4863-6414-1611v8/200382-0007
HOME INVESTMENT PARTNERSHIP AND
AFFORDABLE HOUSING AGREEMENT (LANTANA COURT)
by and between
MORENO VALLEY HOUSING AUTHORITY,
a public body corporate and politic
and
MARY ERICKSON COMMUNITY HOUSING,
a California nonprofit corporation
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TABLE OF CONTENTS
Page
1. DEFINITIONS AND INTERPRETATION .............................................................................. 6
1.1 Defined Terms .............................................................................................................. 6
1.2 Singular and Plural Terms .......................................................................................... 26
1.3 References and Other Terms ....................................................................................... 26
1.4 Exhibits Incorporated .................................................................................................. 26
2. DISPOSITION OF THE SITE. ............................................................................................... 26
2.1 Sale of the Site ............................................................................................................ 26
2.2 Access to Site Prior to the Closing.............................................................................. 26
2.2.1 Site Preparation; Grading ............................................................................ 27
2.2.2 Investigation of the Site ............................................................................... 27
2.3 Authority Loan; Authority Loan Note; Authority Loan Deed of Trust ...................... 27
2.3.1 Terms of the Authority Loan ....................................................................... 27
2.3.2 Protocol for Disbursement of the Authority Loan Cash Subsidy Amount ........................................................................................................ 28
2.3.3 Authority Conveyance Conditions Precedent ............................................. 29
2.3.4 Developer’s Conditions of Authority Developer Closing ........................... 31
2.4 Escrow ......................................................................................................................... 31
2.5 Title Insurance ............................................................................................................ 31
2.6 Repayment .................................................................................................................. 32
2.6.1 Authorized Sales of Affordable Homes ...................................................... 32
2.6.2 Partial Reconveyances and Partial Terminations ........................................ 32
2.6.3 Authority Loan Note Forgiveness ............................................................... 32
2.7 No Assumption of Authority Note .............................................................................. 32
2.8 Recordation ................................................................................................................. 32
2.9 Lobbying ..................................................................................................................... 32
2.10 Uses ............................................................................................................................. 33
3. DEVELOPER ACTIVITIES FOLLOWING CONVEYANCE OF THE SITE TO DEVELOPER .......................................................................................................................... 33
3.1 Property Taxes and Assessments ................................................................................ 33
3.2 Developer’s Obligations after the Authority Conveyance .......................................... 33
3.2.1 Duty to Prevent Hazardous Material Contamination .................................. 33
3.2.2 “As Is” Conveyance .................................................................................... 34
4. SCOPE OF DEVELOPMENT; INSURANCE AND INDEMNITY, FINANCING .............. 34
4.1 Scope of Development ................................................................................................ 34
4.1.1 Construction of Offsite Improvements ........................................................ 34
4.2 Design Review ............................................................................................................ 34
4.2.1 Developer Submissions ............................................................................... 34
4.2.2 MoVal Review and Approval ...................................................................... 35
4.2.3 Revisions ..................................................................................................... 35
4.2.4 Defects in Plans ........................................................................................... 35
4.2.5 Land Use Approvals .................................................................................... 35
4.3 Time of Performance; Progress Reports ..................................................................... 35
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4.4 Construction Contract ................................................................................................. 35
4.4.1 Construction Contracts ................................................................................ 36
4.5 Insurance Requirements .............................................................................................. 36
4.5.2 Waiver of Subrogation ................................................................................ 37
4.6 Obligation to Repair and Restore Damage Due to Casualty ....................................... 38
4.7 Indemnity .................................................................................................................... 38
4.8 Rights of Access ......................................................................................................... 39
4.9 Compliance with Laws ............................................................................................... 39
4.10 Nondiscrimination in Employment ............................................................................. 41
4.11 Property Taxes and Assessments ................................................................................ 41 Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site ............................................................................................... 41
4.12 Liens and Stop Notices ............................................................................................... 41
4.13 Certificate of Completion of Construction.................................................................. 41
4.14 Further Assurances ...................................................................................................... 42
4.15 HOME Program .......................................................................................................... 42
4.15.1 Federal Funding of Authority Loan ............................................................. 42
4.15.2 Property Standards ...................................................................................... 42
4.15.3 Labor Standards ........................................................................................... 43
4.15.4 Handicapped Accessibility .......................................................................... 43
4.15.5 Use of Debarred, Suspended, or Ineligible Participants .............................. 44
4.15.6 Maintenance of Drug-Free Workplace ........................................................ 44
4.15.7 Lead-Based Paint ......................................................................................... 44
4.15.8 Affirmative Marketing ................................................................................ 44
4.15.9 Nondiscrimination, Equal Opportunity and Fair Housing .......................... 44
4.15.10 Energy Conservation Standards .................................................................. 44
4.15.11 AFFH ........................................................................................................... 44
4.15.12 Requests for Disbursements of Funds ......................................................... 44
4.15.13 Eligible Costs .............................................................................................. 44
4.15.14 Records and Reports .................................................................................... 44
4.15.15 Conflict of Interest....................................................................................... 45
4.15.16 Conflicts between and among Federal Program Limitations and State of California Laws .............................................................................. 45
4.15.17 Layering Review ......................................................................................... 45
4.16 Compliance with Laws ............................................................................................... 45
4.17 Federal and State Prevailing Wage Laws ................................................................... 45
4.18 Labor Compliance; Consultant; Construction Security .............................................. 46
4.19 Section 3 Compliance ................................................................................................. 47
5. DEVELOPER’S GENERAL REPRESENTATIONS AND WARRANTIES. ....................... 47
5.1 Formation, Qualification and Compliance .................................................................. 47
5.2 Execution and Performance of Project Documents .................................................... 48
5.3 Covenant Not to Transfer Except in Conformity ........................................................ 48
5.4 Nondiscrimination ....................................................................................................... 48
6. SALE OF THE AFFORDABLE HOMES; AFFORDABLE HOUSING PROGRAM PARTICIPANT DOCUMENTS ............................................................................................. 49
6.1 Sale at Affordable Housing Cost to Low Income Qualified Homebuyers; Homebuyer Documents .............................................................................................. 49
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6.1.1 Affordable Housing ..................................................................................... 49
6.1.2 Sale of the Affordable Homes ..................................................................... 50
6.1.3 Homebuyer Price; Amount of Homebuyer Loan ........................................ 51
6.1.4 Pricing Protocol ........................................................................................... 51
6.2 Process to Complete First Transfer by Sale of Affordable Home by Developer to an Initial Homebuyer .............................................................................................. 52
6.3 Affordable Home Disposition Conditions Precedent; Conditions to Developer’s Sale to Qualified Homebuyers................................................................ 53
6.4 Homebuyer Escrows ................................................................................................... 54
6.4.1 Costs of Escrow ........................................................................................... 54
6.4.2 Escrow Instructions ..................................................................................... 54
6.4.3 Authority of Escrow Holder ........................................................................ 55
6.5 Review of Title ........................................................................................................... 56
6.6 Title Insurance for Conveyance to Initial Homebuyers .............................................. 56
6.7 Homebuyer Closings ................................................................................................... 56
6.7.1 Termination of Escrow ................................................................................ 56
6.7.2 Closing Procedure ....................................................................................... 56
6.7.3 Title Insurance, Disposition to Initial Homebuyers; Home Warranty ........ 57
6.8 Process to Obtain Approval of Transfer of each Affordable Home after the Original Sale of an Affordable Home ......................................................................... 58
6.8.1 Right of First Refusal .................................................................................. 58
6.9 Effect of Violation of the Terms and Provisions of this Agreement after Completion of Construction ........................................................................................ 59
7. DEFAULTS AND REMEDIES .............................................................................................. 59
7.1 Events of Default ........................................................................................................ 59
7.2 Additional Remedies upon Event of Default by Developer ....................................... 61
7.2.2 No Abrogation of Authority and City of Moreno Valley’s Governmental Powers ................................................................................. 61
7.3 Cumulative Remedies; No Waiver ............................................................................. 61
7.4 Event of Default by Authority .................................................................................... 62
7.4.1 Remedies upon Event of Default by Authority ........................................... 62
8. MISCELLANEOUS. ............................................................................................................... 62
8.1 Transfers of Interest in Site or Agreement .................................................................. 62
8.1.1 Prohibition ................................................................................................... 62
8.1.2 Permitted Transfers ..................................................................................... 62
8.1.3 Successors and Assigns ............................................................................... 63
8.1.4 Assignment by Authority ............................................................................ 63
8.2 Enforced Delay; Extension of Times of Performance ................................................ 63
8.3 Nonliability of Officials and Employees of City ........................................................ 63
8.4 Obligations Unconditional and Independent............................................................... 63
8.5 Notices ........................................................................................................................ 64
8.6 Survival of Representations and Warranties ............................................................... 64
8.7 No Third Parties Benefited ......................................................................................... 64
8.8 Use of Consultants by Authority ................................................................................. 64
8.9 Binding Effect; Assignment of Obligations ................................................................ 64
8.10 Counterparts ................................................................................................................ 65
8.11 Superiority of Agreement ........................................................................................... 65
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8.12 Prior Agreements; Amendments; Consents ................................................................ 65
8.13 Governing Law ........................................................................................................... 65
8.14 Severability of Provisions ........................................................................................... 66
8.15 Headings ..................................................................................................................... 66
8.16 Conflicts ...................................................................................................................... 66
8.17 Time of the Essence .................................................................................................... 66
8.18 Conflict of Interest ...................................................................................................... 66
8.19 Warranty against Payment of Consideration .............................................................. 66
8.20 Real Estate Commissions ............................................................................................ 66
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ATTACHMENTS
ATTACHMENT NO. 1 SITE MAP
ATTACHMENT NO. 2 LEGAL DESCRIPTION OF THE SITE
ATTACHMENT NO. 3 SCHEDULE OF PERFORMANCE
ATTACHMENT NO. 4 AUTHORITY NOTE
ATTACHMENT NO. 5 AUTHORITY DEED OF TRUST
ATTACHMENT NO. 6 HOMEBUYER LOAN AGREEMENT WITH ATTACHMENTS,
INCLUDING HOMEBUYER COVENANTS AND HOMEBUYER
LOAN DOCUMENTS
ATTACHMENT NO. 7 AUTHORITY REGULATORY AGREEMENT
ATTACHMENT NO. 8 REQUEST FOR NOTICE OF DEFAULT
ATTACHMENT NO. 9 SCOPE OF DEVELOPMENT
ATTACHMENT NO. 10 CERTIFICATE OF COMPLETION OF CONSTRUCTION ATTACHMENT NO. 11 CALCULATION OF AFFORDABLE HOUSING COST ATTACHMENT NO. 12 DEVELOPER SALE CERTIFICATE
ATTACHMENT NO. 13 AUTHORITY GRANT DEED
ATTACHMENT NO. 14 INTENTIONALLY OMITTED
ATTACHMENT NO. 15 MEMORANDUM OF AGREEMENT
ATTACHMENT NO. 16 REIMBURSEMENT AGREEMENT FOR OFFSITE
IMPROVEMENTS
4863-6414-1611v8/200382-0007
HOME INVESTMENT PARTNERSHIP AND
AFFORDABLE HOUSING AGREEMENT (Lantana Court)
This HOME INVESTMENT PARTNERSHIP AND AFFORDABLE HOUSING AGREEMENT (Lantana Court) (“Agreement”), dated, for identification purposes only, as of June 17, 2025 (“Date of Agreement”) is entered into by and between the MORENO VALLEY HOUSING AUTHORITY, a public body, corporate and politic (“Authority”), and MARY ERICKSON COMMUNITY HOUSING, a California nonprofit corporation (“Developer” or “MECH”).
