this Regulatory Agreement in order to set forth certain terms and conditions relating to the acquisition, rehabilitation, equipping and operation of the Project;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Governmental Lender and the Borrower hereby acknowledge that the above recitals are true and correct and agree as follows:
Section 1. Definitions and Interpretation. The following terms shall have the respective meanings assigned to them in this Section 1 or, if not defined herein, in the Funding Loan Agreement and/or the Borrower Loan Agreement, unless the context in which they are used clearly requires otherwise:
“Adjusted Income” – The adjusted income of a person who intends to reside in a residential unit (together with the adjusted income of all persons the age of 18 years or older who intend to reside with such person in one residential unit) as calculated in the manner prescribed in Regulation Section 1.103-8.
“Affiliated Party” – (1) a Person whose relationship with the Borrower would result in a disallowance of losses under Section 267 or 707(b) of the Code, (2) a Person who together with the Borrower are members of the same controlled group of corporations (as defined in Section 1563(a) of the Code, except that “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears therein), (3) a partnership and each of its partners (and their spouses and minor children) whose relationship with the Borrower would result in a disallowance of losses under Section 267 or 707(b) of the Code or (4) an S Corporation and each of its shareholders (and their spouses and minor children) whose relationship with the Borrower would result in a disallowance of losses under Section 267 or 707(b) of the Code.
“Area” – The Orange County, California, Primary Metropolitan Statistical Area. “Borrower Loan” – The loan from the Governmental Lender to the Borrower pursuant to the Borrower Loan Agreement.
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“Borrower Loan Agreement” – The Borrower Loan Agreement , by and between the Governmental Lender and Borrower , dated as of ___________ 1, 2025, as it may be amended from time to time.
“Borrower’s Tax Certificate” – The certificate of the Borrower, dated as of the Closing Date, with respect to certain Project Costs delivered to the Governmental Lender by the Borrower. “CDLAC” – The California Debt Limit Allocation Committee. “CDLAC Conditions” – Has the meaning given to such term in Section 30. “CDLAC Resolution” – Resolution No. 24-282 adopted by CDLAC on December 11, 2024, as amended or supplemented.
“Certificate of Continuing Program Compliance” – The certificate with respect to the Project to be filed by the Borrower with the Governmental Lender, which shall be substantially in the form attached hereto as Exhibit B.
“Closing Date” – The date of execution and delivery of the Note. “Costs of Issuance” – means:
(a) the fees, costs and expenses of (i) the Governmental Lender , the Governmental Lender’s counsel and the Governmental Lender’s financial advisor, if any, (ii) Tax Counsel, (iii) the Noteholder and the Noteholder’s counsel, (iv) the Borrower’s counsel and the Borrower’s financial advisor, if any, and (v) the Rating Agency, if any;
(b) costs of printing the offering documents relating to the sale of Note, or an interest therein; and
(c) all other fees, costs and expenses directly associated with the authorization and issuance, sale and delivery of the Note, and interests therein, including printing costs, costs of reproducing documents, filing and recording fees, and any fees, costs and expenses required to be paid in connection with the origination of the Funding Loan and Borrower Loan. “Equity Investor” – ___________________, a __________________, together with its successors and assigns in accordance with the terms of the Deed of Trust and the Partnership Agreement.
“Fiscal Agent” – Wilmington Trust, National Association, together with its successors and assigns.
“Funding Lender” – CN Financing, Inc., a ________________, its successors and assigns. “Funding Loan” – The loan from the Funding Lender to the Governmental Lender pursuant to the Funding Loan Agreement.
“Funding Loan Agreement” – The Funding Loan Agreement among the Governmental Lender, Funding Lender and Fiscal Agent, dated as of ___________ 1, 2025, as it may be amended from time to time.
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“Governmental Lender Fee” – The administrative fee of the Governmental Lender payable in the amount of $ 47,125.00 on the Closing Date and on each ___________ 1 thereafter, commencing ___________, in an amount equal to $______________.
“Housing Units” – Collectively, the Low Income Units and the Very Low Income Units. “Income Certification” – The Income Computation and Certification Form in substantially the form attached hereto as Exhibit C.
“Loan Documents” – Collectively, the Funding Loan Agreement, the Borrower Loan Agreement, this Regulatory Agreement and the Deed of Trust. “Low Income Households” – Households which would qualify as Low Income Tenants. “Low Income Tenants” – Individuals or families with Adjusted Income which does not exceed 60 percent of the Median Income for the Area as adjusted for household size as set forth below and as adjusted in a manner consistent with the determination of lower income families under Section 8 of the United States Housing Act of 1937. In no event, however, will the occupants of a residential unit be considered to be Low Income Tenants if all the occupants are students, as defined in Section 42(i)(3)(D) of the Code, as such may be amended, no one of which is entitled to file a joint federal income tax return.
Household Size Adjustment
1 70%
2 80%
3 90%
4 100%
5 108%
6 116%
7 124%
8 132%
“Low Income Units” – The dwelling units in the Project designated for occupancy by Low Income Tenants pursuant to Section 4(a)(ii) of this Regulatory Agreement. “Median Income for the Area” – The median gross income for the Area as most recently determined by the Secretary of Treasury pursuant to Section 142(d)(2)(B) of the Code. “Note” – The Anaheim Housing Authority Multifamily Housing Revenue Note (Tampico Motel Conversion ), Series 2025A executed and delivered in the aggregate principal amount of $______________.
“Noteholder” – The holder of the Note.
“Project” – The Project Facilities and the Project Site. “Project Costs” – To the extent authorized by the Code, the Regulations and the Act, any and all costs incurred by the Borrower with respect to the acquisition, rehabilitation and equipping of the Project, whether paid or incurred prior to or after the sixtieth day preceding August 13, 2024 ,
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including, without limitation, costs for site preparation, the planning of housing and related facilities and improvements, the acquisition of property, the removal or demolition of existing structures, the rehabilitation and equipping of housing and related facilities and improvements, and all other work in connection therewith, and all costs of financing, including, without limitation, the costs of consultant, accounting and legal services, other expenses necessary or incident to determining the feasibility of the Project, administrative and other expenses necessary or incident to the Project and the financing thereof (including reimbursement to any municipality, county or entity for expenditures made for the Project) and all other costs approved by Tax Counsel.
“Project Facilities” – The buildings, structures and other improvements to be rehabilitated on the Project Site that are being financed with proceeds of the Funding Loan, and all fixtures and other property owned by the Borrower and located on, or used in connection with, such buildings, structures and other improvements.
“Project Site” or “Property” – The parcels of real property described in Exhibit A, which is attached hereto and by this reference incorporated herein, and all rights and appurtenances thereunto appertaining in which the Borrower has a leasehold estate. “Qualified Project Costs” – The Project Costs (excluding Costs of Issuance) incurred after the sixtieth day preceding August 13, 2024 , which either constitute land or property of a character subject to the allowance for depreciation under Section 167 of the Code or are chargeable to a capital account with respect to the Project for federal income tax and financial accounting purposes, or would be so chargeable either with a proper election by the Borrower or but for the proper election by the Borrower to deduct those amounts within the meaning of Regulation Section 1.103-8(a)(1)(i); provided, however, that only such portion of interest accrued during rehabilitation of the Project shall constitute a Qualified Project Cost as bears the same ratio to all such interest as the Qualified Project Costs bear to all Project Costs paid from Note proceeds and interest earnings thereon; and provided further that interest accruing after the completion date shall not constitute a Qualified Project Cost; and provided still further that if any portion of the Project is being rehabilitated by the Borrower or an Affiliated Party (whether as a general contractor or a subcontractor), “Qualified Project Costs” shall include only the actual out -of-pocket costs incurred by the Borrower or such Affiliated Party in rehabilitating the Project (or any portion thereof) within the meaning of Section 147(d)(2) of the Code, as provided in the Tax Certificate.
“Qualified Project Period” – The period beginning on the later of (i) the first day on which at least ten percent (10%) of the dwelling units in the Project are first occupied, and (ii) the Closing Date and ending on the later of (a) the date which is 55 years after the date on which fifty percent (50%) of the dwelling units are occupied, (b) the first day on which no tax exempt bonds or notes with respect to the Project are Outstanding, or (c) the date on which any assistance provided with respect to the Project under Section 8 of the United States Housing Act of 1937 terminates; provided that the Qualified Project Period may be shortened with the written consent of the Governmental Lender and CDLAC in their sole discretion, and upon receipt by the Governmental Lender of an opinion of Tax Counsel that such action, in and of itself, will not cause interest on the Note to be includable in gross income for federal tax purposes.
“Section 8” – Section 8 of the United States Housing Act of 1937. “Tax Counsel” – Stradling Yocca Carlson & Rauth LLP or any other attorney or firm of attorneys designated by the Governmental Lender having a national reputation for skill in connection
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with the authorization and issuance of municipal obligations under Sections 103 and 141 through 150 (or any successor provisions) of the Code.
“Very Low Income Households” – Households which would qualify as Very Low Income Tenants.
“Very Low Income Tenants” – Individuals or families with Adjusted Income which does not exceed 50 percent of the Median Income for the Area as adjusted for household size as set forth below and as adjusted in a manner consistent with determination of lower income families under Section 8 of the United States Housing Act of 1937. In no event, however, will the occupants of a residential unit be considered to be Very Low Income Tenants if all the occupants are students, as defined in Section 42(i)(3)(D) of the Code, as such, may be amended, no one of which is entitled to file a joint federal income tax return.
Household Size Adjustment
1 70%
2 80%
3 90%
4 100%
5 108%
6 116%
7 124%
8 132%
“Very Low Income Units” – The dwelling units in the Project designated for occupancy by Very Low Income Tenants pursuant to Section 4(a)(i) of this Regulatory Agreement.
Capitalized terms which are not defined herein shall have the meanings assigned to them in the Funding Loan Agreement and/or the Borrower Loan Agreement.
Unless the context clearly requires otherwise, as used in this Regulatory Agreement, words of the masculine, feminine or neuter gender shall be construed to include each other gender when appropriate and words of the singular number shall be construed to include the plural number, and vice versa, when appropriate. This Regulatory Agreement and all the terms and provisions hereof shall be construed to effectuate the purposes set forth herein and to sustain the validity hereof.
The defined terms used in the preamble and recitals of this Regulatory Agreement have been included for convenience of reference only, and the meaning, construction and interpretation of all defined terms shall be determined by reference to this Section 1 notwithstanding any contrary definition in the preamble or recitals hereof. The titles and headings of the sections of this Regulatory Agreement have been inserted for convenience of reference only, and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof or be considered or given any effect in construing this Regulatory Agreement or any provisions hereof or in ascertaining intent, if any question of intent shall arise.
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Section 2. Acquisition, Rehabilitation, Equipping and Completion of the Project . The Borrower hereby represents, as of the date hereof, and covenants, warrants and agrees as follows:
(a) The Borrower has incurred a substantial binding obligation to acquire, rehabilitate and equip the Project, pursuant to which the Borrower is obligated to expend at least 97% of the net sale proceeds of the Note.
(b) The Borrower’s reasonable expectations respecting the total cost of the acquisition, rehabilitation and equipping of the Project and the disbursement of Funding Loan proceeds are accurately set forth in the Borrower’s Tax Certificate attached to the Tax Certificate which has been delivered to the Governmental Lender.
(c) The Borrower will proceed with due diligence to complete the acquisition, rehabilitation and equipping of the Project and expects to expend the full amount of the proceeds of the Funding Loan for Project Costs prior to three years from the Closing Date. (d) The statements made in the various certificates delivered by the Borrower to the Governmental Lender or the Fiscal Agent on the Closing Date are true and correct in all material respects.
