Moreno Valley City Council
June 17, 2025

4871-0487-2146v4/200382-0007

EXHIBIT B

RIDER TO DEED OF TRUST
Exhibit B to Authority Loan Deed of Trust with Assignment of Rents dated as of [____________________, 2025] (“Deed of Trust”), executed by MARY ERICKSON COMMUNITY HOUSING , a California nonprofit public benefit corporation, as “Trustor”, to [________] Title Company, a California corporation, as “Trustee”, for the benefit of the MORENO VALLEY HOUSING AUTHORITY, a public body corporate and politic , as “Beneficiary”.

1. DEFAULT. A default or breach under any of the following shall, at Beneficiary’s option, constitute a default under this Deed of Trust:
(a) A breach of the Agreement; or
(b) A breach of the Authority Regulatory Agreement; or
(c) A default under any other deed of trust encumbering the Property.

2. DUE ON SALE OR ENCUMBRANCE . In the event of any Transfer (as defined below) of the Property, or any portion thereof or interest therein, Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. As used herein, the term “Transfer” means and includes the direct or indirect sale, transfer, conveyance, mortgage, further encumbrance, assignment, or other alienation of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract, sales agreement or similar instrument affecting all or a portion of the Property, granting of an option to purchase any portion of or interest in the Property or any interest therein, or the lease of all or substantially all of the Property or of all or substantially all of the improvements situated on the Property.

Attachment No. 5
Certificate of Acceptance
Authority Loan Deed of Trust

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CERTIFICATE OF ACCEPTANCE
This is to certify that the fee interest in real property conveyed under the foregoing Authority Loan Deed of Trust with Assignment of Rents including Rider by MARY ERICKSON COMMUNITY HOUSING, a California nonprofit public benefit corporation, to the MORENO VALLEY HOUSING AUTHORITY, a public body corporate and politic (“Authority” or “Beneficiary”) as to the following property: The land referred to herein is situated in the State of California, County of Riverside , described as follows:

Real property in the City of Moreno Valley, County of Riverside, State of California, as described in the foregoing Authority Loan Deed of Trust with Rider is hereby accepted by the Executive Director on behalf of the Authority pursuant to authority conferred by action of the Authority board by its Resolution No. 25-HA-XX, and the Beneficiary consents to recordation thereof by its duly authorized officer.

MORENO VALLEY HOUSING AUTHORITY
Dated: ________________, 2025 By:

Brian Mohan, Executive Director
ATTEST:

M. Patricia Rodriguez, Authority Secretary

Attachment No. 6
Homebuyer Loan Agreement

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ATTACHMENT NO. 6

FORM OF AUTHORITY HOMEBUYER LOAN AGREEMENT
[subject to update in connection with initial sales of Affordable Homes] This AUTHORITY HOMEBUYER LOAN AGREEMENT (“Agreement” or “Homebuyer Loan Agreement” ) is made this [ ] day of [ ], 202__ (“Effective Date”) by and between [full legal name(s) of Homebuyer], [ insert vesting, e.g., husband and wife as joint tenants ] (together, “Homebuyer”) and the MORENO VALLEY HOUSING AUTHORITY, a public body corporate and politic (“Authority”). Each of the Authority and Homebuyer is a “Party” and together , the “Parties”.

RECITALS
A. Authority is a California housing authority acting under the California Housing Authorities Law, Part 2 of Division 24, Section 34200, et seq ., of the Health and Safety Code (“HAL”). Further, Authority serves as the housing successor to the former Community Redevelopment Agency of the City of Moreno Valley (“Former Agency”) and administers the housing assets and funds of the Low and Moderate Housing Asset Fund (“LMIHAF”) pursuant to Health and Safety Code (“HSC”) Sections 34176 and 34176.1. Authority is also a participating housing authority in cooperation with and funding recipient of HUD and State HCD programs.

B. Homebuyer is a Low Income household (as defined in Section 4) and currently earns not more than eighty percent (80%) of the Annual Median Income (“AMI”) for Riverside County, as defined by California Health and Safety Code (“HSC”) Section 50052.5 and the California Code of Regulations (“CCR”).

C. Authority desires to assist persons of Low Income to purchase and reside in single - family residential property as part of its efforts to increase, improve, and preserve Low Income housing available at an Affordable Housing Cost within the corporate limits of the City of Moreno Valley (“City”).

D. On June 17, 2025 the Authority approved that certain HOME Investment Partnership and Affordable Housing Agreement (“Affordable Housing Agreement” or “AHA”) with Mary Erickson Community Housing, a California nonprofit corporation (as “Developer” therein, and may be referred to herein as “Seller” or “MECH”).

E. Certain capitalized terms used in this Agreement are as defined in the AHA unless otherwise defined herein.

F. Pursuant to the AHA, Seller purchased certain real property (“Site”) from the Authority and, as Developer, was required to design, construct and complete a new residential development comprised of seven (7) detached manufactured single-family homes thereon that together are referred to as the “Affordable Homes” in the AHA.

G. Under the AHA, Developer is required to sell the seven (7) Affordable Homes to qualified Low Income Homebuyers that are subject to the Homebuyer Covenants for the 45-year Affordability Period.

Attachment No. 6
Homebuyer Loan Agreement

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H. Developer caused to be prepared a parcel map that was approved by the City Council of the City of Moreno Valley (“City Council”), by which the Site is subdivided into seven (7) legal parcels, with one Affordable Home constructed by Seller on each of the seven lots that comprise the Site.

I. Prior to the Effective Date, Homebuyer submitted an application to Seller and qualified as a Low Income Household and Initial Homebuyer of the subject Affordable Home at an Affordable Housing Cost. Homebuyer represents and warrants such application was truthful, complete, and contains no material omission or misstatement of facts.

J. Based on that application and the supporting, verifiable documents submitted by Homebuyer to Seller and as reviewed by Authority, Homebuyer (i) has qualified as a Low Income Household; (ii) has completed a Homebuyer Training Program; (iii) intends to and shall own and occupy the subject Affordable Home as their primary personal residence as an owner-occupant ; (iv) acquires the subject Affordable Home at an Affordable Housing Cost with a compliant Back End Ratio related to the actual household income of Homebuyer; (v) enters into this Agreement and related instruments to establish the terms, conditions, affordability restrictions, resale, use, ownership, maintenance covenants that touch and concern the Property and that shall remain in full force and effect for both (A) the 15-year HOME Compliance Period, and (B) continuing through the expiration of the 45-year Affordability Period, for Homebuyer and each successor-in-interest.

K. Homebuyer and Seller have entered into that certain Purchase and Sale Agreement dated as of [____________, 202_] for Homebuyer to acquire from Seller one of the seven (1 of 7) Affordable Homes. The Affordable Home that is the subject of this Agreement is located at the common address of [_____________], Moreno Valley, California, as Assessor Parcel Number [APN] [______], and is legally described in the Legal Description, Exhibit A, attached hereto and fully incorporated by this reference (“Affordable Home” or “Property”).

L. Homebuyer requires financial assistance to purchase the Affordable Home and would not be able to complete their acquisition without such assistance from both the Authority and the lender issuing to Homebuyer a Purchase Money Loan.

M. Seller and Homebuyer have entered into an agreement in the form of Exhibit G hereto (“MECH Homebuyer Purchase and Sale Agreement”) under which Seller will sell the Property to the Homebuyer. Seller has delivered to the Authority prior to the Effective Date, the MECH Homebuyer Purchase and Sale Agreement, fully executed by both parties thereto.

N. Authority wishes to lend, and Homebuyer wishes to borrow, funds to assist Homebuyer to purchase the Property upon the terms and conditions set forth herein.

O. During the 45 -year Affordability Period, the Affordable Home shall only be transferred to a buyer that qualifies as Low Income Homebuyer and acquires the Affordable Home at an Affordable Housing Cost (“Eligible Persons and Families”), which transferee(s) shall assume in writing this Agreement and each and all of the instruments that evidence and secure the Homebuyer Loan and Homebuyer Covenants, substantially in the form of this Agreement inclusive of the attachments hereto, and for each resale and transfer during the Affordability Period as acceptable to and approved by the Authority.

Attachment No. 6
Homebuyer Loan Agreement

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NOW, THEREFORE, for good and valuable consideration the parties agree as follows:

Defined Terms. As used in this Homebuyer Loan Agreement and the Homebuyer Covenants the following capitalized terms shall have the following meanings ; if not otherwise defined herein, capitalized terms used in the AHA shall apply.
“Affordable Contract Price ” shall mean a contract purchase price an Affordable Home , which shall be an amount that, based on the financing used to purchase the Affordable Home , results in a Monthly Housing Cost that does not exceed Affordable Housing Cost for Low Income Households as defined in HSC §50052.5 and implementing Cal Code Regs Section 6910, et seq. in particular Sections 6920 and 6924. The Affordable Contract Price equates to the sum of:
(i) a reasonable down payment of not less than two percent (2%) and not more than twenty percent (20%) sourced from the Homebuyer’s own funds, plus (ii) the principal amount of any subordinate “soft” loans or grants obtained for the purchase of the Affordable Home that do not require periodic payments of principal or interest, including the Homebuyer Loan, plus (iii) the principal amount of the Purchase Money Loan with monthly payments, based on a 30-year amortized, level -payment, fixed-rate mortgage at a reasonable interest rate, that when combined with the other components of Monthly Housing Cost, do not exceed Affordable Housing Cost for Low Income Homebuyers.

The Affordable Contract Price shall not exceed the then applicable annual HUD 95% Median Sales Price Limit.
“Affordable Home ” means each of the seven (7) single -family detached, manufactured houses constructed by MECH upon the Site pursuant to the AHA. The Homebuyer hereunder is acquiring one of the seven Affordable Homes.
“Affordable Housing Cost” shall mean for the Affordable Homes a Housing Cost that is calculated and in conformance with HSC Section 50052.5, 25 Cal Code Regs § 6910, et seq ., including without limitation Sections 6914, 6920, 6924, 6926, and 6928 for Low Income Households, except that the maximum cost amount shall be thirty percent (30%) of the Low Income Household’s actual gross annual income that results in a Monthly Housing Cost for an applicable Affordable Unit. Affordable Housing Cost for a Low Income Homebuyer shall not exceed the product of thirty percent (30%) times seventy percent (70%) of Area Median Income adjusted for household size appropriate for the applicable Affordable Home . If the Low Income Household has an income greater than seventy percent (70%) of Area Median Income, “Affordable Housing Cost” means a Monthly Housing Cost that does not exceed the greater of (A) thirty percent (30%) times seventy percent (70%) of Area Median Income adjusted for family size appropriate to the applicable Affordable Home, or (B) thirty percent (30%) times the Homebuyer’s actual monthly gross income.

The phrase “adjusted for family size appropriate to the unit” is defined in HSC § 50052.5 and assumes a household size based on the number of bedrooms in the unit, which equal s the number of bedrooms plus one for each Affordable Home. Thus, for the three-bedroom Affordable Homes the assumed household size for purposes of an Affordable Housing Cost that number is four (4) persons, and for four-bedroom Affordable Homes that number is five (5) persons. “Affordable Price” shall mean as to each Affordable Home , an amount that, based on the financing used to purchase the Affordable Home , results in an annual Monthly Housing Cost that does not exceed Affordable Housing Cost; such Monthly Housing Cost also complies with HOME Regulations and HSC Section 50052.5 for a Low Income Homebuyer. The Affordable Price

Attachment No. 6
Homebuyer Loan Agreement

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equates to the sum of (i) plus (ii) plus (iii) as described above in the definition of Affordable Contract Price.
“Affordability Period” means a period of forty- five (45) years as more particularly set forth in the Homebuyer Loan Agreement and Homebuyer Covenants. The HOME Compliance Period shall run concurrent with the first fifteen (15) years of the 45-year period, which complies with the HOME Program requirements.
“Area Median Income” and “AMI” shall mean the area median household income set forth for each county in California (and for this Agreement for Riverside County), which are based on median income limits promulgated annually by State HCD pursuant to HSC Section 50052.5. “Authority” means the Moreno Valley Housing Authority, a public body, corporate and politic, as further described in the Recitals.
“Back End Ratio” means the ratio of (i) monthly payments as required on all obligations of a property owner or prospective property owner, including without limitation all housing debt, consumer debt, and any other debt, to (ii) the gross income of the property owner or prospective property owner. Where there is an obligation as to which monthly payments are not expressed as a liquidated amount (but excepting therefrom the Homebuyer Loan), payments are to be imputed based upon the full satisfaction of such obligations over five (5) years (assuming substantially level payments) or less or such other amortization period as may be approved on a case -by-case basis by the Authority.
“Cal Code” or “CCR” shall mean the California Code of Regulations, which is the official compilation and publication of the regulations adopted, amended or repealed by state agencies pursuant to the Administrative Procedure Act, and which properly adopted regulations that have been filed with the California Secretary of State have the force of law. (See: https://oal.ca.gov/publications/ccr/.)
“City” means the City of Moreno Valley, a California municipal corporation and general law city. The City is not a party to this Agreement and shall have no obligations hereunder; provided, however, City is an intended third party beneficiary of the covenants and restrictions, as well as the enforcement rights (without any obligation), set forth in this Agreement. “City Codes” means the Municipal Code and the Uniform Codes. “City Manager” means the city manager of City or his/her designee. The City Manager also serves as the Executive Director of the Authority.
“County” means the County of Riverside, California.
“Default” or “Event of Default” shall mean the failure of a party to perform any action or comply with any covenant required by this Agreement, including the attachments hereto, within the time periods provided herein following notice and opportunity to cure, as set forth herein or therein. “Developer” or “MECH” means Mary Erickson Community Housing, a California nonprofit corporation.

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007
“Down Payment” shall mean the cash payment of not less than two percent (2%) and not more than twenty percent (20%) sourced from either or both (i) the Homebuyer’s own funds or assets or (ii) a one -time gift or gifts that do not exceed cumulatively $19,000 [as of 2025], which funds shall be expended by each Homebuyer as the down payment towards the purchase price of an Affordable Home.
“Executive Director ” or “ Director” means the Executive Director of the Moreno Valley Housing Authority or his/her authorized designee. The Executive Director also serves as the City Manager of the City.
“HAL” shall mean the California Housing Authorities Law, HSC Section 34200, et seq. “Homebuyer” and “ Low Income Homebuyer ” means a household that has qualified as (i) a Low Income Household and acquires and owns an Affordable Home; (ii) has satisfactorily completed a Homebuyer Training Program and such completion is certified by each of Developer and by a HUD-certified homebuyer education counselor, which must be evidenced by the delivery of a Homebuyer Training Certificate; (iii) is acquiring an Affordable Home as their primary personal residence as an owner -occupant at a price that does not exceed Affordable Housing Cost and with a compliant Back End Ratio related to the household’s actual income; and (iv) has executed all those instruments to be executed by each original Homebuyer as required by this Agreement, including without limitation the Homebuyer Loan Agreement and the exhibits thereto. “Homebuyer Covenants” means the series of instruments set forth and described in, and/or attached to, the Homebuyer Loan Agreement that set forth the conditions, covenants and restrictions affecting ownership, use, occupancy, maintenance, and each and every resale of the Affordable Home substantially in the form thereof. The Homebuyer Covenants are and shall remain the senior, nonsubordinate encumbrances against each Affordable Home. “Homebuyer Deed of Trust” means a deed of trust substantially in the form of Exhibit C to the Homebuyer Loan Agreement to be executed by each Initial Homebuyer and recorded as a second monetary lien against the corresponding Affordable Home. The Homebuyer Deed of Trust is assignable and assumable by each successor, Qualified Homebuyer during the Affordability Period. “Homebuyer Escrow Holder” means [_____] Escrow or another escrow holder designated by the Authority.
“Homebuyer Loan” means a loan to each Initial Homebuyer as more fully described in the Homebuyer Loan Agreement. Each Homebuyer Loan is assignable and assumable upon resale to the next Qualified Homebuyer, subject to the Homebuyer Covenants. “Homebuyer Loan Agreement” means this Agreement, inclusive of attachments hereto. “Homebuyer Note” means a promissory note substantially in the form of Exhibit B to this Homebuyer Loan Agreement to be executed by the Initial Homebuyer and delivered to the Authority in connection with each sale of an Affordable Home. Homebuyer Note is assignable and assumable by each successor, Qualified Homebuyer during the Affordability Period.

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007
“Homebuyer Price” means that amount determined by Authority upon receipt of request therefor by Developer to represent the purchase price for an Affordable Home to be paid by the corresponding purchaser as Homebuyer. Upon conferring with Developer, the Homebuyer Price shall not, in any case, exceed Affordable Housing Cost for a Low Income Affordable Homebuyer as determined by Authority. During the HOME Compliance Period the Homebuyer Price shall not exceed the then applicable annual HUD 95% Median Sales Price Limit. “Homebuyer Training Certificate” means a certificate affirming the completion by the Homebuyer of a Homebuyer Training Program. The Homebuyer Training Certificate must be valid at the time the prospective purchaser is determined to an “Eligible” Homebuyer. “Homebuyer Training Program ” means classroom-based, homebuyer education program conducted by a HUD -certified homebuyer education counselor consisting of not less than eight (8) hours of classroom instruction.
“HOME Compliance Period ” for the Affordable Home means the period of time commencing upon the date of the initial sale of each Affordable Home and ending on the fifteenth (15
th) anniversary of the such applicable sale so that each home is subject to a 15-year period as required by the HOME Program requirements. While this period will expire upon each applicable 15th anniversary as to each Affordable Home, nonetheless the Affordability Period continues until the applicable 45th anniversary of the sale of each Affordable Home. “HOME Recapture” shall mean during the HOME Compliance Period an Event of Default by the Homebuyer of an Affordable Home, which is also a designated HOME Unit, and for which the Authority shall seek remedies to recapture and cause repayment of the Homebuyer Loan.

Pursuant to the HOME Regulations, in particular Section 92 CFR 254(a)(5)(ii), the recapture provisions hereunder ensure that the Authority (and thereby City as the participating jurisdiction) recoups all or a portion of the HOME assistance to the Homebuyer, if the Affordable Home does not continue to be the principal residence of the Homebuyer for the duration of the period of affordability. The Authority has structured its recapture provisions based on its program design and market conditions. Recapture provisions may permit the subsequent Homebuyer to assume the Homebuyer Loan (subject to the HOME requirements for the remainder of the period of affordability) if the subsequent Homebuyer qualifies as a Low Income Household and no additional HOME Program assistance is provided.
“HOME Resale” shall mean during the HOME Compliance Period the “resale” option defined and described in the HOME Regulations and applicable to the Low Income Homebuyers during the HOME Compliance Period. In this regard, the HOME Resale option ensures that the price of the Affordable Home at original sale and upon each resale remains affordable to Low Income Homebuyers for the duration of the HOME Compliance Period; and as and if additional HOME funds were to be invested in an Affordable Home at resale, the affordability period begins anew pursuant to the HOME Regulation. This Resale Option is a separate and distinct obligation relating to sale of an Affordable Home by a Low Income Homebuyer during the HOME Compliance Period and does not modify, amend or lessen the extended affordability covenants set forth in the Homebuyer Loan Agreement and the 45-year covenant period set forth therein.

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007
Pursuant to the HOME Regulations, in particular Section 92 CFR 254(a)(5)(i), the resale requirements hereunder ensure, if the Affordable Home does not continue to be the principal residence of the Homebuyer for the duration of the period of affordability that the Affordable Home is made available for subsequent purchase only to a Low Income Homebuyer and who shall own and occupy the Affordable Home as his/her/their principal residence. Further, the resale requirements hereunder ensure that the Affordable Price at resale provides the original HOME -assisted Homebuyer a fair return on investment (including the homeowner's investment and capital improvements, if any) and ensure that the Affordable Home shall remain affordable to Low Income buyers at resale. The City has defined “fair return on investment” and “affordability to a reasonable range of low -income homebuyers,” and specifically addresses how the housing will be made affordable to a Low Income Homebuyer in the event that the resale price necessary to provide fair return is not affordable to the subsequent Homebuyer.

The primary objective of the Homebuyer Covenants to implement and comply with the HOME Program is satisfaction of the HOME Resale requirements that will result in ongoing compliance from the initial sale, all resales during the HOME Compliance Period, and continuing through the 45-year Affordability Period.
“HOME Units ” shall mean each of the seven (7) Affordable Home s sold to Low I ncome Homebuyers, which shall be monitored for compliance both (i) during the 15-year HOME Compliance Period, and (ii) continuing for the 45-year Affordability Period, all subject to applicable HOME Regulations and Federal Program Limitations, the HAL, CRL, and Dissolution Law, whichever law or regulation is most restrictive. The HOME Units shall be restricted by income qualification of the Homebuyer at their initial purchase of the Affordable Home at an Affordable Housing Cost. Provided however, because the income and housing cost covenants required by the HAL, CRL, and Housing Successor Law are more restrictive than required by the HOME Program and thereby comply with the HOME Regulations. The HOME Units will be fixed HOME Units, such that all of the Affordable Home s are designated as HOME Units, which designation shall not change during the HOME Compliance Period. The designation of the HOME Units shall terminate at the end of the HOME Compliance Period. After the HOME Compliance Period and during each of the remaining years of the Affordability Period, the former HOME Units shall continue to be restricted as set forth herein.
“HOME Regulations” means the implementing regulations of the HOME Program set forth at 24 CFR §92.1, et seq . as such regulations now exist and as they may hereafter be amended, to the extent applicable to the Project. Developer covenants hereunder to comply with the HAL, Dissolution Law, and all applicable HOME Regulations in the performance of this Agreement, whichever are more restrictive. In implementation of these requirements, this Agreement, the Project, and all eligible contributions and expenditures hereunder shall conform to the following:
(i) the price of any Affordable Home shall not exceed the Maximum Allowable Price; and (ii) this Agreement, including without limitation the attachments hereto, serves as the written agreement that imposes and enumerates (by meeting or exceeding) all of the affordability requirements from 24 CFR §92.254; the property standards requirements of 24 CFR §92.251; and income determinations made in accordance with 24 CFR §92.203.
“HOME Rules ” means each of: (i) the HOME Regulations and t he implementing regulations of the HOME Program set forth at 24 CFR §92.1, et seq . as such regulations now exist (as amended by the 2013 HOME Final Rule) and as they may hereafter be amended, to the extent

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007
applicable to the Project ; (ii) the Davis-Bacon Act (40 U.S.C. 3141, et seq.) to the extent applicable as a matter of law; (iv ) the National Environmental Policy Act of 1969 (NEPA) and related federal environmental authorities and regulations at 24 C.F.R. Part 58; (v) the Flood Disaster Protection Act of 1973 (P.L. 93-2234) for compliance in regard to the sale, lease, or other transfer of land acquired, cleared or improved under the terms of this Agreement; (vi) the price of any Affordable Home shall not exceed the Maximum Allowable Price; (vii) the Clean Air Act, as amended (42 U.S.C. 1857, et seq.); (viii) the Water Pollution Control Act, as amended, 33 U.S.C. 1251, et. seq ., as amended 1318 relating to the inspection, monitoring, entry, reports, and information, as well as other requirements specified in said Section 114 and Section 308, and all regulations and guidelines issued thereunder; (ix) the Environmental Protection Agency Regulations pursuant to 40 C.F.R., Part 50, as amended; (x) Labor Standards (29 CFR Parts 3.5 and 5a) pertaining to contracts and applicable requirements of the regulations of the Division of Labor; (xi) the Drug Free Workplace Act of 1988; (xii) Public Law 101-144, Section 519 (the 1990 HUD Appropriation Act); (xii i) the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470); (xii ) federal regulations requiring that minority and women’s businesses be afforded opportunities to participate in the performance of this Agreement; (xiv) as to conflicts of interest: (a) Developer agrees to abide by the provisions of 24 CFR 84.42 and 570.611, which include (but are not limited to) the following: (1) Developer shall maintain a written code or standards of conduct that shall govern the performance of its officers, employees or agents engaged in the award and administration of contracts supported by Federal funds; (2) no employee, officer or agent of Developer shall participate in the selection, or in the award, or administration of, a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved; (3) no covered persons who exercise or have exercised any functions or responsibilities with respect to HOME-assisted activities, or who are in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a financial interest in any contract, or have a financial interest in any contract, subcontract, or agreement with respect to the HOME - assisted activity, or with respect to the proceeds from the HOME -assisted activity, either for themselves or those with whom they have business or immediate family ties, during their tenure or for a period of one (1) year thereafter. For purposes of this paragraph, a “covered person” includes any person who is an employee, agent, consultant, officer, or elected or appointed official of City, Authority, Developer, or any designated public agency; (xv) Developer shall comply with federal regulations concerning lobbying; (xvi) 42 U.S.C. Section 5309 (nondiscrimination); and (xvi i) to the extent applicable, including a Section 3 Clause in each construction contract. “Housing Trust Fund Contribution” means and applies in connection with the closing of each and all escrows in connection with each resale and subsequent resale of the Property by the existing and selling Homebuyer, which Homebuyer shall pay in an amount equal to three percent (3%) of AMI appropriate for the presumed family size as an administrative and monitoring contribution. The Housing Trust Fund Contribution shall be payment by Homebuyer to Authority for the ongoing administration of the Affordable Home during each selling Homebuyer’s term of ownership and shall be a part of the Note Amount under the Homebuyer Note and due and payable by selling Homebuyer at the time of each resale to a successor Homebuyer.

An example of calculation of a Housing Trust Fund Contribution is as follows and using 2025 AMI figures from the California Department of Housing and Community Development for a three - bedroom unit with presumed household size of four persons that is a Low Income Household, using 3% AMI, equals the following: 80% AMI ($89,500 for corresponding Low Income Household for Riverside County using 2025 AMI figures from the California Department of Housing and Community Development for a one bedroom household) x 3% = $2,685.