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 al so a participating housing authority in cooperation with and funding recipient of HUD and State HCD programs.
B. The City of Moreno Valley (“City”) is a California municipal corporation and a participating jurisdiction with the United States Department of Housing and Urban Project (“HUD”) and funding recipient from the State of California Department of Housing and Community Project (“State HCD”).
C. Developer is a California nonprofit corporation experienced in the ownership, operation, management and maintenance of affordable housing developments, including for-sale, ownership affordable housing projects in Southern California. Further, Developer is a Community Housing Development Organization (“CHDO”) as defined in the HOME Regulations (referenced in Recital C.), in particular Section 24 CFR 92.300. As a CHDO, Developer is a private nonprofit, community-based organization that has staff with the capacity to develop and operate affordable housing for the community it serves. Developer , itself and as a CHDO, is experienced in the acquisition, development, and operation of affordable housing.
D. Authority has been authorized to administer affordable housing activities within its jurisdiction. A major goal of the Authority and City is to provide in the community affordable, owner- occupied housing for qualified Low Income Homebuyers.
E. Together, the City and Authority may be referred to as “MoVal” herein.
F. The City is also a participating jurisdiction (“PJ”) with HUD that has received funds (“HOME Funds”) pursuant to Title II of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. §§ 12701-12839) and the implementing regulations therefor codified at 24 CFR Part 92, as amended by the 2013 HOME Final Rule and amendments and HUD Notices issued thereafter (together, “HOME Program” and “HOME Regulations”):
https://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&tpl=/ecfrbrowse/Title24/24cfr92_main_02.tpl ; https://www.hud.gov/program_offices/comm_planning/affordablehousing/programs/home/.
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G. The HOME Program has, among its purposes, the strengthening of public -private partnerships to provide more affordable housing, and particularly to provide decent, safe, sanitary, and affordable housing, with primary attention for this Project to provide housing to income -qualified homeowners in accordance with the HOME Program and this Agreement. HOME Funds are used by the City, as a PJ, including transfer to Authority, to carry out multi -year housing strategies through acquisition, new construction, and rehabilitation of housing for target income persons and families.
H. State law statutory references in this Agreement are to the California Health and Safety Code (“HSC”) unless otherwise stated.
I. Authority is the fee owner of certain real property, approximately 1.4-acres in size, (formerly Assessor Parcel No. 481-270-058, presently, APNs 481 -270-065 thru -071 [seven parcels for seven Affordable Homes plus Lot A (new cul de sac street area )] as described in the Legal Description. The Site is located along Eucalyptus Avenue, Moreno Valley, California 92553 (“Site”), and more particularly described in the Site Map, Attachment No. 1 and Legal Description, Attachment No. 2, both attached and fully incorporated by this reference.
A. Under the CRL, the Former Agency was required to and did devote certain revenues described at HSC Section 33334.2 and 33334.3 (“Housing Funds”) to activities for the acquisition of property, improvement to property, rehabilitation of properties and preserv ation of properties which are housing resources benefitting and restored to use by and available to households of limited income.
As part of the Former Agency’s activities using Housing Funds, it acquired the Site for affordable housing purposes.
B. The Site was transferred to the Authority by: (i) City Council action designating the Authority as the housing successor entity pursuant to HSC Section 34176, and (ii) action by each of the successor agency to the Former Agency (“Successor Agency”), and the Oversight Board to the Successor Agency as created pursuant to HSC Section 34179.6. The Site remains subject to requirements that it be used for affordable housing purposes for households of limited income pursuant to HSC Section 34176.1. As noted, the Authority serves as the housing successor to the Former Agency, which entity was dissolved pursuant HSC Division 24, Part 1.8, Section 34160, et seq., and Part 1.85, Section 34170, et seq ., in particular as to Authority, as housing successor, HSC Sections 34176 and 34176.1 (together, “Dissolution Law” or “Housing Successor Law”), and as the Dissolution Law references and incorporates certain affordable housing laws set forth in HSC Section 33000, et seq. (“CRL”) that survived the dissolution of all California redevelopment agencies and remain effective as to housing successors, including the Authority.
C. Both Housing Funds and HOME Program funds will be disbursed and/or expended in connection with Developer undertaking the Project as more particularly described herein.
D. Under this Agreement, Developer shall plan, construct, and offer for sale to Qualified Homebuyers at an Affordable Housing Cost a new affordable ownership housing development commonly referred to as “Lantana Court”.
E. Lantana Court (herein together, “Project”) shall include seven (7) detached, new single-story, single-family homes, including four (4) three-bedroom, two-bath homes, and three (3) four-bedroom, two-bath homes, with an average size of about 1,626 square feet (i.e., seven ( 7) “Affordable Homes”). The Affordable Homes will be “ manufactured” homes, the construction type of which shall utilize and comply with the “ MH Advantage” (“MHA”) (FannieMae) and/or
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“CHOICE Home” (FreddieMac) for HUD-authorized manufactured residential structures. Each and all Affordable Homes shall have an attached double-car garage, back yard, landscaped front yard utilizing water efficient landscaping. Each and all Affordable Homes shall meet the City's “Village Special” design features; and, shall meet Department of Energy standards for a “Zero-Energy Ready Home” certified with installed PV Solar and Battery Storage. One of seven (1 of 7) Affordable Homes shall an ADA-accessible home meeting the Uniform Federal Accessibility Standards (“UFAS”) standards that establish the minimum elements required to comply with federal accessibility standards for handicapped individuals , including for design, construction, and alteration of structures to make sure that handicapped and disabled persons can easily access the home. There will be no homeowners’ association, but each and all of the seven Affordable Homes shall be subject to the senior Homebuyer Covenants, Homebuyer Loan Agreement.
F. The Affordable Homes on the Site shall be offered for sale, acquired by and for continuous owner-occupancy by qualified Low Income Homebuyers (as such income category is defined in HSC Section 50079.5, which also complies with 24 CFR Part 92 of the HOME Regulations) (together, “Affordable Homes” or each an “Affordable Home”) each and all at an Affordable Housing Cost as defined in HSC Section 50052.5 as more fully described herein.