(e) Money on deposit in any fund or account in connection with the Note, whether or not such money was derived from other sources, shall not be used by or under the direction of the Borrower, in a manner which would cause the Note to be “arbitrage bonds” within the meaning of Section 148 of the Code, and the Borrower specifically agrees that the investment of money in any such fund shall be restricted as may be necessary to prevent the Note from being “arbitrage bonds” under the Code.
(f) The Borrower (and any person related to it within the meaning of Section 147(a)(2) of the Code) will not take or omit to take, as is applicable, any action if such action or omission would in any way cause the proceeds from the Note or an interest therein to be applied in a manner contrary to the requirements of the Funding Loan Agreement, Borrower Loan Agreement or this Regulatory Agreement. Neither the Borrower nor any Affiliated Party shall purchase the Note and shall not take any action that would cause the Note to be considered federally guaranteed within the meaning of Section 149(b)(2)(B)(ii) of the Code.
(g) The Borrower shall comply with all applicable requirements of Section 65863.10 of the California Government Code, including the requirements for providing notices in Sections (b), (c), (d) and (e) thereof.
(h) The Borrower agrees to acquire, rehabilitate and equip the Property in accordance with the Funding Loan Agreement, Borrower Loan Agreement, the City of Anaheim Municipal Code and all other applicable local codes, construction standards, ordinances and zoning ordinances, and the property standards requirements.
(i) The Borrower shall carry out the acquisition, design, rehabilitation, equipping and operation of the Project in conformity with all applicable laws, including all applicable state labor standards, City of Anaheim zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City of Anaheim Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With
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Disabilities Act, 42 U.S.C. Section 12101, et seq ., California Government Code Section 4450, et seq., California Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.
Section 3. Residential Rental Property. The Borrower hereby acknowledges and agrees that the Project will be owned, managed and operated as a “qualified residential rental project” (within the meaning of Section 142(d) of the Code) until the expiration of the Qualified Project Period. To that end, and for the term of this Regulatory Agreement, the Borrower hereby represents, as of the date hereof, and covenants, warrants and agrees as follows:
(a) The Project is being acquired, rehabilitated and equipped for the purpose of providing multifamily residential rental property, and the Borrower shall own, manage and operate the Project as a project to provide multifamily residential rental property comprised of a building or structure or several interrelated buildings or structures, together with any functionally related and subordinate facilities, and no other facilities, in accordance with applicable provisions of Section 142(d) of the Code and Section 1.103-8(b) of the Regulations, and the Act, and in accordance with such requirements as may be imposed thereby on the Project from time to time. (b) All of the dwelling units in the Project will be similarly constructed units, and, to the extent required by the Code and the Regulations, each dwelling unit in the Project will contain complete separate and distinct facilities for living, sleeping, eating, cooking and sanitation for a single person or a family, including a sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink; provided that any tenant may, but shall not be obligated to, provide a refrigerator for the unit to be occupied. (c) None of the dwelling units in the Project will at any time be utilized on a transient basis, or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, rest home, retirement house or trailer court or park provided that the use of certain units for tenant guests on an intermittent basis shall not be considered transient use for purposes of this Regulatory Agreement. (d) No part of the Project will at any time be owned or used as a condominium or by a cooperative housing corporation, nor shall the Borrower take any steps in connection with a conversion to such ownership or uses. The Borrower shall not take any steps in connection with a conversion of the Project to a condominium or cooperative ownership except with the prior written approving opinion of Tax Counsel that by reason of any such action the interest on the Note will not become includable in gross income for federal income tax purposes. (e) All of the dwelling units (except for two manager’s units described in (g) below) will be available for rental on a continuous basis to members of the general public and the Borrower will not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that dwelling units are required by this Regulatory Agreement or any other restriction to be imposed on the Project to be leased or rented to Low Income Tenants, Very Low Income Tenants and to holders of Section 8 certificates or vouchers or, in the case of any other restrictions imposed on the Project, to tenants meeting the income and affordability restrictions required thereby. (f) All of the Project Facilities will comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project.
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(g) No dwelling unit in any building in the Project shall be occupied by the Borrower unless the building contains five or more dwelling units, in which case one unit may be occupied by the Borrower or by persons related to or affiliated with the Borrower such as a resident manager or maintenance personnel. Subject to the foregoing limitation, one unit in the Project may be occupied by resident managers or maintenance personnel.
(h) Should involuntary noncompliance with the provisions of Section 1.103-8(b) of the Regulations be caused by fire, seizure, requisition, foreclosure, transfer of title by deed in lieu of foreclosure, change in a federal law or an action of a federal agency after the Closing Date which prevents the Governmental Lender from enforcing the requirements of the Regulations, or condemnation or similar event, the Borrower covenants that, within a “reasonable period” determined in accordance with the Regulations, and subject to the provisions of the Funding Loan Agreement and the Borrower Loan Agreement, it will either prepay the Borrower Loan and cause the Note to be prepaid or apply any proceeds received as a result of any of the preceding events to reconstruct the Project to meet the requirements of Section 142(d) of the Code and the Regulations. (i) The Borrower shall not discriminate on the basis of race, religion, creed, color, ethnic group identification, sex, age, source of income (e.g. AFDC, SSI), mental or physical disability, national origin or marital status in the rental, lease, use or occupancy of the Project or in connection with the employment or application for employment of persons for the operation and management of the Project.
(j) Following the expiration or termination of the Qualified Project Period, Low Income Units and Very Low Income Units shall remain available to the Low Income Tenants and Very Low Income Tenants then occupying such units at the date of expiration or termination of the Qualified Project Period at a rent not greater than the rent determined pursuant to Section 4(a)(i) and (ii) below until the earliest of any of the following occurs:
(i) The household’s income exceeds 140 percent of the income at which such household would qualify as a Low Income Tenant or Very Low Income Tenant, applicable. (ii) The household voluntarily moves or is evicted for “good cause.” For these purposes, “good cause” means the nonpayment of rent or allegation of facts necessary to prove major, or repeated minor, violations of material provisions of the lease agreement which detrimentally affect the health and safety of other persons or the structure, the fiscal integrity of the Project, or the purposes or special programs of the Project. (iii) Thirty (30) years after the commencement of the Qualified Project Period. (iv) The Borrower pays the relocation assistance and benefits to such Very Low Income Tenants, as provided in Section 7264(b) of the Government Code of the State of California. (k) The Governmental Lender may but shall not be required to monitor the Borrower’s compliance with the provisions of subparagraph (j) above.
Section 4. Low and Very Low Income Units . (a) Pursuant to the requirements of Section 142(d) of the Code and applicable provisions of the Act, the Borrower hereby represents, as of the date hereof, and warrants, covenants and agrees as follows:
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(i) During the Qualified Project Period, not less than ten percent (10%) of the units in the Project shall be designated as Very Low Income Units and shall be continuously occupied by or held available for occupancy by Very Low Income Tenants at monthly rents paid by tenants which do not exceed one -twelfth of the amount obtained by multiplying 30% times 50% of the Median Income for the Area, as adjusted for household size utilizing the percentages set forth above under the definition of Very Low Income Tenant less a reasonable deduction for utilities paid by the tenant as determined by the Governmental Lender and assuming (solely for purposes of the above-described limit on the amount of monthly rent, and not for purposes of determining whether individuals or families are Very Low Income Tenants for purposes of Section 142(d) of the Code), the following unit sizes and household sizes:
Unit Size Household Size
One Bedroom Two Persons
Two Bedrooms Three Persons
Three Bedrooms Four and a Half Persons
Such Very Low Income Units shall be of comparable quality and offer a range of sizes and number of bedrooms comparable to those units which are available to other tenants and shall be distributed throughout the Project.
A unit occupied by a Very Low Income Tenant who at the commencement of the occupancy is a Very Low Income Tenant shall be treated as occupied by a Very Low Income Tenant until a recertification of such tenant’s income in accordance with Section 4(c)(i) below demonstrates that such tenant no longer qualifies as a Very Low Income Tenant and thereafter any residential unit of comparable or smaller size in the Project is occupied by a new resident other than a Very Low Income Tenant. Moreover, a unit previously occupied by a Very Low Income Tenant and then vacated shall be considered occupied by a Very Low Income Tenant until reoccupied, other than for a temporary period, at which time the character of the unit shall be redetermined. In no event shall such temporary period exceed thirty-one (31) days.
(ii) In addition to the Very Low Income Units set aside under paragraph (i) above, during the Qualified Project Period not less than an additional thirty percent (30%) of the units in the Project shall be designated as Low Income Units and shall be continuously occupied by or held available for occupancy by Low Income Tenants at monthly rents which do not exceed one - twelfth of the amount obtained by multiplying 30% times 60% of the Median Income for the Area, as adjusted for household size utilizing the percentages set forth above under the definition of Low Income Tenant less a reasonable deduction for utilities paid by the tenant as determined by the Governmental Lender and assuming (solely for purposes of the above -described limit on the amount of monthly rent, and not for purposes of determining whether individuals or families are Low Income Tenants for purposes of Section 142(d) of the Code), the following unit sizes and household sizes:
Unit Size Household Size
One Bedroom Two Persons
Two Bedrooms Three Persons
Three Bedrooms Four and a Half Persons
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Such Low Income Units shall be of comparable quality and offer a range of sizes and number of bedrooms comparable to those units which are available to other tenants and shall be distributed throughout the Project.
A unit occupied by a Low Income Tenant who at the commencement of the occupancy is a Low Income Tenant shall be treated as occupied by a Low Income Tenant until a recertification of such tenant’s income in accordance with Section 4(c)(ii) below demonstrates that such tenant no longer qualifies as a Low Income Tenant and thereafter such unit shall be treated as any residential unit of comparable or smaller size in the Project occupied by a new resident other than a Low Income Tenant. Moreover, a unit previously occupied by a Low Income Tenant and then vacated shall be considered occupied by a Low Income Tenant until reoccupied, other than for a temporary period, at which time the character of the unit shall be redetermined. In no event shall such temporary period exceed thirty-one (31) days.
(b) Immediately prior to a Very Low Income Tenant’s occupancy of a Very Low Income Unit and a Low Income Tenant’s occupancy of a Low Income Unit, the Borrower will obtain and maintain on file an Income Certification from each Very Low Income Tenant occupying a Very Low Income Unit and each Low Income Tenant occupying a Low Income Unit, dated immediately prior to the initial occupancy of such Very Low Income Tenant or Low Income Tenant, as applicable, in the Project. In addition, the Borrower will provide such further information as may be required in the future by the State of California, the Governmental Lender, the Act, Section 142(d) of the Code and the Regulations, as the same may be amended from time to time, or in such other form and manner as may be required by applicable rules, rulings, policies, procedures or other official statements now or hereafter promulgated, proposed or made by the Department of the Treasury or the Internal Revenue Service with respect to obligations issued under Section 142(d) of the Code. The Borrower shall verify that the income provided by an applicant is accurate by taking one or more of the following steps as a part of the verification process: (1) obtain a federal income tax return for the most recent tax year, (2) obtain a written verification of income and employment from the applicant’s current employer, (3) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant’s income satisfactory to the Governmental Lender or (4) such other information as may be reasonably requested by the Governmental Lender.
Copies of the most recent Income Certifications for Low Income Tenants and Very Low Income Tenants shall be attached to the annual report to be filed with the Governmental Lender as required in (d) below.
(c) (i) Immediately prior to the first anniversary date of the occupancy of a Very Low Income Unit by one or more Very Low Income Tenants, the Borrower shall recertify the income of the occupants of each Very Low Income Unit by obtaining a completed Income Certification based upon the current income of each occupant of the unit. In the event the recertification demonstrates that such household’s income exceeds 140% of the income at which such household would qualify as Very Low Income Tenants, such household will no longer qualify as Very Low Income Tenants, and to the extent necessary to comply with the requirements of Section 4(a)(i) above, the Borrower will rent the next available unit of comparable or smaller size to one or more Very Low Income Tenants. No tenants shall be denied continued occupancy in the Project because, after occupancy, their income increases to make them no longer qualify as Very Low Income Tenants.