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007

“HUD” means the United States Department of Housing and Urban Development. “Initial Homebuyer” means the initial purchaser of each Affordable Home from Developer. “LMIHAF” shall mean that certain low and moderate income housing asset fund established and administered by the Authority, as housing successor, pursuant to HSC Sections 34176, 34176.1 and applicable provisions of HSC Section 33000, et seq. “Low Income ” or “Lower Income” means a household with annual gross income at or below eighty percent (80%) of the Area Median Income as designated by the Department of Housing and Community Development’s list of state low income limits adopted pursuant to Section 50093. A Low Income household’s income shall not exceed eighty percent ( 80%) of Area Median Income, adjusted for actual household size, as computed in accordance with HSC Section 50079 and the regulations promulgated in the Cal Code or incorporated therein, including, without limitation, all regulations promulgated pursuant to HSC Section 50093, or any successor statute. The upper income limit for Low Income households shall be the income limits for such households published annually for Riverside County by State HCD with adjustments for household size. “Low Income Homebuyer ” means a household earning not greater than eighty percent (80%) of AMI as set forth in Health and Safety Code Section 50079.5. “Maximum Allowable Price ” means the maximum amount allowed to be charged for a newly constructed house based upon ninety-five percent (95%) of the median price for the area based upon Federal Housing Administration (FHA) single -family mortgage program data for newly constructed housing as established by HUD from time to time. Developer acknowledges that it may not be feasible to realize the Maximum Allowable Price for one or more of the Affordable Homes.

As of May 31, 2025 the HUD HOME Program 95% Median Sales Price for Riverside County is $509,000.
“MECH Homebuyer Purchase and Sale Agreement” means an agreement between MECH as seller and Homebuyer as buyer, in a form approved by the Executive Director. “Municipal Code” means the municipal code of City as amended from time to time. “Official Records”, unless the context otherwise requires, means the official land records of the County Recorder of the County of Riverside, State of California. “Purchase Money Deed of Trust ” means a deed of trust securing repayment of a Purchase Money Loan; each Purchase Money Deed of Trust may be senior to the Homebuyer Deed of Trust recorded as to that property, but in all events the Purchase Money Deed of Trust shall be and remain junior and subordinate to the Homebuyer Covenants during the 45-year Affordability Period. “Purchase Money Loan ” means a loan by an institutional lender to each Homebuyer upon the Homebuyer’s original acquisition of an Affordable Home. Each Purchase Money Loan shall be a fully amortized loan, with a 30-year term, fixed interest rate, and monthly payments that comply with Affordable Housing Cost. The lender’s commitment to issue, the original principal amount of, and

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Homebuyer Loan Agreement

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terms and conditions of each Purchase Money Loan are subject to review and approval by the Executive Director. In all events the Purchase Money Loan and terms and conditions thereof shall be and remain junior and subordinate to the Homebuyer Covenants during each applicable Homebuyer’s ownership of the Affordable Home during the 45-year Affordability Period. “Purchase Money Note” means a promissory note to secure the Purchase Money Loan. “Qualified Homebuyer” means a household that is mutually reviewed and approved by each of Developer and Authority for purchase the Initial Homebuyer purchase of an Affordable Home and by Authority for each and all resales that occur during the Affordability Period, applying criteria including: (i) the household is a Low Income Affordable Homebuyer as confirmed by the Executive Director upon receipt of evidence from Developer and a prospective homebuyer; (ii) the household has executed and deposited into escrow for delivery to Authority upon closing of the Homebuyer Loan Agreement, Homebuyer Note, Homebuyer Deed of Trust (with that deed of trust to be recorded as provided in the Homebuyer Loan Agreement), the Purchase Money Deed of Trust, and the Purchase Money Note; (iii) the household has not held an ownership interest in a residence for at least three (3) years preceding the purchase of the corresponding Affordable Home; (iv) the purchase price to the homebuyer, as confirmed by City, does not exceed Affording Housing Cost; (v) Developer for the Initial Homebuyer purchase and Authority for each and all resales that occur during the Affordability Period has/have determined homebuyer income eligibility in accordance 24 CFR Part 5 and has documented to the Authority (and upon request therefor, HUD) the income of all persons acquiring an Affordable Home from Developer under this Agreement. Source documentation evidencing annual income shall include, but is not limited to verification of employment, wage statements, bank statements, unemployment compensation and other documents to confirm annual household income in accordance with the income guidelines established by HUD for the qualifying year. At the time of initial purchase and occupancy of the Affordable Home the size of the buyer’s household shall meet the following: (i) for the 3-bedroom homes, three persons, and (iii) for the 4 -bedroom homes, four persons, and the maximum occupancy during ownership shall not exceed two persons per bedroom plus one, i.e., seven (7) persons for a three bedroom home, and nine (9) persons for a four-bedroom home.
“Qualified Homebuyer Documents ” means, the Homebuyer Loan Agreement, Homebuyer Covenants, Homebuyer Note, Homebuyer Deed of Trust, Purchase Money Deed of Trust, Purchase Money Note, .
“Rules and Regulations ” means each of: (i) Health and Safety Code Sections 50052.5; (ii) all applicable California statutes and the Municipal Code, and (iii) during the HOME Compliance Period,
“Uniform Codes” means each of the following as in effect from time to time as approved by City: the Uniform Building Code, the Uniform Housing Code, the National Electrical Code, the Uniform Plumbing Code, the Uniform Mechanical Code, and the Uniform Code for the Abatement of Dangerous Buildings.

Section 1. Authority Homebuyer Loan. In connection with Homebuyer’s purchase of the Affordable Home from Seller in conformity with the AHA, Authority shall be deemed to have loaned to Homebuyer the amount of [_____________ ] Dollars as the original principal amount of the Homebuyer Note, which loan is referred to herein as the “Homebuyer Loan” and hereby issued by

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the Authority to Homebuyer. The Homebuyer Note amount has been established pursuant to the requirements of the AHA and is certain amount of the full Authority Loan issued by Authority to Seller under the AHA. Thereby, no money will be disbursed by Authority to Homebuyer at Closing in connection with the Authority Homebuyer Loan. The closing of the Authority Homebuyer Loan shall be concurrent with the conveyance of the Affordable Home to the Homebuyer by Developer under the MECH Homebuyer Purchase and Sale Agreement. After the recording of the grant deed from Seller conveying title to the Property to the Homebuyer (“Seller Deed”, which shall be substantially in the form of Exhibit K hereto), the Homebuyer shall make payments to Developer as required under the Authority Homebuyer Loan.

Prior to the conveyance of the Property to Homebuyer by Seller, Homebuyer shall execute and deliver to the Authority a promissory note in favor of the Authority, as holder, in the form of the “Homebuyer Note” attached hereto as Exhibit B and incorporated herein. Homebuyer shall also execute and deliver to the Authority a deed of trust, duly recorded, encumbering the Property which shall secure the Homebuyer Note (“Homebuyer Deed of Trust”), in the form of Exhibit C attached hereto and incorporated herein. The terms and conditions of the Authority Homebuyer Note are set forth in subsections (a), (b) and (c) of this Section 1.

1.1 Purchase Money Loan . Concurrently with the execution and delivery of the Authority Homebuyer Note, Homebuyer shall obtain a Purchase Money Loan that shall be a fully amortized, fixed rate, 30- year loan with monthly payments that do not exceed Affordable Housing Cost under HSC 50052.5.

1.2 Homebuyer Covenants . In addition, Homebuyer shall execute and deliver to the Authority, duly recorded, the “Homebuyer Covenants” in favor of the Authority (and City as an intended third party beneficiary) in the form of Exhibit D to this Agreement), duly recorded as, and shall remain, the senior, nonsubordinate encumbrance against the Affordable Home for the Affordability Period. By this Agreement and under the Homebuyer Covenants, Homebuyer agrees that the Affordable Home is subject to and Homebuyer agrees to comply with the provisions of each of (i) the Authority Grant Deed (as recorded as Instrument No. [202_-_____________] among the Official Records), and (ii) Homebuyer Covenants among the Official R ecords of the County Recorder of the County of Riverside , which Homebuyer Covenants are and shall remain senor and nonsubordinate for the Affordability Period. Homebuyer agrees and acknowledges that Homebuyer has been provided with and has reviewed a copy of each of the Seller Grant Deed, Homebuyer Covenants, Authority Documents, and each and every document referenced therein.

1.3 Authority Homebuyer Note . As more particularly provided in the Authority Homebuyer Note, the essential terms and conditions of the Authority Homebuyer Note are as follows:
(a) Authority Homebuyer Note Provisions. The Authority Homebuyer Note shall be for the original principal amount of [$ ] Dollars , which is a part of the original Authority Loan Note issued by the Authority to Developer (Seller) (“Homebuyer Note Amount”).

Payment and performance thereof shall be secured by the Authority Homebuyer Deed of Trust. The Authority Homebuyer Note shall contain the following provisions:
(i) Interest Rate. The Authority Homebuyer Note Amount shall accrue no (0%) interest unless and until, if at all, an Event of Default and acceleration occurs as described in

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the Authority Homebuyer Note, at which time the Default Interest Rate shall be applied to the full Authority Homebuyer Note Amount.
(A) Default Interest Rate; Alternate Rate. In the Event of Default and acceleration of the Authority Homebuyer Note all outstanding amounts shall accrue interest at a default interest rate of ten percent (10%) per annum (based on a 360-day calendar Year and charged on the basis of the actual number of days elapsed) payable in lawful money of the United States of America. In this regard and upon the occurrence of an Event of Default and by acceleration or otherwise, the entire unpaid principal sum, at the option of Authority, shall bear interest, from the date of occurrence of such Event of Default or maturity and after judgment and until collection, at the “Alternate Rate” (or “Default Interest Rate”), such rate being the highest interest rate then permitted by California law. Interest calculated at the Alternate Rate, when and if applicable, shall be due and payable immediately without notice or demand. Homebuyer agrees that in the event of any Event of Default, the Authority will incur additional expense in servicing the loan evidenced by the Authority Homebuyer Note and will suffer damage and loss resulting from such Event of Default. Developer agrees that in such event Authority shall be entitled to damages for the detriment caused thereby, which damages are extremely difficult and impractical to ascertain. Therefore, Homebuyer agrees that the Alternate Rate (as applied to the unpaid principal balance, accrued interest, fees, costs and expenses incurred) is a reasonable estimate of such damages to the Authority and agrees such sum is due in the Event of Default and on demand.
(ii) Time of Payment . There are no regular, scheduled payments required; provided however, full payment and accrued interest at the Default Interest Rate shall be due upon occurrence of an Event of Default as more particularly set forth in the Authority Homebuyer Note.
(iii) Housing Trust Fund Contribution. Upon the closing of each resale escrow and in connection with each subsequent resale of the Affordable Home the existing Homebuyer shall pay the Housing Trust Fund Contribution, which is due and payable by selling Homebuyer at the time of each resale to a successor Homebuyer. (iv) Acceleration. The whole of the Authority Homebuyer Note Amount and all other payments due hereunder shall become due and immediately payable to Authority by Homebuyer upon the occurrence of any one of the following events of acceleration:
(A) Homebuyer sells or transfers the Affordable Home (or any part thereof or interest therein) by any means, including, without limitation, the lease, exchange or other disposition thereof or any interest therein, whether voluntary or involuntary, excepting the following transfers described in (1) to (3) as follows:
(1) a sale of the Property to a qualified Low Income
Household at an Affordable Housing Cost with Authority’s prior written approval accomplished in strict conformity with this Agreement and Authority (acting in its sole discretion) expressly consents to the assumption of the Authority Homebuyer Loan, or
(2) the transfer of the Property solely as a result of the marriage, divorce, incompetency or death of one or more individuals constituting vested Homebuyer, so long as the transferee(s) give written notice supported by reasonable, verifiable evidence of such

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event to Authority within thirty (30) days of its occurrence and the transferee(s) assume Homebuyer’s obligations under this Agreement, by execution of an assignment and assumption agreement to be provided by Authority, or
(3) a sale or transfer which under federal law would not, by itself, permit Authority to exercise a due on sale or due on encumbrance clause; (B) Homebuyer is in violation of this Agreement , Homebuyer Covenants, or the Authority Homebuyer Note; or
(C) Homebuyer fails to occupy the Affordable Home as
Homebuyer’s principal residence or is in default of any other obligation under this Agreement or the Homebuyer Covenants.

At the request of Homebuyer, and for a specific occasion and based on extreme hardship, Authority may, in its sole and absolute discretion, in writing waive the requirements of this subsection and defer repayment and/or extend the term of the Homebuyer Note Amount. Any waiver or deferment shall be on a case -by-case basis, based on verifiable facts of hardship, and no future rights for waiver or deferment shall arise or be implied (the terms “hardship” and “extreme hardship” are further described in the Homebuyer Covenants.)
(v) Equity Sharing. In the event that the Authority Homebuyer Loan becomes due and payable prior to the forty-fifth (45th) anniversary of the date of this Agreement, in addition to that Homebuyer Loan Note original principal amount, accrued interest, if any, Homebuyer shall be obligated to pay to Authority concurrently with such sale, transfer or refinancing, an amount equal to the “Equity Share Amount”, if any based on the priority of payment and formula described below. The Equity Share Amount shall be determined and paid in the following order of priority of payment:

First, the balance of the Authority Homebuyer Note Amount shall be paid to the Authority.

Second, the amount necessary to pay the Purchase Money Loan and Purchase Money Note balance.

Third, all normal and reasonable closing costs and prorations typical in Riverside County shall be paid to the parties entitled thereto.

Fourth, either the cost of the qualified capital improvements made to the Affordable Home by Homebuyer or the fair market value of such improvements (as determined at the time of such sale to a third party and considering depreciation), whichever is less, shall be paid to Homebuyer.

Fifth, the balance of the sales proceeds shall be multiplied by a fraction, the numerator of which is three hundred sixty (360) minus the number of full months between the date of this Agreement and the date the Property is sold or otherwise conveyed, and the denominator of which is three hundred sixty (360). The resulting amount shall be paid to Authority. If cash sale proceeds are insufficient to pay all such sums, Homebuyer shall nevertheless pay all such sums in

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cash from other funds obtained by Homebuyer, unless other arrangements for payment are made with the written consent of Authority.

Sixth, the balance of sales proceeds after the payment required above shall be paid to Homebuyer.
(A) Equity Share upon Sale or Transfer. While the Homebuyer Covenants prohibit resale(s) to person(s) who do not meet the definition of Qualified Homebuyer, nonetheless if any such non-authorized transfer were to occur, Homebuyer, as seller, shall be obligated to pay the Homebuyer Note Amount plus the Equity Share Amount to Authority upon sale or transfer of the Affordable Home to a person or persons (“Buyer”) whose income exceeds qualification as a Low Income Household for Riverside County. If the Buyer does not submit an income verification statement to Authority, the Buyer shall be deemed to exceed such median income limit.
(B) Equity Share upon Refinancing or Failure to Occupy. The Equity Share Amount shall be payable to Authority upon a refinancing, failure to occupy the Property or material breach of any other provision of this Agreement which causes the Authority Homebuyer Loan to become due and payable. The Sales Price for purposes of determining the Equity Share Amount shall be determined by an appraisal of the Property. Authority shall appoint a certified, independent appraiser to conduct an appraisal of the Property, at Authority’s expense, and shall promptly deliver a copy of such appraisal to Homebuyer. If Homebuyer fails to object to such appraisal in a written notice to Authority within fifteen (15) days of the delivery of the appraisal, such appraised value shall be deemed the sales price of the Property. If Homebuyer objects to such appraisal, Homebuyer shall within fifteen (15) days of sending its written notice of objection appoint a certified, independent appraiser to conduct an independent appraisal of the Property, at Homebuyer’s expense, and shall promptly deliver a copy of such appraisal to Authority. If the Homebuyer fails to appoint such appraiser within the required time period, the Authority’s appraisal shall be deemed the sales price of the Property. If the higher of the two appraisals is not greater than ten percent (10%) higher than the lower appraisal, the average of the two appraisals shall be deemed the sales price of the Property. If the higher of the two appraisals is greater than ten percent (10%) higher than the lower appraisal, the two appraisers shall jointly select a third appraiser who shall conduct an independent appraisal of the Property, with the expense of such appraisal borne equally by Authority and Homebuyer, and such third appraiser’s appraisal shall be deemed the sales price of the Property.
(C) Expiration of Equity Share Obligation; Maturity Date of Homebuyer Note. In the event the Homebuyer does not sell or transfer the Property, remains the owner-occupant of the Property, and/or is not in material breach of any other provision of this Agreement before the forty-fifth (45
th) anniversary of the date of recording the Homebuyer
Covenants, the Homebuyer shall have no obligation to pay the Equity Share Amount to Authority upon any later sale, transfer or refinancing. Further, upon the 45 th anniversary of the date of the
Homebuyer Note, the Homebuyer Note shall be deemed forgiven and marked cancelled. (vi) Security. Payment under the Homebuyer Note, shall be secured by the Homebuyer Deed of Trust including the Rider thereto encumbering the Affordable Home as the second monetary lien, junior only to the Purchase Money Deed of Trust, but in all events the Homebuyer Covenants shall be and remain the senior, nonsubordinate encumbrance against the

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Property. The Authority Homebuyer Deed of Trust shall be executed by Homebuyer, as trustor, in favor of Authority, as beneficiary.
(vii) Monetary Lien Priority. Subject to and in all events the Homebuyer Covenants shall be and remain the senior, nonsubordinate encumbrance against the Property, however the monetary lien priority shall be as follows: (A) first monetary lien is the Purchase Money Deed of Trust, (B) second monetary lien is the Homebuyer Note, and (C) third and following shall be other deed(s) of trust for subordinate loan(s) authorized by Authority, such as downpayment assistance loan(s).
(viii) Prepayment. Homebuyer may prepay amounts under the Authority Homebuyer Note; provided however, the restrictions of the Homebuyer Covenants, Authority Homebuyer Deed of Trust, shall continue in full force and effect, notwithstanding any such prepayment or other payments without regard to amount.
(ix) Assumption under Authority Homebuyer Note . The Authority Homebuyer Note may be assumed only by a Low Income Q ualified Homebuyer as purchaser of the Affordable Home who has obtained the prior written approval of the Authority. (x) Homebuyer Waivers . As to the Authority Homebuyer Note, Homebuyer waives any rights to require Authority to: (A ) demand payment of amounts due (known as “presentment”), (B) give notice that amounts due have not been paid (known as “notice of dishonor”) and (C) obtain an official certification of nonpayment (known as “protest”).

1.4 Repayment under the Authority Homebuyer Note. If there is an Event of Default and acceleration pursuant to Section 1. above, all amounts payable under the Authority Homebuyer Note shall, without regard to the schedule for payments, be calculated and Homebuyer shall pay all amounts due under the Authority Homebuyer Note.
(a) Authority Homebuyer Note Amount Due In Full. The whole of the Authority Homebuyer Note Amount , plus the Equity Sharing amount, shall be due in full when an event of acceleration occurs. After paying all costs and fees relating to the transaction, if any (such as escrow fees, transfer taxes, recording fees, brokerage commissions and similar costs), the proceeds of any such transaction (or, in the case of any event of acceleration other than a sale, an amount representing the appraised value of the Property as determined by an appraiser retained for such purpose by the Authority) shall be distributed or applied in the following order of priority:
(i) Payment of the Purchase Money Note evidencing the Purchase Money Loan;
(ii) Repayment to Authority of the principal amount due under the Authority Homebuyer Note;
(iii) Payment to Authority of any other amounts due under the Authority Homebuyer Note; and
(iv) Payment to Authority of any other amounts due under the Homebuyer Loan Agreement.

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1.5 Right of First Refusal . The Affordable Home shall be held subject to a right of first refusal in favor of the Authority as set forth with more particularity in the AHA at Section 6.1.6.1 thereof (“Right of First Refusal”); the Affordable Home may not be sold without first complying with the Right of First Refusal. The provisions of Section 6.8.1 and its subparts are as follows:
“6.8.1 Right of First Refusal . Prior to any sale or resale of an Affordable Home, whether by Developer or a subsequent owner, such owner (whether Developer or subsequent owner) shall first offer the Affordable Home for sale to the Authority under the following protocol. Developer and subsequent owners shall not have authority to convey title without first complying with this Section 6.8.1, including all subparts hereof, as well as the Homebuyer Covenants. This Section 6.8.1 shall remain in effect from the period commencing as of the date of sale of each Affordable Home to each Initial Homebuyer and continuing until the last day of the 45-year Affordability Period for each Affordable Home. (a) Notification as to Initial Offer. In the event the Homebuyer, as current owner and potential seller of an Affordable Home, receives an offer for the purchase of their Affordable Home on the terms as proposed (together, the “Designated Price and Terms”) by the offeror (“Offeror”), before conveying the corresponding Affordable Home to the Offeror, the current Homebuyer, as owner and seller of the Affordable Home, shall provide written notice to Authority thereof (“Initial Notice”) that an offer has been received, including the Designated Price and Terms.
(b) Response to Notification as to Initial Offer . Authority shall have forty-five (45) days from the receipt of the Initial Notice to indicate to the selling Homebuyer that: (i) Authority is prepared to purchase the Affordable Home under the Designated Price and Terms (“Election Notice”), or (ii) Authority does not desire to purchase the Affordable Home (“Decline Notice”). If Authority delivers an Election Notice, it shall cause the Designated Price and Terms to be complied with by the later to occur of sixty (60) days from the date of the Election Notice or the date for performance by buyer under the Designated Price and Terms. In addition, if Authority informs the Homebuyer, as owner of the Affordable Home, that the proposed sale does not conform to the requirements of this Agreement, including without limitation the Homebuyer Covenants the Affordable Home may not be sold by the Homebuyer, as seller, under the Designated Price and Terms or otherwise to any third party or other private person or entity.
(c) Closing Protocol . The closing shall be accomplished substantially in the manner described in the Designated Price and Terms or as otherwise determined by the Executive Director; provided that it is contemplated that the allocation of closing costs would be accomplished substantially in the manner described in this Agreement with respect to the original sale (as between buyer and seller).

Section 2. Maintenance of Property; Insurance . Homebuyer shall maintain the improvements and landscaping on the Property in the manner prescribed by the Homebuyer Covenants. Homebuyer shall maintain, during the term of the Authority Homebuyer Loan, an all -risk property insurance policy insuring the Property in an amount equal to the full replacement value of the structures on the Property. The policy shall name Authority and City as loss payees and shall contain a statement of obligation on behalf of the carrier to notify Authority (and City) of any material change, cancellation or termination of coverage at least thirty (30) days in advance of the effective date of such material

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change, cancellation or termination. Homebuyer shall transmit a copy of the certificate of insurance and loss payee endorsement to Authority within thirty (30) days of the effective date of this Agreement, and upon request by Authority, Homebuyer shall transmit to Authority (and City) further copies of the certificate of insurance and a loss payee endorsement. The copy of the certificate of insurance and loss payee endorsement shall be transmitted to Authority (and City) at the address set forth in Section 24 hereof. Any certificate of insurance must be in a form, content, and with companies reasonably acceptable to Authority.

Section 3. Authorized Resale to Qualified Homebuyer; Authority Homebuyer Loan Assumed by Approved Successor Qualified Homebuyer; Acceleration and Note Due on Event of Default .

Homebuyer agrees to notify Authority not less than forty-five (45) days prior to (a) the proposed sale or transfer of any interest the Affordable Home, or (b) any attempt to refinance, or refinancing of, the lien of the Purchase Money Deed of Trust, or any other authorized subordinate lien thereon.

The Homebuyer Loan and interest accruing at the Alternate Rate shall be due and payable upon (i) unauthorized sale or transfer, (ii) unauthorized refinancing of Purchase Money Loan or other approved lien against the Property, (iii) Homebuyer is no longer an occupant of the Affordable Home pursuant to Section 5. of this Agreement or (iv) material default of any other obligation pursuant to this Agreement. If Authority is asked to forbear from enforcing the due -on-sale clause or to allow the assumption of the Homebuyer L oan evidenced by the Authority Homebuyer Note, the party or parties so requesting shall prepare and submit to the Authority a complete package containing all information necessary to demonstrate and verify the income of the proposed transferee, the proposed Affordable Housing Cost (including the Homebuyer Price and monthly payments on the Purchase Money Loan), and all other information reasonably requested by the Executive Director or which would have been required had such proposed transferee attempted to qualify as an Initial Homebuyer under the terms of the Agreement.

Section 4. Permitted Resale(s) Only to Low Income Household that is a Qualified Homebuyer.

During the 45- year Affordability Period, commencing upon the date of the sale of the Affordable Home to an Initial Homebuyer and terminating on the forty-fifth (45 th) anniversary thereof (“Affordability Period Termination Date”), the Authority Homebuyer Note Amount will not become due and payable if, in strict conformity with all requirements of this Agreement, Homebuyer sells or otherwise conveys the Property to a Low Income Qualified Homebuyer at an Affordable Housing Cost with the prior written approval of Authority, the purchaser is a Qualified Homebuyer and assumes the Authority Homebuyer Note, Authority Homebuyer Deed of Trust, this Agreement, and Homebuyer Covenants, by an assignment and assumption agreement that is acceptable to the Authority, as Beneficiary. In connection with each resale of an Affordable Home during the Affordability Period, the purchaser shall be a Low Income Household, purchasing at an Affordable Housing Cost and with a “Back End Ratio” (as defined below) that does not exceed forty three percent (43%) of household income, and which assumes, executes and delivers to Authority the required assignment and assumption agreements and instruments in conformity with this Agreement. “Low Income,” “Lower Income,” “Low Income Homebuyers” means a household with annual gross income at or below 80 percent of the Area Median Income as designated by the Department of Housing and Community Development’s list of state low income limits adopted pursuant to Section 50093, in particular subsection (b)(3). A Low Income household’s income shall not exceed eighty percent (80%) of Area Median Income, adjusted for actual household size, as computed in accordance with HSC Section 50079 and the regulations promulgated in the Cal Code or incorporated therein, including, without limitation, all regulations promulgated pursuant to HSC

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Section 50093, or any successor statute. The upper income limit for Low Income households shall be the income limits for such households published annually for Riverside County by State HCD with adjustments for household size.