G. Pursuant to the terms and conditions of this Agreement, the Authority will sell and convey the Site to Developer for the nominal sum of Eight Dollars ($8.00) in consideration of and upon which Developer shall construct, complete, cause sales to qualified L ow Income Homebuyers and administer an affordable ownership housing project. This Agreement, including without limitation the Homebuyer Loan Agreement , Homebuyer Covenants and shall constitute the written agreement required by 24 CFR Sections 92.504(c)(3) and 92.2, and complies with HSC Section 34176.1 for development of affordable housing. Disbursement of proceeds of the Authority Loan shall be subject to satisfaction of the Conditions Precedent set forth herein. The permitted income levels of the eligible Homebuyers of the Affordable Homes and the allowed Affordable Price to acquire each Affordable Home are set forth in detail in this Agreement, in order to ensure compliance with the requirements of the HOME Program , HAL, Dissolution Law, and other applicable federal and state laws and regulations, and in furtherance of the Housing Element of the City’s General Plan, and toward meeting the City’s Regional Housing Needs Assessment by State HCD and Allocation by Southern California Association of Governments (“SCAG”) (together, “RHNA”).
H. In addition to and as a part of the overall development, Developer will complete certain offsite improvements including a new public street that will provide access to and from the seven new Affordable Homes, as more fully described herein.
I. Each Affordable Home completed as part of the P roject shall be dedicated and covenanted as an affordable ownership housing unit and will be restricted for use, ownership and occupancy as the principal residence for the Low Income Homebuyer household, and each successor Homebuyer during the forty-five year Affordability Period.
J. Authority Loan will be evidenced by the Authority Note and secured by the Authority Deed of Trust, subordinate to Developer’s Construction Loan for the Project, which Authority Deed of Trust shall be recorded against the Property in connection with the Closing of Financing and disposition of the Site by the Authority to Developer. The Authority Loan will be a deferred loan, forgivable in partial credits to and forgiveness of the Authority Note and partial reconveyances of the Authority Deed of Trust that equal one-seventh (1/7th) of the Authority Loan Amount concurrent with the sale of each Affordable Home to a Qualified Homebuyer. Upon the last/7th sale of the Affordable
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Homes, Authority will cancel the Authority Note and cause to be recorded in the Official Records , County of Riverside , State of California (“Official Records”) a full reconveyance of the Authority Loan Deed of Trust.
K. The sources of funds for the grants and loans described herein to undertake the Project include HOME Program, LMIHAF, and Measure A funds.
L. Further, the Authority will provide the initial seven Low Income Homebuyers a second mortgage deferred and forgivable loan as described herein (each a “Homebuyer Loan”). The seven (7) Homebuyer Loans that will be (i) assumable by each subsequent qualified Low Income Homebuyer, (ii) conditioned on the Homebuyer Covenants recorded as and remaining senior, nonsubordinate encumbrances against the applicable Affordable Home, and (iii) subject to continuous compliance by each Homebuyer with the applicable Homebuyer Loan Agreement, Homebuyer Covenants, all in effect during the 45-year Affordability Period.
M. Based on a series of updated and then a final Project proforma prepared by Developer and presented to MoVal, its legal counsel, and economic consultant, and their financial analys es and subsidy layering review thereof, Authority determines that the Project is not financially feasible, in particular the Affordable Homes cannot be constructed, developed, marketed, and sold at an Affordable Housing Cost to qualified Low Income Homebuyers without the Authority providing certain financial subsidies and assistance to the Project that include grants and loans as described herein (“Authority Assistance”). Therefore, Authority desires to provide Developer the Authority Assistance and provide the Homebuyer Loans, all to promote the new construction and provision of high quality, ownership housing for owner-occupancy by Low Income Homebuyers. Further, pursuant to the HOME Regulations, HAL, Dissolution Law, the Authority Loan and grants herein are necessary to make the Project financially feasible based on the Authority’s analysis of Developer’s Project proforma and in compliance with legal requirements.
N. Of even date herewith, Authority and City have entered into that certain Cooperation Agreement (Lantana Court) (“Cooperation Agreement”) by which the City will transfer to the Authority the HOME Program funds necessary for the Authority to issue the Authority Loan and related disbursements to Developer to undertake and complete the Project.
O. The appraised fair market value of the Site is Seven Hundred Thousand Dollars ($700,000); however, Authority has determined that to make the Project financially feasible, Authority agrees to sell the Site for a purchase price of Eight Dollars ($8.00). To the extent the HOME Regulations or other applicable laws require an appraisal update, or a review appraisal, to be evaluated as part of the subsidy layering review and analysis, such shall occur and be a Condition Precedent to the sale and disposition of the Site by Authority to Developer for development of the Project. Authority will issue the Authority Loan to Developer that will be forgiven in part and repaid in part through the Authority issuing each Homebuyer Loan to each Homebuyer of an Affordable Home pursuant to a Homebuyer Loan Agreement and this Agreement.
P. The Affordable Homes will be sold exclusively to Homebuyers who qualify as Low Income Households and shall be covenanted for continuous owner-occupancy by the original owner and each successor-in -interest owner during both the 15 -year HOME Compliance Period and the 45-year Affordability Period, and sold at an Affordable Price with each Homebuyer Loan issued by the Authority to each original Homebuyer as a “silent” or “soft” deferred , forgivable mortgage , securing the Homebuyer Loan and Homebuyer Covenants, thereby serving as a monetary and
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performance deed of trust (“Authority Deed of Trust”). In addition to the Homebuyer Loan, each Homebuyer will (i) apply for and obtain Down Payment Assistance Loan(s) (or grants) funds through federal, state, and/or local homebuyer program(s), and (ii) apply for and obtain a purchase money mortgage from an institutional lender that shall be a 30-year fully amortized loan. This funding structure for each Homebuyer will assure that their acquisition costs, in particular monthly housing cost, complies with and does not exceed both the HOME maximum per unit subsidy based on number of bedrooms in the applicable Affordable Home and at an Affordable Housing Cost for a Low Income Household as set forth in HSC Section 50052.5 and the implementing regulations in California Code of Regulations, Section 6910, et seq. (“Cal Code Regs”).
Q. Developer shall require each Homebuyer of an Affordable Home to enter into a Homebuyer Loan Agreement with the Authority substantially in the form of Attachment No. 6 that among other provisions will evidence the soft second mortgage issued by Authority to each Low Income Homebuyer purchasing an Affordable Home in the Project. Each Homebuyer shall agree to and Authority shall cause recording in the Official Records against the Affordable Home the Homebuyer Covenants as the senior, nonsubordinate encumbrance s. The Homebuyer Covenants establish the long -term covenants for ownership, owner-occupancy, management, maintenance, and resale restrictions as set forth in a series of instruments to be executed in connection with the sale and each resale of the Affordable Homes in effect during the 15- year HOME Compliance Period and continuing through the 45-year Affordability Period.
R. In this regard, with each sale of an Affordable Home by Developer, there will be two corresponding loans: (i) a first mortgage purchase money loan from an institutional lender (each a “Purchase Money Loan”) but that is expressly junior and subordinate to the Homebuyer Covenants, and (ii) the second mortgage loan payable to and administered by the Authority (each a “Homebuyer Loan”), as further described in the Homebuyer Loan Agreement.
S. In addition to the Authority Assistance to Developer for construction of the Project, Developer has obtained a commitment from the County of Riverside for a loan of HOME Program funds and from sources other than MoVal. In the event of non-MoVal sources of funding, Developer agrees to comply with the requirements pertaining to such funding sources so long as such funding is junior and subordinate to the Homebuyer Covenants and Homebuyer Loan; provided that Developer shall remain obligated to comply with all provisions hereof, with the result that the most restrictive provisions shall apply in each case.
T. Developer shall obtain a construction loan from an institutional lender that, subject to the normal and customary processes of such institutional lender, in place at Closing of Financing which, together with the Authority Assistance (and County Loan), are sufficient to undertake and complete the Project.
U. In connection with the City’s review and action on the land use entitlement for the Project, which “project” contemplated development of the Project and this Agreement, the City determined that the Project is categorically exempt from the provisions of the California Environmental Quality Act, Public Resources Code Section 21000, et seq. (“CEQA”), pursuant to the Guidelines for Implementation of the California Environmental Quality Act set forth at Title 14 California Code of Regulations Section 15000, et seq. (“CEQA Guidelines”) and caused the filing and posting of a Notice of Exemption with the County of Riverside on January 11, 2024 Document No. E-20240024 “NOE”).
The NOE determined the Project is Article 19, Categorical Exemption Section 15332 (Infill Development) as it meets the zoning requirements of the Village Specific Plan 204, under five acres
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in size, surrounded by existing urban uses, will be adequately served by all required utilities, and there are no significant impacts on the environment. Further, both the City and the County of Riverside evaluated the Project and HOME funding therefor pursuant to National Environmental Protection Act (“NEPA”) and implementing regulations thereto and determined the project meets the requirements for categorical exclusion from NEPA, and thereby each of the City and County adopted the Environmental Assessment Report and made a finding of No Significant Impact (“FONSI”) (i) by the City on February 15, 2024, and (ii) by the County on August 29, 2023 by action of the County Board of Supervisors. Further, the Project consists of Authority’s implementation of affordable housing covenants on the Affordable Homes in implementation of City’s adopted Housing Element, the City’s Consolidated Plan and Annual Action Plan required by HUD, and pursuant to the CEQA Guidelines and NEPA and implementing regulations thereto.