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(ii) Immediately prior to the first anniversary date of the occupancy of a Low Income Unit by one or more Low Income Tenants, and on each anniversary date thereafter, the Borrower shall recertify the income of the occupants of each Low Income Unit by obtaining a completed Income Certification based upon the current income of each occupant of the unit. In the event the recertification demonstrates that such household’s income exceeds 140% of the income at which such household would qualify as Low Income Tenants, such household will no longer qualify as Low Income Tenants and to the extent necessary to comply with the requirements of Section 4(a)(ii) above, the Borrower will rent the next available unit of comparable size to one or more Low Income Tenants.
(d) Upon commencement of the Qualified Project Period, and within ten days of the last day of each year thereafter during the term of this Regulatory Agreement, the Borrower shall advise the Governmental Lender of the status of the occupancy of the Project by delivering to the Governmental Lender a Certificate of Continuing Program Compliance (with a copy to the Noteholder).
(e) The Borrower shall maintain complete and accurate records pertaining to the Low Income Units and Very Low Income Units, and shall permit, upon reasonable prior notice, any duly authorized representative of the Governmental Lender , the Noteholder, the Department of the Treasury or the Internal Revenue Service to inspect the books and records of the Borrower pertaining to the Project, including those records pertaining to the occupancy of the Low Income Units and Very Low Income Units.
(f) The Borrower shall submit to the Secretary of the Treasury annually on the anniversary date of the start of the Qualified Project Period, or such other date as is required by the Secretary, a certification that the Project continues to meet the requirements of Section 142(d) of the Code, and shall provide a copy of such certification to the Governmental Lender and the Noteholder. (g) The Borrower shall accept as tenants on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937, or its successor. The Borrower shall not apply selection criteria to Section 8 certificate or voucher holders that are more burdensome than criteria applied to all other prospective tenants. The Borrower shall not collect any additional fees or payments from a Low Income Tenant or a Very Low Income Tenant except security deposits or other deposits required of all tenants. The Borrower shall not collect security deposits or other deposits from Section 8 certificate or voucher holders in excess of those allowed under the Section 8 Program. The Borrower shall not discriminate against applicants for Low Income Units or Very Low Income Units on the basis of source of income (i.e., AFDC or SSI), and the Borrower shall consider a prospective tenant’s previous rent history of at least one year as evidence of the ability to pay the applicable rent (ability to pay shall be demonstrated if an applicant can show that the same percentage or more of the applicant’s income has been paid for rent in the past as will be required to be paid to rent the Very Low Income Unit to be occupied). (h) Each lease pertaining to a Low Income Unit or Very Low Income Unit shall contain a provision to the effect that the Borrower has relied on the Income Certification and supporting information supplied by the applicant in determining qualification for occupancy of the Low Income Unit or Very Low Income Unit, as applicable, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Each lease will also contain a provision that f ailure to cooperate with the annual recertification process
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reasonably instituted by the Borrower pursuant to Section 4(c) above may, at the option of the Borrower, disqualify the unit as a Low Income Unit or Very Low Income Unit, as applicable, or provide grounds for termination of the lease.
(i) Prior to the Closing Date, the Borrower agrees to provide to the Governmental Lender a copy of the form of application and lease to be provided to prospective Low Income Tenants and Very Low Income Tenants. The term of the lease shall be not less than thirty (30) days. (j) To the extent required by law, notwithstanding the termination of the Qualified Project Period, the rent of “in -place” Low Income Tenants and Very Low Income Tenants at the conclusion of the Qualified Project Period will continue to be governed by the applicable affordability restrictions in this Section 4, so long as those tenants continue to live in the Project.
The foregoing shall not prevent the Borrower from terminating a tenant’s occupancy in accordance with the terms of such tenant’s lease or from declining to extend such tenant’s lease.
Notwithstanding anything in this Section 4 to the contrary, Borrower shall comply with the terms set forth in Section 30 hereof and all of the CDLAC Conditions. Additionally, notwithstanding anything in this Section 4 to the contrary, in the event of conflicts between this Regulatory Agreement and any other regulatory agreement with respect to the Project, the most restrictive terms shall apply.
Section 5. Selection of Tenants.
(a) Borrower shall be responsible for the selection of tenants for the Housing Units in compliance with all lawful and reasonable criteria, and shall adopt a tenant selection system that shall be approved (or disapproved) by the Governmental Lender ’s Executive Director in his or her reasonable discretion, pursuant to which Borrower shall establish and maintain a chronological waiting list system for selection of tenants in the order of priority set forth below, and which shall be set forth in the Marketing and Tenant Selection Plan and the Management Plan, which plans are required to be submitted by Borrower and approved by Governmental Lender . Throughout the remainder of the Qualified Project Period, Borrower shall establish and maintain for the Project waiting lists of eligible, prospective tenants to facilitate re -tenanting Housing Units in compliance with the approved Marketing and Tenant Selection Plan, the Management Plan and Anaheim Municipal Code. Further, subject to applicable Fair Housing Laws and in compliance with the Anaheim Municipal Code, in particular Section 18.52.160 thereof, Governmental Lender shall be afforded a priority marketing period for thirty (30) days after receiving written notice from Borrower that one or more Housing Units will become vacant at the Project, during which time Governmental Lender and Borrower shall work cooperatively to select tenants for any vacant Housing Units at the Project. Borrower shall provide prompt written notice to Governmental Lender when vacancies of Housing Units occur to facilitate timely re -tenanting of Housing Units pursuant to the approved Marketing and Tenant Selection Plan, the Management Plan and Anaheim Municipal Code. Subject to applicable Fair Housing Laws and Internal Revenue Code Sections 42, 103 and 141 and the rules and regulations governing such sections, Borrower’s waiting list of prospective, eligible tenants for Housing Units at the Project shall include and follow the following order of priority for selection of tenants, and Governmental Lender will follow such order of priority:
(i) Very Low and Low Income Households, as applicable, who have been displaced from their residences due to programs or projects implemented by the City of Anaheim or another governmental entity;
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(ii) Very Low and Low Income Households, as applicable, who are listed on Governmental Lender’s waiting lists for affordable housing and who live and/or work in Anaheim; (iii) Very Low and Low Income Households, as applicable, who have applied for and have received rental vouchers from Governmental Lender; and (iv) Very Low and Low Income Households, as applicable, who live and/or work in Anaheim.
In addition to the requirements set forth herein, all tenant selections shall also be in compliance with any and all other agreements between the City of Anaheim and/or the Authority and the Borrower entered into in connection with the financing of the Project. (b) Borrower shall not refuse to lease a Housing Unit to a holder of a portable rental voucher who is otherwise qualified to be a tenant in accordance with the approved tenant selection criteria.
(c) In the event Borrower rents a Housing Unit to a household holding a Section 8 portable voucher (a “Section 8 Portable Voucher”) issued by the Governmental Lender, the rental agreement (or lease agreement, as applicable) between Borrower, as landlord, and the subtenant shall expressly provide that monthly rent collected directly from such subtenant holding a Section 8 Portable Voucher shall be not more than 30% of subtenant’s actual gross income pursuant to the applicable voucher program regulations, and the total monthly rent for such unit may, in the Borrower’s discretion, be set at (i) Affordable Rent, or (ii) “fair market rent” (“FMR”) for the area as set by the Governmental Lender in its sole discretion (with respect to calculation of FMR) under Section 8 laws and other applicable federal regulations. For Section 8 Portable Vouchers issued by an entity other than the Governmental Lender , the total monthly rent for such unit may in the Borrower’s discretion be set at either (i) Affordable Rent, or (ii) up to FMR for the area as set by the issuing public housing authority under Section 8 laws and other applicable federal regulations with respect to calculation of FMR.
Section 6. Marketing and Tenant Selection Plan . Prior to and as a condition precedent to the execution and delivery of the Note, Borrower shall prepare and obtain Governmental Lender’s approval, which approval shall not be unreasonably withheld, of the Borrower’s marketing and tenant selection plan (the “Marketing and Tenant Selection Plan”). During the Qualified Project Period, any material changes to an approved Marketing and Tenant Selection Plan are subject to reasonable review and approval by the Executive Director. The rental of the Housing Units, as and when they are vacated by the existing tenants, shall be conducted in accordance with the approved Marketing and Tenant Selection Plan. The availability of Housing Units shall be marketed in accordance with the Marketing and Tenant Selection Plan as the same may be amended from time to time with Governmental Lender’s prior written approval, which approval shall not unreasonably be withheld.
Upon the reasonable request of Governmental Lender, Borrower shall provide Governmental Lender with periodic reports (but not more frequently than annually) with respect to the marketing for lease of the Housing Units. Governmental Lender agrees to exercise reasonable efforts to assist Borrower in connection with the implementation of the Marketing and Tenant Selection Plan; provided, however, Governmental Lender shall not be under any obligation to incur any out -of-pocket expenses in connection therewith.
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Section 7. Maintenance.
(a) General Maintenance. Borrower shall maintain the Project Site and all improvements thereon, including lighting and signage, in good condition, free of debris, waste and graffiti, and in compliance with the applicable provisions of the Anaheim Municipal Code. Borrower shall maintain the improvements and landscaping on the Project Site in accordance with the Maintenance Standards (as hereinafter defined). Such Maintenance Standards shall apply to all buildings, signage, lighting, landscaping, irrigation of landscaping, architectural elements identifying the Project Site and any and all other improvements on the Project Site. To accomplish the maintenance, Borrower shall either staff or contract with and hire licensed and qualified personnel to perform the maintenance work, including the provision of labor, equipment, materials, support facilities, and any and all other items necessary to comply with the requirements of this Agreement.
Borrower and its maintenance staff, contractors or subcontractors shall comply with the following standards (collectively, “Maintenance Standards”):
(i) The Project Site shall be maintained in conformance and in compliance with reasonable maintenance standards for comparable first quality affordable housing projects, including but not limited to painting and cleaning of all exterior surfaces and other exterior facades comprising all private improvements and public improvements to the curbline. The Project Site shall be maintained in good condition and in accordance with the custom and practice generally applicable to comparable first quality affordable apartment complexes in the County of Orange (the “County”). (ii) Landscape maintenance shall include, but not be limited to:
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees.
(iii) Clean-up maintenance shall include, but not be limited to: maintenance of all sidewalks, paths and other paved areas in clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers.
Governmental Lender agrees to notify Borrower in writing if the condition of the Project Site does not meet with the Maintenance Standards and to specify the deficiencies and the actions required to be taken by Borrower to cure the deficiencies. Upon notification of any maintenance deficiency, Borrower shall have commenced to cure such deficiency within thirty (30) days and shall diligently act to correct, remedy or cure such deficiency within no more than sixty (60) days. If the written notification states the problem is urgent relating to the public health and safety of the City of Anaheim or Governmental Lender , then Borrower shall have forty -eight (48) hours to rectify the problem. In the event Borrower does not maintain the Project Site in the manner set forth herein and in accordance with the Maintenance Standards, Governmental Lender shall have, in addition to any other rights and remedies hereunder, the right to maintain the Project Site, or to contract for the
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correction of such deficiencies, after written notice to Borrower, and Borrower shall be responsible for the payment of all such costs incurred by Governmental Lender. (b) Program Maintenance . In addition to the routine maintenance and repair required pursuant to Section 7(a) Borrower shall perform the following programmed maintenance on the Apartment Complex:
(i) Interior painting and window covering replacement at least every five (5) years;
(ii) Exterior painting at least every ten (10) years;
(iii) Repair and resurfacing of parking areas and walkways at least every five (5) years; and
(iv) Replacement of all deteriorated or worn landscaping at least every five (5) years and replacement of play equipment at least every five (5) years.