The Initial Homebuyer has, and each successor Homebuyer shall (i) qualify as a Low Income Household; (ii) satisfactorily complete a Homebuyer Training Program and such completion is certified by each of Developer and by a HUD -certified homebuyer education counselor, which must be evidenced by the delivery of a Homebuyer Training Certificate; (iii) acquire the Affordable Home as their primary personal residence as an owner-occupant at a price that does not exceed Affordable Housing Cost and with a compliant Back End Ratio based on the household’s actual income; and (iv) execute all instruments to be executed as required by this Homebuyer Loan Agreement and the exhibits thereto
“Affordable Housing Cost” means a Housing Cost that is calculated and in conformance with HSC Section 50052.5, 25 Cal Code Regs § 6910, et seq ., including without limitation Sections 6914, 6920, 6924, 6926, and 6928 for Low Income Households, except that the maximum cost amount shall be thirty percent (30%) of the Low Income Household’s actual gross annual income that results in a Monthly Housing Cost for an applicable Affordable Unit. Affordable Housing Cost for a Low Income Homebuyer shall not exceed the product of thirty percent (30%) times seventy percent (70%) of Area Median Income adjusted for household size appropriate for the applicable Affordable Home . If the Low Income Household has an income greater than seventy percent (70%) of Area Median Income, “Affordable Housing Cost” means a Monthly Housing Cost which does not exceed the greater of (A) thirty percent (30%) times seventy percent (70%) of Area Median Income adjusted for family size appropriate to the applicable Affordable Home , or (B) thirty percent (30%) times the Homebuyer’s actual monthly gross income. The phrase “adjusted for family size appropriate to the unit” is defined in HSC § 50052.5 and assumes a household size based on the number of bedrooms in the unit, which equals the number of bedrooms plus one for each Affordable Home. Thus, for the three-bedroom Affordable Homes the assumed household size for purposes of an Affordable Housing Cost that number is four (4) persons, and for four-bedroom Affordable Homes that number is five (5) persons.
“Qualified Homebuyer”, for purposes of each and all resales of the Property during the Affordability Period, means a household that (i) is a Low Income Household, (ii ) has satisfactorily completed a Homebuyer Training Program and such completion is certified by each of Developer and by a HUD-certified homebuyer education counselor, which must be evidenced by the delivery of a Homebuyer Training Certificate; (i ii) is acquiring an Affordable Home as his/her/their owner-occupied personal residence of such household at a price which does not exceed Affordable Housing Cost and with a compliant Back End Ratio based on the household’s income ; and (iv) has executed such assignment and assumption and related instruments as are approved by Authority, and (v) acknowledgment that the Property is subject to the “Homebuyer Covenants” (as defined below). For purposes of this paragraph, “Back End Ratio” means the ratio of (A) monthly payments as required on all obligations of a property owner or prospective property owner, including without limitation all housing debt, consumer debt, and any other debt, to (B) the gross income of the property owner or prospective property owner; for this purpose, gross income of a household shall be determined in accordance the most restrictive of 25 Cal Code § 6000, et seq., or 24 CFR Part 5. Where there is an obligation as to which monthly payments are not expressed as a liquidated amount (but excepting therefrom the “ Homebuyer Loan”, as defined in the Homebuyer Loan Agreement , should such loan remain outstanding), payments are to be imputed

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based upon the full satisfaction of such obligations over five (5 ) years (assuming substantially level payments) or less or such other amortization period as may be approved on a case -by-case basis by Authority.

4.1 Assignment and Assumption Agreement upon Authorized Resale . Subject to the prior written approval of the Authority having first been obtained, if the Property is sold during the Affordability Period by Homebuyer to a Qualified Homebuyer and Low Income Household, and the Sales Price does not exceed an “Affordable Housing Cost” to such successor Homebuyer, then so long as the Homebuyer, as Trustor, is not in default then this Agreement , Homebuyer Covenants, Homebuyer Note and Homebuyer Deed of Trust may be assumed by the Qualified Homebuyer by an assignment and assumption agreement that is acceptable to Authority as Beneficiary and Authority legal counsel . Upon the effective date of such assignment and assumption with the prior written approval of the Authority, the assigning Trustor shall no longer be liable for any further obligations under the Agreement or the Authority Homebuyer Note that may accrue after the date of such assignment and assumption, unless the facts and circumstances require the selling Homebuyer and acquiring successor Homebuyer to allocate liability or issues flagged in connection with such sale and assignment . In order to verify the prospective new homebuyer’s status as a Low Income Household, Trustor shall submit to the Authority the identity of the proposed buyer and adequate information evidencing the income and household size of the proposed buyer. Said income information shall be submitted together with the notice of proposed sale pursuant to Section 2 of the Agreement not less than forty-five (45) days prior to opening of escrow for the proposed sale and shall include original or true copies of pay stubs, income tax records or other financial documents in order that the Authority may determine and verify the household income of the proposed buyer to determine whether the buyer is a Low Income Household and whether the Property is being transferred to such buyer at Affordable Housing Cost. If the Authority is unable to verify the prospective buyer’s income as provided herein prior to the proposed sale, then the buyer’s income shall be deemed to exceed the maximum allowable income limit for Eligible Persons and Families. (a) The income of co -signers (individuals who sign only the Authority Homebuyer Note) and co-mortgagors (individuals who sign both the Authority Homebuyer Note and the grant deed) will be included for determining whether Homebuyer is a Low Income Household, if such co-signers and co-mortgagors are part of Homebuyer’s household and are residing and shall reside in the Affordable Home.
(b) Homebuyer expressly acknowledges that any sale can only be made to an income-eligible buyer and at a price which does not exceed 95% of the median price of houses within the area, as determined by HUD and implemented by the Authority.

Section 5. Minimum and Maximum Occupancy Standards. The Affordable Home shall be used as the primary personal residence of Homebuyer and Homebuyer’s immediate family and for no other purpose. Homebuyer shall not enter into an agreement for the rental or lease of all or any part of the Property. T he maximum number of occupants who may reside at the Property at any time during the Affordability Period, which in no event shall exceed two (2) persons plus one per bedroom. For example, a house with t hree bedrooms would be limited to occupancy by seven (7) persons; a house with four bedrooms would be limited to occupancy by nine (9) persons, etc. At the time of the initial purchase by each Homebuyer, the minimum number or occupants who reside at the Property upon the household’s initial occupancy shall be not less than three persons for a three - bedroom house and not less than four persons for a four-bedroom house. The HQS occupancy

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standard is set forth in and established by HUD and as of the date of the original sale to the Initial Homebuyers, the HQS occupancy standard is two (2) persons per bedroom plus one (i.e., the maximum occupancy described above .) Homebuyer shall, upon demand by Authority, submit to Authority an affidavit of continuous ownership, owner-occupancy, and compliance with the Homebuyer Covenants. Authority (or City) may request that Homebuyer execute such an affidavit not less than annually during the period of their ownership.

Section 6. Income Information. Homebuyer has submitted an eligibility verification form to the Authority prior to execution of this Agreement. Homebuyer represents and warrants to the Authority that all information Homebuyer has provided and will provide in the future is and will be true, correct and complete. Homebuyer acknowledges that the Authority is relying upon Homebuyer’s representations that Homebuyer’s income does not exceed eighty percent (80%) of the Area Median Income and would not have entered into this Agreement if Homebuyer’s income exceeded eighty percent (80%) of the area median income.

Section 7. Loan Servicing. The Authority may, but is not required to, contract with a private lender to originate and service the Authority Homebuyer Loan; further, the lender for the Purchase Money Loan may contract to service the Purchase Money Loan.

Section 8. Married Sole and Separate Property. An individual taking title in this manner is subject to special requirements because of California Community Property Laws and the Internal Revenue Code. If Homebuyer is legally separated, or has filed for divorce and a legal property disposition agreement exists between Homebuyer and Homebuyer’s spouse, a quitclaim deed from Homebuyer’s spouse and a copy of the property disposition agreement may be required by Authority.

In the absence of an existing legal property disposition agreement between Homebuyer and Homebuyer’s spouse, as a condition of approval of Authority Homebuyer Loan, a quitclaim deed, a special agreement and a release of interest signed by both Homebuyer and Homebuyer’s spouse, after consultation with an attorney, may be required by Authority. Additionally, if Homebuyer’s spouse is to reside in the household (and all/any other adult members of the household), their combined income must be included in the income test for eligibility to acquire the Affordable Home pursuant to this Agreement.

Section 9. Homebuyer Covenants. Homebuyer acknowledges that the Property is subject to recorded Homebuyer Covenants -- Authority Declaration of Conditions, Covenants and Restrictions with Affordable Housing Resale Restrictions (“Homebuyer Covenants”) in the form of Exhibit D hereto, which shall be or have been recorded among the official land records of the County Recorder of Riverside County (“Official Records”) on ___________ 202_ as Document No. [recording information re Homebuyer Covenants]. The Homebuyer Covenants restrict use of the Property to owner-occupancy by households of Low Income, and restrict the price , and other terms, and conditions at which the Property may be sold or resold, during the 45 -year Affordability Period.

Each Affordable Home at the date of acquisition by the Initial Homebuyer and thereafter by each successor Qualified Homebuyer shall be an eligible Low Income Household and pay an Affordable Housing Cost, as those terms are defined in California Health & Safety Code Sections 50052.5 in particular Section 50052.5(b)(3). Homebuyer shall not discriminate against any person or group of persons on the basis of race, color, religion, sex, marital status, national origin or ancestry; additional provisions are contained in the Homebuyer Covenants, a copy of which has been provided to and has been reviewed by Homebuyer.

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007
Section 10. Indemnification. Homebuyer shall defend, indemnify and hold harmless the Authority and the City and their respective officers, agents, employees, representatives and volunteers from and against any loss, liability, claim or judgment relating in any manner to the Affordable Home or this Agreement. The Homebuyer shall remain fully obligated for the payment of property taxes and assessments related to the Affordable Home. There shall be neither reduction in taxes for Homebuyer, nor any transfer of responsibility to the Authority (or City) to make such payments, by virtue of the moneys loaned as evidenced by the Authority Homebuyer Note.

Section 11. No Third Party Beneficiaries of this Agreement Except for City. The City of Moreno Valley shall be deemed to be a third party beneficiary of this Agreement. Except for the City, there shall be no third party beneficiaries as to this Agreement.

Section 12. Defaults. Failure or delay by either party to perform any term or provision of this Agreement which is not cured within thirty (30) days after receipt of notice from the other party constitutes a default under this Agreement; provided, however, if such default is of the nature requiring more than thirty (30) days to cure, the defaulting party shall avoid default hereunder by commencing to cure within such thirty (30) day period and thereafter diligently and continuously pursuing such cure to completion. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence.
(a) The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice, and after the expiration of such period the default shall be deemed and Event of Default. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default.

Section 13. Remedies. Authority shall be entitled to all legal and equitable remedies available under the law upon the default of the terms of this Agreement by Homebuyer. Such remedies may include, without limitation, (a) specific performance of the terms of the Agreement, (b) disgorgement of any amount of consideration received for the Affordable Home that exceeds an Affordable Housing Cost, (c) an order to pay attorneys’ fees, as set forth herein, (d) foreclosure of the Homebuyer Deed of Trust.

13.1 No Abrogation of Authority and City of Moreno Valley’s Governmental Powers .

While the Purchase Money Deed of Trust may be the senior monetary lien against the Affordable Home, for each Purchase Money Loan the loan documents shall expressly acknowledge and affirmatively state that nothing in such Purchase Money Loan documents are intended, nor will it be construed, to in any way limit the exercise by Authority and the City of Moreno Valley of their governmental powers (including police, regulatory and taxing powers and the power granted to governmental agencies under California Health and Safety Code Section 17980, et seq .) with respect to Homebuyer, as owner of the subject Affordable Home.

Section 14. Non-Waiver. Failure to exercise any right Authority (and City) may have or be entitled to, in the event of default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default.

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007
Section 15. Documents. Homebuyer is aware that the Authority has prepared certain documents to implement the AHA and this Agreement to establish the senior, nonsubordinate Homebuyer Covenants and to evidence and secure the Authority Homebuyer Loan. Developer, as seller, to each Initial Homebuyer has reviewed and approved such instruments prior to executing the Affordable Housing Agreement. And, Homebuyer as purchaser, has reviewed and agrees to execute the following documents prior to receiving the Authority Homebuyer Loan:
(a) Homebuyer Covenants (Exhibit D);
(b) Authority Homebuyer Note (Exhibit B);
(c) Authority Homebuyer Deed of Trust (Exhibit C);
(d) An instrument substantially in the form of Exhibit E hereto (“Notice of Affordability Restrictions”);
(e) Disclosure Statement (Exhibit F);
(f) Seller/MECH grant deed (Exhibit J); and
(g) Purchase Money Loan documents.

15.2 Recording in Official Records. Homebuyer agrees and acknowledges that each of the Authority Homebuyer Deed of Trust, as well as the Purchase Money Deed of Trust shall be recorded in the Official Records and, along with the senior, nonsubordinate Homebuyer Covenants , and Notice of Affordability Restrictions shall appear of record with respect to and as encumbrances to the Affordable Home.

Section 16. Further Assurances. Homebuyer shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as the Authority shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Agreement.

Section 17. Governing Law. Homebuyer hereby agrees to comply with all ordinances, rules, and regulations of City and the Housing Authority. Nothing in this Agreement is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule, or regulation. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Riverside, State of California, or in the Federal District Court in the Central District of California.

Section 18. Amendment of Agreement . No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by the Homebuyer and Authority.

Section 19. Authority May Assign . Authority may, at its option, assign its right to receive repayment of the loan proceeds without obtaining the consent of the Homebuyer.

Section 20. Homebuyer Assignment Prohibited. In no event shall Homebuyer assign or transfer any portion of this Agreement without the prior express written consent of the Authority, which consent may be given or withheld in the Authority’s sole discretion. No assumption of the loan made

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007
by Authority as evidenced by the Authority Homebuyer Note shall be permitted at any time. This section shall not prohibit the Authority’s right to assign all or any portion of its rights to the loan proceeds hereunder.

Section 21. Relationship of Homebuyer and Authority. The relationship of Homebuyer and Authority pursuant to this Agreement is that of debtor and creditor and shall not be, or be construed to be a joint venture, equity venture, partnership, or other relationship.

Section 22. Monitoring. To the extent permitted by law, Authority (and City) and their designated employees and agents shall have the right to enter the Property (and all Affordable Homes) at all reasonable times without a warrant for the purpose of monitoring Homebuyer’s compliance with this Agreement. Any such entry shall be made only after reasonable notice to Homebuyer, which shall mean at least forty-eight (48) hours in all non-emergency situations. Upon receipt of such notice, Homebuyer agrees to consent to entry by Authority and to cooperate in making the Affordable Home available for inspection by Authority. Homebuyer acknowledges and agrees that if for any reason Homebuyer fails to consent to such entry or inspection, Authority (and/or City) may obtain an administrative inspection warrant or take such other legal actions as may be necessary to gain access to and inspect the Property. Authority shall indemnify and hold harmless Homebuyer from any costs, claims, damages or liabilities pertaining to any such entry.

Section 23. Notices. Any notices, requests or approvals given under this Agreement from one party to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested to the following address:

To Homebuyer: [name of homebuyer]
[____ Lantana Court [insert address among Parcels 1-7]
Moreno Valley, California 92552
To Authority: Moreno Valley Housing Authority
14177 Frederick Street
Moreno Valley, California 92552
Attention: Executive Director
Either party may change its address for notice by giving written notice thereof to the other party.

Section 24. Attorneys’ Fees and Costs . Should either of the parties to this Agreement incur attorneys’ fees in seeking the enforcement of this Agreement, whether or not a final court judgment is entered, the prevailing party shall be entitled to reimbursement of its reasonable attorneys’ fees and litigation costs, including without limitation expert witness fees, by the other party.

Section 25. Entire Agreement . This Agreement constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between the Authority and the Homebuyer concerning all or any part of the subject matter of this Agreement.

Attachment No. 6
Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007

Attachment No. 6
Homebuyer Loan Agreement
Page S-1
4874-8142-1779v5/200382-0007
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below.
“HOMEBUYER”
By:

Printed Name:

By:

Printed Name:

Dated: __________, 202_

Attachment No. 6
Homebuyer Loan Agreement
Page S-2
4874-8142-1779v5/200382-0007
AUTHORITY:

MORENO VALLEY HOUSING AUTHORITY,
a public body, corporate and politic
By:

Brian Mohan, Executive Director
or Authorized Designee
ATTEST:

M. Patricia Rodriguez, Authority Secretary
or Authorized Designee
APPROVED AS TO FORM:

STRADLING YOCCA CARLSON & RAUTH LLP

Celeste Stahl Brady, Special Counsel

Attachment No. 6
Exhibit A to Homebuyer Loan Agreement

4874-8142-1779v5/200382-0007

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY / AFFORDABLE HOME
[to be inserted in connection with initial sale of Affordable Home]

Attachment No. 6
Exhibit B -- Authority Homebuyer Note

4874-8142-1779v5/200382-0007
E

XHIBIT B

AUTHORITY HOMEBUYER NOTE

PROMISSORY NOTE SECURED BY DEED OF TRUST
[subject to update in connection with initial sales of Affordable Homes] $[to come]] Moreno Valley, California
__________ __, 202_ (“Note Date”)
Property Address: [_____] Lantana Court
Moreno Valley, California _____
Maturity Date: ________ 1, 207[_] (“Maturity Date”)
FOR VALUE RECEIVED, the undersigned [_____________________] (“Maker”) promises to pay to the MORENO VALLEY HOUSING AUTHORITY, a public body corporate and politic (“Holder”) at 14177 Frederick Street, Moreno Valley, California 92552, or at such other address as Holder may direct from time to time in writing, the sum of: (i) [to come] (“Note Amount”), plus other sum(s), if due, as described herein. All sums hereunder shall be payable in lawful money of the United States of America.

1. Homebuyer Loan Agreement. This Authority Homebuyer Note (“Note”) is made and delivered pursuant to and in implementation of that certain Homebuyer Loan Agreement entered by and between the Holder and the Maker dated as of ____________, 202_ (“Agreement”), a copy of which is on file as a public record with the Holder. The Agreement is incorporated herein by this reference. The Agreement provides for the sale of the “Affordable Home” (also referred to as the “Property”) to Maker as an Initial Homebuyer. The Maker acknowledges that but for the execution of this Note the Holder would not enter into the Agreement or make the Homebuyer L oan contemplated therein. Unless definitions of terms have been expressly set out at length herein, each term shall have the same definition as set forth in the Agreement.

2. Interest Rate. The Note Amount shall bear interest at the rate of zero percent (0%) per annum; provided that this Note is subject to acceleration in connection with an Event of Default and upon such shall accrue the Alternate Rate.
(a) Alternate Rate. Upon the occurrence of an Event of Default, or upon the maturity hereof (by acceleration or otherwise), the entire unpaid principal sum, at the option of Authority, shall bear interest, from the date of occurrence of such Event of Default or after judgment and until collection, at the “Alternate Rate”, such rate being the highest interest rate then permitted by law by a city within the State of California. Interest calculated at the Alternate Rate, when and if applicable, shall be due and payable immediately without notice or demand. Maker agrees that in the event of any Event of Default, Holder will incur additional expense in servicing the loan evidenced by this Note and will suffer damage and loss resulting from such Event of Default. Maker agrees that Attachment No. 6
Exhibit B -- Authority Homebuyer Note

4874-8142-1779v5/200382-0007
in such event Holder shall be entitled to damages for the detriment caused thereby, which damages are extremely difficult and impractical to ascertain. Therefore, Maker agrees that the Alternate Rate (as applied to the unpaid principal balance, accrued interest, fees, costs and expenses incurred) is a reasonable estimate of such damages to Holder, and Maker agrees to pay such sum on demand.

3. Time of Payment; Forgiveness upon Expiration of Affordability Period . In the event that Maker is in compliance with all of the requirements of the Agreement and the Note Amount has not earlier become due and payable, as provided in Section 4 hereof, the Note Amount shall be forgiven on the 45
th anniversary of this Note (“Maturity Date”).

4. Acceleration. The whole of the Note Amount and all other payments due hereunder and under the Homebuyer Loan Agreement shall, at the election of Holder, be accelerated, become due, and be immediately payable to the Holder by the Maker upon the occurrence of any of the following events: (a) the unauthorized sale or transfer of the Property, including, without limitation, the lease, exchange or other disposition of the Property or any interest therein, whether voluntary or involuntary, except (i) a sale of the Property to a Low Income Household at an Affordable Housing Cost with Holder’s prior written approval accomplished in conformity with the Agreement, or (ii) the transfer of the Property solely as a result of the marriage, divorce, incompetency or death of one or more individuals constituting the Maker, so long as the transferee(s) give written notice supported by reasonable evidence of such event to Holder within thirty (30) days of its occurrence and the transferee(s) assume the Maker’s obligations under the Agreement and this Note, by execution of an assignment and assumption agreement to be provided by the Holder, or (iii) a sale or transfer which under applicable law would not, by itself, permit the Holder to exercise a due on sale or due on encumbrance clause, or (b) such time if or when Maker is no longer an occupant of the Property or is in default of any other obligation under the Homebuyer Covenants, Homebuyer Loan Agreement and implementing documents thereto.

4.1 Equity Sharing. In the event that the Authority Homebuyer Loan becomes due and payable prior to the forty -fifth (45
th) anniversary of the date of this Agreement, Homebuyer shall pay to Authority both the Note Amount plus and concurrently with an unauthorized sale, transfer or refinancing, an amount equal to the “Equity Share Amount”, if any based on the priority of payment and formula described below. The Equity Share Amount shall be determined and paid in the following order of priority of payment:

First, the amount necessary to pay the outstanding balance of the Purchase Money Note shall be paid to the lender thereof.

Second, the Note Amount hereunder pursuant to the terms of the Homebuyer Loan Agreement shall be paid to the Authority.

Third, all normal and reasonable closing costs and prorations typical in Riverside County shall be paid to the parties entitled thereto.

Fourth, either the cost of the qualified capital improvements made to the Property by Homebuyer or the fair market value of such improvements (as determined at the time of such sale to a third party and considering depreciation), whichever is less, shall be paid to Homebuyer.

Attachment No. 6
Exhibit B -- Authority Homebuyer Note

4874-8142-1779v5/200382-0007
Fifth, the balance of the sales proceeds shall be multiplied by a fraction, the numerator of which is three hundred sixty (360) minus the number of full months between the date of this Agreement and the date the Property is sold or otherwise conveyed, and the denominator of which is three hundred sixty (360). If cash sale proceeds are insufficient to pay all such sums, Homebuyer shall nevertheless pay all such sums in cash from other funds obtained by Homebuyer, unless other arrangements for payment are made with the written consent of Authority.

Sixth, the balance of sales proceeds after the payment required above shall be paid to Homebuyer.
(a) The Equity Share Amount shall be payable to Authority upon a refinancing, failure to occupy the Property or material breach of any other provision of this Agreement which causes the Authority Homebuyer Loan to become due and payable. The Sales Price for purposes of determining the Equity Share Amount shall be determined by an appraisal of the Property. Authority shall appoint a certified, independent appraiser to conduct an appraisal of the Property, at Authority’s expense, and shall promptly deliver a copy of such appraisal to Homebuyer. If Homebuyer fails to object to such appraisal in a written notice to Authority within fifteen (15) days of the delivery of the appraisal, such appraised value shall be deemed the sales price of the Property. If Homebuyer objects to such appraisal, Homebuyer shall within fifteen (15) days of sending its written notice of objection appoint a certified, independent appraiser to conduct an independent appraisal of the Property, at Homebuyer’s expense, and shall promptly deliver a copy of such appraisal to Authority.

If the Homebuyer fails to appoint such appraiser within the required time period, the Authority’s appraisal shall be deemed the sales price of the Property. If the higher of the two appraisals is not greater than ten percent (10%) higher than the lower appraisal, the average of the two appraisals shall be deemed the sales price of the Property. If the higher of the two appraisals is greater than ten percent (10%) higher than the lower appraisal, the two appraisers shall jointly select a third appraiser who shall conduct an independent appraisal of the Property, with the expense of such appraisal borne equally by Authority and Homebuyer, and such third appraiser’s appraisal shall be deemed the sales price of the Property.

4.2 Expiration of Equity Share Obligation; Maturity Date of Homebuyer Note. In the event the Homebuyer does not sell or transfer the Property, remains the owner-occupant of the Property, and/or is not in material breach of any other provision of this Agreement before the forty- fifth (45
th) anniversary of the date of recording the Homebuyer Covenants, the Homebuyer shall have no obligation to pay the Equity Share Amount to Authority upon any later sale, transfer or refinancing. Further, upon the 45
th anniversary of the date of the Homebuyer Note, the Homebuyer Note shall be deemed forgiven and marked cancelled.

5. Security. Payment under this Homebuyer Note, shall be secured by the Homebuyer Deed of Trust including the Rider thereto encumbering the Affordable Home as the second monetary lien, junior only to the Purchase Money Deed of Trust, but in all events the Homebuyer Covenants shall be and remain the senior, nonsubordinate encumbrance against the Property. The Authority Homebuyer Deed of Trust shall be executed by Homebuyer, as trustor, in favor of Authority, as beneficiary.

5.1. Monetary Lien Priority. Subject to and in all events the Homebuyer Covenants shall be and remain the senior, nonsubordinate encumbrance against the Property, Attachment No. 6
Exhibit B -- Authority Homebuyer Note

4874-8142-1779v5/200382-0007
however the monetary lien priority shall be as follows: (A) first monetary lien is the Purchase Money Deed of Trust, (B) second monetary lien is the Homebuyer Note, and (C) third and following shall be other deed(s) of trust for subordinate loan(s) authorized by Authority, such as downpayment assistance loan(s).

5.2 Prepayment . Homebuyer may prepay amounts under the Authority Homebuyer Note; provided however, the restrictions of the Homebuyer Covenants, Authority Homebuyer Deed of Trust, shall continue in full force and effect, notwithstanding any such prepayment or other payments without regard to amount.

5.3 Assumption under Authority Homebuyer Note. The Authority Homebuyer Note may be assumed only by a Low Income Qualified Homebuyer as purchaser of the Affordable Home who has obtained the prior written approval of the Authority.

5.4 Homebuyer Waivers . As to the Authority Homebuyer Note, Homebuyer waives any rights to require Authority to: (A) demand payment of amounts due (known as “presentment”), (B) give notice that amounts due have not been paid (known as “notice of dishonor”) and (C) obtain an official certification of nonpayment (known as “protest”).