V. Developer and Authority will explore potential homebuyer grant and loan programs and obtain commitments for an additional subsidy to the Homebuyers in connection with their purchase of an Affordable Home. Examples of such potential programs include: (i) Federal Home Loan Bank member banks issue loans to homebuyers with funding sourced from FHLB’s Workforce Initiative Subsidy for Homeownership program (“WISH”), (ii) CalHome homeownership grants and loans, (iii) American Dream Downpayment Initiative (“ADDI” ) loans for first -time homebuyers. For each source of down payment assistance, the applicable program regulations shall be applied, and if applicable, each secured by a deed of trust in junior lien priority to the Purchase Money Loan and Homebuyer Loan.
W. Authority’s conveyance of the Site to Developer and Developer’s construction and sale of the Affordable Homes on the Site, and the Authority Assistance, including the Authority Loan, and subsequent sale of each Affordable Home to Qualified Homebuyers pursuant to this Agreement are in the vital and best interest of MoVal and the health, safety and welfare of residents of the MoVal community.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and conditions herein contained, the parties hereto agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. As used in this Agreement (and in all other Project Documents, unless otherwise defined), the following capitalized terms shall have the following meanings:
“Affiliate” shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer. The term “control” as used in the immediately preceding sentence, means, with respect to a pers on that is a corporation, the right to exercise, directly or indirectly, at least fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person.
“Affordable Contract Price” shall mean a contract purchase price for 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
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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 house s to be constructed by Developer upon the Site, all as more particularly described here in and in the Scope of Development, Attachment No. 9.
“Affordable Home Disposition Conditions Precedent” is defined at Section 2.10. “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 Home .
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.
For illustration and based on the 2025 income limits issued by State HCD (effective April 23, 2025), assuming the Low Income Household’s income does not exceed 70% AMI, Affordable Housing Cost for Low Income Homebuyers of the Affordable Homes (HSC §50052.5(b)(3)):
• purchasing a three-bedroom Affordable Home monthly housing cost may not exceed $1,818.25; and
• purchasing a four-bedroom Affordable Home monthly housing cost may not exceed $1,963.50.
As noted in clause B in the second paragraph of th e statutory definition, for a Low Income Homebuyer, the Authority allows the term Affordable Housing Cost to be an amount not to exceed 30 percent of the gross income of the actual household with income within a range between the following (based on State HCD 2025 income limits and per HSC §50052.5(b)(3)):
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• 1 person household whose income is between $51,653 and $62,650 • 2 person households whose income is between $59,001 and $71,600 • 3 person households whose income is between $66,385 and $80,550 • 4 person households whose income is between $73,769 and $89,500 • 5 person households whose income is between $79,662 and $96,700 • 6 person households whose income is between $85,555 and $103,850 • 7 person households whose income is between $91,484 and $111,000 • 8 person households whose income is between $97,377 and $118,150 The parties note and acknowledge that the above definition and calculation of Affordable Housing Cost for each Homebuyer’s acquisition of an Affordable Home, also meets and complies with the HOME Regulations that require the Affordable Homes to be affordable to Lower Income Homebuyers.
Thereby, compliance with the above definition of Affordable Housing Cost is concurrent compliance with the HOME Regulations because the State HCD, HSC, and Cal Code requirements provide deeper, more affordable housing costs and pricing for the Homebuyers. “Affordable Housing Resale Restriction” means the restrictive covenants to be recorded with respect to each Affordable Home as set forth in each Homebuyer Loan Agreement . The Affordable Housing Resale Restriction is one of the series of instruments that comprise the Homebuyer Covenants. “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 for a Low Income Homebuyer. The Affordable Price 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. “Approved Construction Lender ” means one or more of Bank of America, Cit y National Bank, Wells Fargo Bank, Citibank, U.S. Bank, Banner Bank, Century Housing, Clearinghouse CDFI, or another mutually acceptable reputable and established bank, savings and loan association, or other similar financial institution or a state agency or instrumentality, but not CalHFA, the Federal National Mortgage Association (Fannie Mae) or Freddie Mac, or a Governmental Entity. “Authority” means the Moreno Valley Housing Authority, a public body, corporate and politic, as further described in the Recitals.
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“Authority Assistance ” means $3,446,961, the total of grants, loans, in- kind professional services provided by Authority to Developer to acquire the Site, undertake construction of the Onsite Improvements and Offsite Improvements, sell the Affordable Homes to Qualified Homebuyers, all to complete the Project, including:
(A) HOME funds $1,686,961;
(B) LMIHAF funds up to $550,000 which includes the funding for Offsite Improvements as described in (C) below (i.e., from the $550,000, approximately $125,000 for Onsite Improvements and approximately $425,000 for Offsite Improvements); (C) $1,200,000 of which up to $850,000 will be sourced from “ Measure A ” funds and approximately up to $425,000 will be sourced from LMIHAF or other MoVal funding source(s) to complete the Offsite Improvements, including the new street that MECH shall cause to be constructed in accordance with the Reimbursement Agreement and all applicable legal requirements and the City’s construction standards for public works improvements;
(D) Sale of the Site for $8.00 thereby grant of the fair market value of the Site ($700,000); and
(E) $360,00 of in-kind professional services incurred by MoVal including: (a) Engineering plans for Offsite Improvements street construction, (b) engineering and surveying to prepare Legal Descriptions (metes and bounds for eight (8) parcels that include Parcels 1 to 7, inclusive, for Affordable Homes plus Lot A for new cul de sac street and associated assessor parcel numbers); (c) Water Quality Management Plan (“WQMP”). “Authority Closing” and “Closing of Financing” means the close of escrow for the Authority Conveyance, recording Authority Regulatory Agreement, Memorandum of Agreement, issuance of the Authority Loan, closing of Developer’s Construction Loan. “Authority Conveyance” means the conveyance by which Developer is to acquire title to the Site from Authority under this Agreement.
“Authority Conveyance Conditions Precedent” shall have the meaning set forth therefor in Section 2.1.4 hereof.
“Authority Loan Deed of Trust ” means a deed of trust in the form of Attachment No. 5 hereto.
“Authority Escrow” is described in Section 2.2.
“Authority Grant Deed” shall mean the instruments by which the Authority shall convey title to the Site by the Grant Deed in connection with the Closing, substantially in the form of Attachment No. 13.
“Authority Loan” shall mean that certain loan issued by Authority to Developer with the original principal of the Authority Loan Amount of [Three Million Four Hundred Forty-Six Nine Hundred Sixty-One Dollars ($3,446,961) that includes $1,686,961 HOME Funds, up to $850,000
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Measure A funds, up to $550,000 LMIHAF, and $360,00 in kind professional services, in accordance with this Agreement, and evidenced by the Authority Loan Note, Attachment No. 5, and as secured by the Authority Loan Deed of Trust, Attachment No. 6.
“Authority Loan Amount” means Three Million Four Hundred Forty-Six Nine Hundred Sixty-One Dollars ($3,446,961) that includes $1,686,961 HOME Funds, up to $850,000 Measure A funds, up to $550,000 LMIHAF, and $360,00 in kind professional services. “Authority Loan Deed of Trust” or “Authority Deed of Trust” shall mean a deed of trust, security agreement and fixture filing that secures the Authority Loan, substantially in the form of Attachment to be dated as of the Closing Date, executed by Developer in favor of the Authority and recorded on the Closing Date.
“Authority Loan Note” or “Authority Note” shall mean the promissory note evidencing the Authority Loan substantially in the form of Attachment No. 4 to be dated as of the Closing and executed by Developer in favor of the Authority.
“Authority Regulatory Agreement” means Attachment No. 7. “Authority Title Policy (Homebuyer)” means a lender’s policy of title insurance in favor of the Authority to be issued by the Title Company in connection with the Homebuyer Loan that insures the Homebuyer Deed of Trust as a second monetary lien against the applicable Affordable Home. “Authority Title Policy ” means a lender’s policy of title insurance issued by the Title Company in connection with the Authority Loan issued at the Closing of Financing, which:
(i) is based upon the principal amount of the Authority Loan, and (ii) insures the Authority Deed of Trust as a monetary lien against the Site until the Authority Deed of Trust is fully reconveyed. “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. “Best Knowledge ” shall mean the actual knowledge or constructive knowledge of (i) Susan McDevitt, Executive Director of MECH, and all documents and materials in the possession of lead staff that negotiated this Agreement on behalf of Developer, and shall not impose a duty of investigation, except as to documents of record or actually provided to such party or its employees or agents, whether actually known or not.
“Building Permit ” means the building permit(s) issued by City and required for the construction through completion of the Onsite Improvements that comprise the Project. “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/.)
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“Calculation of Affordable Housing Cost” means Attachment No. 11. “Certificate of Completion of Construction” means Attachment No. 10. “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.
“Closing” shall mean a point in time prior to the date set forth in the Schedule of Performance when all Conditions Precedent to the sale and disposition of the Site have been satisfied in accordance with this Agreement.
“Closing Date shall mean the date of the concurrent recordation of the Authority Grant Deed, Authority Regulatory Agreement, and Authority Loan Deed of Trust at the Closing. “Closing Escrow Instructions” shall mean escrow instructions prepared on behalf of the Authority relating to disposition of the Site.