Upon the request of Borrower, the Executive Director, at his sole and absolute discretion, may grant a waiver or deferral of any program maintenance requirement. Borrower shall keep such records of maintenance and repair as are necessary to prove performance of the program maintenance requirements.
Section 8. Management of the Apartment Complex.
(a) Property Manager. Borrower shall manage or cause the apartment complex which is part of the Project (the “Apartment Complex”), and all appurtenances thereto that are a part of the Project, to be managed in a prudent and business -like manner, consistent with property management standards for other comparable first quality, well -managed affordable rental housing projects in the County. Borrower may contract with a property management company or property manager to operate and maintain the Apartment Complex in accordance with the terms of this Section 8 (“Property Manager”); provided, however, the selection and hiring of the Property Manager (and each successor or assignee) is and shall be subject to prior written approval of Executive Director (or designee) in his sole discretion. __________________ is hereby approved to act as the Property Manager for the Apartment Complex. Except for [PROPERTY MANAGER] , Borrower shall conduct due diligence and background evaluation of any potential outside property manager or property management company to evaluate experience, references, credit worthiness, and related qualifications as a property manager. Any proposed property manager shall have prior experience with projects and properties comparable to the Apartment Complex and the references and credit record of such manager/company shall be investigated (or caused to be investigated) by Borrower prior to submitting the name and qualifications of such proposed property manager to the Executive Director for review and approval. A complete and true copy of the results of such background evaluation shall be provided to the Executive Director. Approval of a Property Manager by Executive Director shall not be unreasonably conditioned, withheld or delayed but shall be in his sole discretion, and Executive Director shall use good faith efforts to respond as promptly as practicable in order to facilitate effective and ongoi ng management of the Apartment Complex. Furthermore, the identity and retention of any approved Property Manager shall not be changed without the prior written approval of the Executive Director (or designee), which approval shall not be unreasonably conditioned, withheld or delayed, but shall be in his sole discretion. The selection by Borrower of
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any new Property Manager also shall be subject to the foregoing requirements. The terms of the property management agreement entered into between Borrower and the Property Manager shall include or incorporate by reference the Management Plan and shall require the management of the Apartment Complex to be conducted in accordance with all terms, conditions, and restrictions contained in this Regulatory Agreement, including the income and rent restrictions set forth this Regulatory Agreement.
(b) Management Plan . As a condition precedent to the execution and delivery of the Note, Borrower shall prepare and submit to the Executive Director for review and approval a property management plan which includes a detailed plan and strategy for long term marketing, operation, maintenance, coordination and provision of social services, repair and security of the Apartment Complex, method of selection of tenants, rules and regulations for tenants, and other rental policies for the Apartment Complex with particular focus and specific provisions on operation of affordable housing (“Management Plan”). Executive Director approval of the Management Plan shall not be unreasonably withheld or delayed. Subsequent to approval of the Management Plan by the Executive Director the ongoing management, coordination and provision of social services and operation of the Apartment Complex shall be in compliance with the approved Management Plan.
Borrower and Property Manager may from time to time submit to the Executive Director proposed amendments to the Management Plan, which are also subject to the prior written appro val of the Executive Director.
(c) Gross Mismanagement . In the event of “Gross Mismanagement” (as that term is defined below) of the Apartment Complex or any part of the Project, Executive Director shall have and retain the authority to direct and require any condition(s), acts, or inactions constituting Gross Mismanagement to cease and/or be corrected immediately, and further to direct and require the immediate removal of the Property Manager and replacement with a new qualified and approved Property Manager, if such condition(s) is/are not ceased and/or corrected after expiration of thirty (30) days from the date of written notice from Executive Director to Borrower, the Property Manager and the Noteholder. If the Borrower or Property Manager has commenced to cure such Gross Mismanagement condition(s) on or before the 20th day from the date of written notice (with evidence of such submitted to the Executive Director), but has failed to complete such cure by the 30th day (or such longer period if the cure cannot reasonably be accomplished in thirty (30) days as reasonably determined by the non-defaulting party), then Borrower or Property Manager shall have an additional 10 days to complete the cure of such Gross Mismanagement condition(s). In no event shall any condition of Gross Mismanagement continue uncured for a period exceeding 45 days from the date of the initial written notice of such condition(s) except that the condition described in (iii) below, may exist for up to, but no longer than, seventy -five (75) days without triggering the Executive Director’s right to remove the Property Manager as described in the immediately following sentence as long as Borrower is diligently working to cure such conditions of Gross Management. If such condition(s) do persist beyond such period Executive Director shall have the sole and absolute right to immediately and without further notice to Borrower (or to Property Manager or any other person/entity) to replace the Property Manager with a new property manager of the Executive Director’s selection at the sole cost and expense of Borrower. If the Borrower takes steps to select a new Property Manager that selection is subject to the requirements set forth above for selection of a Property Manager.
For purposes of this Agreement, the term “Gross Mismanagement” shall mean management of the Apartment Complex (or any part of the Project) in a manner which violates the terms and/or
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intention of this Regulatory Agreement to operate a first quality apartment complex, and shall include, but is not limited to, any one or more of the following:
(i) Habitually leasing to tenants who exceed the prescribed income levels; (ii) Habitually allowing the tenants to exceed the prescribed occupancy levels without taking immediate action to stop such overcrowding; (iii) Failing to timely maintain and operate the Apartment Complex in accordance with the Management Plan and the manner prescribed herein; (iv) Failing to submit timely and/or adequate annual reports to Governmental Lender as required herein;
(v) Fraud or embezzlement of Apartment Complex funds, including without limitation funds in the reserve accounts;
(vi) Failing to reasonably cooperate with the Anaheim Police Department or other local law enforcement agency(ies) with jurisdiction over the Apartment Complex, in maintaining a crime-free environment within the Apartment Complex;
(vii) Failing to reasonably cooperate with the Anaheim Fire Department or other local public safety agency(ies) with jurisdiction over the Apartment Complex, in maintaining a safe environment within the Apartment Complex;
(viii) Failing to reasonably cooperate with the Anaheim Planning & Building Department, including the Code Enforcement Division, or other local health and safety enforcement agency(ies) with jurisdiction over the Apartment Complex, in maintaining a safe environment within the Apartment Complex; and
Notwithstanding the requirements of the Property Manager to correct any condition of Gross Mismanagement as described above, Borrower is obligated and shall use its best efforts to correct any defects in property management or operations at the earliest feasible time and, if necessary, to replace the Property Manager as provided above. Borrower shall include advisement and provisions of the foregoing requirements and requirements of this Regulatory Agreement within any contract between Borrower and its Property Manager.
(d) Code Enforcement. Borrower acknowledges and agrees that Governmental Lender and the City of Anaheim and their employees and authorized agents shall have the right to conduct code compliance and/or code enforcement inspections of the Apartment Complex and the individual units, both exterior and interior, at reasonable times and upon reasonable notice (not less than 48 hours prior notice) to Borrower and/or an individual tenant. If such notice is provided by Governmental Lender or City representative(s) to Borrower, then Borrower (or its Property Manager) shall immediately and directly advise tenant of such upcoming inspection and cause access to the area(s) and/or units on the Apartment Complex to be made available and open for inspection.
Borrower shall include express advisement of such inspection rights within the lease/rental agreements for each Housing Unit in the Apartment Complex in order for each and every tenant and tenant household to be aware of this inspection right.
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(e) Occupancy Limits . The maximum occupancy of the Housing Units in the Project shall not exceed more than such number of persons as is equal to two persons per bedroom, plus one.
Thus, for the one (1) bedroom Housing Units, the maximum occupancy shall not exceed three (3) persons. For the two (2) bedroom Housing Units, the maximum occupancy shall not exceed five (5) persons. For the three (3) bedroom Housing Units, the maximum occupancy shall not exceed seven (7) persons.
Section 9. Tax Status of the Note. The Borrower and the Governmental Lender each hereby represents, as of the date hereof, and warrants, covenants and agrees that:
(a) It will not knowingly take or permit, or omit to take or cause to be taken, as is appropriate, any action that would adversely affect the exclusion from gross income for federal income tax purposes or the exemption from California personal income taxation of the interest on the Note and, if it should take or permit, or omit to take or cause to be taken, any such action, it will take all lawful actions necessary to rescind or correct such actions or omissions promptly upon obtaining knowledge thereof;
(b) It will take such action or actions as may be necessary, in the written opinion of Tax Counsel filed with the Governmental Lender, to comply fully with the Act and all applicable rules, rulings, policies, procedures, Regulations or other official statements promulgated, proposed or made by the Department of the Treasury or the Internal Revenue Service pertaining to obligations issued under Section 142(d) of the Code to the extent necessary to maintain the exclusion from gross income for federal income tax purposes of interest on the Note; and (c) The Borrower, at the Borrower’s expense, will file of record such documents and take such other steps as are necessary, in the written opinion of Tax Counsel filed with the Governmental Lender, in order to insure that the requirements and restrictions of this Regulatory Agreement will be binding upon all owners of the Project, including, but not limited to, the execution and recordation of this Regulatory Agreement in the real property records of the County of Orange.
The Borrower hereby covenants to notify any subsequent owner of the Project of the requirements and restrictions contained in this Regulatory Agreement in any documents transferring any interest in the Project to another person to the end that such transferee has notice of such restrictions, and to obtain the agreement from any transferee to abide by all requirements and restrictions of this Regulatory Agreement; provided that the covenants contained in this paragraph shall not apply to the Noteholder should the Noteholder become the owner of the Project by foreclosure, deed in lieu of foreclosure or comparable conversion of the Funding Loan.
Section 10. Modification of Special Tax Covenants. The Borrower and the Governmental Lender hereby agree as follows:
(a) To the extent any amendments to the Act, the Regulations or the Code shall, in the written opinion of Tax Counsel filed with the Governmental Lender, impose requirements upon the ownership or operation of the Project more restrictive than those imposed by this Regulatory Agreement which must be complied with in order to maintain the exclusion from gross income for federal income tax purposes of interest on the Note, this Regulatory Agreement shall be deemed to be automatically amended to impose such additional or more restrictive requirements following delivery of written notice thereof to Borrower.
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(b) To the extent any amendments to the Act, the Regulations or the Code shall, in the written opinion of Tax Counsel filed with the Governmental Lender, impose requirements upon the ownership or operation of the Project less restrictive than imposed by this Regulatory Agreement, this Regulatory Agreement may be amended to conform in whole or in part to such changed requirements should the Governmental Lender , in its sole discretion, determine that such requirements should be made applicable to the Project.
(c) The Borrower and the Governmental Lender shall execute, deliver and, if applicable, file of record any and all documents and instruments, necessary to effectuate the intent of this Section 10, and the Borrower hereby appoints the Governmental Lender as its true and lawful attorney-in-fact to execute, deliver and, if applicable, file of record on behalf of the Borrower any such document or instrument (in such form as may be approved in writing by Tax Counsel) if the Borrower defaults in the performance of its obligations under this subsection (c); provided, however, that the Governmental Lender shall take no action under this subsection (c) without first notifying the Borrower and without first providing the Borrower or the Governmental Lender , or both, as is applicable, an opportunity to comply with the requirements of this Section 10.