6. Sale to Lower Income Affordable Household at Affordable Housing Cost. For a period commencing upon the date of this Note and continuing until the later to occur of:
(i) the Maturity Date of this Note, or (ii) the confirmation in writing by the Authority, signed by the Executive Director, that the Authority Homebuyer Loan has been satisfied in full and no moneys remain payable to the Authority (or other holder) thereunder (the later of such times as so determined by the Authority constituting the “Extended Expiration Date”), the Note Amount will not become due and payable if Maker sells or otherwise conveys the Property to a Low Income Household at an Affordable Housing Cost as a Qualified Homebuyer with Holder’s prior written approval, and the purchaser assumes this Note, the Authority Homebuyer Deed of Trust, the Homebuyer Loan Agreement, and Homebuyer Covenants by an assignment and assumption agreement which is reasonably acceptable to the Holder.

6.1 Certain Defined Terms.
“Low Income,” “Lower Income,” “Low Income Homebuyers” means a household with annual gross income at or below 80 percent of the Area Median Income as designated by the Department of Housing and Community Development’s list of state low income limits adopted pursuant to Section 50093. A Low Income household’s income shall not exceed eighty percent (80%) of Area Median Income, adjusted for actual household size, as computed in accordance with HSC Section 50079 and the regulations promulgated in the Cal Code or incorporated therein, including, without limitation, all regulations promulgated pursuant to HSC Section 50093, or any successor statute. The upper income limit for Low Income households shall be the income limits for such households published annually for Riverside County by State HCD with adjustments for household size.
“Affordable Housing Cost” shall mean for the Affordable Homes a Housing Cost that is calculated and in conformance with HSC Section 50052.5, 25 Cal Code Regs § 6910, et seq., including without limitation Sections 6914, 6920, 6924, 6926, and 6928 for Low Income Attachment No. 6
Exhibit B -- Authority Homebuyer Note

4874-8142-1779v5/200382-0007
Households, except that the maximum cost amount shall be thirty percent (30%) of the Low Income Household’s actual gross annual income that results in a Monthly Housing Cost for an applicable Affordable Unit. Affordable Housing Cost for a Low Income Homebuyer shall not exceed the product of thirty percent (30%) times seventy percent (70%) of Area Median Income adjusted for household size appropriate for the applicable Affordable Home. If the Low Income Household has an income greater than seventy percent (70%) of Area Median Income, “Affordable Housing Cost” means a Monthly Housing Cost which does not exceed the greater of (A) thirty percent (30%) times seventy percent (70%) of Area Median Income adjusted for family size appropriate to the applicable Affordable Home, or (B) thirty percent (30%) times the Homebuyer’s actual monthly gross income.

The phrase “adjusted for family size appropriate to the unit” is defined in HSC § 50052.5 and assumes a household size based on the number of bedrooms in the unit, which equals the number of bedrooms plus one for each Affordable Home. Thus, for the three -bedroom Affordable Homes the assumed household size for purposes of an Affordable Housing Cost that number is four (4) persons, and for four-bedroom Affordable Homes that number is five (5) persons.

Notwithstanding the provisions of this Section 6, if the Property is sold during the Affordability Period by the Maker to a Low Income Homebuyer, and the Sales Price does not exceed an “Affordable Housing Cost”, then so long as the Maker is not in default of the Agreement, this Note may be assumed by a buyer determined by Authority to be qualified (as a Low Income Household paying a price which does not exceed Affordable Housing Costs and to otherwise meet the definition of Qualified Homebuyer as set forth in the Agreement) by an assignment and assumption agreement which is reasonably acceptable to the Holder. Upon the effective date of such assignment and assumption, the assigning Maker shall no longer be liable for any further obligations under the Agreement or this Note which accrue after the date of such assignment and assumption. In order to verify the prospective buyer’s status as a Low Income Household, Maker shall submit or cause the proposed buyer to submit to the Holder the identity of the proposed Homebuyer and adequate information evidencing the income and household size of the proposed buyer. Said income information shall be submitted together with the notice of proposed sale pursuant to the Agreement not less than thirty (30) days prior to the opening of escrow for the proposed resale and shall include original or true copies of pay stubs, income tax records or other financial documents in order that the Holder may determine and verify the household income of the proposed Buyer to determine whether the buyer is a Low Income Household and whether the Property is being transferred to such buyer as the next Homebuyer at Affordable Housing Cost. If the Holder is unable to verify the buyer’s income as provided herein prior to the proposed sale, then the buyer’s income shall be deemed to exceed the maximum allowable income limit for qualifying buyers.

7. Non-Recourse. This Note is non -recourse to the Homebuyer personally, but the Note is and shall remain secured by the Authority Homebuyer Deed of Trust, the senior monetary lien against the Property, subordinate only to the Authority Homebuyer Covenants.

8. Holder May Assign. Holder may, at its option, assign its rights under this Note without necessity of obtaining the consent of the Maker.

9. Maker Assignment Prohibited. In no event shall Maker assign or transfer a ny
port
ion of this Note, the Note Amount and/or the Agreement without the prior express written consent of the Holder, as provided in Section 7 hereof.

Attachment No. 6
Exhibit B -- Authority Homebuyer Note

4874-8142-1779v5/200382-0007

10. Joint and Several. The undersigned, if more than one person, shall be jointly and severally liable hereunder.

11. Housing Trust Fund Contribution. Upon the closing of each and all escrows i n c
onnection with each subsequent resale of the Property the existing Homebuyer shall pay an amount equal to three percent (3%) of AMI appropriate for the presumed family size as an administrative and monitoring contribution (“Housing Trust Fund Contribution”). The Housing Trust Fund Contribution shall be payment to Holder for the ongoing administration of the Affordable Home during the selling Homebuyer’s term of ownership and shall be a part of the Note Amount hereunder, but due and payable by selling Homebuyer at the time of each resale to a successor Homebuyer. (a) An example of calculation of a Housing Trust Fund Contribution is as follows and using 2025 AMI figures from the California Department of Housing and Community Development for a three -bedroom unit with presumed household size of four persons that is a Low Income Household, using 3% AMI, equals the following: 80% AMI ($89,500 for corresponding Low Income Household for Riverside County using 2025 AMI figures from the California Department of Housing and Community Development for a one bedroom household) x 3% = $2,685.

12. Attorneys’ Fees and Costs. In the event that any action is instituted to enforce payment under this Note, the parties agree the non- prevailing party shall be responsible for and shall pay to the prevailing party all court costs and all attorneys’ fees incurred in enforcing this Note.

13. Amendments. This Note may not be modified or amended except by an instrument in writing expressing such intention executed by the parties sought to be bound thereby, which writing must be so firmly attached to this Note so as to become a permanent part thereof.

14. Maker’s Waivers. Maker waives any rights to require the Holder to: (a) demand payment of amounts due (known as “presentment”), (b) give notice that amounts due have not been paid (known as “notice of dishonor”), and (c) obtain an official certification of nonpayment (known as “protest”).

15. Notice. Any notice that must be given to Maker under this Note shall be given by personal delivery or by mailing it by certified mail addressed to Maker at the Property address above or such other address as Maker shall direct from time to time in writing. Failure or delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. Any notice to Holder shall be given by certified mail at the address stated above.

16. Successors Bound. This Note shall be binding upon the parties hereto and their respective heirs, successors and assigns.

IN WITNESS WHEREOF, Maker has executed this Homebuyer Note as of the date first set forth below.

MAKER:

Attachment No. 6
Exhibit B -- Authority Homebuyer Note

4874-8142-1779v5/200382-0007
[to come]
By:
(____________)
By:
(____________)

Attachment No. 6
Exhibit C -- Authority Homebuyer Deed of Trust

4874-8142-1779v5/200382-0007

EXHIBIT C

AUTHORITY HOMEBUYER DEED OF TRUST
[subject to update in connection with initial sales of Affordable Homes] WHEN RECORDED MAIL TO:

Moreno Valley Housing Authority
14177 Frederick Street
Moreno Valley, California 92552
Attention: Executive Director

SPACE ABOVE THIS LINE FOR RECORDER’S USE
This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383.

HOMEBUYER DEED OF TRUST WITH ASSIGNMENT OF RENTS
(SHORT FORM)
This HOMEBUYER DEED OF TRUST WITH ASSIGNMENT OF RENTS (“Deed of Trust”) is made as of _______________, 202_ between [name of Homebuyer] (“Homebuyer” or “Trustor”) whose address is [address of homebuyer], Moreno Valley, California 92552, [_____] TITLE COMPANY OF CALIFORNIA, a California corporation, herein called TRUSTEE, and the MORENO VALLEY HOUSING AUTHORITY, a public body corporate and politic, herein called

BENEFICIARY,
WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Moreno Valley, County of Riverside, State of California, described as:

SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF.
together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing: (1) payment of the sum of [to come ] $____________, according to the terms of a promissory note of even date herewith designated as the “Homebuyer Note” made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof pursuant to an unrecorded Homebuyer Loan Agreement between Trustor and Beneficiary as of _____________, 202_ (“Agreement”; a copy of the Agreement is on file with Beneficiary as a public record and is deemed incorporated herein by reference). All capitalized terms not defined herein shall have the meanings established therefor under the Agreement unless the context requires otherwise, (2) the performance of each agreement of Trustor incorporated by reference or contained herein, the default under any of which shall constitute a default hereunder, (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust, (4) compliance under each of (i) that certain Homebuyer Covenants -- Authority Declaration of Conditions, Covenants and

Attachment No. 6
Exhibit C -- Authority Homebuyer Deed of Trust

4874-8142-1779v5/200382-0007
Restrictions recorded on ___________ __, 202_ as Document No. [recording information re Homebuyer Covenants] among the official land records of the County of Riverside (“Authority Homebuyer Covenants”), and (5) performance under Exhibit B which is attached hereto and incorporated herein by reference.

To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Riverside County on August 18, 1964, commencing at Book 3778, Page 347 of Official Records of the County Recorder for the County of Riverside shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B thereof (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law.

The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth.

SEE RIDER TO THIS DEED OF TRUST ATTACHED HERETO
AS EXHIBIT B AND MADE A PART HEREOF.

[name and vesting of Homebuyer]

[name and vesting of Homebuyer]

Attachment No. 6
Exhibit A Legal Description to
Authority Homebuyer Deed of Trust

4874-8142-1779v5/200382-0007

EXHIBIT A

LEGAL DESCRIPTION
[to be inserted in connection with initial sale of Affordable Home]

EXHIBIT B

RIDER TO DEED OF TRUST
[subject to update in connection with initial sales of Affordable Homes] Exhibit B to Deed of Trust with Assignment of Rents dated as of ________________, 202_, executed by [name of homebuyer], a ________________, as “Trustor”, to [____] Title Company of California, a California corporation, as Trustee, for the benefit of Moreno Valley Housing Authority, a public body corporate and politic, as “Beneficiary” (“Deed of Trust”). Reference is also made to that certain Homebuyer Covenants as defined in the Homebuyer Loan Agreement, which Homebuyer Covenants are incorporated by reference. To the extent of a conflict between this Rider and the Homebuyer Covenants the Homebuyer Covenants shall prevail.

1. DEFAULT. A default or breach by Trustor under any of the following shall, at Beneficiary’s option, constitute a default under this Deed of Trust:
(a) A default by Trustor under that certain Homebuyer Loan Agreement , e
xecuted by Trustor as Homebuyer and Authority as Beneficiary; (b) A default by Trustor under the Authority Homebuyer Covenants; (c) A default by Trustor under the Authority Homebuyer Note; (d) A default by Trustor under the Purchase Money Loan or any other deed of
trust encumbering the Property.

2. DUE ON SALE OR ENCUMBRANCE . In the event of any nonauthorized Transfer (as defined below) of the Property, or any portion thereof or interest therein, Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. As used herein, the term “Transfer” means and includes the direct or indirect sale, transfer, conveyance, mortgage, further encumbrance, assignment, or other alienation of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract, sales agreement or similar instrument affecting all or a portion of the Property, granting of an option to purchase any portion of or interest in the Property or any interest therein, or the lease of all or substantially all of the Property
or of all or substantially all of the improvements situated on the Property; provided that a sale of the Property to a Low Income Household at an Affordable Housing Cost with City’s prior written approval accomplished in strict conformity with Section 4 of the Homebuyer Loan Agreement shall not be deemed to constitute grounds for acceleration under this Deed of Trust. Failure of Beneficiary to exercise the option to declare all sums secured hereby immediately due and payable upon a Transfer will not constitute waiver of the right to exercise this option in the event of any subsequent Transfer.

4. PRIORITY OF DEED OF TRUST. This Deed of Trust shall be subject and junior to the senior, nonsubordinate Authority Homebuyer Covenants but shall be senior to all other monetary deed(s) of trust and encumbrances.

Attachment No. 6
Exhibit B -- Rider to Authority Homebuyer Deed of Trust

4874-8142-1779v5/200382-0007
Attachment No. 6
Exhibit B -- Authority Homebuyer Deed of Trust
Do not Record

4874-8142-1779v5/200382-0007

5. HOMEBUYER’S REPRESENTATIONS AND WARRANTIES AS TO THE SALE OF THE PROPERTY TO HOMEBUYER. Homebuyer represents and warrants to Authority that the financial and other information that Homebuyer has provided to Authority with respect to Homebuyer’s income and the purchase price of the Property was true and correct at the time such information was provided, and remains true and correct as of the Date of this Rider.

6. PERMITTED SALES OF THE PROPERTY . Authority hereby permits sales of the Property to proposed transferees who are qualify as a Low Income Household and Qualified Homebuyer and are approved in accordance herewith, provided the Affordable Contract Price does not exceed an Affordable Housing Cost to such proposed transferee (“Permitted Transfers”). In the event that Homebuyer desires to Transfer the Property during the Affordability Period, prior to the Transfer the Homebuyer, as proposed seller, shall notify Authority by delivering a Notice of Intent to Transfer to Authority, which shall indicate the identity of the proposed transferee who desires to purchase the Property, whether the purchaser is a Low Income Household and whether the proposed selling price is at an Affordable Housing Cost. In addition to Homebuyer’s and the proposed transferee’s delivery of the Notice of Intent to Transfer, the following procedure shall apply:
(a) Notice to Authority. Homebuyer shall send the Notice of Intent to Transfer to Authority at the address set forth herein.
(b) Qualification of Proposed Transferee. The proposed transferee shall provide Authority with sufficient information in the form provided by Authority including without limitation, a certification as to the income and family size of the proposed transferee, for Authority to determine if the proposed transferee is a Low Income Household and the purchase price is at an Affordable Housing Cost.
(c) Certificates from Parties. The selling Homebuyer and proposed transferee each shall certify in writing, in a form acceptable to Authority, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by Authority and that all consideration delivered by the proposed transferee to owner has been fully disclosed to Authority. The written certificate shall also include a provision that in the event a Transfer is made in violation of the terms of this Rider and the Homebuyer Covenants or false or misleading statements are made in any documents or certificate submitted to Authority for its approval of the Transfer, Authority shall have the right to file an action at law or in equity to make the parties terminate and/or rescind the sales contract and/or declare the sale void notwithstanding the fact that the Transfer may have closed and become final as between Homebuyer and transferee. (d) Written Consent of Authority Required b efore Transfer. During the Affordability Period, the Property, and any interest therein, shall not be conveyed by any Transfer except with the express written consent of Authority, which consent shall be given only if the Transfer is in accordance with the provisions of this Rider, Homebuyer Covenants, and Homebuyer Loan Agreement. This provision shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Property as a new Purchase Money Mortgage.

7. NOTICE OF PROHIBITED TRANSFER . Within thirty (30) days after receiving notification of a proposed Transfer in accordance with Section 6(a), Authority shall determine and give notice to Homebuyer as to whether the proposed Transfer is a Permitted Transfer or Prohibited Attachment No. 6
Exhibit B -- Authority Homebuyer Deed of Trust
Do not Record

4874-8142-1779v5/200382-0007
Transfer. In the event that the proposed Transfer is a Prohibited Transfer, such notice to Homebuyer shall specify the nature of the Prohibited Transfer. If the violation is not corrected to the satisfaction of Authority within ten (10) days after the date of the notice, or within such further time as Authority determines is necessary to correct the violation, Authority may declare a Default under this Restriction. Upon the declaration of a Default, Authority may apply to a court of competent jurisdiction for specific performance of this Homebuyer Deed of Trust and Rider, Homebuyer Covenants, and Homebuyer Loan Agreement, for an injunction prohibiting a proposed sale or Transfer in violation hereof, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate.

8. DELIVERY OF DOCUMENTS . Upon the close of the proposed Transfer, Homebuyer and transferee, as applicable, shall provide the Authority with a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this Section 4 and any other documents Authority may request.

9. HOUSING TRUST FUND CONTRIBUTION. In connection with the closing of each resale of the Property the selling Homebuyer shall pay an amount equal to three percent (3%) of AMI appropriate for the presumed family size as an administrative and monitoring contribution (“Housing Trust Fund Contribution”); provided, however, that the Housing Trust Fund Contribution shall not be due if no Contingent Equity Participation Amount is due under Section 3 hereof. The Housing Trust Fund Contribution shall be payment to Authority for the ongoing administration of the Program and shall be a part of the Note Amount due from Homebuyer.

Attachment No. 6
Exhibit B -- Authority Homebuyer Deed of Trust
Do not Record

4874-8142-1779v5/200382-0007

DO NOT RECORD
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.

A. To protect the security of this Deed of Trust, Trustor agrees:
(1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney’s attorneys’ fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed.
(4) to pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this trust.

Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation thereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees.

Attachment No. 6
Exhibit B -- Authority Homebuyer Deed of Trust
Do not Record

4874-8142-1779v5/200382-0007
(5) To Pay immediately and without demand all sums so expended by Be
neficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.

B. It is mutually agreed:
(1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such monies received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. (2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
(3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. (4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance or any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as “the person or persons legally entitled thereto.” (5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s attorneys’ fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

A
ttachment No. 6
Exhibit B -- Authority Homebuyer Deed of Trust
Do not Record

4874-8142-1779v5/200382-0007
(6) That upon default Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby.

After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.

After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
(7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee.
(8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. (9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.

E
XHIBIT D TO ATTACHMENT NO. 6

HOMEBUYER COVENANTS
4874-8142-1779v5/200382-0007

EXHIBIT D

AUTHORITY HOMEBUYER COVENANTS
[subject to update in connection with initial sales of Affordable Homes]

Authority Homebuyer Covenants as recorded ___________ __, 202_ as Document No. [recording information re Authority Homebuyer Covenants] Homebuyer Covenants

4905-7533-9338v1/200382-0007

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Moreno Valley Housing Authority
14177 Frederick Street
Moreno Valley, CA 92552
Attention: Executive Director
Exempt From Recording Fee Pursuant to
Government Code Sections 6103 and 27383

HOMEBUYER COVENANTS
(Low Income Affordable Housing Covenant)
These HOMEBUYER COVENANTS (Low Income Affordable Housing Covenant) (“Homebuyer Covenant”) is made as of _______, 202_ (“E ffective Date” is date of recording in the Official Records), by and between [insert full legal names and vesting of the Homebuyer] (“Homebuyer ”) in favor of the MORENO VALLEY HOUSING AUTHORITY, a public body corporate and politic (“Authority”). Homebuyer and Authority are hereafter periodically referred to collectively as the “parties” and individually as a “party.”

R E C I T A L S
A. Homebuyer has purchased a [single family home /townhome /condominium] located at __________, Escondido, California, as such real property is more particularly described in Exhibit “1” attached hereto and incorporated herein by this reference (“ Affordable Home”). The Affordable Home is part of a seven (7) unit residential community known as “Lantana Court ” (“Project”).

B. Pursuant to that certain “Homebuyer Loan Agreement” between the Authority and _____________ (“ Owner” or “ Homebuyer”) entered into concurrently with this Homebuyer Covenant, the Owner is required to transfer certain of the homes in the Project to families which qualify as “ Low Income Households” and “ Qualified Homebuyer ”, at an “ Affordable Housing Cost”.

The Homebuyer Loan Agreement is a public record and is available for inspection and copying at the office of the Authority Secretary/City Clerk located at 14177 Frederick Street, Moreno Valley, California 92552. Capitalized terms used herein are as defined in the Homebuyer Loan Agreement or otherwise defined herein.

C. The Af
fordable Home has been designated by the Owner as one of the seven (7) Affordable Homes in the Lantana Court Project that is to be sold and resold to a Low Income Qualified Homebuyer at an Affordable Housing Cost during the 45-year Affordability Period.

D. Homebuyer has represented to Authority that Homebuyer and the members of Homebuyer’s household intend to reside in the Affordable Home as the Homebuyer’s principal residence at all times during the Homebuyer ’s ownership of the Affordable Home, that Homebuyer shall not rent . or lease, or allow occupancy (excepting occasional guests), of all or any part the Affordable Home to any person other than members of the Owner’s household, which at the time of acquisition such household qualified as a Low Income Household.

EXHIBIT D
Homebuyer Covenants

4905-7533-9338v1/200382-0007
E. Homebuyer ha s acknowledged and understands that the Affordable Home must re
main subject to each and all affordability restrictions in this Homebuyer Covenant for the duration of the Affordability Period set forth herein. In addition, Homebuyer recognizes the special nature of the terms and conditions affecting the purchase of the Affordable Home and freely and voluntarily accepts the terms and conditions, including, without limitation, restrictions that may affect the marketability and resale price of the Affordable Home.

F. Pursuant to the Homebuyer Loan Agreement , A uthority shall have the ability to enforce the affordability restrictions set forth herein because Owner’s ability to develop the Project was conditioned thereon.

G. It is the intent of the parties that Homebuyer’s f ee interest in the Affordable Home shall be subject to this Homebuyer Covenant and that the terms hereof shall be binding on Homebuyer and Homebuyer’s successors in interest to the Affordable Home during the Affordability Period.

A G R E E M E N T
NOW, THEREFORE, based upon the foregoing Recitals, which are incorporated to this Homebuyer Covenant by this reference, for good and valuable consideration, the parties agree as follows:

1. DEFINITIONS AND EXHIBITS.

1.1 Definitions. In addition to the terms that may be defined elsewhere in this Homebuyer Covenant, the following terms when used in this Homebuyer Covenant shall be defined as follows:

1.1.1 “Adjusted for family size appropriate to the unit” means a household of one person in the case of a studio unit, a household of four persons in the case of a three-bedroom Affordable Home and five persons in the case of a four-bedroom Affordable Home in the Lantana Court Project.

1.1.2 “Affordability Period” means that period of time commencing upon the date of recording of the Homebuyer Covenants in the Official Records, County of Riverside, State of California (“Effective Date”) and ending and expiring on the forty-fifth (45th) anniversary of such date.

1.1.3 “Affordable Housing Cost” means for a Low Income Household that purchase price which would result in an annual Monthly Housing Cost (as defined below) authorized pursuant to Health and Safety Code Section 50052.5 (copy of which is attached as Exhibit B hereto), which shall not exceed the product of thirty percent (30%) times seventy percent (70%) of the Median Income adjusted for family size appropriate to the unit or, at Authority’s election, thirty percent (30%) of the gross income of the Household if the gross income of the Household exceeds seventy percent (70%) of Median Income adjusted for family size appropriate to the unit. Affordable Housing Cost for the Affordable Home that is the subject of this Homebuyer Covenant shall be calculated as of the date of the initial sale and upon each resale of the Affordable Home. Exhibit C to this Homebuyer Covenant includes an example of the calculation of Affordable Housing Cost.

Homebuyer Covenants

4905-7533-9338v1/200382-0007

1.1.4 “Affordable Housing Deed of Trust” or “Homebuyer Deed of Trust” means that certain Homebuyer Deed of Trust recorded in the Official Records pursuant to the Homebuyer Loan Agreement, executed by Homebuyer which encumbers the Affordable Home and secures the obligations of Homebuyer and his or her successors and assigns as provided herein, in the Homebuyer Loan Agreement and Reimbursement Agreement.

1.1.5 “Affordable Housing Option Agreement” and “Option Agreement” means an agreement substantially in the form attached hereto Exhibit D that provides an option to purchase in favor of the Authority as provided herein, which option shall be exercisable in the event that the Homebuyer is in breach of the Homebuyer’s obligations in this Homebuyer Covenant.

1.1.6 “Affordable Home ” means the real property described in Recital A and legally described in the attached Legal Description, Exhibit A, incorporated hereto.

1.1.7 “Authority” means the Moreno Valley Housing Authority, a public body corporate and politic, including successors and assigns, if any.

1.1.8 “Authority Attorney” means the City Attorney and General Counsel (or special counsel) to the Moreno Valley Housing Authority.

1.1.9 “Authority Executive Director ” means the Executive Director of Moreno Valley Housing Authority or his/her authorized designee.

1.1.10 “County” means the County of Riverside, California.

1.1.11 “Covenant” or “Homebuyer Covenant ” means this declaration of Homebuyer Covenants.

1.1.12 “Default” means the failure of a party to perform any action or covenant required by this Homebuyer Covenant within the time periods provided herein following notice and opportunity to cure.

1.1.13 “Homebuyer Loan Agreement ” means the agreement referenced in Recital B of this Homebuyer Covenant.

1.1.14 “Effective Date” means the date the Authority Council of Authority approved the Homebuyer Loan Agreement and caused recording of this Homebuyer Covenant in the Official Records as the senior, nonsubordinate encumbrance against the Affordable Home.

1.1.15 “First Lien” or “Purchase Money Mortgage” means the lien of a an institutional first lien, purchase money Lender that secures the obligations of the Homebuyer to repay amounts owed to such Lender.

1.1.16 “Homebuyer ” means the person or persons set forth in the first paragraph of this Homebuyer Covenant, and his, her or their permitted successors and assigns. In this regard, upon each authorized resale of the Affordable Home, the term Homebuyer means the Qualified Homebuyer, as buyer, that acquired the Affordable Home, from the seller Homebuyer.

Homebuyer Covenants

4905-7533-9338v1/200382-0007

1.1.17 “Home Office” means a separate area or room in the Affordable Home used for business purposes and claimed as a business expense pursuant to federal and state income tax laws. Any room used for business purposes shall not reduce the number of bedrooms that are required to be within the Affordable Home pursuant to the Homebuyer Loan Agreement.

1.1.18 “Household” means all persons lawfully residing in the Affordable Home as his, her, their permanent residence during the Owner’s ownership of the Affordable Home.

1.1.19 “Housing Regulations” means the regulations published from time to time by the California Department of Housing and Community Development pursuant to Health and Safety Code Section 50093, as they exist as of the Effective Date.