“Conditions to Sale to Homebuyer” means those matters set forth in Section 6.3. “Construction Lender ” or “ Primary Construction Lender ” means the responsible institutional lender that provides to Developer the Construction Loan to undertake through completion the construction and development of the Project. The lender shall not include the financial entities or agencies commonly referred to as CalHFA, FannieMae or FreddieMac; provided however, the foregoing prohibition shall not be construed to prohibit a transfer or assignment of the Construction Loan on the secondary market so long a s such transfer does not require a rider, amendment or other modification to this Agreement, Authority Regulatory Agreement, Authority Loan documents, Homebuyer Covenants, Homebuyer Loan documents or other Project Document to which the Authority is a party, signatory or intended beneficiary. “Construction Loan ” or “ Primary Construction Loan ” means the construction loan obtained by Developer from a state agency or instrumentality or a reputable and established bank, savings and loan association, or other similar financial institution (but excluding CalHFA, FannieMae or FreddieMac provided however, the foregoing prohibition shall not be construed to prohibit a transfer or assignment of the Primary Construction Loan on the secondary market so long as such transfer does not require a rider, amendment or other modification to this Agreement, other Project Documents, or other documents in this transaction to which Authority is a party, signatory or intended beneficiary) for financing the development of the Project pursuant to this Agreement. Developer’s proforma shows the Construction Loan is estimated to be in an original principal amount of $1,500,000, which evidences an approximate loan to value of 48% (“LTV”).
“Construction Security” shall mean and include payment and performance bonds from responsible sureties admitted in the State of California in the amount of 100% of the construction costs both the Onsite Improvements and Offsite Improvements (as detailed in Developer's GC Contracts one
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for both the Onsite Improvements and one for Offsite Improvements ) and, with respect to the performance bond, naming each the Authority and City as dual co-obligees, along with reasonably satisfactory evidence demonstrating said Contractor’s financial strength (such as the two most recent financial statements of Contrac tor) and reputation for quality and timely work and performance necessary to complete construction of the Project in accordance with Developer's construction contract.
In the event payment an d performance bonds are obtained and delivered, the payment bond shall remain in full force and effect until thirty -five (35) days after the date of recordation of the Notice of Completion and the performance bond will be released one year after said date. “Cooperation Agreement” means the agreement between the City and Authority by which the City authorizes transfer of the HOME Program funds, and if applicable, other funds necessary to provide the Authority Assistance.
“County” means the County of Riverside, California.
“Current Market Appraised Value ” means the value of a foreclosed home or residential property that is established through an appraisal made in conformity with the appraisal requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) at 49 CFR 24.103 and completed within sixty (60) days prior to an offer made for the property by a grantee, subrecipient, developer, or individual homebuyer. If the appraisal is completed greater than sixty (60) but less than one hundred twenty (120) days prior to an offer, a n updated valuation will be required, if the appraisal is completed greater than one hundred twenty (120) days prior to an offer it is considered expired and a new appraisal will be required. The sales price is determined as the lesser of: (a) Total Project Costs, or (b) the market appraised value. “Date of Agreement” shall mean the date the approval of this Agreement by the governing board of the Moreno Valley Housing Authority, reserving all discretion to the governing board to review, consider and approve (or disapprove) this Agreement. “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. “Designated Homebuyer Lien Priorities” are set forth in Section 2.7.2. “Developer” as defined in the first paragraph hereof, means Mary Erickson Community Housing, a California nonprofit corporation.
“Developer Sale Certificate” means a certificate in the form of Attachment No. 12. “Developer Owner’s Policy ” means an owner’s policy of title insurance for the Site as described in Sections 2.3.4 and 2.5.
“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, which funds shall be expended by each Homebuyer as the down payment towards the purchase price of an Affordable Home. “Downpayment Assistance Loan” means one or more sources of financial assistance from governmental source(s), including federal, state, regional or local program(s). Examples of such
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potential programs include: (i) Federal Home Loan Bank member bank s issue loans to homebuyers with funding sourced from FHLB’s Workforce Initiative Subsidy for Homeownership program (“WISH”), (ii) CalHome homeownership grants and loans, (iii) American Dream Downpayment Initiative (“ADDI”) loans for first-time homebuyers. For each source of a Downpayment Assistance Loan, the applicable program regulations shall be applied, and if applicable, each loan secured by a deed of trust in junior lien priority to the Purchase Money Loan and Homebuyer Loan. “Escrow Holder” means [_____] Escrow or another escrow holder designated by City. “Event of Default” has the meaning set forth in Section 7.1. “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.
“Fair Housing Laws” means, together, the Fair Housing Act of 1968 as amended from time to time (42 U.S. Code Sections 3601-3619 and 3631), the Unruh Civil Rights Act (California Civil Code Section 51), California Government Code Section 12920, the prohibition against discrimination on the basis of marital status per Smith v. Fair Employment & Housing Commission, 12 Cal. 4th 1143 (1996), and the prohibition on discrimination based upon personal characteristic or trait, such as physical attributes or a households receipt of public assistance (per Harris v. Capital Growth Investors XIV, 52 Cal. 3d 1142 (1991)), the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., California Fair Employment and Housing Act (FEHA), federal Affirmatively Furthe ring Fair Housing (“AFFH”), Government Code Sections 8899.50 implementing state AFFH (https://www.hcd.ca.gov/community- development/affh/docs/AFFH_Document_Final_4-27-2021.pdf#page=23), and all other applicable state and federal fair housing laws and regulations.
“Federal Program Limitations ” means compliance with the HOME Program and HOME Regulations, as applicable to the Project, and also includes any and all other applicable federal regulations relating to fair housing, affirmatively furthering fair housing (AFFH), and nondiscrimination applicable to the Project and each and all Homebuyers . Developer covenants, acknowledges, and agrees it is subject to the HAL, Dissolution Law, HSC, and all Federal Program Limitations, including the HOME Program and HOME Regulat ions (whichever are most restrictive and to the extent applicable to the Project), in connection with its performance under this Agreement, and agrees it shall endeavor to cause the use and operation of the Project to conform to the Federal Program Limitations.
“Financing Plan” means the Developer’s financing plan and project proforma for construction and development of the Project on the Site through the final sale of the 7 th Affordable Home to the
7th Initial Homebuyer. Developer shall regularly (at least monthly) provide a written progress report to the Executive Director concerning the financing for and ongoing viability of the proposed development of the Onsite Improvements and sale of the Affordable Homes to Low Income Homebuyers at prices which do not exce ed Affordable Housing Cost in conformity with this Agreement. Developer shall also meet monthly with the Executive Director or his designee at Moreno Valley City Hall or another location designated by the Executive Director to review progress; Developer shall also participate in such additional meetings, if any, as may be deemed appropriate by the Executive Director. The meetings and reports regarding implementation of the Financing Plan and development of the Project shall continue until the last to occur of: (i) the completion of the Onsite
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Improvements; (ii) the sale of seven (7) Affordable Homes to Low Income Homebuyers at prices that do not exceed (A) Affordable Housing Cost or (B) 95% Median Sales Price for Riverside County for the applicable year in which the pricing occurs; and (iii) any liens imposed as to the Site, or any portion thereof, in connection with the development of the Onsite Improvements , shall have been removed, released and reconveyed.
“FIRPTA” means the Foreign Investment in Real Property Transfer Act. “Force Majeure” or “Force Majeure Event” shall mean, subject to the party’s compliance with the notice requirements hereunder, performance by a Party shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to causes beyond the control and without the fault of the party claiming an extension of time to perform, which may include, without limitation, the following: war, insurrection, strikes, lockouts, riots, floods, e arthquakes, fires, assaults, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary la bor, materials or tools, acts or omissions of the other party, or acts or failures to act of any public or governmental entity (except that Authority’s acts or failure to act shall not excuse performance of Authority hereunder). Subject to the following paragraphs of this definition, in no event shall Developer’s difficulty or inability to obtain and secure a construction loan or other financing become an event of force majeure. An extension of the time for any such cause shall be for the period of the en forced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within forty-five (45) days after the party becomes aware of the commencement of the cause.
“General Contractor” means each of the general contractors hired by Developer to engage and supervise the subcontractors in the performance and completion of the construction of both the Onsite Improvements and Offsite Improvements . Each General Contractor shall be reasonably acceptable to and approved by the Executive Director in his/her reasonable discretion. The parties acknowledge that the General Contractors may not be performing all of the actual construction work for portions of the Onsite Improvem ents and Offsite Improvements , but instead may hire qualified Subcontractors (after competitive bidding) who shall be reasonably approved by the Executive Director.
“Governmental Authority” shall mean the United States of America, the State of California, the County of Riverside, the City, the Authority or any other political subdivision in which the Site is located, and any court or political subdivision, agency or instrumentality having jurisdiction over the Site.
“Governmental Fees” means fees charged by governmental agencies exercising regulatory authority over the Onsite Improvements.
“Governmental Requirements ” shall mean all laws, ordinances, statutes, codes, rules, regulations, orders, and decrees of the United States, the State of California, the County, the City, or any other political subdivision in which the Site is located, and of any other political subdivision, agency, or instrumentality exercising jurisdiction over Developer or the Site, as may be amended from time to time.
“HAL” shall mean the California Housing Authorities Law, HSC Section 34200, et seq.