Section 11. Indemnification. The Borrower hereby releases the Governmental Lender , the Noteholder, their officers and employees from, and covenants and agrees to indemnify, hold harmless and defend the Governmental Lender , the Noteholder, their officers, members, directors, officials, agents and employees and each of them (collectively the “Indemnified Parties,” and, individually an “Indemnified Party”) from and against, any and all claims, losses, costs, damages, demands, expenses, taxes, suits, judgments, actions and liabilities of whatever nature, joint or several (including, without limitation, costs of investigation, reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement, and amounts paid to discharge judgments), made directly or indirectly (a) by or on behalf of any person arising from any cause whatsoever in connection with transactions contemplated hereby or otherwise in connection with the Project, the Borrower Loan, the Funding Loan, the Note or the execution or amendment of any document relating thereto; (b) arising from any cause whatsoever in connection with the approval of financing for the Project, the making of the Borrower Loan, the Funding Loan or otherwise; (c) arising from any act or omission of the Borrower or any of its agents, servants, employees or licensees, in connection with the Borrower Loan, the Funding Loan or the Project; (d) arising in connection with the issuance and sale, resale or re-execution and delivery of the Note or any interest therein or any certifications or representations made by any person (other than the Governmental Lender or the party seeking indemnification in connection therewith) or the carrying out by the Borrower of any of the transactions contemplated by the Borrower Loan, the Funding Loan, the Note , the Borrower Loan Agreement, the Funding Loan Agreement or this Regulatory Agreement; (e) arising in connection with the operation of the Project, or the conditions, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, rehabilitation or equipping of, the Project or any part thereof; and (f) arising out of or in connection with the Noteholder’s exercise of its powers or duties under the Borrower Loan Agreement, the Funding Loan Agreement , this Regulatory Agreement or any other agreements in connection therewith to which it is a party.
This indemnification shall extend to and include, without limitation, all reasonable costs, counsel fees, expenses and liabilities incurred in connection with any such claim, or proceeding brought with respect to such claim, except to the extent such damages are caused by the gross negligence or willful misconduct of such Person.
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In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Borrower, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment of counsel selected by the Indemnified Party and approved by the Borrower (which approval shall not be unreasonably withheld); and the Borrower shall assume the payment of all reasonable fees and expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided that the Governmental Lender shall have the right to review and approve or disapprove any such compromise or settlement. The Borrower specifically acknowledges and agrees that it has an immediate and independent obligation to defend each Indemnified Party from any claim which actually or potentially falls within this Section 11 even if such claim is or may be groundless, fraudulent or false, which obligation arises at the time such claim is tendered to the Borrower by any Indemnified Party and continues at all times thereafter. Each Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and participate in the investigation and defense thereof, and the Borrower shall pay the reasonable fees and expenses of such separate counsel; provided, however, that unless such separate counsel is employed with the approval of the Borrower, which approval shall not be unreasonably withheld, the Borrower shall not be required to pay the fees and expenses of such separate counsel unless the Indemnified Party reasonably determines that a conflict exists between the interests of the Borrower and such Indemnified Party, in which case the Borrower shall pay the reasonable fees and expenses of such separate counsel.
The Borrower also shall pay and discharge and shall indemnify and hold harmless the Governmental Lender and the Noteholder from (i) any lien or charge upon payments by the Borrower to the Governmental Lender and the Noteholder hereunder arising out of Borrower’s actions or inactions and (ii) any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges in respect of any portion of the Project. If any such claim is asserted, or any such lien or charge upon payments, or any such taxes, assessments, impositions or other charges, are sought to be imposed, the Governmental Lender shall give prompt notice to the Borrower, and the Borrower shall have the sole right and duty to assume, and will assume, the defense thereof, with full power to litigate, compromise or settle the same in its sole discretion.
Notwithstanding any transfer of the Project to another owner in accordance with the provisions of Section 14 of this Regulatory Agreement, the Borrower shall remain obligated to indemnify the Indemnified Parties pursuant to this Section 11 for all claims arising from events occurring prior to such transfer, unless at the time of transfer the Governmental Lender has consented to indemnification under this Section 11 from such subsequent owner for claims arising from events prior to the transfer. If the Governmental Lender has consented to any transfer of the Project in accordance with the provisions of Section 14 of this Regulatory Agreement, the Borrower shall not be obligated to indemnify the Indemnified Parties pursuant to this Section 11 for actions or inactions of the transferee arising after such transfer, but shall remain obligated to provide indemnity for claims related to actions or inactions occurring prior to such transfer.
In addition to the foregoing, the Borrower will pay upon demand all of the fees and expenses paid or incurred by the Governmental Lender and/or Noteholder in enforcing the provisions hereof.
The provisions of this Section 11 shall survive the terms of the Note and this Regulatory Agreement.
The obligations of the Borrower under this Section are independent of any other contractual obligation of the Borrower to provide indemnity to the Indemnified Parties, and the obligation of the
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Borrower to provide indemnity hereunder shall not be interpreted, construed or limited in light of any other separate indemnification obligation of the Borrower. The Indemnified Parties shall be entitled simultaneously to seek indemnity under this Section and any other provision under which they are entitled to indemnity.
Section 12. Consideration. The Governmental Lender has executed and delivered the Note to make the Funding Loan to finance the Project, all for the purpose, among others, of inducing the Borrower to acquire, rehabilitate, equip and operate the Project. In consideration of the execution and delivery of the Note by the Governmental Lender, the Borrower has entered into this Regulatory Agreement and has agreed to restrict the uses to which the Project can be put on the terms and conditions set forth herein.
Section 13. Reliance. The Governmental Lender and the Borrower hereby recognize and agree that the representations, warranties, covenants and agreements set forth herein may be relied upon by all persons interested in the legality and validity of the Note, and in the exclusion from gross income for federal income tax purposes of interest on the Note and the exemption from California personal income taxes of the interest on the Note. In performing their duties and obligations hereunder, the Governmental Lender may rely upon statements and certificates of the Borrower, the Low Income Tenants, the Very Low Income Tenants, and upon audits of the books and records of the Borrower pertaining to the Project. In addition, the Governmental Lender may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Governmental Lender under this Regulatory Agreement in good faith and in conformity with such opinion; provided, however, if there are conflicting opinions among the counsel selected by such parties, the opinion of Tax Counsel shall govern the interpretation and enforcement of this Regulatory Agreement.
Section 14. Sale or Transfer of the Project; Syndication . The Borrower intends to hold the Project for its own account with the exception of a transfer of the Project to Borrower’s general partner or a third party following the end of the low income housing tax credit compliance period applicable to the project, has no current plans to sell, transfer or otherwise dispose of the Project, and hereby covenants and agrees not to sell, transfer or otherwise dispose of the Project, or any portion thereof (other than for ind ividual tenant use as contemplated hereunder), without obtaining the prior written consent of the Governmental Lender (except as provided in the next succeeding paragraph) and upon receipt by the Governmental Lender (except as provided in the next succeeding paragraph) of (i) such certifications as deemed necessary by the Governmental Lender to establish that the Borrower shall not be in default under this Regulatory Agreement or under the Borrower Loan Agreement or, if any such defaults exist, the purchaser or assignee undertakes to cure such defaults to the satisfaction of the Governmental Lender ; (ii) a written instrument by which the Borrower’s purchaser or transferee has assumed in writing and in full the Borrower’s duties and obligations under this Regulatory Agreement, (iii) an opinion of counsel for the transferee that the transferee has duly assumed the obligations of the Borrower under this Regulatory Agreement and that such obligations and this Regulatory Agreement are binding on the transferee, (i v) documentation from the transferee reflecting the transferee’s experience or, should the transferee choose to have a property manager run the Project, a property manager’s experience with owning and/or operating multifamily housing projects such as the Project and with use and occupancy restrictions similar to those contained in this Regulatory Agreement, and (v) an opinion of Tax Counsel addressed to the Governmental Lender to the effect that such transfer will not cause interest on the Note, to become includable in the gross income of the recipients thereof for federal income tax purposes. The Borrower shall not allow any non-profit entity, which is not as of the date hereof a general partner of
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the Borrower, to become a general partner of the Borrower nor release any non -profit entity which is a general partner of the Borrower as of the date hereof from the limited partnership without the prior written consent of an Authorized Officer of the Governmental Lender (which consent shall not be unreasonably withheld). However, the preceding sentence shall not apply with respect to the rights of the Equity Investor to remove and replace a general partner of the Borrower in accordance with the partnership agreement with respect to the Borrower.
No transfer of the Project shall operate to release the Borrower from its obligations under this Regulatory Agreement with respect to any action or inaction taken prior to such transfer. Nothing contained in this Section 14 shall affect any provision of the other Loan Documents to which the Borrower is a party which requires the Borrower to obtain the consent of the Noteholder as a precondition to sale, transfer or other disposition of, or any direct or indirect interest in, the Project or of any direct or indirect interest in the Borrower or which gives the Noteholder the right to accelerate the maturity of the Funding Loan made pursuant to the Funding Loan Agreement, or to take some other similar action with respect to the Funding Loan, upon the sale, transfer or other disposition of the Project. Notwithstanding anything contained in this Section 14 to the contrary, neither the consent of the Governmental Lender nor the delivery of items (i) through (v) of the preceding paragraph shall be required in the case of a foreclosure or deed in lieu of foreclosure or comparable conversion of the Funding Loan made pursuant to the Funding Loan Agreement, whereby the Noteholder or its designee, or a third party purchaser from the Noteholder becomes the owner of the Project, and nothing contained in this Section 14 shall otherwise affect the right of the Noteholder or its designee, or any such third party purchaser to foreclose on the Project or to accept a deed in lieu of foreclosure or to effect a comparable conversion of the Funding Loan made pursuant to the Funding Loan Agreement. Notwithstanding anything contained in this Section 14 to the contrary, neither the consent of the Governmental Lender nor the delivery of items (i) through ( iv) of the preceding paragraph shall be required in the case of a transfer of the interest of the Equity Investor as permitted pursuant to the terms of the Partnership Agreement, provided that delivery of item (v) shall still be required in such case . During the term of this Regulatory Agreement, c onsent of the Governmental Lender (which shall not be unreasonably withheld) and delivery of items (i) through (v) of the preceding paragraph shall be required for any future transfer of the Project to be made subsequent to any transfer described in the preceding sentence.
Section 15. Foreclosure. Notwithstanding anything contained in Section 14 to the contrary, neither the consent of the Governmental Lender nor the delivery of items (i) through (v) of the first paragraph of Section 14 (the “Transfer Conditions”) shall be required in the case of a transfer by foreclosure or deed in lieu of foreclosure, whereby the Noteholder becomes the owner of the Project, and nothing contained in this Section 15 shall otherwise affect the right of the Noteholder to foreclose on the Project or accept a deed in lieu of foreclosure. The Transfer Conditions shall be applicable to any subsequent transfer by the Noteholder.
Section 16. Term. This Regulatory Agreement and all and several of the terms hereof shall become effective upon its execution and delivery and shall remain in full force and effect during the Qualified Project Period, or for such longer period as is provided in Sections 3(j) and 11 above, and in the CDLAC Resolution referred to in Section 30 below, it being expressly agreed and understood that the provisions hereof are intended to survive the retirement of the Note and expiration of the Borrower Loan Agreement, the Fu nding Loan Agreement and the Deed of Trust .
Notwithstanding any other provisions of this Regulatory Agreement to the contrary, this entire Regulatory Agreement, or any of the provisions or sections hereof, may be terminated prior to the expiration of the Qualified Project Period upon agreement by the Governmental Lender , the
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Noteholder (if the Funding Loan is still outstanding) and the Borrower only if there shall have been received by the Governmental Lender an opinion of Tax Counsel that such termination will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Note or the exemption from State personal income taxes of the interest on the Note.