1.1.20 “Income Verification Materials ” means those materials specified in Sections 4.2.1 and 4.2.2 of this Homebuyer Covenant used to verify the income of a proposed purchaser of the Affordable Home.

1.1.21 “Lender” means a lender making a Purchase Money Loan to the Homebuyer for the purchase of the Affordable Home, whether upon the initial sale and each resale of the Affordable Home during the Affordability Period.

1.1.22 “Low Income Household” means a Household whose income does not exceed the qualifying limits for lower income households pursuant to Health and Safety Code Section 50079.5 as such statute exists on the Effective Date of the Homebuyer Loan Agreement, which is those households earning eighty percent (80%) or less of Median Income, adjusted for family size .

The income level of a Household shall be determined in accordance with the Housing Regulations.

1.1.23 “Median Income” or “AMI” means the Riverside County, California area median income, as established by the United States Department of Housing and Urban Development, and as published periodically by the State of California Department of Housing and Community Development. Upon request by Homebuyer , Authority shall provide to Homebuyer the amount of the Median Income as posted annually by the State of California Department of Housing and Community Development.

1.1.24 “Monthly Housing Cost” shall include all of the following associated with the Affordable Home, estimated or known as of the date of the proposed sale of the Affordable Home: (i ) principal and interest payments on a mortgage loan not exceeding the prevailing conventional home mortgage lending rates applied by any reputable institutional home mortgage lender, or the lending rates of any government -subsidized or special mortgage program for which a Qualified Homebuyer qualifies and has obtained a first trust deed loan for the acquisition of the Affordable Home; (ii) property taxes and assessments, including Community Facilities District (CFD) fees, if applicable; (iii) the cost of fire and casualty insurance covering replacement value of property improvements; (iv) Affordable Home maintenance and repair costs; (v) a reasonable utility allowance.

Monthly Housing Cost of a purchaser shall be the monthly average of estimated costs for the next twelve (12) months as determined by the Authority; and (vii) purchase price down payment, subject to verification by the Executive Director.

1.1.25 “Notice of Intent to Transfer” means the Notice of Intent to Transfer substantially in the form attached hereto as Exhibit E.

Homebuyer Covenants

4905-7533-9338v1/200382-0007

1.1.26 “Owne
r” and “Homebuyer” means each lawfully vested fee owner of the Affordable Home during the Affordability Period.

1.1.27 “Permitted Transfer” means any Transfer which is permitted pursuant to Section 4 hereof.

1.1.28 “ Permitted Transferee” means a Transferee from the Homebuyer who acquires ownership of the Affordable Home as a Qualified Homebuyer in full compliance with Section 4 hereof.

1.1.29 “ Permitted Transferee Assignment and Assumption Agreement ” means the assignment and assumption agreement to be executed by Owner, as assignor and seller, to a Permitted Transferee, as buyer, assignee, and successor-i n-interest Qualified Homebuyer, by which this Homebuyer Covenant, Reimbursement Agreement, Affordable Housing Option Agreement, Homebuyer Note, and Homebuyer Deed of Trust are assigned and assumed for benefit of Authority, substantially in the form prepared by Authority at the time of each pending resale of the Affordable Home.

1.1.30 “ Prohibited T ransfer” means a ny Transfer whic h is not permitted pursuant to Section 4 hereof.

1.1.31 “ Project” or “ Lantana Court ” means that certain seven-unit single-family affordable housing development more particularly described in the Recital s of this Homebuyer Covenant and as described in the Homebuyer Loan Agreement.

1.1.32 “ Qualified Homebuyer ” means a Low Income Household who complies with all income verification requirements in the Homebuyer Loan Agreement and this Homebuyer Covenant, and earns eighty percent (80%) or less of the Median Income, adjusted for family size, to be determined in accordance with the Housing Regulations.

1.1.33 “ Reimbursement Agreement” means the Reimbursement Agreement to be executed by the Homebuyer in favor of the Authority, substantially in the form attached hereto as Exhibit F.

1.1.34 “ Request for Notice” means the Request for Notice under Civil Code Section 2924 b attached hereto as Exhibit G.

1.1.35 “ Transfer” shall mean any sale, assignment, conveyance, lease, or transfer, voluntary or involuntary, of any interest in the Affordable Home . Without limiting the generality of the foregoing, Transfer shall include (i ) a transfer by devise, inheritance or intestacy; (ii) the creation of a life estate; (iii) t he creation of a joint tenancy interest; (iv ) a gift of all or any portion of the Affordable Home; or (v) any voluntary conveyance of the Affordable Home.

1.1.36 “ Transferee” shall mean any natural person or persons who obtains lawful ownership rights in the Affordable Home pursuant to a Transfer.

1.2 Exhibits. The following documents are attached to, and by this reference made a part of, this Homebuyer Covenant: [check and reorder] Homebuyer Covenants

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xhibit A – Legal Description of Affordable Home
Exhibit B – Notice of Intent to Transfer
Exhibit C – Request for Notice
Exhibit D – Reimbursement Agreement
Exhibit E – Affordable Housing Option and Resale Agreement Exhibit F – Affordable Housing Deed of Trust
Exhibit G – Permitted Transferee Assignment and Assumption Agreement Exhibit H – Example of Calculation of Affordable Housing Cost

2. COVENANT REGARDING USE AND SALE OF AFFORDABLE HOME .

Fo
r the Affordability Period, the Affordable Home shall be owned and occupied as the principal residence of a Low Income Household. Homebuyer covenants and agrees that, during the Affordability Period, each subsequent Transfer of the Affordable Home by the then -Homebuyer shall be to a Low Income Household as a Qualified Homebuyer at a purchase price that does not exceed the Affordable Housing Cost. Homebuyer further covenants and agrees that, during the Affordability Period, Homebuyer shall abide by and be bound by all the obligations of Homebuyer set forth in this Homebuyer Covenant.

HOMEBUYER, AND EACH SUCCESSOR, HEIR OR ASSIGN OF HOMEBUYER,

UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING

COST CAN BE MADE ONLY AT THE TIME OF A PROPOSED SALE, RESALE, OR

OTHER TRANSFER OF THE AFFORDABLE HOME, TAKING INTO

CONSIDERATION PREV AILING INTEREST RATES, THE OFFERED TERMS OF

SALE OR RESALE, AS APPLICABLE , THE ECONOMIC CIRCUMSTANCES OF

THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE

ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED

HEREUNDER MAY BE LESS THAN THE FAIR MARKET V ALUE OF THE SAME

OR OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS HOMEBUYER COVENANT. HOMEBUYER , AND EACH SUCCESSOR, HEIR OR

ASSIGN OF HOMEBUYER, FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN

SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE

AUTHORITY AND THIS HOMEBUYER COVENANT IS TO PROVIDE

OWNERSHIP HOUSING TO LOW INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST.
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Homebuyer’s Initials

3. HOMEBUYER’S

REPRESENTATIONS AND WARRANTIES AS TO THE
S
ALE OF THE HOME TO HOMEBUYER. Homebuyer represents and warrants to the Authority and Owner that the financial and other information which Homebuyer has provided to the Authority with respect to Homebuyer’s income, assets, and the purchase price of the Affordable Home were true, truthful, correct with no material omission, at the time such information was provided, and remains true and correct as of the date of this Homebuyer Covenant.

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4. T
RANSFERS OF THE HOME.

4.1 Permitted and Prohibited Transfers . The following Transfers, made in compliance with the terms and conditions of this Homebuyer Covenant, shall constitute “Permitted Transfers”: (i) a Transfer to a surviving joint tenant or other permitted co-Homebuyer of the Affordable Home by devise, descent, or operation of law on the death of a Homebuyer ; (ii) a Transfer to a spouse as a result of marriage such that the spouses become co-owners, and thereby Homebuyer, of the Affordable Home ; (iii ) a Transfer by decree of dissolution, legal separation agreement, or from an incidental property settlement by which the spouse becomes a Homebuyer of t
he Affordable Home, provided that in each case the transferee spouse occupies or will occupy the Affordable Home and the Household still qualifies as a Low Income Household; (iv) a Transfer to an i
nter vivos trust in which Homebuyer is and remains the beneficiary and occupant of the Affordable Home; (v) a Transfer to the Lender holding the Purchase Money First Lien on the Affordable Home to s
ecure the financing of the purchase of the Affordable Home that complies with the terms and conditions of this Homebuyer Covenant and the Homebuyer Loan Agreement; and (vi) a Transfer to a Low Income Household at Affordable Housing Cost. A Transfer that is not a Permitted Transfer specified above is a “Prohibited Transfer.” The occurrence of a Prohibited Transfer is a Default under this Homebuyer Covenant and under the Homebuyer Loan Agreement.

4.2 Procedure to Verify a Proposed Transfer. During the Affordability Period, Homebuyer shall not permit a Transfer of the Affordable Home, or any interest therein, except with the express written consent of the Authority, which consent shall be given only if the Transfer is a Permitted Transfer and in strict compliance with the provisions of this Section 4.

4.2.1 Proposed Sale of Affordable Home. During the Affordability Period, in the event that Homebuyer decides to sell or otherwise receive consideration for a Transfer of the Affordable Home, the Transfer shall be serviced through an escrow pursuant to a purchase and sale agreement. Homebuyer, as seller and transferor, shall deliver to Authority a copy of the preliminary title report for the proposed Transfer of the Affordable Home. Homebuyer shall also comply with all of the following set forth in Subsection (a)-(h) below in connection with said sale or other Transfer for consideration; provided, however, income verification shall not be required for inter-spousal transfers:
(a) Notice to Authority. The Homebuyer, as proposed seller, sha ll
de
liver to Authority no later than forty-five (45) days prior to the close of escrow the Notice of Intent to Transfer. The Notice of Intent to Transfer shall identify the proposed Transferee as a Qualified Homebuyer, shall certify that, to the best knowledge of the selling Homebuyer, the buyer as proposed Transferee lawfully qualifies as a Low Income Household (if, in fact, the Income Verification Materials support the conclusion that the proposed Transferee is a Low Income Household), and shall certify that the sale price, including monthly out-of-pocket housing cost, is no more than the Affordable Housing Cost. Homebuyer shall include copies of the purchase and sale agreement between Homebuyer, as seller, and the proposed Transferee, as buyer, of the Affordable Home, the form of grant deed or other document that is proposed to be used to effectuate the Transfer, copies of the Income Verification Materials and all other material documents related to the proposed Transfer. (b) Sale of Affordable Home s
. The sale price of the Affordable
Home shall not exceed the Affordable Housing Cost. So that Authority may verify the amount is not more than the Affordable Housing Cost, Homebuyer shall provide written notice to Moreno Valley Housing Authority the sale price of each Affordable Home prior to offering for sale the Affordable Homebuyer Covenants

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me. Authority verification shall be provided within twenty (20) business days of Authority’s receipt of Homebuyer’s written notice of the proposed sale price. Owner shall sell the Affordable Home only to the proposed Transferee who qualifies as a Qualified Homebuyer. Homebuyer shall not convey title to the Affordable Home to a household that does not qualify as a Low Income Household and Homebuyer shall not convey fee title to the Affordable Home to a Low Income Household at a price that exceeds the Affordable Housing Cost.
(c) Income Verification. The proposed Transferee shall provide and certify, for the purpose of Authority approval, the following information: the Social Security Number of the proposed Transferee; copies of the federal and state income tax returns if filed by the proposed Transferee for the prior three (3) calendar years; copies of the most recent three (3) months of bank statements of proposed Transferee for each and all accounts held by members of the household; copies of the three (3) most current wage earning statements of the adult members of the proposed Transferee household; a certification as to the income and family size of the proposed Transferee; the purchase price the proposed Transferee intends to pay for the Affordable Home ; and any other information that Authority may reasonably require to verify the income and assets of the proposed Transferee household, as proposed buyer. The proposed Transferee shall also provide, for the purpose of Authority approval, the following: (A) an agreement by the proposed Transferee to assume the obligations of an owner of the Affordable Home as set forth in this Homebuyer Covenant and the Homebuyer Loan Agreement, including Homebuyer Note and Homebuyer Deed of Trust, in such form as the Authority may request, and (B) a written statement signed by the proposed Transferee (in a form reasonably acceptable to Authority Attorney) that authorizes Authority to inspect, use, and rely on the information provided by the proposed Transferee, and waiving and releasing any right or claim that said proposed Transferee might otherwise have in the absence of such written authorization to maintain the privacy or confidentiality of such information. The information, statements, agreements, and other documents that a proposed Transferee is required to provide pursuant to this subsection (c) are collectively the “Income Verification Materials.” Homebuyer shall have the obligation to collect and compile all Income Verification Materials from the proposed Transferee of the Affordable Home. (d) Authority Verification. Homebuyer shall not sell or otherwise convey fee title to the Affordable Home to the proposed Transferee until such time as Authority has determined (i ) the proposed Transferee intends to occupy the Affordable Home as a principal residence; (ii) the proposed Transferee is a Low Income Household; (iii ) the purchase price of the Affordable Home does not exceed the Affordable Housing Cost; (iv) the proposed Transferee and Authority have executed in a recordable form (where appropriate) any instruments , including without limitation assignment and assumption agreement, necessary to effectuate the agreement by the proposed Transferee to be bound by the obligations set forth in this Homebuyer Covenant, Homebuyer Loan Agreement, Homebuyer Note, Homebuyer Deed of Trust, Affordable Housing Option Agreement, and the Reimbursement Agreement; and (v) the proposed conveyance will not otherwise violate the terms and conditions of this Homebuyer Covenant. Homebuyer shall cooperate with and reasonably assist Authority with its determination of the matters set forth in clauses (i)-(v) above .

Homebuyer shall have the obligation to deliver to Authority all Income Verification Materials for the proposed Transferee of the Affordable Home no later than thirty (30) days prior to the close of escrow.

Authority shall respond to a request from Homebuyer for verification of the matters in clauses (i)-(v) above by written notice, which shall be delivered to Homebuyer within thirty (30) calendar days of Authority’s receipt of all Income Verification Materials for the proposed Transferee of the Affordable Home. If Authority is unable to verify the prospective Transferee’s income as provided herein, then the prospective Transferee’s income shall be deemed to exceed the maximum allowable income limit
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for a Low Income Household. In the event that Authority determines a proposed conveyance would violate this Homebuyer Covenant, Authority shall specify the reason for said violation. If the proposed violation is not corrected to the satisfaction of Authority within thirty (30) days after the date of the notice specifying the violation, or within such further time as the Authority determines in its sole and absolute discretion is necessary to correct the proposed violation, Homebuyer shall not convey title to the proposed Transferee. The Authority may apply to a court of competent jurisdiction for injunctive relief or specific performance of this Agreement, for a declaration that the proposed conveyance is void, or for any such other relief as may be appropriate. (e) Agreement to Assume the Obligations of this Homebuyer Covenant. The grant deed or other document effectuating the conveyance of the Affordable Home shall include for the duration of the Affordability Period the following : (A) references to this Homebuyer Covenant and the obligation of the Qualified Homebuyer to be bound by all the obligations set forth in this Homebuyer Covenant, (B) references to the Homebuyer Note, Homebuyer Deed of Trust, Affordable Housing Option Agreement, and Reimbursement Agreement, and (C) a covenant that will require the Qualified Homebuyer , and any successor or assign, to include in any document transferring any interest in the Affordable Home a reference to the Affordable Housing Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement, and the obligation of the Transferee to be bound by the obligations set forth in the Affordable Housing Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement and the Reimbursement Agreement.
(f) The Authority’s Title Policy. The Authority shall receive a title policy, in an amount to be determined by Authority, insuring the Affordable Housing Deed of Trust as a monetary lien of second priority, subordinate in priority among monetary liens only to the monetary lien of any First Lien recorded at the time of sale, which First Lien shall secure an amount not in exc ess of the then Affordable Housing Cost of the Affordable Home. Notwithstanding the foregoing provisions of this Subsection, in the event of a transfer to a spouse in a dissolution proceeding, the Authority shall not require a new title policy, nor shall the Authority require reimbursement for its costs.
(g) Certificates from Parties . The Homebuyer and proposed Transferee each shall certify in writing, in a form acceptable to the Authority, that the Transfer shall be closed in accordance with, and only with, the terms of the purchase and sale agreement and other documents submitted to and approved by the Authority, and that all consideration delivered by the proposed Transferee to Homebuyer has been fully disclosed to the Authority . The written certificate shall also include a provision that in the event a Transfer is made in violation of the terms of this Homebuyer Covenant or false or misleading statements are made in any documents or certificate submitted to the Authority for its approval of the Transfer, the Authority shall have, in addition to any other rights and remedies available, the right to order that the Transfer shall not occur, and the right to file an action at law or in equity to make the parties terminate and/or rescind the sales contract and/or declare the sale void notwithstanding the fact th at the Transfer may have closed and become final as between Homebuyer and the Transferee.
(h) Upon the close of the escrow for the proposed Transfer, the Transferor and the Transferee, as applicable, shall provide the Authority with a copy of the final purchase and sale agreement, settlement statement, escrow instructions, all certificates required by this Section 4, and any other documents which the Authority may reasonably request.

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4.2.2 Proposed Transfer Other Than By Sale . During the Affordability Period, in the event that a Transfer of the Affordable Home or any interest therein will be accomplished by means other than by sale or receipt by Homebuyer of consideration, Homebuyer (or Homebuyer’s lawfully designated representative in the event of the death of Homebuyer ) shall comply with all of the following set forth in Subsections (a)-(d) below in connection with said Transfer so that Authority can determine whether said Transfer is a Permitted Transfer:
(a) Notice to Authority. Homebuyer shall deliver to Authority no l
ater than thirty (30) days prior to the date of Transfer (such as the close of an escrow or closing of an estate) the Notice of Intent to Transfer. The Notice of Intent to Transfer shall identify the proposed Transferee, shall specify the reason(s) for the proposed Transfer, and shall certify that, to the best of Homebuyer’s knowledge, the proposed Transfer is a Permitted Transfer authorized in clauses (i) – (iv) of Section 4.1 of this Homebuyer Covenant (if, in fact, evidence supports the conclusion that the proposed Transfer is a Permitted Transfer). Homebuyer (or Homebuyer’s lawfully designated representative in the event of the death of Homebuyer ) shall include copies of all documents that support a conclusion that the proposed Transfer is a Permitted Transfer. (b) Income Verification. Homebuyer (or Homebuyer’s lawfully designated representative in the event of the death of Homebuyer ) shall deliver or cause to be delivered to Authority no later than thirty (30) days prior to the date of Transfer the following information: the Social Security Number(s) (if available) of the proposed Transferee if the proposed Transferee is a natural person or persons; copies of the federal and state income tax returns if filed by the proposed Transferee for the prior two (2) calendar years if the proposed Transferee is a natural person or persons; copies (if available) of the two most current wage earning statements of proposed Transferee if a natural person or persons; a certification as to the income and family size of the proposed Transferee if a proposed Transferee(s) is/are natural persons; and any other information that city may reasonably require to verify the income of the proposed Transferee. Homebuyer shall also deliver, for the purpose of Authority approval, the following: (A) an agreement by the proposed Transferee to assume the obligations of an owner of the Affordable Home as set forth in this Homebuyer Covenant in such form as the Authority may request, and (B) a written statement signed by the proposed Transferee (in a form reasonably acceptable to the Authority Attorney) that authorize Authority to inspect, use, and rely on the information provided by the proposed Transferee, and waiving and releasing any right or claim that such proposed Transferee might otherwise have in the absence of such written authorization to maintain the privacy or confidentiality of such information. The information, statements, agreements, and other documents that a proposed Transferee is required to provide pursuant to this subsection (b) are collectively the “Income Verification Materials.” Homebuyer shall have the obligation to collect and compile all Income Verification Materials from the proposed Transferee of the Affordable Home. (c) Authority Verification. Homebuyer shall not convey fee title to the Affordable Home to the proposed Transferee until such time as Authority has determined (i) the proposed Transferee intends to occupy the Affordable Home as a principal residence; (ii) the proposed Transfer is a Permitted Transfer; (iii ) the proposed Transferee and Authority have executed in a recordable form (where appropriate) any instruments necessary to effectuate the agreement by the proposed Transferee to be bound by the obligations set forth in this Homebuyer Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, and the Reimbursement Agreement; and (iv) the proposed conveyance will not otherwise violate the terms and conditions of this Homebuyer Covenant. Homebuyer shall c ooperate with and reasonably assist Authority with its determination of the matters set forth in clauses (i)-(iv) above. Homebuyer shall Homebuyer Covenants

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ve the obligation to deliver to Authority all Income Verification Materials for the proposed Transferee of the Affordable Home no later than thirty (30) days prior to the close of escrow. Authority shall respond to a request from Homebuyer for verification of the matters in clauses (i)-(iv) above by written notice, which shall be delivered to Homebuyer within thirty (30) calendar days of Authority’s receipt of all Income Verification Materials for the proposed Transferee of the Affordable Home. If Authority is unable to verify the prospective Transferee’s income as provided herein, then the prospective Transferee’s income shall be deemed to exceed the maximum allowable income limit for a Low Income Household. In the event that Authority determines a proposed conveyance would violate this Homebuyer Covenant, Authority shall specify the reason for said violation. If the proposed violation is not corrected to the satisfaction of Authority within thirty (30) days after the date of the notice specifying the violation, or within such further time as the Authority determines in its sole and absolute discretion is necessary to correct the proposed violation, Homebuyer shall not convey title to the proposed Transferee. The Authority may apply to a court of competent jurisdiction for injunctive relief or specific performance of this Agreement, for a declaration that the proposed conveyance is void, or for any such other relief as may be appropriate. (d) Agreement to Assume the Obligations of this Homebuyer Covenant. The grant deed or other document effectuating the conveyance of the Affordable Home shall include for the duration of the Affordability Period the following: (A) references to the Homebuyer Covenant, and the obligation of the Qualified Homebuyer to be bound by all the obligations set forth in the Affordable Housing Covenant, (B) references to the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, and the Reimbursement Agreement (all as defined in the Affordable Housing Covenant), and (C) a covenant that will require the Qualified Homebuyer, as buyer, and any successor or assign, to include in any document transferring any interest in the Affordable Home a reference to these Homebuyer Covenant s, Homebuyer Loan Agreement, Homebuyer Note, Homebuyer Deed of Trust, Affordable Housing Option Agreement, Reimbursement Agreement, and the obligation of the Transferee to be bound by the obligations set forth herein and therein.
(e) Transfer By Gift, Devise, Inheritance Or Intestacy. In the event of a Transfer by gift, devise, inheritance, or intestacy, which would result in the Transfer of the Affordable Home to a person or persons who are not eligible to occupy the Affordable Home in accordance with the terms of this Homebuyer Covenant, the Transferee shall have one hundred eighty (180) da
ys (or such longer period expressly approved by Executive Director in his/her sole discretion or as may be required by any applicable law ), within which to transfer the Affordable Home to a Permitted Transferee for no more than the Affordable Housing Cost in accordance with the provisions of this Section 4. In the event the Transferee fails to transfer the Affordable Home to a Permitted Transferee within one hundred eight (180) days (or such authorized longer period) of acquiring title to the Affordable Home, the Transferee shall be deemed to be in Default under the terms of thi s H
omebuyer Covenant and the Homebuyer Loan Agreement, and Authority may, in addition to any other rights and remedies it may have pursuant to this Homebuyer Covenant or at law and in equity, exercise its option to purchase the Affordable Home pursuant to the terms of the Option Agreement , or a
vail any remedy at law or equity.

4.3 Financings on Transfer. This Section 4 shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Affordable Home upon a Transfer thereof; however, any such financing shall be for the Homebuyer and (i) must be a Purchase Money Loan as the first lien mortgage , (ii) must not be in excess of the Affordable Housing Cost of Homebuyer Covenants

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he Affordable Home as of date of approval for the financing, (iii ) must be in compliance with this Homebuyer Covenant, Homebuyer Loan Agreement, Homebuyer Note, Homebuyer Deed of Trust, and (iv) shall be subordinate to this Homebuyer Covenant, which shall be and remain the senior, nonsubordinate encumbrance of record against the Affordable Home.

4.4 Execution and Recording of Documents.
(a) Upon Authority’s determination that the proposed Transfer is a Permitted Transfer in accordance with Section 4 of this Homebuyer Covenant , Authority shall acknowledge and deliver to the Permitted Transferee the Permitted Transferee Assignment and Assumption Agreement in recordable form. The Permitted Transferee and Homebuyer shall thereafter execute the Permitted Transferee Assignment and Assumption Agreement . At the time of Transfer, such as the close of escrow or closing of an estate, the Permitted Transferee shall record or cause to be recorded in the Official Records for Riverside County the Permitted Transferee Assignment and Assumption Agreement. The Permitted Transferee, upon completion of the Transfer, shall deliver to Authority a conformed copy of the recorded Permitted Transferee Assignment and Assumption Agreement, and shall deliver to Authority the fully executed original(s). (b) Notwithstanding the provisions in Section 4.4(a) above, in the event that Authority determines, in its reasonable discretion, that any of the Exhibits to this Homebuyer Covenant must be executed by a Permitted Transferee (and Authority, if appropriate) in order to preserve the affordability covenants and rights of the Authority and obligations of the owner of the Affordable Home, then the Permitted Transferee (and Authority, if appropriate) shall execute originals of any said Exhibit or Exhibits to this Homebuyer Covenant (and/or the Homebuyer Loan Agreement) in lieu of an assignment and assumption of said Exhibit pursuant to Section 4.4(a) above. By way of explanation of the foregoing, Authority may require in its reasonable discretion that a Permitted Transferee shall execute a new Affordable Housing Option Agreement, Reimbursement Agreement, and Homebuyer Deed of Trust (or modification of such deed of trust), in lieu of having the Permitted Transferee assume said Exhibit s that were executed by Homebuyer . In the event that Authority requires the Permitted Transferee to execute any Exhibit or Exhibit s pursuant to this subsection (b), Permitted Transferee (and Authority, if appropriate) shall execute the same prior to the time of Transfer, such as the close of escrow or closing of an estate, and the Permitted Transferee shall record or cause to be recorded any of said Exhibits that are in recordable form. The Permitted Transferee, upon completion of the Transfer, shall deliver to Authority the originally executed copies, and conformed copies of any said Exhibits recorded.