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“Hazardous Materials ” means any substance, material, or waste which is or becomes regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a “hazardous waste,” “extremely hazardous waste,” or “restricted hazardous waste” under Section 25115, 25117 or 25122.7, or listed pursuant to HSC Section 25140, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a “hazar dous substance” under HSC Section 25316, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under HSC Section 25501, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a “hazardous substance” under HSC Section 25281, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as “hazardous” or “extremely hazardous” pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as “hazardous substances” pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317), (x) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903), (xi) Methyl Tertiary Butyl Ether or (xii) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601, 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 a n 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 an agreement, inclusive of attachments thereto, in the form of Attachment No. 6 hereof.
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“Homebuyer Loan Policy” is defined in Section 6.7.3.
“Homebuyer Note” means a promissory note substantially in the form of Exhibit B to the Homebuyer Loan Agreement to be executed by each 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. “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 City. During the HOME Compliance Period the Homebuyer Price shall not exceed the then applicable annual HUD 95% Median Sales Price Limit. “Homebuyer Purchase and Sale Agreement” has the meaning set forth in Section 6.1. “Homebuyer Purchase Escrow” has the meaning set forth in Section 6.4. “Homebuyer Title Insurance Policy” is defined in Section 6.7.3. “Homebuyer Training Certificate” means a certificate affirming the completion by the corresponding 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. The form of Homebuyer Training Certificate is to be submitted by Developer to Executive Director and shall be subject to approval by the Executive Director at his/her discretion. “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 each 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 Program” is defined in Recital F.
“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 City 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
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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.
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 pr ovide 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. This Agreement calls for “resale” and not “recapture” under the HOME Program except in the event of default under the Homebuyer Covenants, Homebuyer Loan Agreement and implementing instrument in which case all legal remedies available at law and equity shall be available to Authority (and City), including recapture of the monies due under the Homebuyer Note as secured by the Homebuyer Deed of Trust plus an equity share as provided therein. “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.
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“HOME Rules” means each of: (i) the HOME Regulations and the 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 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); (x iii) 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; (xi v) 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, ma y 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, A uthority, Developer, or any designated public agency; (xv) Developer shall comply with federal regulations concerning lobbying; (xvi) 42 U.S.C. Section 5309 (nondiscrimination); and (xv ii) to the extent applicable, including a Section 3 Clause in each construction contract.
“HOME Units ” shall mean the seven (7) Affordable Home s to be sold to Low I ncome Homebuyers, which Developer shall designate as HOME Units and which shall be monitored for compliance by Authority (and City) (i) during the 15-year HOME Compliance Period, and continuing (ii) 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 Homes 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
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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. “HUD” means the United States Department of Housing and Urban Development. “Initial Homebuyer” means the initial purchaser of each Affordable Home from Developer. “Legal Description of the Site” means Attachment No. 2. “Lender’s Title Policy (Developer)” is defined in Section 2.5. “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 incorporat ed 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. “Map” or “Site Map” means Attachment No. 1 hereof.
“Marketing Plan for Affordable Homes” or “ Marketing Plan” shall mean the marketing plan for sale of the Affordable Homes to be prepared by Developer and submitted to Authority for its review and approval as a Condition Precedent to Closing. Developer agrees to provide each prospective Affordable Homebuyer true and complete copies of this Agreement, including all Attachments. In all events, e mployees and consultants of Developer, its general contractor, any subcontractor(s), and their families shall not be eligible to apply to purchase or otherwise purchase an Affordable Home.
(a) Selection of Initial Homebuyers. For the initial sale of the seven (7) Affordable Homes, Developer shall be responsible for the marketing, screening, housing counseling, and selection of Qualified Homebuyers in compliance with the HOME Program, in particular 92 CFR 351.
(i) Developer shall develop the Marketing Plan for initial sale of the Affordable Homes and the selection of qualified prospective buyers, which shall target marketing efforts primarily toward Low Income Households that meet the following criteria in the following waterfall and order of reasonable preferences, subject to applicable Fair Housing Law:
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(A) as to up to two (2) Affordable Homes (but not exceeding two), reasonable preference shall be provided to applicant Low Income Household with one or more household member(s), if any, who qualify as a “military veteran”, which term is defined in 38 U.S.C (United States Code) as a person who served in the active military, naval, or air service, and who was discharged or released therefrom under conditions other than dishonorable; (B) persons, if any, who have been directly displaced by governmental activities of the City or Authority;
(C) persons, if any, who have been directly displaced by governmental activities of the County of Riverside;
(D) persons, if any, who at the time of application reside in, or work in the City of Moreno Valley;
(E) persons, if any, who at the time of application reside in, or work in the County of Riverside; and
(F) persons, if any, who at the time of application are on a waiting list maintained by the City, Authority or County of Riverside for ownership affordable housing “Material Adverse Change” means any event the occurrence of which is reasonably likely to have a material adverse effect on Developer’s ability to fulfill its obligations hereunder, including without limitation:
(a) a voluntary or involuntary bankruptcy of Developer (which is not dismissed within ninety (90) days of institution);
(b) a notice of default under California Civil Code Section 2920, et seq , in particular Section 2924, issued by a Primary Construction Lender (or its agent) to Developer under the Primary Construction Loan;
(c) a court order placing Developer under receivership; (d) a sale of all or substantially all of the assets held by Developer, except as expressly permitted hereunder;
(e) any violation of Developer or other failure of Developer to comply at all times with any applicable law, statute, ordinance, code, rule, regulation, judgment, order, ruling, condition or other requirement of a statutory, regulatory, administrative, judicial or quasi -judicial nature or any other legal or governmental requirement of whatever kind or nature related, which violation is likely to have a material adverse effect on the ability of Developer to perform its duties and obligations under any Project Document; and/or
(f) Developer incurs one or more liabilities, contingent or otherwise, or pending or threatened litigation or any asserted or unasserted claim exists against Developer, which would have a material adverse effect on its ability to perform its duties and obligations hereunder. “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
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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 th e Affordable Homes. As of May 31, 2025, the HUD HOME Program 95% Median Sales Price for Riverside County is $509,000; this not to exceed figure is published annually by HUD.
“MECH Homebuyer Grant Deed” means a grant deed substantially in the form of Exhibit “K” to the Homebuyer Loan Agreement.
“MECH Homebuyer Purchase and Sale Agreement ” means an agreement in the form of Exhibit G to Homebuyer Loan Agreement, together with such amendments, if any, as may be approved by the Executive Director.
“Memorandum of Agreement” shall mean a memorandum of this Agreement to be entered into between the Authority and Developer substantially in the form of Attachment No. 15. “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. “Offsite Improvements” mean the offsite public improvements that are required to be undertaken and completed by Developer and its selected lowest responsible bidder general contractor, which contractor selection shall be subject to review and approval by the City and Authority. This public improvement work consists of the new cul de sac public street for access to the Project from Eucalyptus Avenue, as well as appurtenant utilities and related improvement work. Subject to review of the bid(s) and determina tion of the lowest responsible bid obtained by Developer, the following contractor entities are pre-approved by Authority (and City): (i) All-American Asphalt, (ii) R.J Nobel, and (iii) Hardy & Harper Inc. The City shall review and approve all contracts, certificates of insurance, and related materials and information for Developer’s bid package and related to selection of the lowest responsible bidder for construction of the Offsite Improvements. “Onsite Improvements” means all of the onsite improvements that comprise the construction of the seven (7) Affordable Homes, all appurtenances thereto, both interior, exterior, houses, garages, yards and related improvements as further detailed and described in the Scope of Development, Attachment No. 9 and as detailed in the plans and specifications approved by Authority (and City) in connection with preparing, processing and approving the Development Plans therefor. “Option Agreement ” is defined and referenced in the Homebuyer Covenants, by which Authority shall have an option to acquire the Affordable Home in connection with a resale and/or an Event of Default under the Homebuyer Loan Agreement or Homebuyer Covenants. “Parcel Map” means the parcel map that subdivided the Site into eight (8) legal parcels, prior to the Date of Agreement that was caused to be prepared by the City and Developer and was recorded in the Official Records, County of Riverside. More particularly, the Parcel Map is described as “Parcel 3 of Parcel Map No. 28871 in the City of Moreno Valley, County of Riverside, State of California, recorded in Book 194, Pages 50 & 51 of parcel maps, in the Office of the Riverside County Recorder.” There are eig ht parcels including Parcels 1 to 7 inclusive and Lot A, the new cul de sac street. Assessor parcel numbers (“APN”) have been assigned to the eight subdivided parcels including
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APNs 481-270-065 thru -071 for the seven (7) Affordable Homes and Lot A (new street); the Site was formerly prior to subdivision denoted as APN 481-270-058. “Plans” means those building plans approved by City regarding the development of the Onsite Improvements and all Offsite Improvements.
“Pricing Protocol” has the meaning established therefor in Section 6.1.4. “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 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 of an Affordable Home, 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 has 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., s even (7) persons for a three bedroom home, and nine (9) persons for a four-bedroom home.
“Offsite Improvements” mean the new street and related offsite public improvements for which Developer agrees hereunder to cause construction through completion pursuant to the Reimbursement Agreement for Offsite Improvements, Attachment No. 16.