The terms of this Regulatory Agreement to the contrary notwithstanding (except as to the provisions of Section 11), this Regulatory Agreement, and each and all of the terms hereof, shall terminate and be of no further force or effect in the event of an involuntary noncompliance by the Borrower with the provisions of this Regulatory Agreement caused by fire, seizure, requisition, change in a federal law or an action of a federal agency after the Closing Date which prevents the Governmental Lender and the Noteholder from enforcing the provisions of this Regulatory Agreement, foreclosure on the Project or delivery of a deed in lieu of foreclosure or condemnation or a similar event, but only if within a reasonable period thereafter the Note is prepaid or retired or amounts received as a consequence of such event are used to provide a project that meets the requirements of the Code set forth in this Regulatory Agreement; provided, however, that the preceding provisions of this sentence shall cease to apply and the restrictions contained herein shall be reinstated if, at any time subsequent to the termination of such provisions as the result of the foreclosure on the Project or the delivery of a deed in lieu of foreclosure or a similar event, the Borrower or any Affiliated Party obtains an ownership interest in the Project for federal income tax purposes. Upon the termination of the terms of this Regulatory Agreement, the parties hereto agree to execute, deliver and record appropriate instruments of release and discharge of the terms hereof; provided, however, that the execution and delivery of such instruments shall not be necessary or a prerequisite to the termination of this Regulatory Agreement in accordance with its terms.
Section 17. Covenants to Run With the Land . The Borrower hereby subjects the Project (including the Project Site) to the covenants, reservations and restrictions set forth in this Regulatory Agreement. The Governmental Lender and the Borrower hereby declare their express intent that the covenants, reservations and restrictions set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Borrower’s successors in title to the Project; provided, however, that on the termination of this Regulatory Agreement said covenants, reservations and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Project or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments.
Section 18. Burden and Benefit . The Governmental Lender and the Borrower hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that the Borrower’s legal interest in the Project is rendered less valuable thereby.
The Governmental Lender and the Borrower hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Low Income Tenants and Very Low Income Tenants and by furthering the public purposes for which the Note were executed and delivered.
Section 19. Uniformity; Common Plan . The covenants, reservations and restrictions hereof shall apply uniformly to the entire Project in order to establish and carry out a common plan for the use, development and improvement of the Project Site.
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Section 20. Enforcement. If the Borrower defaults in the performance or observance of any covenant, agreement or obligation of the Borrower set forth in this Regulatory Agreement, and if such default remains uncured for a period of 60 days after notice thereof shall have been given (i) by the Governmental Lender to the Noteholder and the Borrower and Equity Investor or (ii) by the Noteholder to the Governmental Lender and the Borrower and Equity Investor (provided, however, that the Governmental Lender may at its sole option extend such period if the Borrower provides the Governmental Lender and the Noteholder with an opinion of Tax Counsel to the effect that such extension will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Note), then the Governmental Lender may, or the Noteholder, subject to the provisions of the Borrower Loan Agreement and the Funding Loan Agreement , may and at the direction of the Governmental Lender shall, declare an “Event of Default” to have occurred hereunder and shall provide written notice thereof to the Borrower and the Equity Investor and the Governmental Lender or the Noteholder, as applicable, and, at its option may take any one or more of the following steps:
(i) by mandamus or other suit, action or proceeding at law or in equity, require the Borrower to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of the rights of the Governmental Lender or the Noteholder hereunder;
(ii) have access to and inspect, examine and make copies of all of the books and records of the Borrower pertaining to the Project; or
(iii) take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of the Borrower hereunder.
The Borrower hereby agrees that specific enforcement of the Borrower’s agreements contained herein is the only means by which the Governmental Lender may fully obtain the benefits of such agreements made by the Borrower herein, and the Borrower therefore agrees to the imposition of the remedy of specific performance against it in the case of any Event of Default by the Borrower hereunder.
The Governmental Lender hereby agrees to accept cure of an Event of Default by the Equity Investor as if such cure were made by Borrower.
The Noteholder shall have the right, in accordance with this Section 20, to exercise any or all of the rights or remedies of the Governmental Lender hereunder; provided that such right shall be in addition to the rights of the Governmental Lender hereunder and prior to taking any such act the Noteholder shall give the Governmental Lender written notice of its intended action. All fees, costs and expenses of the Noteholder (including, without limitation, reasonable attorneys’ fees) incurred in taking any action pursuant to this Section 20 shall be the sole responsibility of the Borrower.
Notwithstanding anything contained in this Regulatory Agreement or the Funding Loan Agreement or Borrower Loan Agreement to the contrary, the occurrence of an Event of Default under this Regulatory Agreement shall not be deemed, under any circumstances whatsoever, to be a default under the other Loan Documents except as may be otherwise specified in the other Loan Documents. The parties hereto agree that the maturity date of the Funding Loan may be accelerated solely by the Noteholder upon the occurrence of a default, after the expiration of any notice, grace or
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cure periods, on the part of the Borrower under the Loan Documents in accordance with their respective terms and for no other reason.
The Governmental Lender may not, upon the occurrence of an event of default under this Regulatory Agreement, seek, in any manner, to foreclose on the Deed of Trust , to cause the Noteholder to cause a prepayment of the Note or to declare the principal of the Note and the interest accrued on the Note to be immediately due and payable or to cause the Noteholder to take any action under any of the Loan Documents or any other documents which action would or could have the effect of achieving any one or more of the actions, events or results described above. The occurrence of an Event of Default under this Regulatory Agreement shall not impair, defeat or render invalid the lien of the Deed of Trust.
The rights of the Noteholder under this Section are in addition to all rights conferred upon the Noteholder under the Funding Loan Agreement and the other Loan Documents and in no way limit those rights.
Section 21. Recording and Filing . The Borrower shall cause this Regulatory Agreement and all amendments and supplements hereto and thereto, to be recorded and filed in the real property records of the County of Orange and in such other places as the Governmental Lender may reasonably request. The Borrower shall pay all fees and charges incurred in connection with any such recording.
Section 22. Payment of Fees . The Borrower hereby agrees to pay or shall cause the Fiscal Agent to pay all reasonable costs and expenses of the Governmental Lender in connection with the Note and the financing of the Project as such costs and expenses become due and payable upon the receipt of written invoices verifying such costs and expenses.
On the Closing Date, the Governmental Lender shall be paid a one -time fee equal to $______________ plus the initial ongoing Governmental Lender Fee of $______________.
Thereafter, the Borrower shall pay or shall cause the Fiscal Agent to pay to the Governmental Lender the Governmental Lender Fee on ___________ 1 of each year throughout the term of the Regulatory Agreement, commencing ___________, in an amount equal to $______________.
Notwithstanding any prepayment of the Funding Loan or Borrower Loan and notwithstanding a discharge of the Funding Loan Agreement and the Borrower Loan Agreement, throughout the term of this Regulatory Agreement, the Borrower shall continue to pay to the Governmental Lender the Governmental Lender Fee, and, in the event of default, shall also pay to the Governmental Lender and to the Noteholder reasonable compensation for any services rendered by either of them hereunder and reimbursement for all expenses reasonably incurred by either of them in connection therewith. The fee payable to the Governmental Lender referenced in this section shall in no way limit amounts payable by the Borrower under Section 11 hereof, or arising after an Event of Default in connection with the Governmental Lender ’s or the Noteholder’s enforcement of the provisions of this Regulatory Agreement. The fee payable to the Governmental Lender referenced in this section includes any fee to be paid by the Governmental Lender to any entity which administers the Project.
In the event that the Note is prepaid in part or in full prior to the end of the term of this Regulatory Agreement, the Governmental Lender Fee for the remainder of the term of this Regulatory Agreement shall continue to be payable to the Governmental Lender for the number of
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years remaining in the Qualified Project Period. However, at the option of the Borrower, the Governmental Lender Fee may be paid by the Borrower at the time of the final prepayment of the Note in a lump sum amount equal to the present value (based on a discount rate equal to the yield on the Note, as determined by the Governmental Lender at the time of prepayment) of the Governmental Lender Fee for the number of years remaining in the Qualified Project Period under this Regulatory Agreement.
Section 23. Governing Law. This Regulatory Agreement shall be governed by the laws of the State of California.
Section 24. Amendments. Except as provided in Section 10(a) hereof, this Regulatory Agreement shall be amended by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Orange. Any amendment to this Regulatory Agreement shall be accompanied by an opinion of Tax Counsel to the effect that such amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Note.
Section 25. Notice. All notices, certificates or other communications shall be sufficiently given and shall be deemed given on the date personally delivered or on the second day following the date on which the same have been mailed by certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Governmental Lender: Anaheim Housing Authority 201 S. Anaheim Boulevard, Suite 100
Anaheim, California 92805
Attention: Executive Director
Telephone: (714) 765-4318
If to the Borrower: Center Housing Partners LP
_________________________
_________________________
_________________________
Attention: _________________________
with copy to: _________________________
_________________________
_________________________
Attention: _________________________
Telephone: _________________________
If to Equity Investor: _________________________
_________________________
_________________________
_________________________
_________________________
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with a copy to: _________________________
_________________________
_________________________
_________________________
If to the Noteholder: _________________________
_________________________
_________________________
_________________________
Attention: _________________________
with copy to: _________________________
_________________________
_________________________
Attention: _________________________
Any of the foregoing parties may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates, documents or other communications shall be sent. Copies of notices sent by any party hereto shall be sent concurrently to each of the parties listed above.
Section 26. Severability. If any provision of this Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby.
Section 27. Multiple Counterparts . This Regulatory Agreement may be executed in multiple counterparts, all of which shall constitute one and the same instrument, and each of which shall be deemed to be an original.
Section 28. Compliance by Borrower . The Noteholder shall not be responsible for monitoring or verifying compliance by the Borrower with its obligations un der this Regulatory Agreement.
Section 29. Obligation of Borrower; Limitations on Recourse to Borrower .
Notwithstanding any provisions of this Regulatory Agreement to the contrary, all obligations of the Borrower under this Regulatory Agreement for the payment of money and all claims for damages against the Borrower occasioned by breach or alleged breach by the Borrower of its obligations under this Regulatory Agreement, including indemnification obligations and other Recourse Exceptions described in the next paragraph, shall not be secured by or i n any manner constitute a lien on the Project and no person shall have the right to enforce such obligations other than directly against the Borrower without recourse to the Project, and all such obligations shall be subordinate in priority, in right to payment and in all other respects to the obligations, liens, rights (including without limitation the right to payment) and interests arising or created under the Loan Documents. Except as otherwise provided in Section 11 of this Regulatory Agreement, no su bsequent owner of the Project shall be liable or obligated for the breach or default of any obligation of any prior owner of the Project (including the Borrower) under this Regulatory Agreement. Such obligations shall be the Obligations of the Person who was the owner of the Project at the time the default or breach was alleged to have occurred and, as to Recourse Exceptions, such Person shall remain liable for any and
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all damages occasioned by the default or breach even after such Person ceases to be the owner of the Project.
The following obligations of the Borrower (“Recourse Exceptions”) shall, subject to the limitations set forth in the preceding paragraph, and Section 20 of this Regulatory Agreement, be and remain the joint and several full recourse obligations of the Borrower and each general partner of the Borrower (other than any nonprofit general partner) or general partner wholly owned by a non-profit:
(i) the Borrower’s obligation to pay any and all rebate amounts that may be owed with respect to the Note; and
(ii) the Borrower’s obligations under Section 11 of this Regulatory Agreement.