4.5 Qualified Homebuyer Marketing and Orientation. Authority may provide or cause to be provided to the Permitted Transferee an in -person, informational session (“Affordable Housing Counseling”) that shall explain, in plain and simple language, the resale restrictions and other provisions of the Homebuyer Covenant that affect the marketability of the Affordable Home .

Authority shall have the right to charge Homebuyer or Permitted Transferee of the Affordable Home, or both, a reasonable fee for costs incurred in connection with the informational session. Authority may record or cause to be recorded each informational session by videotape or other means, which recording shall clearly show the attendance of the Permitted Transferee. Upon completion of the informational session, Authority shall cause the Permitted Transferee to execute an agreement, in a form approved by the Authority Attorney, acknowledging the Permitted Transferee’s attendance of the informational session and providing for the Permitted Transferee’s waiver and release of Homebuyer and Authority from any claim or cause of action related to the restrictions on the marketability of the Homebuyer Covenants

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ffordable Home, provided that the Permitted Transferee represents that he or she understands the restrictions on marketability.

4.6 Equity Share; Damages for Prohibited Transfer . In the event that the Prohibited Transfer involves a sale or resale of the Affordable Home for an amount greater than the Affordable Housing Cost and Authority seeks monetary damages for the Prohibited Transfer, the Authority shall have the right to demand of Homebuyer , to the maximum extent permitted by law, to pay to Authority the amount by which the purchase price exceeds the Affordable Housing Cost, taking into account that Homebuyer may retain the value of any permanent capital improvements to the Affordable Home (such as remodeling, alterations and fixtures as evidenced by copies of paid receipts, photographs of completed work, with City building permits through final inspection, if required) paid by Homebuyer , down payment made by Homebuyer, and, if applicable, Homebuyer’s proportionate share of appreciation (if any). For purposes of this Section 4.6, the “Authority’s initial subsidy” shall be an amount equal to the fair market value of the Affordable Home at the time of the last Permitted Transfer (not taking into account of the restrictions set forth in this Homebuyer Covenant ) minus the actual sale price of the Affordable Home at the time of the last Permitted Transfer, plus any amount of down payment or mortgage assistance that Authority may have provided to Homebuyer for the purchase of the Affordable Home. Upon a Prohibited Transfer involving a sale or resale of the Affordable Home, Authority shall recover its proportionate share of appreciation, which shall be the amount equal to the ratio of the “Authority’s initial subsidy” to the sale or resale price of the Affordable Home at the time of the Prohibited Transfer. Nothing herein shall be deemed to limit Authority’s remedy for such a Prohibited Transfer to seeking monetary damages, and Authority shall be entitled to pursue any other equitable remedy permitted by law, including specific performance or injunctive relief or the exercise of the option pursuant to the Affordable Housing Option Agreement.

HOMEBUYER AGREES THAT THE AMOUNT SET FORTH IN THIS
SECTION 4.6 (THE “EQUITY SHARING AMOUNT”) CONSTITUTES A REASONABLE

AND FAIR APPLICATION OF THE EQUITY SHARING PROTECTIONS THAT HA VE

BEEN ESTABLISHED BY THE STATE DENSITY BONUS LAW (GOVERNMENT CODE SECTION 65915(c)), AS THOSE PROTECTIONS ARE ADAPTED TO THE AFFORDABLE HOME HERE RESERVED FOR A LOW INCOME HOUSEHOLD. HOMEBUYER

FURTHER AGREES THAT THE EQUITY SHARING AMOUNT IS A REASONABLE

APPROXIMATION OF THE ACTUAL DAMAGES THAT CITY WOULD SUFFER DUE TO THE DEFAULTS BY HOMEBUYER SET FORTH IN THIS SECTION 4.6, CONSIDERING

ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS COVENANT,

INCLUDING THE RELATIONSHIP OF THE EQUITY SHARING AMOUNT TO THE RANGE OF HARMTOCITY,ANDTHEACCOMPLISHMENTOFCITY’SPURPOSEOF

ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO LOW INCOME HOUSEHOLDS THAT REASONABLY COULD BE ANTICIPATED. THE EQUITY SHARING AMOUNT SET FORTH IN THIS SECTION 4.6 SHALL BE THE SOLE DAMAGES REMEDIES FOR THE DEFAULTS SET FORTH IN THIS SECTION 4.6, BUT NOTHING IN THIS SECTION 4.6 SHALL BE INTERPRETED TO LIMIT CITY’S REMEDY FOR SUCH DEFAULT TO THE EQUITY SHARING AMOUNT. IN PLACING ITS INITIALS HEREIN

BELOW, HOMEBUYER SPECIFICALLY CONFIRMS THE ACCURACY OF THE

STATEMENTS MADE ABOVE AND THE FACT THAT HOMEBUYER HAS BEEN

REPRESENTED BY COUNSEL OR HAS HAD THE OPPORT HOMEY TO BE

REPRESENTED BY COUNSEL TO EXPLAIN THE CONSEQUENCES OF THE EQUITY Homebuyer Covenants

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HARING PROVISION AT OR PRIOR TO THE TIME HOMEBUYER EXECUTED THIS COVENANT.

HOMEBUYER’S INITIALS:
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4.7 Successive Affordable Transfers. The provisions in this Section 4 shall apply to every successive Permitted Transfer during the Affordability Period. Upon completion of a Permitted Transfer, the Permitted Transferee shall constitute the “Homebuyer ” under this Homebuyer Covenant and shall be subject to and required to comply with all of the terms and conditions of this Homebuyer Covenant.

5. ENCUMBRANCES.

5.1 Subordination. This Covenant shall have priority over all monetary liens and encumbrances for the Affordability Peri od. However, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, and the Reimbursement Agreement may be subordinated to any First Lien on the Affordable Home that secures the payment of a principal amount that is not in excess, as of the date of approval for said financing, of the Affordable Housing Cost of the Affordable Home. The Authority shall execute a written instrument for the subordination of its rights under the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement and the Reimbursement Agreement in the form approved by the Authority Attorney as may reasonably be requested by the Lender. The Authority’s agreement to so subordinate its rights is subject to agreement in writing by the Lender providing the Authority the following rights:
(a) Upon the occurrence of a Default under any of the First Lien documents, the holder of the First Lien shall promptly notify the Authority of the occurrence of such Default, which notification shall be provided to the Authority contemporaneously with the delivery to Homebuyer of any notice of Default under any of the First Lien documents; and (b) The Authority shall have the right, during the cure periods which apply to the Homebuyer pursuant to the First Lien documents and any cure period which may apply to the Authority under applicable law, to cure the Homebuyer’s Default relative to the First Lien; and
(c) After a Default on any of the First Lien documents but prior to a foreclosure sale or deed in lieu assignment of the Affordable Home, the Authority shall have the right to take title to the Affordable Home and cure the Default relative to the First Lien documents, without the holder of the First Lien exercising any right it might otherwise have to accelerate the obligations secured by the First Lien by reason of such title transfer, so long as the Authority promptly cures any such Default upon taking title to the Affordable Home; and

5.2 Request for Notice of Default. The Authority may cause a Request for Notice to be recorded on the Affordable Home subsequent to the recordation of the First Lien deed of trust or mortgage requesting a statutory notice of Default as set forth in California Civil Code Section 2924 b.

5.3 Further Encumbrances Prohibited. Homebuyer shall not record or cause or permit the recordation of any deed of trust, mortgage, lien or other instrument creating a security Homebuyer Covenants

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nterest in or to the Affordable Home (a “ Further Encumbrance ”) other than this Homebuyer Covenant, the First Lien, the Affordable Housing Deed of Trust, and the Affordable Housing Option Agreement (and any assignment and assumption of the foregoing approved by the Authority pursuant to this Homebuyer Covenant).

6. REIMBURSEMENT AGREEMENT. Homebuyer covenants and agrees to pay timely any and all amounts due and payable on the obligations secured by the First Lien. Authority shall have the right to make payments to cure a Default or delinquency of any obligation secured by the First Lien pursuant to the Reimbursement Agreement, which provides that the Homebuyer reimburse the Authority for any payments made by Authority to cure such Default or delinquency, together with any costs incurred by Authority in making such payments, including costs of staff time and interest on the sums advanced by Authority at the current rate received by Authority on the investment of Authority’s general fund or at the maximum allowable interest rate pursuant to law, whichever is less. Homebuyer shall secure its obligations under the Reimbursement Agreement by the Affordable Housing Deed of Trust. In addition to any other right Authority may have under this Homebuyer Covenant, at law or in equity, Authority shall have the right pursuant to the terms and conditions of the Affordable Housing Deed of Trust to collect payment made pursuant to the Reimbursement Agreement on behalf of Homebuyer for Homebuyer’s Default.

7. OPTION

TO ACQUIRE HOME UPON DEFAULT OF OBLIGATIONS
UNDER THIS COVENANT . Authority shall have an option to purchase the Affordable Home pursuant to the Option Agreement in the event that the Homebuyer is in Default of any of his or her or their obligations under this Homebuyer Covenant.

8. USES. Homebuyer covenants and agrees to devote, use, and maintain the Affordable Home in accordance with this Homebuyer Covenant. All uses conducted on the Affordable Home , including, without limitation, all activities undertaken by the Homebuyer pursuant to this Homebuyer Covenant, shall conform to all applicable provisions of federal, state, and local laws, including the Escondido Municipal Code, and the recorded documents pertaining to and running with the Affordable Home.

9. MAINTENANCE OF HOME. Homebuyer shall maintain the Affordable Home in a manner consistent with community standards which will uphold the value of the Affordable Home, in accordance with the Escondido Municipal Code. Homebuyer also shall comply with all applicable federal, state and local laws.

10. OCCUPANCY STANDARDS. The Affordable Home shall be used as the principal residence of Homebuyer and Homebuyer’s family and for no other purpose. Homebuyer may have a Home Office so long as the Affordable Home is Homebuyer’s and Homebuyer’s family’s principle residence. Homebuyer shall not enter into an agreement for the rental, lease, or sublease of the Affordable Home, and Homebuyer shall not otherwise rent, lease, or sublease the Affordable Home .

The maximum number of persons permitted to occupy the Af fordable Home shall not exceed the occupancy permitted pursuant to the general requirements of the United States Department of Housing and Urban Development in effect on the Effective Date of the Homebuyer Loan Agreement, which is two persons per bedroom, plus one person (e.g., for a two bedroom unit the maximum number of persons residing in the unit can be five). The minimum occupancy standard permitted for a two- bedroom unit is one person per bedroom. Homebuyer shall, commencing upon the first anniversary of the date of this Homebuyer Covenant first set forth above and on each succeeding anniversary Homebuyer Covenants

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hereafter, submit to the Authority an affidavit of occupancy in a form provided by the Authority. The Authority may grant a temporary waiver of the above requirements for good cause, in the Authority’s sole and absolute discretion.

11. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF THIS COVENANT.

11.1 Covenants Run with the Land. This Covenant is designed to create equitable servitudes and covenants running with the Affordable Home, in accordance with the provisions of Civil Code Section 1468 and Moreno Valley Municipal Code . The covenants, conditions, restrictions, reservations, equitable servitudes, liens and charges set forth herein shall run with the Affordable Home and shall be binding upon all persons having any right, title or interest in the leasehold interest in the Affordable Home, or any part thereof, their heirs, successive owners and assigns; shall inure to the benefit of the Authority and its successors and assigns, shall be binding upon Homebuyer , and its successors and assigns; and may be enforced by Authority and its successors and assigns. Homebuyer hereby declares its understanding and intent that the burden of the covenants set forth herein touch and concern the land and that the Homebuyer’s interest in the Affordable Home is rendered less valuable thereby. Homebuyer hereby further declares its understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Affordable Home by Homebuyer , and by furthering public purposes for Authority.

In amplification and not in restriction of the provisions hereinabove, it is intended and agreed that Authority is deemed a beneficiary of the agreements and covenants provided herein both for and in its own right and also for the purposes of protecting the interests of the community . All covenants without regard to technical classification or designation shall be binding for the benefit of Authority and such covenants shall run in favor of Authority for the entire period during which such covenants shall be in force and effect, without regard to whether Authority is or remains an owner of any land or interest therein to which such covenants relate . However, all such covenants and restrictions shall be deemed to run in favor of all real property owned by the Authority which real property shall be deemed the benefited property of such covenants. Furthermore, all of the covenants, conditions, and restrictions contained herein shall also constitute easements in gross running in favor of the Authority. Authority shall have the right, in the event of any breach of any such agreement or covenant, to exercise all the rights and remedies, and to maintain any action at law or suit in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant.

11.2 Notice of Default. Failure or delay by Homebuyer to perform any term or provision of this Homebuyer Covenant which is not cured within thirty (30) days after receipt of notice from the Authority constitutes a Default under this Homebuyer Covenant; provided, however, if such Default is of the nature requiring more than thirty (30) days to cure, Homebuyer may avoid Default hereunder by immediately commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion within sixty (60) days after the expiration of the initial thirty (30) day period, for a total of ninety (90) days. Failure or delay in giving notice by the Authority shall not constitute a waiver of any Default, nor shall it change the time of Default.

11.3 Authority’s Remedies. Upon the declaration of a Default, the Authority may (i) apply to a court of competent jurisdiction for specific performance, for an injunction prohibiting any act or omission in violation of this Homebuyer Covenant, or for any such other relief as may be appropriate, (ii) exercise the Authority’s rights under this Homebuyer Covenant and the Affordable Homebuyer Covenants

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ousing Deed of Trust, including, without limitation, foreclosure of the Affordable Home , (iii) exercise the Authority’s rights under the Affordable Housing Option Agreement, and (iv) pursue such other rights and remedies permitted under this Homebuyer Covenant and by applicable law.

11.4 Prohibited Transfers Void. Any attempt by the Homebuyer to make a Prohibited Transfer of title to or any interest in the Affordable Home in violation of this Homebuyer Covenant shall be void and subject to rescission, specific performance, or any other right or remedy available at law or in equity.

12. INDEMNIFICATION. Homebuyer shall defend (with counsel of Authority’ s c
hoosing), indemnify and hold harmless the Authority and its officers, officials, agents, employees, representatives, and volunteers from and against any loss, liability, claim, or judgment relating in any manner to the Homebuyer’s use of the Affordable Home or Homebuyer’s violation of this Homebuyer Covenant. The Homebuyer shall remain fully obligated for the payment of taxes, liens and assessments related to the Affordable Home. There shall be no reduction in taxes for Homebuyer , nor any transfer of responsibility to the Authority to make such payments, by virtue of this Homebuyer Covenant.

13. INSURANCE. Homebuyer shall maintain or cause the homeowners association for the Project to maintain, during the term of this Homebuyer Covenant , an all-risk property insurance policy insuring the Affordable Home in an amount equal to the full replacement value of the structures and improvements for the Affordable Home. The policy shall contain a statement of obligation on behalf of the carrier to notify the Authority of any material change, cancellation or termination of coverage at least thirty (30) days in advance of the effective date of such material change, cancellation or termination. Homebuyer shall transmit a copy of the certificate of insurance to the Authority within thirty (30) days of acquiring title to the Affordable Home , and Homebuyer shall annually transmit to the Authority a copy of the certificate of insurance, signed by an authorized agent of the insurance carrier setting forth the general provisions of coverage. Any certificate of insurance must be in a form, content and with companies approved by the Authority.

14. TIME OF THE ESSENCE. Time is of the essence with respect to all provisions of this Homebuyer Covenant in which a definite time for performance is specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or cure period provided for in this Homebuyer Covenant.

15. NO WAIVER. No waiver of any provision or consent to any action under this Homebuyer Covenant shall constitute a waiver of any other provision or consent to any other action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver in the future except to the extent specifically set forth in writing. Any waiver given by a party shall be null and void if the party requesting such waiver has not provided a full and complete disclosure of all material facts relevant to the waiver requested.

16. FURTHER ASSURANCES . Homebuyer shall execute any further documents consistent with the terms of this Homebuyer Covenant, including documents in recordable form, as the Authority shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Homebuyer Covenant.

17. GOVERNING LAW. Homebuyer hereby agrees to comply with all ordinances, rules and regulations of the Authority. Nothing in this Homebuyer Covenant is intended to be, nor shall it Homebuyer Covenants

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deemed to be, a waiver of any Authority ordinance, rule or regulation. This Covenant shall be governed by the laws of the State of California without regard to conflict of law principles. Any legal action brought under this Homebuyer Covenant must be instituted in the Superior Court of the County of Riverside, State of California, or in the Federal District Court in the Central District of California.

18. AMENDMENT OF COVENANT. No modification, rescission, waiver, release or amendment of any provision of this Homebuyer Covenant shall be made except by a written agreement executed by Homebuyer and the Authority.

19. CITY MAY ASSIGN. The Authority may, at its option, assign its rights hereunder without obtaining the consent of the Homebuyer .

20. HOMEBUYER ASSIGNMENT PROHIBITED . In no event shall Homebuye r a
ssign or transfer all or any portion of the Affordable Home or any portion of this Homebuyer Covenant without the prior express written consent of the Authority, which consent shall be given by the Authority only in the event that the Authority determines the Transfer fully complies with Section 4.

This section shall not affect or diminish the Authority’s right to assign all or any portion of its rights hereunder.

21. NOTICES. As used in this Agreement, “notice” includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. All notices shall be in writing and shall be considered given either: (i) when delivered in person to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with r eturn receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below; or (iii) two (2) days after deposit in the United States mail in a sealed envelope, first class mail and postage prepaid, and addressed to the recipient named below; or (iv ) one (1) day after deposit with a known and reliable next -da y
doc
ument delivery service (such as FedEx), charges prepaid and delivery scheduled next -day to the recipient named below, provided that the sending party receives a confirmation of delivery from the delivery service provider; or (v) the first business day following the date of transmittal of any facsimile, provided confirmation of successful transmittal is retained by the sending Party. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows:

To Homebuyer :

To Authority:

Moreno Valley Housing Authority
201 North Broadway
Escondido, CA 92025-2798
Attention: Director of Community Development & Housing Manager Email:

Homebuyer Covenants

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W
ith copy to:

Business Name
Business Address, Suite #
Authority, State Zip code
Attn: Owner Name
Email:

Either party may change its address for notice by giving written notice thereof to the other party.

22. ATTORNEYS’ FEES AND COSTS . If any party to this Homebuyer Covenant institutes any action, suit, counterclaim, appeal or arbitration for any relief against another party, declaratory or otherwise (collectively an “ Action”), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenants, representations or warranties on the part of the other party to this Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover of and from the other party all costs and expenses of the Action, including reasonable attorneys’ fees (provided, however, that the attorneys’ fees awarded pursuant to this Section shall not exceed the hourly rate paid by Authority for legal services multiplied by the reasonable number of hours spent by the prevailing Party in the conduct of the litigation) and costs incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or award (collectively, a “Decision”) granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys’ fees and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount of reasonable attorneys’ fees and costs upon the request of either party, in accordance with the terms of this Section. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including reasonable attorneys’ fees and expert fees and costs (collectively “Costs”) incurred in enforcing, perfecting and executing such judgment . For the purposes of this Section, Costs shall include, without limitation, in addition to Costs incurred in prosecution or defense of the underlying action, reasonable attorneys’ fees, costs, expenses and expert fees and costs incurred in the following : (a) post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party examinations; (d) discovery; (e ) bankruptcy litigation; and (f) appeals of any order or judgment. For the purposes of this Agreement the term “prevailing party” shall have the meaning set forth in the California Code of Civil Procedure Section 1032(a)(4).

23. ENTIRE AGREEMENT. This Covenant, its Exhibits, and the Homebuyer Loan Agreement constitute the entire understanding and agreement of the parties. This Covenant integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between the Authority and the Homebuyer concerning all or any part of the subject matter of this Homebuyer Covenant.

24. SEVERABILITY. So long as the material bargain of the parties may be preserved, any provision of this Homebuyer Covenant that is deemed to be illegal, invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to the extent of the invalidity or unenforceability of such provision and shall be deemed stricken from this Homebuyer Covenant. Any stricken provision shall not affect the legality, enforceability or validity of the remainder of this Homebuyer Covenants

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omebuyer Covenant. If any provision or part thereof of this Homebuyer Covenant is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision that is as similar in tenor and intent to the stricken provision as is lega lly possible. Any such invalidity or unenforceability of any provision in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

25. CITY MANAGER AUTHORIZATION. The Executive Director or authorized designee is authorized to execute on behalf of Authority this Homebuyer Covenant, and shall have the authority to execute on behalf of Authority any further documents necessary or appropriate to effectuate the Authority’s purposes in entering into this Homebuyer Covenant.

26. COUNTERPARTS. This Covenant may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument . This Covenant shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Any one of such completely executed counterparts shall be sufficient proof of this Homebuyer Covenant.

27. COMPUTATION OF DAYS. Unless otherwise specified in this Agreement or any Exhibit attached hereto, use of the term “days” shall mean calendar days . For purposes of this Agreement and all Exhibits attached hereto, “business days” shall mean every day of the week that Authority Hall of the Authority is open for business to the general public.

28. EXHIBITS. Each of the Exhibit s referenced in this Homebuyer Covenant an d
a
ttached hereto is incorporated into this Homebuyer Covenant by this reference as though fully set forth in this Section.
[Signatures on next page]
Exhibit “D-2”
To Density Bonus Housing Agreement (Low Income)
Affordable Housing Covenant

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I
N WITNESS WHEREOF, the parties have executed this Homebuyer Covenant as of the date set forth above.
“HOMEBUYER”
Printed Name:

Printed Name:
“CITY”

MORENO V ALLEY HOUSING

AUTHORITY,
a public body corporate and politic
By:

Its:

APPROVED AS TO FORM:

OFFICE OF THE AUTHORITY ATTORNEY
MICHAEL R. MCGUINNESS, AUTHORITY ATTORNEY
BY:

Dare DeLano, Assistant Authority Attorney

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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 RIVERSIDE )

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

4905-7533-9338v1/200382-0007
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 RIVERSIDE )

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

Exhibit “1” To Affordable Housing Covenant
Legal Description of Affordable Home
4905-7533-9338v1/200382-0007
ATTACHMENT “1” TO AFFORDABLE HOUSING COVENANT

LEGAL DESCRIPTION OF AFFORDABLE HOME
[Attached]

Exhibit “1” To Affordable Housing Covenant
Legal Description of Affordable Home

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[REPLACE THIS PAGE WITH LEGAL DESCRIPTION OF LOW INCOME AFFORDABLE HOME, ONCE KNOWN AND TO BE SOLD]

Exhibit “2” To Affordable Housing Covenant
Notice of Intent To Transfer (360 Fusion Apartments)

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ATTACHMENT “2” TO AFFORDABLE HOUSING COVENANT

NOTICE OF INTENT TO TRANSFER
(360 FUSION APARTMENTS)

NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE MORENO V ALLEY

HOUSING AUTHORITY PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE PROPERTY .

From: (“Homebuyer ”)
To: Moreno Valley Housing Authority
201 North Broadway
Escondido, CA 92025-2798
Attn: Director of Community Development
Re: (Homebuyer’s street address)
Escondido, California (“Affordable Home”)
Circle appropriate words: Homebuyer desires to [sell, convey, transfer by inheritance or devise, lease, gift, otherwise transfer] the Affordable Home.

Proposed Transferee:

Ages of Proposed Transferee:

Gross Income of Proposed Transferee:

Household Size of Proposed Transferee:

Proposed Transfer Price:

If Proposed Transfer is not by sale, specify reason(s) for Proposed Transfer (e.g., Transfer as a Result of Marriage):

If the Authority has a program to help locate a Low Income purchaser, does the Homebuyer want the Authority to help look for a Low Income purchaser to buy the Unit? Yes: No:

Date
Signature of Homebuyer
( )
daytime telephone number of Homebuyer

Exhibit “3” To Affordable Housing Covenant
Request For Notice Under Civil Code Section 2924b

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ATTACHMENT “3” TO AFFORDABLE HOUSING COVENANT

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Moreno Valley Housing Authority
201 North Broadway
Escondido, CA 92025-2798
Attention: Director of Community Development

SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY
Exempt from recording fees pursuant to
Government Code §27383
Request for Notice Under Civil Code Section 2924b
In accordance with Section 2924b of the California Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as instrument No. on , 200 , in
Book ___, Page ___, Official Records of Riverside County, California, and describing land therein as See Sub-Exhibit “A” attached hereto
executed by , as Trustor, in
which is named as
Beneficiary, and , as Trustee, be
mailed to MORENO V ALLEY HOUSING AUTHORITY, at 14177 Frederick Street, Moreno Valley, California 92552, Attention: Director of Community Development NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED THIS RECORDED REQUEST . IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED.

MORENO V ALLEY HOUSING AUTHORITY
By:

Name:

Its: Executive Director

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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 RIVERSIDE )

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

4905-7533-9338v1/200382-0007
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 RIVERSIDE )

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

Sub-Exhibit “A” To Exhibit “3”
Legal Description
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SUB-ATTACHMENT “A” TO ATTACHMENT “3”

LEGAL DESCRIPTION
(Attached)

Sub-Exhibit “A” To Exhibit “3”
Legal Description

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[REPLACE THIS PAGE WITH LEGAL DESCRIPTION OF LOW INCOME AFFORDABLE HOME, ONCE KNOWN AND TO BE SOLD]

Exhibit “4” To Affordable Housing Covenant
Reimbursement Agreement

4905-7533-9338v1/200382-0007
ATTACHMENT “4” TO AFFORDABLE HOUSING COVENANT

REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of _____________________, ____, (“Reimbursement Agreement”), is hereby entered into by and between the MORENO V ALLEY HOUSING AUTHORITY, a public body corporate and politic (“Authority”), and ______________________________________ (“Homebuyer ”). Homebuyer and Authority are hereafter periodically referred to collectively as the “parties” and individually as a “party.”

RECITALS
A. The Homebuyer is purchasing a [single family
home/townhome/condominium] located at ________________, Escondido, California (“Affordable Home”). The Affordable Home is more particularly described in Exhibit “1” (incorporated herein by this reference) to that certain Homebuyer Covenant(defined below).