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“Project Documents” means, collectively, this Agreement, Authority Regulatory Agreement, Memorandum of Agreement, Authority Note, Authority Deed of Trust, Homebuyer Loan Agreement, Homebuyer Covenants, Homebuyer Note, Homebuyer Deed of Trust, Purchase Money Deed of Trust, Purchase Money Note.
“Proposed Transferee’s Application ” means a form of application to be prepared by Developer and reviewed by Authority (and City ) staff and counsel that will include all information necessary for the verification of eligibility of a household to purchase the corresponding Affordable 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.
“Request for Notice of Default” means Attachment No. 8 hereof. “Reimbursement Agreement” or “Reimbursement Agreement for Offsite Improvements” means that certain Reimbursement Agreement for Public Improvements (Lantana Court Affordable Housing Project, substantially in the form of Attachment No. 16. “Right of First Refusal” has the meaning set forth therefor in Section 6.8.1. “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, the HOME Rules and Federal Program Limitations.
“Schedule of Performance” means Attachment No. 3 hereof. “Scope of Development” means Attachment No. 9 hereof.
“Section 3” means and refers to Section 3 of the Housing and Urban Project Act of 1968, 12 U.S.C. § 1701u, as amended. City has prepared a Section 3 “checklist” and other forms related to Section 3 compliance; and as provided to Developer, its General Contractor, Subcontractors, or other contractor(s) or subcontractor(s), as applicable, such forms shall be utilized in all contracts and subcontracts to which Section 3 applies.
“Section 3 Clause” means the language, set forth below, which is required to be included in each and every construction contract entered into by Developer, the General Contractor, each Subcontractor and/or any other contractor(s) or subcontractor(s), as applicable, for the development or rehabilitation of the Project. For purposes of this Section 3 Clause and compliance therewith, whenever the word “contractor” is used it shall mean and include, as applicable, Developer , General Contractor, any and all Subcontractors, and any other contractor(s) and subcontractor(s) performing work on the Project.
In this regard, Developer hereby acknowledges and agrees to take all responsibility for compliance with all Section 3 Clause federal requirements and further acknowledges and agrees that compliance with all Section 3 Clause requirements by Developer, the General Contractor, all Subcontractors, and/or other contractor(s), subcontractor(s), and other agents, is the primary obligation of Developer. Developer shall provide or cause to be provided to its General Contractor and each Subcontractor, and each of it s other contractor(s), subcontractor(s) and agents, a checklist for
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compliance with the Section 3 Clause federal requirements, to obtain from the General Contractor, each Subcontractor, and other contractor(s), subcontractor(s), and agents, all applicable items, documents, and other evidence of compliance with the items, actions, and other provisions within the checklist, and to submit all such completed Section 3 Clause documentation and proof of compliance to the Executive Director.
The particular text to be utilized in any and all contracts of the General Contractor or any Subcontractor doing work covered by Section 3 shall be in substantially the form of the following Section 3 Clause, as reasonably determined by the Authority, or as directed by HUD or its representative, and shall be executed by the applicable contractor under penalty of perjury:
“(i) The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Project Act of 1968, as amended, 12 U.S.C. 1701u (“Section 3”). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low and very low income persons (inclusive of Very Low and Low Income Persons, Very Low and Low Income Homebuye rs, and Very Low and Low Income Tenants served by the Project), particularly persons who are recipients of HUD assistance for housing.
(ii) The parties to this contract agree to comply with HUD’s regulations in 24 C.F.R. Part 135, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 135 regulations. (iii) The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers’ representative of the contractor’s commitments under this Section 3 clause, and will post copies of notices in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number of job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of person(s) taking applications for each of the positions; and the anticipated date the work shall begin. (iv) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 C.F.R. Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 C.F.R.
Part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 C.F.R. Part 135.
(v) The contractor will certify that any vacant employment positions, including training positions, that are filled (a ) after the contractor is selected but before the contract is executed, and (b) with persons other than those to whom the regulations of 24 C.F.R.
Part 135 require employment opportunities to be directed, were not filled to circumvent the contractor’s obligations under 24 C.F.R. Part 135.
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(vi) Noncompliance with HUD’s regulations in 24 C.F.R. Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts.
(vii) With respect to work performed in connection with Section 3 covered Indian Housing assistance, section 7(b) of the Indian Self Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract.
Section 7(b) requires that to the greatest extent feasible, (a ) preference and opportunities for training and employment shall be given to Indians, and (b) preference in the award of contracts and subcontracts shall be given to Indian organizations and Ind ian owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with section 7(b).”
“After the foregoing Section 3 Clause, Participant shall add the signature block of the General Contractor, Subcontractor, or other contractor(s) and subcontractor(s), as applicable, and shall add the following text immediately above the signature block: “The contractor/provider by this his signature affixed hereto declares under penalty of perjury that contractor has read the requirements of this Section 3 Clause and accepts all its requirements conta ined therein for all of his operations related to this contract.”
“Site” means that property so designated in the Legal Description of the Site and the Map. “Site Purchase Price” is the sales price for conveyance of the Site is Eight Dollars ($8.00).
The difference between the fair market value based on an independent appraisal of the Site ($700,00) and $8.00 shall be deemed a grant of funds and part of the Authority Assistance hereunder. “Subcontractor” and “Subcontractors” means, individually and collectively, one or more subcontractors hired by Developer’s General Contractor for the Onsite Improvements to perform and complete, or to engage and supervise others to perform and complete, the construction of the Onsite Improvements. Each of the Subcontractors shall be selected after competitive bidding, and City shall have every reasonable right and opportunity to observe and review all material stages of such competitive bidding process, including a right to review the invitation to bidders, each bid package, each responsive bid form, each submitted bid package and the right to be present when each bid is opened by Developer and/or the General Contractor. Developer shall submit to City information regarding the entity serving as the Subcontractor for any portion of the construction of the Onsite Improvements, including compliance with plans approved by City and the obtaining by Developer of all required licenses, certifications, insurance, etc., as reasonably requested by the Executive Director. “Title Company” means [First American] Title Company of California or another title insurer designated by City.
“Total Project Costs” means all Authority-approved, and HUD-approved, eligible costs including, but not limited to planning, architecture, civil engineering, permitting, inspections, surveys, administration, site acquisition, relocation, demolition, site remediation, site costs (except where noted), dwelling unit hard costs including construction and equipment, interest and financing/carrying charges, builder’s overhead and profit, cost of initial sales of Affordable Homes, On-Site
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Improvements, Offsite Improvements, inclusive of utilities, finish landscaping, a contingency allowance, insurance premiums, off-site facilities.
“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.
1.2 Singular and Plural Terms. Any defined term used in the plural in this Agreement or any Project Document shall refer to all members of the relevant class and any defined term used in the singular shall refer to any number of the members of the relevant class.
1.3 References and Other Terms . Any reference to this Agreement or any Project Document shall include such document both as originally executed and as it may from time to time be modified. References herein to Articles, Sections and Exhibits shall be construed as references to this Agreement unless a different document is named. References to subparagraphs shall be construed as references to the same Section in which the reference appears. The term “document” is used in its broadest sense and encompasses ag reements, certificates, opinions, consents, instruments and other written material of every kind. The terms “including” and “include” mean “including (include) without limitation.”
1.4 Exhibits Incorporated . All attachments and exhibits to this Agreement, as now existing and as the same may from time to time be modified, are incorporated herein by this reference.
2. DISPOSITION OF THE SITE.
2.1 Sale of the Site. All references in this Agreement to acreage are approximate; the price for the Site as payable by Developer will not change regardless of whether the actual acreage of the Site differs from the acreage figures set forth in this Agreement. Subject to conditions and limitations set forth in the foregoing part of this Section 2.1 and further subject to the prior satisfaction of the Authority Conveyance Conditions Precedent, the conveyance of the Site is to be accomplished as set forth in Sections 2.1 to 2.5 hereof. In consideration of Authority executing the Authority Grant Deed, Developer shall comply with and cause the use of the Site to conform to this Agreement and the Authority Regulatory Agreement.
2.2 Access to Site Prior to the Closing. Subject to the facts described in Section 2.2.1 below, prior to the Authority Conveyance, representatives of Developer shall have the right of access to all portions of the Site for the purpose of: (i) obtaining data and making surveys and tests necessary to carry out this Agreement, including without limitation further investigation of the environmental condition of the Site; and (ii ) commencing preliminary work for the construction of the Onsite Improvements. Developer agrees to notify Authority in writing prior to undertaking any studies or work upon the Site prior to the Authority Conveyance . Authority may require Developer to execute and/or update a right of entry agreement satisfactory to Authority legal counsel prior to commencing such further studies or work. Any such preliminary work by Developer shall be undertaken only after securing any and all necessary permits from the appropriate governmental agencies. Developer shall indemnify, defend, and hold each of the Authority and the City harmless from any claims, losses, liabilities, and damages arising out of the activities of Developer as set forth herein. In addition, in the event that Developer causes any damage to any portion of the Site, Developer shall promptly restore
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the Site as nearly as possible to the physical condition existing immediately prior to Developer’s entry onto the Site.