Section 30. CDLAC Requirements. In addition to other requirements set forth herein and to the extent not prohibited by the requirements set forth in Sections 4 and 9 hereof, the Borrower hereby agrees to comply with each of the requirements of CDLAC set forth in this Section 30, as follows:
(a) The Borrower shall comply with the CDLAC Resolution and the CDLAC Conditions set forth in Exhibit A thereto (collectively, the “CDLAC Conditions”), which conditions are incorporated herein by reference and made a part hereof. The Borrower will prepare and submit to the Governmental Lender:
(i) not later than ___________ 1 of each year, until the Project is completed, and on ___________ 1 every three years thereafter (such that the next succeeding year shall be the beginning of each such three -year period) until the end of the Compliance Period, a Certification of Compliance II for Qualified Residential Rental Projects, in substantially the form attached hereto as Exhibit E or otherwise required or provided by CDLAC from time to time after the date hereof (“CDLAC Compliance Certificate”), executed by an authorized representative of the Borrower; such CDLAC Compliance Certificate shall be prepared pursuant to the terms of the CDLAC Conditions; (ii) a Certificate of Completion, in substantially the form attached hereto as Exhibit F or otherwise required or provided by CDLAC from time to time after the date hereof, executed by an authorized representative of the Borrower certifying among other things to the substantial completion of the Project; and
(iii) not later than ___________ 1 of every third year following the submission of the Certificate of Completion, until the later of the end of the Compliance Period or the period described in paragraph (c), below, a project status report, as required or provided by the California Tax Credit Allocation Committee or equivalent documentation required or otherwise provided by CDLAC from time to time after the date hereof, executed by an authorized representative of the Borrower.
(b) Compliance with the terms of the CDLAC Conditions not contained within this Regulatory Agreement, but referred to in the CDLAC Conditions, are the responsibility of the Borrower to report to the Governmental Lender.
(c) The Borrower acknowledges that the Governmental Lender shall monitor the Borrower’s compliance with the terms of the CDLAC Conditions. The Borrower acknowledges that
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the Governmental Lender will prepare and submit to CDLAC, not later than March 1 of each year, until the Project is completed, and on March 1 every three years thereafter (such that the next succeeding year shall be the beginning of each such three -year period) until the end of the Compliance Period, a Self-Certification Certificate in the form provided by CDLAC. The Borrower will cooperate fully with the Governmental Lender in connection with such monitoring and reporting requirements.
(d) Except as otherwise provided in Section 16 of this Regulatory Agreement, this Regulatory Agreement shall terminate on the date 55 years after the date on which at least fifty percent (50%) of the units in the Project are first occupied or otherwise after the commencement of the Qualified Project Period.
(e) The Borrower shall notify CDLAC in writing of: (i) any change in ownership of the Project; (ii) any change in the issuer of the Note; (iii) any change in the name of the Project or the property manager; (iv) any default under the Funding Loan Agreement , the Borrower Loan Agreement or this Regulatory Agreement, including, but not limited to, such defaults associated with the Tax-Exempt status of the Note, and the income and rental requirements as provided in Sections 4 and 5 hereof and the CDLAC Conditions; or (v) termination of this Regulatory Agreement.
CDLAC shall have the right, but not the obligation, to deliver revised CDLAC Conditions to the Borrower after the Closing Date, at any time, that are not more restrictive than the original CDLAC Conditions; provided however, that, with the prior written consent of the Borrower, which will not be unreasonably withheld: (i) any changes in the terms and conditions of the CDLAC Conditions prior to the recordation against the Project in the real property records of the County of Orange of a regulatory agreement between the Borrower and the California Tax Credit Allocation Committee (“TCAC Regulatory Agreement”) shall be limited to such changes as are necessary to correct any factual errors or to otherwise conform the CDLAC Conditions to any change in facts or circumstances applicable to the Borrower or the Project; and (ii) after recordation of the TCAC Regulatory Agreement, any changes in the terms and conditions of the CDLAC Conditions shall be limited to such changes as are necessary to conform Items 1, 6, 7, 10, 11, 12, 14, 15, 16, 18, 19, 20, 21, 22, 23, 24, 25, 26 and/or 37 of Exhibit A to the CDLAC Conditions to any change in terms and conditions requested by the Borrower and approved by CDLAC. The Governmental Lender may, in its sole and absolute discretion, require the Borrower to enter into an amendment to this Regulatory Agreement reflecting the revised CDLAC Conditions, which amendment shall be executed by the parties hereto or their successor in title and duly recorded in the official real estate records of the County of Orange. The Borrower shall pay any costs and expenses in connection therewith and provide CDLAC with a copy of that recorded amendment reflecting the revised CDLAC Conditions.
Any of the foregoing requirements of the CDLAC Conditions contained in this Section 30 may be expressly waived by CDLAC, in its sole discretion, in writing, but (i) no waiver by CDLAC of any requirement of this Section 30 shall, or shall be deemed to, extend to or affect any other provision of this Regulatory Agreement except to the extent the Governmental Lender has received an opinion of Tax Counsel that any such provision is not required by the Act and may be waived without adversely affecting the exclusion from gross income of interest on the Note for federal income tax purposes; and (ii) any requirement of this Section 30 shall be void and of no force and effect if the Governmental Lender and the Borrower receive a written opinion of Tax Counsel to the effect that compliance with any such requirement would cause interest on the Note to cease to be Tax-Exempt or to the effect that compliance with such requirement would be in conflict with the Act or any other state or federal law.
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Section 31. Damage, Destruction or Condemnation of the Property . In the event that the Property is damaged or destroyed or title to the property, or any part thereof, is taken through the exercise or the threat of the exercise of the power of eminent domain, the Borrower shall comply with all applicable requirements of the Deed of Trust and the other Loan Documents.
Section 32. Third-Party Beneficiary. The parties to this Regulatory Agreement recognize and agree that the terms of this Regulatory Agreement and the enforcement of those terms are essential to the security of the Noteholder and are entered into for the benefit of the Noteholder. The Noteholder shall have contractual rights in this Regulatory Agreement and shall be entitled (but not obligated) to enforce, separately or jointly with the Governmental Lender , or to cause the Governmental Lender to enforce, the terms of this Regulatory Agreement. The Noteholder is intended to be and shall be a third -party beneficiary of this Regulatory Agreement, and the Noteholder shall have the right (but not the obligation) to enforce the terms of this Regulatory Agreement insofar as this Regulatory Agreement sets forth obligations of the Borrower. [THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Governmental Lender and the Borrower have executed this Regulatory Agreement by duly authorized representatives, all as of the date first written hereinabove.
AUTHORITY:
ANAHEIM HOUSING AUTHORITY,
a public body, corporate and politic
By:
Executive Director or Authorized Designee
ATTEST:
AUTHORITY SECRETARY
Authority Secretary
or Authorized Designee
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
Assistant City Attorney
or Authorized Designee
STRADLING YOCCA CARLSON & RAUTH
Housing Authority Special Counsel
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BORROWER:
CENTER HOUSING PARTNERS LP,
a California limited partnership
By:
Its:
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________________________ )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
4932-0952-4780/022620-0118
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________________________ )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
4932-0952-4780/022620-0118
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________________________ )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT A
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Parcel 1:
Those portions of lots 13, 16, 17 and 18, in Tract No. 1843, in the City of Anaheim, County of Orange, State of California, as per Map recorded in Book 53, Pages 45 and 46 of Miscellaneous Maps, in the Office of the County Recorder of said County, together with that portion of the ally lying between said Lots 13 and 18, vacated by a Resolution of the City Council of said City of Anaheim, a copy of which was recorded November 15, 1954 in Book 2869 Page 219 of Official Records, lying Easterly and Southerly of the following described line:
Beginning at the Southwest corner of said Lot 13; thence North 0° 25’ 53” East 15.00 feet along the West line of said lot; thence South 89° 34’ 07” East 125.00 feet parallel with the Southerly line of said lot to a line parallel with and distance Easterly 5.00 feet from the Westerly line of said Lot 18; thence Northerly 50.00 feet along said last mentioned parallel line to its intersection with the Easterly prolongation of the Northerly line of said Lot 13; thence Westerly 5.00 feet along said parallel line to its intersection with the Westerly line from Lot 18; thence Northerly
11.35 feet to the Southwesterly corner of said Lot 17; thence Easterly 20.00 feet along the Southerly line of said Lot 17; thence Northerly 143.56 feet parallel with the Easterly line of Placentia Avenue, as shown on said map to the Northerly line of said Lot 16.
EXCEPT that portion of said alley lying Southerly of the Easterly prolongation of the South line of said Lot 13, as per document recorded February 4, 2004 as Instrument No. 200400084618 of Official Records.
ALSO EXCEPT all oil, gas and other hydrocarbon substances below a depth of 500 feet from the surface of said land, but without the right of surface entry thereon, as provided in a document recorded October 8, 1953 in Book 2590, Page 404, Official Records.
Parcel 2:
An easement for ingress and egress as granted TO Dr. Leon L. Newman and Dr. Andrew M.
Bloss, and others, in that certain Agreement recorded October 25, 1956 in Book 3690, Page 204, Official Records, over a strip of land 15 feet in width along the Northerly boundary of that portion of Section 12, Township 4 South, Range 10 West in the Rancho San Juan Cajon de Santa Ana, including a portion of Lots 12 and 19 of Tract No. 1843, partly, as per Map recorded in Book 53, Pages 45 and 46, Miscellaneous Maps, and including a portion of the alley adjoining said Lots 12 and 19 as shown on said map and vacated by Resolution of the City Council of the City of Anaheim, a certified copy of which was recorded November 15, 1954 in Book 2869, Page 219, Official Records, described as follows:
Beginning at the intersection of the centerline of Placentia Avenue and Anaheim Olive Road, as shown on said map; thence on the centerline of Placentia Avenue North 0° 11’ 45” East 4.25 feet; thence North 0° 25’ 53” East 195.19 feet; thence South 89° 34’ 07” East 190.00 feet to the West line of that portion of Lot 19 of said Tract No. 1843, conveyed to the Hill Company, a corporation, by deed recorded October 20, 1954 in Book 2847, Page 496, Official Records; thence South 0° 25’ 53” West 52.33 feet along the West line of said Bill Company land to the center line of the alley adjoining said Lot 19 on the South; thence South 76° 12’ 44” East 5.14 feet along said centerline to the Northerly prolongation of the East line of the West 35.00 feet of Lot 12 of Tract No. 1843; thence South 0° 25’ 53” West 182.74 feet along said East line and its prolongation to the centerline of said Anaheim-Olive Road; thence North 78° 52’ 26” West 198.44 feet to the point of beginning.
APN: 083-343-33
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EXHIBIT B
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
The undersigned, ____________________, being duly authorized to execute this certificate on behalf of CENTER HOUSING PARTNERS LP , a California limited partnership (the “Borrower”), hereby represents and warrants that:
1. The undersigned has read and is thoroughly familiar with the provisions of the following documents associated with the Borrower’s participation in the Anaheim Housing Authority’s (the “Governmental Lender”) execution and delivery of the Anaheim Housing Authority Multifamily Housing Revenue Note (Tampico Motel Conversion ), Series 2025A , such documents including:
(a) the Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”) dated as of ___________ 1 , 2025 between the Borrower and the Governmental Lender;
(b) the Borrower Notes, dated ____________, 2025 from the Borrower to the Governmental Lender representing the Borrower’s obligation to repay the Borrower Loan.
2. As of the date of this certificate, the following percentages of residential units in the Project (i) are occupied by Low Income Tenants and Very Low Income Tenants (as such terms are defined in the Regulatory Agreement) or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Low Income Tenant or Very Low Income Tenant, as applicable, vacated such unit; as indicated:
Studio 1 Bedroom 2 Bedrooms 3 Bedrooms Total
Occupied by
Low Income Tenants: % Unit Nos.: _____ ____ ____ ____ ____
Held vacant for occupancy
continuously since last
occupied by a Low
Income Tenant: % Unit Nos.: _____ ____ ____ ____ ____
Studio 1 Bedroom 2 Bedrooms 3 Bedrooms Total
Occupied by Very
Low Income Tenants:
% Unit Nos.: _____ ____ ____ ____ ____
Held vacant for occupancy
continuously since last
occupied by a Very Low
Income Tenant:
% Unit Nos.: _____ ____ ____ ____ ____
3. The Borrower hereby certifies that the Borrower is not in default under any of the terms of the above documents and no event has occurred which, with the passage of time, would constitute an Event of Default thereunder, with the exception of the following [state actions being taken to remedy default].