B. On or about even date as this Reimbursement Agreement, Authority and Homebuyer have executed and recorded that certain Affordable Housing Covenant, recorded as Instrument No. _____ in the Official Records of Riverside County, California (“Covenant”), which requires for a _____________ (__) year period commencing ________________________________________ [DATE TO BE DETERMINED IN ACCORDANCE WITH THE DENSITY BONUS AGREEMENT’S PROVISIONS ON THE “TOTAL AFFORDABILITY PERIOD”] that the Affordable Home be sold only to Low Income Households at an Affordable Housing Cost, which may result in purchase prices which are substantially less than the current fair market value of a similarly unrestricted unit. Unless expressly defined in this Reimbursement Agreement, all capitalized terms herein shall have the same meanings set forth in this Homebuyer Covenant.

C. The Homebuyer is obtaining a purchase money loan (“ Loan”) from a private lender (“Lender”) for a portion of the costs of acquisition of the Affordable Home, which loan shall be secured by a First Lien (as defined in this Homebuyer Covenant ) against the Affordable Home. A description of the Loan is set forth in Sub-Exhibit “A” hereto, which is incorporated herein.

D. The Homebuyer may Transfer his, her or their interests in the Affordable Home to a Permitted Transferee who may in turn obtain a First Lien purchase money loan from an institutional lender for a portion of the Affordable Housing Cost for the acquisition of the Affordable Home. This subsequent lender and loan are also hereinafter referred to as the “Lender” and the “Loan”.

E.

Pursuant to this Homebuyer Covenant , the Authority has the right to acquire the Affordable Home in the event, among other things, that it becomes subject to a foreclosure proceeding, and the Authority has the right to make payments to cure a Default or delinquency on the Loan.

F. The right to make payments to cure a Default or delinquency on the Loan will be of benefit to the Authority by allowing the Authority to prevent the foreclosure of the Affordable Home.

Exhibit “4” To Affordable Housing Covenant
Reimbursement Agreement

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G. The Authority’s right to make payments to cure a Default or delinquency on the Loan will also be of benefit to the Homebuyer , by allowing the Homebuyer to retain ownership of the Affordable Home and to avoid foreclosure.

H. The Authority desires to obtain the authority to make payments to cure a Default or delinquency on the Loan, on the condition that the Homebuyer agrees to reimburse the Authority for any payments made to cure a Default or delinquency on the Loan and any costs incurred in making such payments, including but not limited to the cost of staff time and interest on the sums advanced by Authority at the current rate received by Authority on the investment of Authority’s general fund or at the maximum allowable interest rate pursuant to law, whichever is less . The Homebuyer understands and acknowledges that the Authority would not make payments to cure a Loan Default or delinquency but for the Homebuyer’s agreement to make such reimbursements to the Authority, as provided herein.

AGREEMENT
NOW, THEREFORE, based upon the foregoing Recitals, which are incorporated to the Reimbursement Agreement by this reference, and in consideration of the mutual covenants herein contained, it is agreed by and between the parties hereto as follows:

1. Cure of Loan Default. The Authority hereby has the right, but not the obligation, to make payments to the Lender to fully or partially cure any Default or delinquency in payments of the Loan.

2. Reimbursement Obligation of Homebuyer . Homebuyer shall reimburse the Authority for any and all payments made by the Authority to fully or partially cure any Default or delinquency in payments of the Loan and for any costs incurred by the Authority in making such payments, including but not limited to the cost of staff time and interest on the sums advanced by Authority at the current rate received by Authority on the investment of Authority’s general fund or at the maximum allowable interest rate pursuant to law, whichever is less . Such payments shall be delivered to Authority within thirty (30) days after written demand is made therefor from the Authority to the Homebuyer . The Authority may make such written demand to the Homebuyer at any time after making such payments. If such written demand is made by personal delivery to the Homebuyer or to the Affordable Home, such demand shall be deemed given immediately upon such delivery. If such written demand is made by reliable overnight delivery service (such as FedEx), such demand shall be deemed given one business day after deposit of the written demand with the overnight delivery service.

If such written demand is made by registered, certified, or first class (postage prepaid) U.S. Mail, such demand shall be deemed given three (3) business days after deposit of the written demand with the U.S. Postal Service . Failure of Homebuyer to timely pay Authority shall be a Default under this Reimbursement Agreement and Covenant.

3. Security for Reimbursement . The obligation of the Homebuyer to make the reimbursement payments to the Authority required under Section 2 shall be secured by the Affordable Housing Deed of Trust, which shall encumber the Homebuyer’s fee title to the Affordable Home. Such deed of trust shall be executed by the Homebuyer and shall be recorded in the Official Records of Riverside County, California, at the time Homebuyer acquires title to the Affordable Home . The Homebuyer consents to recordation of such deed of trust in the official records of Riverside County, California. The Affordable Housing Deed of Trust shall secure the performance and payment of

Exhibit “4” To Affordable Housing Covenant
Reimbursement Agreement

4905-7533-9338v1/200382-0007
amounts due from the Homebuyer and/or his, her or their successors and assigns as provided in this Reimbursement Agreement.

4. Notice of Default and Delinquency. Homebuyer shall deliver to the Authority a copy of any notice of Default or delinquency in repayment of the Loan which Homebuyer receives from or on behalf of the Lender. Such notices shall be delivered to the Authority within five (5) days of Homebuyer’s receipt of such notice from the Lender.

5. Waivers.
(a) The Homebuyer expressly agrees that any payment due hereunder may be extended from time to time at the Authority’s sole and absolute discretion, and that the Authority may accept security in consideration for any such extension or release any security for this Reimbursement Agreement at its sole discretion, all without in any way affecting the liability of the Homebuyer . (b) No extension of time for payment of the amounts due pursuant to this Reimbursement Agreement made by agreement by the Authority with any person now or hereafter liable for the payment of this Reimbursement Agreement shall operate to release, discharge, modify, change or affect the original liability of the Homebuyer under this Reimbursement Agreement, either in whole or in part.
(c) The obligations of the Homebuyer under this Reimbursement Agreement shall be absolute and the Homebuyer waives any and all rights to offset, deduct or withhold any payments or charges due under this Reimbursement Agreement for any reasons whatsoever. (d) The Homebuyer waives presentment, demand, notice of protest and nonpayment, notice of Default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of interests in or to properties securing this Reimbursement Agreement, and the benefit of any exemption under any homestead exemption laws, if applicable. (e) No previous waiver and no failure or delay by the Authority in acting with respect to the terms of this Reimbursement Agreement shall constitute a waiver of any breach, Default, or failure or condition under this Reimbursement Agreement . A waiver of any term of this Reimbursement Agreement must be made in writing and shall be limited to the express written terms of such waiver.

6. Attorneys’ Fees and Costs. If any amounts due under this Reimbursement Agreement are not paid when due, the Homebuyer shall pay, in addition, all costs and expenses of collection and reasonable attorneys’ fees paid or incurred in connection with the collection or enforcement of this Reimbursement Agreement, whether or not suit is filed. The Homebuyer further agrees that the provisions of Section 22 of this Homebuyer Covenant regarding attorneys’ fees and costs shall be equally applicable to this Reimbursement Agreement.

Exhibit “4” To Affordable Housing Covenant
Reimbursement Agreement

4905-7533-9338v1/200382-0007

7. Miscellaneous.
(a) Term of Agreement. This Reimbursement Agreement shall take effect upon the date set forth in the first paragraph hereof and shall terminate concurrently with the termination of this Homebuyer Covenant.
(b) Successor is Deemed Included in All References to Predecessor. Whenever in this Reimbursement Agreement either the Homebuyer or the Authority is named or referred to, such reference shall be deemed to include the permitted successors or assigns thereof as prescribed in this Homebuyer Covenant , and all the covenants and agreements in this Reimbursement Agreement contained by or on behalf of the Homebuyer or the Authority shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. (c) Amendment. No modification, rescission, waiver, release or amendment of any provision of this Reimbursement Agreement shall be made except by a written agreement executed by Homebuyer and the Authority.
(d) Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received in the manner and to the addresses set forth in Section 21 of this Homebuyer Covenant.
(e) Further Assurances and Corrective Instruments. Homebuyer shall execute any further documents consistent with the terms of this Reimbursement Agreement, including documents in recordable form, as the Authority shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Reimbursement Agreement. (f) Execution in Counterparts . This Reimbursement Agreement may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument.

This Reimbursement Agreement shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original . Any one of such completely executed counterparts shall be sufficient proof of this Reimbursement Agreement. (g) Applicable Law. This Reimbursement Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflict of law principles.
(h) Captions. The captions or headings in this Reimbursement Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions of this Reimbursement Agreement.
(i) Definition of Terms . Terms not otherwise defined in this Reimbursement Agreement are defined and shall have the same meaning set forth in this Homebuyer Covenant. (j) Executive Director Authorization. The Executive Director or authorized designee is authorized to execute on behalf of Authority this Reimbursement Agreement, and shall

Exhibit “4” To Affordable Housing Covenant
Reimbursement Agreement

4905-7533-9338v1/200382-0007
have the authority to execute on behalf of Authority any further documents necessary or appropriate to effectuate the Authority’s purposes in entering into this Reimbursement Agreement. (k) Time of the Essence. Time is of the essence with respect to all provisions of this Reimbursement Agreement in which a definite time for performance is specified. (l) Computation of Days. Unless otherwise specified in this Agreement or any Exhibit attached hereto, use of the term “days” shall mean calendar days . For purposes of this Agreement and all Exhibits attached hereto, “business days” shall mean every day of the week that Authority Hall of the Authority is open for business to the general public. (m) Severability. So long as the material bargain of the parties may be preserved, any provision of this Reimbursement Agreement that is deemed to be illegal, invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to the extent of the invalidity or unenforceability of such provision and shall be deemed stricken from this Reimbursement Agreement.

Any stricken provision shall not affect the legality, enforceability or validity of the remainder of this Reimbursement Agreement. If any provision or part thereof of this Reimbursement Agreement is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision that is as similar in tenor and intent to the stricken provision as is legally possible. Any such invalidity or unenforceability of any provision in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. [signatures on next page]

Exhibit “4” To Affordable Housing Covenant
Reimbursement Agreement

4905-7533-9338v1/200382-0007
IN WITNESS WHEREOF, the Homebuyer and the Authority have duly executed this Reimbursement Agreement, all as of the date first above written. “HOMEBUYER”

Name:

Name:
“CITY”

MORENO V ALLEY HOUSING

AUTHORITY,
a public body corporate and politic
By:

Its:

APPROVED AS TO FORM:

OFFICE OF THE AUTHORITY ATTORNEY
MICHAEL R. MCGUINNESS, AUTHORITY ATTORNEY
BY:

Dare DeLano, Assistant Authority Attorney

Sub-Exhibit “A” To Exhibit “4”

4905-7533-9338v1/200382-0007
Sub-Exhibit “A” TO ATTACHMENT “4”
Name of Homebuyer :

Address of Unit:

Name of Lender:

Amount of Loan:

Exhibit “5” To Affordable Housing Covenant
Affordable Housing Resale And Option Agreement

4905-7533-9338v1/200382-0007
ATTACHMENT “5” TO AFFORDABLE HOUSING COVENANT

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Moreno Valley Housing Authority
201 North Broadway
Escondido, CA 92025-2798
Attention: Director of Community Development

Document is exempt from the payment of a recording fee
pursuant to Government Code Sections 6103 and 27383.

AFFORDABLE HOUSING RESALE AND OPTION AGREEMENT

THIS AFFORDABLE HOUSING RESALE AND OPTION AGREEMENT
(“Option Agreement”) is entered into as of ___________________, _____, by and between the MORENO V ALLEY HOUSING AUTHORITY, a public body corporate and politic (“Authority”), and ___________________ (“Homebuyer ”). Homebuyer and Authority are hereafter periodically referred to collectively as the “parties” and individually as a “party.”

R E C I T A L S
A. Homebuyer has purchased a [single family home/townhome/condominium] located at __________________, Escondido, California, as such real property is more particularly described in Sub-Exhibit “A” attached hereto and incorporated herein (“Affordable Home”).

B. Of or about even date as this Option Agreement, Authority and Homebuyer have executed and recorded that certain Affordable Housing Covenant, recorded as Instrument No. _____ in the Official Records of Riverside County, California (“Covenant”). Under the terms of this Homebuyer Covenant, the parties have agreed that for the forty-five (45)-year Affordability Period _______________, [DATE TO BE INSERTED, SAME DATE AS RECORDING OF THIS INSTRUMENT] the Affordable Home shall be sold only to Low Income Households at an Affordable Housing Cost and that the Affordable Home may be sold or otherwise transferred only as provided in Section 4 of this Homebuyer Covenant.

C. Pursuant to this Homebuyer Covenant , the Homebuyer has agreed to grant to the Authority an option to purchase the Affordable Home in the event Homebuyer is in Default of any of his, her or their obligations set forth in this Homebuyer Covenant.

D. Homebuyer agrees to grant to Authority an option to purchase the Affordable Home on the terms and conditions set forth herein below . For purposes of this Option Agreement, “Affordable Home” shall also be deemed to include any and all improvements located on the real property.

Exhibit “5” To Affordable Housing Covenant
Affordable Housing Resale And Option Agreement

4905-7533-9338v1/200382-0007
E. Pursuant to the Homebuyer Loan Agreement , this Homebuyer Covenant and California Government Code Section 65915(c)(2), at the expiration of the Affordability Period and upon resale, the Authority is entitled to recover any initial subsidy, as defined in state law, and its proportionate share of appreciation.

AGREEMENT
NOW, THEREFORE, based on the foregoing Recitals, which are incorporated to the Option Agreement by this reference, in consideration of the mutual covenants and conditions contained herein, the parties hereto agree as follows:

1. Grant of Option.
(a) Homebuyer grants to Authority an option (“Option”) to purchase the Affordable Home on the terms and conditions set forth in this Option Agreement. The Option may be exercised only upon the occurrence of an event of Default under this Homebuyer Covenant. (b) The purchase price payable by the Authority to the Homebuyer for the Affordable Home shall be the Affordable Housing Cost of the Affordable Home for Very Low Income Households (all as defined in this Homebuyer Covenant), as of the date of the close of escrow for the Authority’s acquisition of the Affordable Home (“Option Price”). (c) The Option created hereby shall be irrevocable by Homebuyer and shall be binding upon the successors and assigns of Homebuyer . The Authority shall have the right of specific performance to enforce the terms of this Option Agreement.

2. Term and Consideration for Option. The term of the Option (“Option Term”) shall commence on the date of this Option Agreement, and shall expire upon the expiration of the Affordability Period as defined in this Homebuyer Covenant.

3. Exercise of Option . The Option may be exercised by Authority’s delivery to Homebuyer of written notice of such exercise (“ Exercise Notice”). In the event that the Authority exercises the Option, but, prior to the sale of the Affordable Home to the Authority, the Homebuyer cures the event that gave rise to the right of the Authority to exercise the Option, the Authority’s exercise of the Option shall be deemed revoked. The revocation of the exercise of the Option shall not terminate this Option Agreement or preclude the Authority from subsequently exercising the Option upon a later occurrence of an event giving rise to the right of the Authority to exercise the Option.

4. Escrow and Completion of Sale. Within thirty (30) days after Authority has exercised the Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with an escrow company mutually acceptable to Authority and Homebuyer , which acceptance may not be unreasonably withheld, for the conveyance of the Affordable Home to the Authority. The Authority shall deposit in escrow not later than one (1) business day prior to the anticipated close of escrow date (“Close of Escrow”) cash or cashier’s check in an amount equal to the Option Price. The Authority’s obligation to close escrow shall be subject to the Authority’s approval of a then current preliminary title report and, at Authority’s option, environmental and other site testing. Any exceptions shown on such preliminary title report created on or after the Homebuyer’s acquisition of the Affordable Home shall be removed by Homebuyer at its sole expense prior to the close of escrow pursuant to this

Exhibit “5” To Affordable Housing Covenant
Affordable Housing Resale And Option Agreement

4905-7533-9338v1/200382-0007
Section 4 unless such exception(s) is (are) accepted by Authority in its sole and absolute discretion; provided, however, that Authority shall accept the following exceptions to title : (i) current taxes not yet delinquent, (ii) liens and encumbrances in favor of the Authority, and (iii) matters shown as printed exceptions in the standard form CLTA Homebuyer’s policy of title insurance. After exercising the Option, the Authority shall have right to enter upon the Affordable Home to conduct any tests, inspections, investigations, or studies of the condition of the Affordable Home. Homebuyer shall permit the Authority access to the Affordable Home for such purposes. Close of Escrow shall take place promptly after acceptance by Authority of the condition of title and the physical and environmental condition of the Affordable Home . Until the Close of Escrow, the terms of this Homebuyer Covenant and the documents executed and recorded pursuant thereto shall remain in full force and effect.

5. Failure to Exercise Option. If the Option is not exercised in the manner provided in Section 3 above before the expiration of the Option Term, the Option shall terminate. Upon receipt of the written request of Homebuyer , Authority shall cause a quitclaim deed terminating or releasing any and all rights Authority may have to acquire the Affordable Home (“Quitclaim Deed”) to be recorded in the Official Records of Riverside County, California.

6. Sale to Market Homebuyer . If the Authority does not exercise the Option and the Owner proceeds to Transfer the Affordable Home to a Market Homebuyer at an unrestricted price (supported by an MAI or other qualified appraisal), then Owner shall pay to the Authority an amount equal to the Authority’s initial subsidy as defined by California Government Code Section 65915(c)(2) which states the initial subsidy “shall be equal to the fair market value of the home at the time of initial sale minus the initial sale price to the moderate -income household, plus the amount of any downpayment assistance or mortgage assistance . If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value.”

7. Assignment and Nomination. The Authority may, in its sole and absolute discretion, assign its rights hereunder without obtaining the consent of the Homebuyer , and the Authority may nominate another person or entity to acquire the Affordable Home, and the identity of such nominee shall not be subject to the approval of the Homebuyer . In no event shall Homebuyer , without the prior express written consent of the Authority, which consent shall be given by the Authority only in the event that the Authority determines the Transfer fully complies with Section 4 of this Homebuyer Covenant, assign or transfer its obligations under this Option Agreement to any person or entity.

8. Title. Following the date of execution of this Option Agreement, except as permitted by this Homebuyer Covenant, Homebuyer agrees not to cause, and shall use all reasonable efforts not to permit, any lien, easement, encumbrance or other exception to title to be recorded against the Affordable Home without Authority’s prior written approval, such approval not to be unreasonably withheld.

9. Representations and Warranties of Homebuyer . Homebuyer hereby represents, warrants and covenants to Authority as follows, which representations and warranties shall survive the exercise of the Option and the Close of Escrow:
(a) That this Option Agreement and the other documents to be executed by Homebuyer hereunder, upon execution and delivery thereof by Homebuyer , will have been duly entered into by Homebuyer , and will constitute legal, valid and binding obligations of Homebuyer ;

Exhibit “5” To Affordable Housing Covenant
Affordable Housing Resale And Option Agreement

4905-7533-9338v1/200382-0007
(b) Neither this Option Agreement, nor anything provided to be done under this Option Agreement, violates or shall violate any contract, document, understanding, agreement or instrument to which Homebuyer is a party or by which it is bound; and (c) Homebuyer shall pay, prior to delinquency, any and all real property taxes and assessments which affect the Affordable Home.

Homebuyer agrees to indemnify, protect, defend (with counsel of Authority’s choosing), and hold Authority and the Affordable Home harmless from and against any damage, claim, liability, or expense of any kind whatsoever (including, without limitation, reasonable attorneys’ fees and fees of expert witnesses) arising from or in connection with any breach of the foregoing representations, warranties and covenants . Such representations and warranties of Homebuyer shall be true and correct on and as of the date of this Option Agreement, and on and as of the date of the Close of Escrow.

10. Representations and Warranties of Authority. Authority hereby represents and warrants and covenants to Homebuyer as follows, which representations and warranties shall survive the Close of Escrow:
(a) That this Option Agreement and the other documents to be executed by Authority hereunder, upon execution and delivery thereof by Authority, will have been duly entered into by Authority, and will constitute legal, valid and binding obligations of Authority, and (b) Neither this Option Agreement, nor anything provided to be done under this Option Agreement, violates or shall violate any contract, document, understanding, agreement or instrument to which Authority is a party or by which it is bound.

11. General Provisions.

11.1 Paragraph Readings. The paragraph headings used in this Option Agreement are for purposes of convenience only . They shall not be construed to limit or extend the meaning of any part of this Option Agreement.

11.2 Notices. As used in this Agreement, “notice” includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. All notices shall be in writing and shall be considered given either: (i) when delivered in person to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with return receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below; or (iii) two (2) days after deposit in the United States mail in a sealed envelope, first class mail and postage prepaid, and addressed to the recipient named below; or (iv ) one (1) day after deposit with a known and reliable next -day document delivery service (such as FedEx), charges prepaid and delivery scheduled next -day to the recipient named below, provided that the sendi ng party receives a confirmation of delivery from the delivery service provider; or (v) the first business day following the date of transmittal of any facsimile, provided confirmation of successful transmittal is retained by the sending Party . Unless otherwise provided in writing, all notices hereunder shall be addressed as follows:

Exhibit “5” To Affordable Housing Covenant
Affordable Housing Resale And Option Agreement

4905-7533-9338v1/200382-0007
To Homebuyer :

To Authority:

Moreno Valley Housing Authority
201 North Broadway
Escondido, CA 92025-2798
Attention: Director of Community Development & Housing Manager Email:

With copy to:

Business Name
Business Address, Suite #
Authority, State & Zip Code
Attn: Owner Name
Email:

Either party may change its address for notice by giving written notice thereof to the other party.

11.3 Binding Effect. Subject to the provisions of Section 6, the terms, covenants and conditions of this Option Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and transferees.

11.4 Entire Agreement. This Option Agreement together with this Homebuyer Covenant and Homebuyer Loan Agreement set forth the entire agreement between the parties hereto respecting the Option, and supersedes all prior negotiations and agreements, written or oral, concerning or relating to the subject matter of this Option Agreement.

11.5 California Law. This Option Agreement shall be governed by the laws of the State of California without regard to conflict of law principles.

11.6 Time of the Essence. Time is of the essence with respect to all provisions of this Option Agreement in which a definite time for performance is specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or c ure period provided for in this Option Agreement.

11.7 Counterparts. This Option Agreement may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original . Such counterparts shall, together, constitute and shall be one and the same instrument . This Option Agreement shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature

Exhibit “5” To Affordable Housing Covenant
Affordable Housing Resale And Option Agreement

4905-7533-9338v1/200382-0007
pages and consolidate them into a single identical original . Any one of such completely executed counterparts shall be sufficient proof of this Option Agreement.

11.8 Attorneys’ Fees. If any party to this Option Agreement institutes any action, suit, counterclaim, appeal or arbitration for any relief against another party, declaratory or otherwise (collectively an “Action”), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenants, representations or warranties on the part of the other party to this Option Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover of and from the other party all costs and expenses of the Action, including, without limitation, reasonable attorneys’ fees (provided, however, that the attorneys’ fees awarded pursuant to this Section shall not exceed the hourly rate paid by Authority for legal services multiplied by the reasonable number of hours spent by the prevailing Party in the conduct of the litigation) and costs incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or award (collectively, a “Decision”) granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys’ fees and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount of reasonable attorneys’ fees and costs upon the request of either party, in accordance with the terms of this Section. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including, without limitation, reasonable attorneys’ fees and expert fees and costs (collectively “Costs”) incurred in enforcing, perfecting and executing such judgment . For the purposes of this Section, Costs shall include, without limitation, in addition to Costs incurred in prosecution or defense of the underlying action, reasonable attorneys’ fees, costs, expenses and expert fees and costs incurred in the following : (a ) post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment . For the purposes of this Option Agreement the term “prevailing party” shall have the meaning set forth in the California Code of Civil Procedure Section 1032(a)(4).

11.9 Computation of Time. Unless otherwise specified in this Agreement or any Exhibit attached hereto, use of the term “days” shall mean calendar days . For purposes of this Agreement and all Exhibits attached hereto, “business days” shall mean every day of the week that Authority Hall of the Authority is open for business to the general public.

11.10 Definition of Terms. Terms not otherwise defined in this Option Agreement are defined and have the same meaning set forth in this Homebuyer Covenant.

11.11 Further Assurances. Each of the parties hereto shall execute and deliver at their own cost and expense, any and all additional papers, documents, or instruments, and shall do any and all acts and things reasonably necessary or appropriate in connection with the performance of their respective obligations hereunder in order to carry out the intent and purposes of this Agreement.

11.12 Executive Director Authorization. The Executive Director or authorized designee is authorized to execute on behalf of Authority this Option Agreement, and shall have the authority to execute on behalf of Authority any further documents necessary or appropriate to effectuate the Authority’s purposes in entering into this Option Agreement.

Exhibit “5” To Affordable Housing Covenant
Affordable Housing Resale And Option Agreement

4905-7533-9338v1/200382-0007

11.13 Severability. So long as the material bargain of the parties may be preserved, any provision of this Option Agreement that is deemed to be illegal, invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to the extent of the inv alidity or unenforceability of such provision and shall be deemed stricken from this Option Agreement . Any stricken provision shall not affect the legality, enforceability or validity of the remainder of this Option Agreement. If any provi sion or part thereof of this Option Agreement is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision that is as similar in tenor and intent to the stricken provision as is legally possible. Any such invalidity or unenforceability of any provision in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

IN WITNESS WHEREOF, this Option Agreement is executed by the parties hereto as of the date first above written.
“HOMEBUYER”

Name:

Name:
“CITY”

MORENO V ALLEY HOUSING

AUTHORITY,
a public body corporate and politic
By:

Its:

APPROVED AS TO FORM:

OFFICE OF THE AUTHORITY ATTORNEY
MICHAEL R. MCGUINNESS, AUTHORITY ATTORNEY
BY:

Dare DeLano, Assistant Authority Attorney

4905-7533-9338v1/200382-0007
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 RIVERSIDE )

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

4905-7533-9338v1/200382-0007
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 RIVERSIDE )

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

Sub-Exhibit “A” To Exhibit “5”
Legal Description

4905-7533-9338v1/200382-0007
SUB-ATTACHMENT “A” TO ATTACHMENT “5”

LEGAL DESCRIPTION
[Same as Exhibit 1 to this Homebuyer Covenant]

Exhibit “6” To Affordable Housing Covenant
Affordable Housing Deed of Trust
4905-7533-9338v1/200382-0007
ATTACHMENT “6” TO AFFORDABLE HOUSING COVENANT

AFFORDABLE HOUSING DEED OF TRUST

Exhibit “6” To Affordable Housing Covenant
Affordable Housing Deed of Trust

4905-7533-9338v1/200382-0007

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Moreno Valley Housing Authority
Community Development Department
201 North Broadway
Escondido, CA 92025-2798
Attn: Director of Community Development

(Space Above For Recorder’s Use)
This Deed of Trust is recorded at the request and for the benefit of the Moreno V alley Housing Authority and is
exempt from the payment of a recording fee pursuant to
Government Code Sections 6103 and 27383.

DEED OF TRUST WITH ASSIGNMENT OF RENTS
This DEED OF TRUST WITH ASSIGNMENT OF RENTS (“Deed of Trust”) is made this __________ day of __________________________, ____, among [INSERT HOMEBUYER ] (“Trustor”), whose address is ________________________________, [FIRST AMERICAN TITLE INSURANCE COMPANY], a California corporation (“Trustee”), and the MORENO V ALLEY HOUSING AUTHORITY, a public body corporate and politic (“Beneficiary”).

1. Grant In Trust. For the purposes and upon the terms and conditions in this Deed of Trust, Trustor grants, transfers, and assigns to Trustee, in trust, with power of sale and right of entry and possession, the following property and any interest therein (collectively, the “Trust Estate”) :
(a) Trustor’s ownership interest in and to that certain real property and all improvements and structures now or hereafter located on or part thereof, located in the Moreno Valley Housing Authority , County of Riverside , State of California, described as set forth in Sub-Exhibit “A” attached hereto and incorporated herein by reference (“Affordable Home ”), (b) all existing and future leases, subleases, subtenancies, licenses, agreements and concessions relating to the use, occupancy or enjoyment of all or any part of the Affordable Home, together with any and all guaranties and other agreements relating to or made in connection with any of the foregoing (individually, a “Lease”, and collectively, the “Leases”); and (c) all rents, issues, income, revenues, royalties, profits, proceeds and earnings now or hereafter payable with respect to or otherwise derived from the ownership, use, management, operation, leasing or occupancy of the Affordable Home, including, without limitation, cash or security deposited under any of the leases to secure the performance by the lessees of their obligations thereunder (collectively, the “Rents”).

2. Obligations Secured. Trustor makes this grant and assignment for the purpose of securing the following : (a) performance of and payment by Trustor under the Reimbursement Agreement of even date of this Deed of Trust between Trustor and Beneficiary (“ Reimbursement Agreement”), as such agreements may be amended from time to time, and each agreement of Trustor incorporated by reference or contained herein; and (b) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust . This Deed of Trust and the Reimbursement Agreement are collectively referred to herein as the “Security Documents .” Any

Exhibit “6” To Affordable Housing Covenant
Affordable Housing Deed of Trust

4905-7533-9338v1/200382-0007
capitalized terms contained in this Deed of Trust which are not defined herein shall have the meaning given in that certain Affordable Housing Covenant, executed and recorded on or about even date as this Deed of Trust and recorded as Instrument No. _______ (“Covenant”), unless expressly provided to the contrary.

3. Acceleration of Payment Upon Sale, Encumbrance, Refinance, or Default. To the extent permitted by applicable law, if Trustor shall : (a) directly or indirectly, voluntarily or involuntarily, sell, assign, transfer, dispose of, alienate, encumber, lease, or agree to sell, assign, transfer, dispose of, alienate, encumber, or lease all or any portion of the Trust Estate (excluding the First Lien by the purchase money Lender, a Permitted Transfer in accordance with this Homebuyer Covenant, and any other assignment, transfer, or encumbrance approved in writing by Authority); (b) unless otherwise approved in writing by Authority, refinance any lien or encumbrance which has priority over the Deed of Trust (excluding only the First Lien by the purchase money Lender); or (c) Default on any of its obligations set forth in the Security Documents and fail to cure the default within the applicable cure period, then Beneficiary, at its option, may (i) declare all obligations and the entire indebtedness evidenced hereby to be immediately due and payable and collectible then or thereafter as Beneficiary may elect, and/or (ii ) collect and apply all Leases and Rents to the entire indebtedness evidenced hereby.

4. Default. Trustor shall be deemed in Default of this Deed of Trust in the event Trustor is in Default of any obligation in the Security Documents and such Default is not cured within the applicable cure period set forth therein.

5. Incorporation of Fictitious Deed of Trust. To protect the security of this Deed of Trust, and with respect to the Affordable Home above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B, of the fictitious deed of trust recorded in the Riverside County Recorder’s Office, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely:

COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633
Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774

shall inure to and bind the parties hereto, with respect to the Affordable Home.

Exhibit “6” To Affordable Housing Covenant
Affordable Housing Deed of Trust

4905-7533-9338v1/200382-0007
WITNESSETH: Trustor has caused this Deed of Trust to be executed as of the date set forth above.
“TRUSTOR”
[INSERT HOMEBUYER]
By:

Print Name:

4905-7533-9338v1/200382-0007
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 RIVERSIDE )

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

4905-7533-9338v1/200382-0007

DO NOT RECORD
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.

A. To protect the security of this Deed of Trust, Trustor agrees:
1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said prop erty may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary . The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be relea sed to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, i n any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.

Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may : make or do the same is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporti ng to aff ect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at th e time when said statement is demanded.

B. It is mutually agreed:
1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof . The Grantee in such reconveyance may be described as “the person or persons legally entitled thereto.”
5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any ti me without notice, either in person, by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby.

After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and plac e fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement.

Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, expres s or implied. The

4905-7533-9338v1/200382-0007
recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof . Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.

After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of : all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the per son or persons legally entitled thereto.
7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary here under, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceed ing in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.

REQUEST FOR FULL RECONVEYANCE
To be used only when note has been paid
Date
To: Trustee:

The undersigned is the legal owner and holder of all indebtedness secured by this Deed of Trust. All sums secured by said Deed of Trust have been paid, and you are requested, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel all evidences of indebtedness, secured by said Deed of Trust, delivered to you herewith and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, the estate now held by you under the same.

Mail Reconveyance to:

By:

By:

Do not lose or destroy this Deed of Trust OR the Note which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made.

Sub-Exhibit “A” To Deed Of Trust
Legal Description of Affordable Home

4905-7533-9338v1/200382-0007
SUB-ATTACHMENT “A” TO DEED OF TRUST

LEGAL DESCRIPTION OF AFFORDABLE HOME
[Same as Exhibit 1 to this Homebuyer Covenant]

Exhibit “7” To Affordable Housing Covenant
Permitted Transferee Assignment And Assumption Agreement 4905-7533-9338v1/200382-0007
ATTACHMENT “7” TO AFFORDABLE HOUSING COVENANT

PERMITTED TRANSFEREE ASSIGNMENT AND ASSUMPTION AGREEMENT

Exhibit “7” to Affordable Housing Covenant
Permitted Transferee Assignment And Assumption Agreement

4905-7533-9338v1/200382-0007

RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:

Moreno Valley Housing Authority
201 North Broadway
Escondido, CA 92025-2798
Attn: Director of Community Development

(Space Above For Recorder’s Use)
This Assignment and Assumption Agreement is recorded
at the request and for the benefit of the Moreno Valley Housing Authority and is exempt from the payment of a
recording fee pursuant to Government Code Sections
6103 and 27383.

ASSIGNMENT AND ASSUMPTION AGREEMENT

AFFECTING REAL PROPERTY
This ASSIGNMENT AND ASSUMPTION AGREEMENT AFFECTING REAL PROPERTY (“Agreement”) is hereby entered into as of ___________________, ______, by and between ____________________________ [INSERT HOMEBUYER] (“Homebuyer ”) and ____________________________ [INSERT PERMITTED TRANSFEREE] (“Permitted Transferee”). Homebuyer and Permitted Transferee are hereinafter periodically referred to collectively as the “parties” and individually as a “party.”

RECITALS
A. Homebuyer has purchased a [single family home/ townhouse/ condominium] located at ________________, Escondido, California, as such real property is more particularly described in Sub-Exhibit “A” attached hereto and incorporated herein (“Affordable Home”).

B. The Affordable Home is subject to that certain Homebuyer Covenant dated ________________ and recorded on ________________ as Instrument No. _________ in the Official Records for Riverside County, California (“Covenant”). Under the terms of this Homebuyer Covenant, the original homeowner and Moreno Valley Housing Authority , a public body corporate and politic (“Authority”) agreed, that for a ________________ (___) year period commencing ________________, [DATE TO BE DETERMINED ACCORDING TO PROVISIONS IN THE

DENSITY BONUS HOUSING AGREEMENT REGARDING THE TOTAL
AFFORDABILITY PERIOD] the Affordable Home shall be sold only to Low Income Households at an Affordable Housing Cost and that the Affordable Home may be sold or otherwise transferred only as provided in Section 4 of this Homebuyer Covenant. Capitalized terms not otherwise defined in this Agreement are defined and have the same meaning as set forth in this Homebuyer Covenant.

C. Pursuant to this Homebuyer Covenant, in the event that Homebuyer received Authority approval for a Transfer of the Affordable Home pursuant to this Homebuyer Covenant , Homebuyer and the Authority-approved transferee must execute this Agreement, whereby the Authority-approved transferee would assume [INCLUDE ALL THAT APPLY (SEE Section 4.4 of this Homebuyer

Exhibit “7” to Affordable Housing Covenant
Permitted Transferee Assignment And Assumption Agreement

4905-7533-9338v1/200382-0007
Covenant)]: this Homebuyer Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, and the Reimbursement Agreement (all as defined and attached to this Homebuyer Covenant ) (collectively, the “Assigned/Assumed Documents”), and assume all of Homebuyer’s obligations in those agreements.

D. Authority has approved Permitted Transferee as complying with the terms and conditions of this Homebuyer Covenant , thereby allowing the transfer of the Affordable Home from Homebuyer to Permitted Transferee.

AGREEMENT
NOW, THEREFORE, based upon the foregoing Recitals, which are incorporated into this Agreement by this reference, and for good and valuable consideration, the parties agree as follows:

1. Assignment of Documents . Homebuyer hereby expressly transfers and assigns to Permitted Transferee all of Homebuyer’s right, title, and interest in the Affordable Home subject to the Assigned/Assumed Documents, as may be amended from time to time.

2. Assumption of Documents . Permitted Transferee hereby expressly assumes all of Homebuyer’s right, title, and interest in the Affordable Home subject to the Assigned/Assumed Documents, and Permitted Transferee expressly assumes the Assigned/Assumed Documents, as may be amended from time to time, and agrees to keep, perform, and fulfill all of the terms, conditions, covenants, and obligations required to be kept, performed, and fulfilled by the “Homebuyer ” that are set forth therein.

3. Recording of Agreement. Pursuant to the requirements of this Homebuyer Covenant , this Agreement shall be recorded in the Official Records for Riverside County, California.

4. Subsequent Actions. Homebuyer and Permitted Transferee shall cooperate and shall execute any further documents consistent with the terms of this Homebuyer Covenant , including documents in recordable form, as the Authority shall from time to time find necessary or appropriate to effectuate Authority’s purpose in entering into this Homebuyer Covenant.

5. Third Party Beneficiary. Authority (and any of Authority’s successors or assigns) is an express third party beneficiary of this Agreement and shall have the right, but not the obligation, to enforce its terms . Neither party may rescind or amend this Agreement without the express written consent of Authority (or its successor or assign).

6. Notices. Upon the assumption by Permitted Transferee of the Assigned/Assumed Documents, all notices, certificates and other communications between Authority and Permitted Transferee required pursuant to the Assigned/Assumed Documents shall be accomplished pursuant to Section 21 of this Homebuyer Covenant. All notices, certificates and other communications to be sent by Authority to Permitted Transferee as the assuming “Homebuyer ” shall be to the following address:

Exhibit “7” to Affordable Housing Covenant
Permitted Transferee Assignment And Assumption Agreement

4905-7533-9338v1/200382-0007
To PERMITTED
TRANSFEREE:

7. Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument.
[Signatures on next page]

Exhibit “7” To Affordable Housing Covenant
Permitted Transferee Assignment And Assumption Agreement

4905-7533-9338v1/200382-0007
IN WITNESS WHEREOF, this Agreement is entered into this Assignment as of the date first set forth above.
“HOMEBUYER”

By:

Name:

By:

Name:
“PERMITTED TRANSFEREE”

By:

Name:

By:

Name:

Exhibit “7” to Affordable Housing Covenant
Permitted Transferee Assignment And Assumption Agreement

4905-7533-9338v1/200382-0007
ACKNOWLEDGED AND AGREED:

The undersigned hereby acknowledges and agrees to the terms of the assignment and assumption of the parties hereto as set forth herein.
“CITY”

MORENO V ALLEY HOUSING

AUTHORITY,
a public body corporate and politic
By:

Its:

APPROVED AS TO FORM:

OFFICE OF THE AUTHORITY ATTORNEY
MICHAEL R. MCGUINNESS, AUTHORITY ATTORNEY
BY:

Dare DeLano, Assistant Authority Attorney

Sub-Exhibit “A” to Assignment And Assumption
Agreement Affecting Real Property
Legal Description of Affordable Home

4905-7533-9338v1/200382-0007
SUB-ATTACHMENT “A” TO ASSIGNMENT AND ASSUMPTION

AGREEMENT AFFECTING REAL PROPERTY

LEGAL DESCRIPTION OF AFFORDABLE HOME
[Same as Exhibit 1 to this Homebuyer Covenant]

4905-7533-9338v1/200382-0007
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 RIVERSIDE )

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

4905-7533-9338v1/200382-0007
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 RIVERSIDE )

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

Exhibit “8” to Affordable Housing Covenant
Example of Calculation of Affordable Housing Cost

4905-7533-9338v1/200382-0007
ATTACHMENT “8” TO AFFORDABLE HOUSING COVENANT

NEED TO UPDATE

EXAMPLE OF CALCULATION OF AFFORDABLE HOUSING COST
Calculation of Affordable Housing Cost
The following information provides examples of how affordable housing costs for ownership housing pursuant to the provisions of State of California Density Bonus law, Government Code Chapter 65915, in effect upon approval of the Homebuyer Loan Agreement (“Homebuyer Loan Agreement”). The process in determining costs is a two-step process based on published median income levels in effect at the time of sale of the affordable housing units.

The first step in determining unit costs for a density bonus affordable housing program is determining whether the household which will be purchasing the housing unit meets the income standards applicable to Riverside County, based on the size of the household for that specific year as published by the State of California Department of Housing and Community Development. Table 1 lists the current median income by household size and is based on currently effective median income of Riverside County, as set forth in 25 California Code of Regulations, Section 6932 for 2015. These median income numbers are revised annually by the State.

Table 1
2015 Riverside County Median Income
Household Size
1 person 2 person 3 person 4 person 5 person
Household Household Household Household Household
Median Income $61,050 $69,750 $78,500 $87,200 $94,200

Based on 2015 figures (which will be revised annually), the maximum income for households of 1, 2, 3, 4, and 5 persons for the Low Income units is as follows:

Household
Size
Low Income
Affordable Homes
Maximum
Annual Income
2015
1 Person $53,950
2 Person 61,650
3 Person 69,350
4 Person 77,050
5 Person 83,250

The second step in determining compliance with affordable housing requirements is determining the monthly housing cost payable by a buyer of the affordable housing unit and then determining what factors as listed below equal the maximum monthly cost.

Exhibit “8” to Affordable Housing Covenant
Example of Calculation of Affordable Housing Cost

4905-7533-9338v1/200382-0007
OWNERSHIP CALCULATION EXAMPLE1
For purposes of determining the Affordable Housing Cost for a For Sale Affordable Home, Homebuyer shall comply with Health and Safety Code Section 50052.5(b)(2) and Sections 6920 and 6924 of Title 25 of the California Code of Regulations (as enacted as of the Effective Date of the Homebuyer Loan Agreement ). In explanation thereof, Homebuyer shall use monthly housing costs for the particular For Sale Affordable Home to determine the housing costs for the upcoming twelve month period. Homebuyer shall use the following items associated with the For Sale Affordable Home when determining housing costs:
• Principal and interest payments on the mortgage loan. • Property taxes and assessments (including Communities Facility District (CFD) fees, if applicable)
• Fire and casualty insurance to the extent not covered by the homeowner’s association. • Property maintenance and repair to the extent not covered by the homeowner’s association.
• A reasonable allowance for utilities (including garbage collection, sewer, water, electricity, gas and other fuels, but not telephone or cable service). Such an allowance shall take into consideration the cost of an adequate level of service. • Homebuyer association fees.
• Space rent, if the housing unit is on rented or leased land. • Estimates of purchase price down payment (subject to verification by the Executive Director).

When calculating property maintenance and repair costs, Homebuyer shall use best efforts to consider annual maintenance and repair costs specific to the interior of the Affordable Home, based on the twelve months prior to calculation of the Affordable Housing Cost. An example would be annual repair costs for plumbing and electrical service fixtures specific to the Affordable Home, as reasonably and in good faith determined by Homebuyer and approved by Authority.

Homebuyer shall follow the computation formula in Section 6924 of Title 25 of the California Code of Regulations (as enacted as of the Effective Date of the Homebuyer Loan Agreement ) to determine the maximum monthly housing payment allowable pursuant to Health and Safety Code Section 50052.5(b)(2) for very low-income households. In explanation of the foregoing, Table 2 below shows the maximum very low-income monthly housing payment, being the product of 30 percent times 50 percent of the area median income adjusted for household size appropriate to the unit2.

Table 2
2015 Low Income Buyers Monthly Housing Payment
Purchasing a 0 bedroom house, payment may not exceed $1,068 Purchasing a 1 bedroom house, payment may not exceed 1,221

1 The information and example in this Exhibit are based upon Health and Safety Code Section 50052.5 (and implementing regulations in the California Code of Regulations) as the same exists or is hereafter amended. 2 Adjusted for family size appropriate to the unit” shall mean for a household of one person in the case of a four persons in the case of a three-bedroom unit and five persons in the case of a four-bedroom unit.

Exhibit “8” to Affordable Housing Covenant
Example of Calculation of Affordable Housing Cost

4905-7533-9338v1/200382-0007
Purchasing a 2 bedroom house, payment may not exceed 1,374 Purchasing a 3 bedroom house , payment may not exceed 1,526 Table 3 provides examples of how the monthly housing cost calculation would establish a maximum sales price in 2015 for very low households using assumptions for interest rates, loan terms, HOA dues, CFD fees, utilities, maintenance and taxes. A down payment is then added to establish the sales price.

Table 3

0 $1,068 $557 $90 $0 $72 $50 $300 $92,864 $4,888 $97,752 1 1,221 671 108 - 92 50 300 111,865 5,888 117,752
2 1,374 791 127 - 105 50 300 131,996 6,947 138,944
3 1,526 887 143 - 146 50 300 147,980 7,788 155,768
4 1,649 976 157 - 165 50 300 162,849 8,571 171,420
5 1,770 1,067 172 - 181 50 300 178,025 9,370 187,394

Assumptions:

Interest Rate 6.00%
Term – Years 30
HOA 300
Utilities Use Authority Schedule Gas/Electric Combination Insurance (1) Included in HOA
Maintenance 50
Taxes 1.10%
Downpayment 5%

Exhibit B
To Homebuyer Covenants
Health and Safety Code Sections 50052.5, 50053, 50079.5, and 50093

4905-7533-9338v1/200382-0007
E

XHIBIT B
To Homebuyer Covenants
HSC Sections 50052.5, 50053, 50079.5, and 50093 (Low Income) 50052.5.
(a) F
or any owner-occupied housing that receives assistance prior to January 1, 1991, and a condition of that assistance is compliance with this section, “affordable housing cost” with respect to lower income households may not exceed 25 percent of gross income. (b) F
or any owner -occupied housing that receives assistance on or after January 1, 1991, and a condition of that assistance is compliance with this section, “affordable housing cost” may not exceed the following:
(1) F
or extremely low income households the product of 30 percent times 30 percent of the area median income adjusted for family size appropriate for the unit. (2) F
or very low income households the product of 30 percent times 50 percent of the area median income adjusted for family size appropriate for the unit. (3) F
or lower income households whose gross incomes exceed the maximum income for very low income households and do not exceed 70 percent of the area median income adjusted for family size, the product of 30 percent times 70 percent of the area median income adjusted for family size appropriate for the unit. In addition, for any lower income household that has a gross income that equals or exceeds 70 percent of the area median income adjusted for family size, it shall be optional for any state or local funding agency to require that affordable housi ng
c
ost not exceed 30 percent of the gross income of the household. (4)
For moderate-income households, affordable housing cost shall not be less than 28 percent of the gross income of the household, nor exceed the product of 35 percent times 110 percent of area median income adjusted for family size appropriate for the unit. In addition, for any moderate-income household that has a gross income that exceeds 110 percent of the area median income adjusted for family size, it shall be optional for any state or local funding agency to require that affordable housing cost not exceed 35 percent of the gross income of the household.
(c
)
The department shall, by regulation, adopt criteria defining, and providing for determination of, gross income, adjustments for family size appropriate to the unit, and housing cost for purposes of determining affordable housing cost under this section. These regulations may provide alternative criteria, where necessary to be consistent with pertinent federal statutes and regulations governing federally assisted housing. The agency may, by regulation, adopt alternative criteria, and pursuant to subdivision (f) of Section 50462, alternative percentages of income may be adopted for agency-assisted housing development.
(d)
With respect to moderate - and lower income households who are tenants of rental housing developments and members or shareholders of cooperative housing developments, or limited equity Exhibit B
To Homebuyer Covenants
Health and Safety Code Sections 50052.5, 50053, 50079.5, and 50093

4905-7533-9338v1/200382-0007
c
ooperatives “affordable housing cost” has the same meaning as affordable rent, as defined in Section 50053.
(e) Re
gulations of the department shall also include a method for determining the maximum construction cost, mortgage loan, or sales price that will make housing available to an income group at affordable housing cost.
(f) F
or purposes of this section, “area median income” shall mean area median income as published by the department pursuant to Section 50093.
(g) F
or purposes of this section, “moderate income household” shall have the same meaning as “persons and families of moderate income” as defined in Section 50093. (h) F
or purposes of this section, and provided there are no pertinent federal statutes applicable to a project or program, “adjusted for family size appropriate to the unit” shall mean for a household of one person in the case of a studio unit, two persons in the case of a one-bedroom unit, three persons in the case of a two-bedroom unit, four persons in the case of a three -bedroom unit, and five persons in the case of a four-bedroom unit.
50053.
(a) F
or any rental housing development that receives assistance prior to January 1, 1991, and a condition of that assistance is compliance with this section, “affordable rent” with respect to lower income households shall not exceed the percentage of the gross income of the occupant person or household established by regulation of the department that shall not be less than 15 percent of gross income nor exceed 25 percent of gross income.
(b) (1)E
xcept as provided in paragraph (2), for any rental housing development that receives assistance on or after January 1, 1991, and a condition of that assistance is compliance with this section, “affordable rent,” including a reasonable utility allowance, shall not exceed:
(A) (i
) For acutely low income households, as defined in Section 50063.5, the product of 30 percent times 15 percent of the area median income adjusted for family size appropriate for the unit.
(ii)
This subparagraph shall apply to a lease entered into on or after January 1, 2022.
(B) F
or extremely low income households, the product of 30 percent times 30 percent of the area median income adjusted for family size appropriate for the unit. (C) F
or very low income households, the product of 30 percent times 50 percent of the area median income adjusted for family size appropriate for the unit. (D) F
or lower income households whose gross incomes exceed the maximum income for very low income households, the product of 30 percent times 60 percent of the area Exhibit B
To Homebuyer Covenants
Health and Safety Code Sections 50052.5, 50053, 50079.5, and 50093

4905-7533-9338v1/200382-0007
m
edian income adjusted for family size appropriate for the unit. In addition, for those lower income households with gross incomes that exceed 60 percent of the area median income adjusted for family size, it shall be optional for any state or local funding agency to require that affordable rent be established at a level not to exceed 30 percent of gross income of the household.
(E) F
or moderate-income households, the product of 30 percent times 110 percent of the area median income adjusted for family size appropriate for the unit. In addition, for those moderate-income households whose gross incomes exceed 110 percent of the area median income adjusted for family size, it shall be optional for any state or local funding agency to require that affordable rent be established at a level not to exceed 30 percent of gross income of the household.
(2)
Notwithstanding paragraph (1), for a rental housing development described in paragra ph (1) t
hat dedicates 80 percent of units, exclusive of a manager’s unit or units, to lower income households, “affordable rent,” including a reasonable utility allowan ce, shall not exceed the rent prescribed by deed restrictions or regulatory agreements pursuant to the terms of the public financing or public financial assistance for the rental housing development, if the rental housing development receives an award on or after January 1, 2025, of any of the following:
(A
) F
ederal or state low-income housing tax credits.
(B) T
ax-exempt private activity bonds or general obligation bonds. (C) L
ocal, state, or federal loans or grants.
(c)
The department’s regulation shall permit alternative percentages of income for agency- assisted rental and cooperative housing developments pursuant to regulations adopted under subdivision (f) of Section 50462. The department shall, by regulation, adopt criteria defining and providing for determination of gross income, adjustments for family size appropriate to the unit, and rent for purposes of this section. These regulations may provide alternative criteria, where necessary, to be cons isten t
w
ith pertinent federal statutes and regulations governing federally assisted rental and cooperative housing. The agency may, by regulation, adopt alternative criteria, and pursuant to subdivision (f) of Section 50462, alternative percentages of income may be adopted for agency- assisted housing developments.
(d) F
or purposes of this section, “area median income” and “moderate -income household” shall have the same meaning as provided in Section 50093.
(e) F
or purposes of this section, and provided there are no pertinent federal or state statutes or regulations applicable to a project or program that are in conflict with this definition, “adjusted for family size appropriate to the unit” shall mean for a household of one person in the case of a studio unit, two persons in the case of a one -bedroom unit, three persons in the case of a two-bedroom unit, four persons in the case of a three -bedroom unit, and five persons in the case of a four -bedroom unit.

If there is a conflict, the applicable state or federal statutes or regulations for the project of program shall apply.

Exhibit B
To Homebuyer Covenants
Health and Safety Code Sections 50052.5, 50053, 50079.5, and 50093