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CENTER HOUSING PARTNERS LP,
a California limited partnership
By:
Name:
Its:
EXHIBIT C
INCOME COMPUTATION AND CERTIFICATION
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EXHIBIT D
CDLAC RESOLUTION
(See Attached)
RESOLUTION NO.
A RESOLUTION OF THE GOVERNING BOARD OF THE ANAHEIM
HOUSING AUTHORITY AUTHORIZING THE EXECUTION AND
DELIVERY OF ITS MULTIFAMILY HOUSING REVENUE NOTE IN
ONE OR MORE SERIES IN A CUMULATIVE AND AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $13,105,723 FOR THE
PURPOSE OF FINANCING THE ACQUISITION AND
REHABILITATION OF THE TAMPICO MOTEL CONVERSION
MULTIFAMILY RENTAL HOUSING PROJECT; APPROVING AND
AUTHORIZING THE EXECUTION AND DELIVERY OF ANY AND
ALL DOCUMENTS NECESSARY TO EXECUTE AND DELIVER
THE NOTE, SUBSTANTIALLY IN THE FORM APPROVED
HEREBY, COMPLETE THE TRANSACTION AND IMPLEMENT
THIS RESOLUTION, AND RATIFYING AND APPROVING ANY
ACTION HERETOFORE TAKEN IN CONNECTION WITH THE
NOTE
WHEREAS, pursuant to the Housing Authorities Law, Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (“Housing Authorities Law”), the Anaheim Housing Authority, a public body corporate and politic organized, existing and operating pursuant to the Housing Authorities Law, (“Authority”) is empowered to issue revenue bonds or notes for the purpose of financing the acquisition, construction, rehabilitation, refinancing, development, and operation of multifamily rental housing; and
WHEREAS, Center Housing Partners LP, a California limited partnership (the “Borrower”), intends to acquire, rehabilitate and equip a multifamily rental project into a 31-unit plus one manager’s unit multifamily residential project on that certain real property located at 151 South Cenpla Way (formerly 120 S. State College Boulevard) in the City of Anaheim, California (together, “Project”); and
WHEREAS, pursuant to the proposed form of Funding Loan Agreement (the “Funding Loan Agreement”), by and among the Authority, CN Financing, Inc., a wholly owned subsidiary of City National Bank, as funding lender (the “Funding Lender”) and Wilmington Trust, National Association (the “Fiscal Agent”), the Borrower has requested the Authority execute and deliver a series of tax - exempt multifamily housing revenue note in an aggregate principal amount not to exceed $13,105,723 (the “Note”) and to loan the proceeds of the Note to the Borrower pursuant to a proposed form of Borrower Loan Agreement, by and between the Authority and the Borrower (the “Borrower Loan Agreement”) to finance the acquisition, rehabilitation and equipping through completion of the Project, and
WHEREAS, Authority, by action of its Governing Board (“Governing Board”), desires to assist the Borrower and to increase the supply of affordable housing by making a portion of the units in the Project available for low and very low income persons or families, and in order to accomplish such purposes it is desirable for Authority to provide for the execution and delivery of the Note and financing of the Project; and
WHEREAS, Government Code Section 8869.85 requires a local agency to file an application with the California Debt Limit Allocation Committee (“Committee”) prior to the execution and 2 delivery of tax-exempt multifamily housing revenue notes and the Authority has filed such an application; and
WHEREAS, the Committee has allocated to the Project $13,105,723 of the State of California 2024 State ceiling for private activity bonds or notes under Section 146 of the Internal Revenue Code of 1986;
NOW, THEREFORE, THE ANAHEIM HOUSING AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS:
1. Authorization of Note. In accordance with the Act and pursuant to the Funding Loan Agreement and the Borrower Loan Agreement, Authority authorizes the execution and delivery of the Note designated as “Anaheim Housing Authority Multifamily Housing Revenue Note (Tampico Motel Conversion), Series 2025A” in an aggregate principal amount not to exceed $13,105,723, with an interest rate or rates, a maturity date and other terms as provided in Funding Loan Agreement; provided, however, that the maximum interest rate on the Note shall not exceed 12 percent per annum and the final maturity of the Note shall not exceed 40 years from the date of execution and delivery. The outstanding principal amount of the Note shall be in the amounts advanced by the Funding Lender from time to time to fund the Funding Loan, not to exceed the aggregate principal amount of $13,105,723. The Note shall be in the form set forth in and otherwise in accordance with the Funding Loan Agreement, and shall be executed on behalf of Authority by the manual or facsimile signature of the Chairperson of the Authority (“Chairperson”) or the Executive Director of the Authority (“Executive Director,” and, together with the Chairperson, the “Authorized Officers”), and shall be attested by the manual or facsimile signature of the Secretary of the Authority (“Secretary”).
Notwithstanding the above, the Note may be issued in one or more series, including a taxable series (the “Taxable Series”), with the same parameters as set forth above; provided that the tax exempt series of Notes shall not exceed $13,105,723 in an aggregate principal amount. The Taxable Series shall be outstanding only during construction of the Project and the aggregate principal amount of the Taxable Series shall not exceed $3,000,000.
2. Approval of Transaction Documents. The proposed form of each of the Funding Loan Agreement, the Borrower Loan Agreement and the Regulatory Agreement and Declaration of Restrictive Covenants, by and between the Authority and the Borrower (the “Regulatory Agreement,” and, together with the Funding Loan Agreement and the Borrower Loan Agreement, the “Transaction Documents”) presented at this meeting is hereby approved, and any Authorized Officer is authorized to execute, and the Secretary is authorized to attest, the Transaction Documents in substantially said form, with such additions thereto and changes therein as such Authorized Officer may approve or recommend in accordance with Section 3 hereof.
3. Approval of Changes to Documents . Any Authorized Officer executing a document approved herein, in consultation with General Counsel and Special Counsel, is authorized to approve and make such modifications, changes or additions to the Transaction Documents or other documents as may be necessary or advisable, and the approval of any modification, change or addition to any of the aforementioned agreements shall be evidenced conclusively by the execution and delivery thereof by such Authorized Officer and approval as to form by General Counsel and Special Counsel. Further, any Authorized Officer, acting alone, is authorized to execute any assignment agreement related to any mortgage note, mortgage, deed of trust or other document related to Borrower Loan made to the 3 Borrower from the proceeds of the Note. Additionally, without limiting the generality of the foregoing, the forms of the Transaction Documents hereby approved may be amended to provide for the Taxable Series.
4. Selection of Fiscal Agent. Wilmington Trust, National Association is hereby approved to serve as Fiscal Agent under the Funding Loan Agreement.
5. Actions Ratified and Authorized. All actions heretofore taken by the officers, employees and agents of Authority with respect to the execution and delivery of the Note are approved, confirmed and ratified, and the officers, employees and agents of Authority are authorized and directed, for and in the name and on behalf of Authority, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents, including, but not limited to, those documents described in the Transaction Documents and the other documents herein approved, which they, or any of them, may deem necessary or advisable in order to consummate the lawful execution and delivery of the Note and to effectuate the purposes thereof and of the documents herein approved in accordance with this resolution and resolutions heretofore adopted by the Governing Board. In the event that the Secretary is unavailable to sign any document related to the Note, any Deputy Secretary of the Authority may sign on behalf of the Secretary.
6. Further Consents, Approvals and Other Actions . All consents, approvals, notices, orders, requests and other actions permitted or required by any of the documents authorized by this Resolution or otherwise appropriate in the administration of the Note and the lending program financed thereby, including without limitation any of the foregoing that may be necessary or desirable in connection with any amendment of such documents, any transfer of the Project, any substitution of security for the Note, or any prepayment of the Note may be taken or given by the Chairperson or the Executive Director, and the Chairperson or the Executive Director are hereby authorized and directed to give any such consent, approval, notice, order or request and to take any such action which such officer may deem necessary or desirable to further the purposes of this Resolution.
7. Conflicting Resolutions Repealed. As to the Note, all prior resolutions or parts thereof, if any, in conflict herewith are, to the extent of such conflict, repealed.
8. Severability. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any remaining sections, paragraphs or provisions of this Resolution.
9. Effectiveness of Resolution and Date Thereof. This Resolution shall take effect upon its adoption.
10. Certification. The Secretary shall certify to the passage and adoption of this Resolution.
4 THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED BY THE GOVERNING BOARD OF THE ANAHEIM HOUSING AUTHORITY THIS 22ND DAY OF APRIL, 2025, BY THE FOLLOWING ROLL CALL VOTE:
AYES:
NOES:
ABSTAIN:
ABSENT:
CHAIRPERSON
ATTEST:
AUTHORITY SECRETARY
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
By:
APPROVED AS TO FORM:
STRADLING YOCCA CARLSON & RAUTH
Bradley R. Neal, Esq.
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EXHIBIT E
CDLAC COMPLIANCE CERTIFICATE
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EXHIBIT F
CDLAC COMPLETION CERTIFICATE
CERTIFICATE of COMPLETION
for QUALIFIED RESIDENTIAL RENTAL PROJECTS
1. Project Name: ______________________________
(If project name has changed since the award of allocation, please note the original project name and request a change in the CDLAC resolution.)
Original: ______________________________
2. CDLAC Application No.: _______________
3. Name of Bond Issuer: ______________________________
4. Name of Borrower: ______________________________
(If Borrower has changed name since the award, please note the original Borrower and request a change in the CDLAC resolution.)
Original: ______________________________
5. The undersigned hereby certifies that all work on the Project was substantially completed as of ___________ ____, 20____.
The undersigned hereby further certifies that:
(a) the aggregate amount disbursed on the Loan to date is $ __________________
(b) all amounts disbursed from proceeds of the Bonds have been applied to pay or reimburse the undersigned for the payment of Project Costs and none of the amounts disbursed from the proceeds of the Bonds have been applied to pay or reimburse any party for the payment of costs or expenses other than Project Costs; and
(c) at least 95 percent of the amount disbursed from the proceeds of the Bonds have been applied to pay or reimburse the Borrower for the payment of Qualified Project Costs (as that term is used in the
Regulatory Agreement) and less than 25 percent of the amount disbursed from the proceeds of the Bonds, exclusive of amounts applied to pay the costs of issuing the Bonds, have been applied to pay or reimburse the Borrower for the cost of acquiring land.
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6. The undersigned hereby certifies the project meets the general federal rule for a Qualified Project Period.
No____ Yes____
(a) 10% of the dwelling units in the project financed in part from the proceeds of the captioned Bonds
were first occupied on ___________ ____, 20____ and
(b) 50% of the dwelling units in the project financed in part from the proceeds of the captioned Bonds
were first occupied on ___________ ____, 20____.
7. If no to #6, the undersigned hereby certifies the project meets the special federal rule for a Qualified Project Period.
No____ Yes____
(Project qualifies if it is an acquisition/rehabilitation where no more than 90% of the units were not available for occupancy within 60 days of the earlier of the project acquisition or the Bond Issuance Date.)
(a) Bonds were issued on ___________ ____, 20____.
(b) Property was acquired on ___________ ____, 20____.
(c) The date 10% of the units were available to occupy (within 60 days of the earlier of the acquisition or bond issuance) ________ _____ , 20____.
Signature of Officer
Date
Printed Name of Officer
Phone Number
Title of Officer