2.2.1 Site Preparation; Grading. Prior to the Date of Agreement, Authority (and City) caused site preparation, including rough grading of the Site, inclusive of the subdivided eight (8) parcels that comprise the Site.
2.2.2 Investigation of the Site . No later than the forty-five days after the Date of Agreement, and prior to and as a condition to the conveyance of the Site by Authority to Developer, Developer shall complete its investigation of the Site and, if Developer, in its sole and absolute discretion, elects to proceed, Developer shall deliver written notice to Authority of its intention to proceed with the Onsite Improvements . Developer’s investigation may include, in Developer’s sole and absolute discretion: physic al inspection of the Site, including, but not necessarily limited to, inspection and examination of soils, environmental factors, hazardous substances, archaeological information, geological, engineering and other tests, a review and investigation of zoning, permits and entitlements, review of all governmental matters affecting the Site, an appraisal of the Site, and such other matters pertaining to the Onsite Improvements as Developer deems appropriate. Developer shall have the right to, at any reasonable time and from time to time to inspect (or have its consultants inspect) the Site, and Developer shall not conduct any invasive soil, gas or groundwater sampling at the Site without first submitting a work plan to Authority which is acceptable to Authority in its reasonable discretion. No later than seven days after its receipt of any such proposed work plan from Developer, Authority shall notify Developer in writing whether it approves or reasonably disapproves of such work plan. All fees and other expenses incurred by Developer relating to the inspection of the Site shall be Developer’s obligations. In the event Developer constructs the Onsite Improvements, all fees and expenses incurred by Developer relating to the inspection of the Site will be included in the total development cost. Developer agrees to repair any damage caused by Developer or Developer’s consultants in making any inspection.
2.3 Authority Loan; Authority Loan Note; Authority Loan Deed of Trust. Authority hereby commits and agrees, subject to the terms and provisions of this Agreement, to make the Authority Loan to Developer, and Developer hereby agrees to borrow the Authority Loan from Authority, in an amount not to exceed Three Million Three Hundred Ninety-Six Nine Hundred Sixty-One Dollars ($3,446,961) that includes $1,686,961 HOME Funds, up to $850,000 Measure A funds, up to $550,000 LMIHAF, and $360,00 in kind professional services all subject to the terms and conditions set forth in this Agreement, and subject further to the terms and conditions set forth within the Project Documents. The Authority Loan shall be evidenced by the Authority Loan Note and secured by the Authority Loan Deed of Trust and the Security Agreement, which shall be recorded against the Site in the Official Records in a second lien position junior and subordinate only to Primary Construction Loan.
2.3.1 Terms of the Authority Loan. The Authority Loan Note shall be for a term commencing upon the date of initial disbursement of funds thereunder and continuing until the last sale of the Affordable Homes by Developer to the Initial Homebuyers. The Authority Loan Note shall bear simple interest at the rate of one percent (1%) per annum from the date of disbursement of Authority Loan proceeds. The Authority Loan Note, principal and accrued interest, shall be forgiven upon the close of escrow for the last sale of the seven (7) Affordabl e Homes. The terms of the Authority Loan are more particularly described in the Authority Loan Note. In the Event of Default the Authority Loan Note shall be accelerated and due in full, including interest accruing at the Default Rate of 10%/annum.
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(a) Prohibited Use of HOME Program Proceeds . The portion of the proceeds of the Authority Loan sourced from HOME Program funds shall be expended in compliance with the HOME Program and HOME Regulations and such proceeds shall not be used for Project reserve accounts, monitoring, or servicing and origination fees, or for expenditures incurred more than one calendar year after the issuance of the Release of Construction Covenants.
2.3.2 Protocol for Disbursement of the Authority Loan Cash Subsidy Amount.
The cash subsidy component of the Authority Loan Amount shall be subject to disbursement to or for the benefit of Developer as follows:
(a) Pursuant to the Cooperation Agreement City shall have transferred to the Authority to fund the cash subsidy portion of the Authority Loan Amount for disbursement :
(i) to Developer the amount of (A) $1,686,961 HOME Funds and approximately up to $125,000 of LMIHAF disbursed in installments based upon the progress toward completion of the O nsite Improvements and (B) up to $850,000 of Measure A funds and approximately up to $425,000 of LMIHAF disbursed in installments based upon the progress toward completion of the Offsite Improvements pursuant to the Reimbursement Agreement, and, with amounts of (A) and (B) to be disbursed based upon the degree of completion up to costs incurred as determined in good faith by the Executive Director ; such determinations are solely for the use of the Authority (and City ) in implementing the objectives of this Agreement and are not to be relied upon by any third party. Prior to each disbursement of any portion of the Authority Loan Amount, Developer shall submit to City an “Application for Disbursement” (more commonly known as a “Draw Request”) which shall include:
(i) A written, itemized statement, signed by a representative of Developer which sets forth: (A) a description of the work performed, material supplied and/or costs incurred or due for which disbursement is requested; and (B) the total amount incurred, expended and/or due for the requested disbursement. All moneys applied for and disbursed pursuant to this Section 2.3.2 shall be applied only for the Onsite Improvements and the statement(s) by the representative of Developer shall so affirm. Disbursements may be used only to defray the cost of work performed on the Onsite Improvements , and only where such work is performed by (and disbursements are made to) third parties not related or connected to Developer; (ii) Copies of billing invoices, statements, receipts and other documents evidencing the total amount expended, incurred or due for any requested disbursement; (iii) Mechanics lien waivers including: (1) a Conditional Waiver and Release Upon Progress Payment (California Civil Code Section 3262(d)(1)) for itself and each contractor covered by such Request Payment, (2) an Unconditional Waiver and Release Upon Progress Payment (California Civil Code Section 3262(d)(2)) for itself and each of its contractors covering the full amount of all previous payments made to Developer, and (3) an Unconditional Waiver and Release Upon Final Payment (California Civil Code Section 3262(d)(4)) for its contractors who have competed their work and for whom Developer has received full payment; and (iv) A statement that the percentage and/or stage of construction corresponding to the Application for Disbursement has been substantially completed and substantially conforms to the Plans.
(b) Subject to satisfaction of the requirements of this Section 2.3.2, City will endeavor to make payments within ten (10) days after the submittals required pursuant to this
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Section 2.3.2 are fully accomplished, review by the Executive Director has been completed, and the Executive Director has had a reasonable opportunity to review the stage of completion. After the Date of Agreement, further approval by the Authority shall not be required to authorize the disbursement of moneys pursuant to this Section 2.3.2
(c) Notwithstanding any provision of this Agreement to contrary effect, in the event an Event of Default has occurred, Authority shall, at its election, cease to make a ny disbursements to Developer. Authority may thereafter, at its discretion, determine whether an Event of Default may be or has been cured, in which event Authority may at its option recommence disbursements; provided that the foregoing shall be without prejudice as to the rights of Authority and authority to enforce this Agreement, terminate th is Agreement, or pursue legal and/or equitable remedies.
(d) Prior to the disbursement of funds sourced from in whole or in part with HOME Program funds, a ll Governmental Requirements including all Environmental Laws applicable to the Project, including without limitation, the National Environmental Policy Act of 1969, Public Law 91-190 as amended, 42 U.S.C. Sections 4321–4347, and §§92.352, 92.355 of the HO ME Regulations, shall have been satisfied if and to the extent such satisfaction is required prior to disbursement of HOME moneys. Authority shall have conducted its environmental review in accordance with 24 CFR Part 58 before any HOME funds are released to Developer.
2.3.3 Authority Conveyance Conditions Precedent. Authority shall not convey title to the Site to Developer, unless and until each and every one of the following conditions precedent (“Authority Conveyance Conditions Precedent” are satisfied by Developer, or otherwise extended for time of performance or waived by Authority in Executive Director’s sole discretion. The Authority Conveyance Conditions Precedent are solely for the benefit of Authority) as determined in good faith by the Executive Director (each of which condition[s], if it requires action by Developer, shall also be a covenant of Developer):
(a) Final Financing Plan. Developer shall have submitted and shall have obtained approval of the Executive Director of a Final Financing Plan. (b) Homebuyer Financing Plan. Developer shall have submitted and shall have obtained approval of the Executive Director of an updated financing plan, including sources and uses, for the sales to the Initial Homebuyers, identification of institutional lender(s) for Purchase Money Loans with term and conditions therefor, evidence each such lender acknowledges and agrees the Homebuyer Covenants will be and remain senior, nonsubordinate encumbrances to Purchase Money Loan deeds of trust, amount of Authority’s Home buyer Loan, Down Payment Assistance Loans, and if applicable down payment grants with sources, terms and conditions of same , so long as junior and subordinate in encumbrance and lien priority to Homebuyer Covenants, Authority Regulatory Agreement, Purchase Money Mortgage, and Homebuyer Loan. (c) Project Documents. Not later than two (2) days prior to recordation of the Authority Grant Deed, Developer shall have delivered to the Escrow Holder, in recordable form, the following documents : the Authority Grant Deed, the Authority Regulatory Agreement , the Authority Deed of Trust , and the Memorandum of Agreement, all duly executed and notarized by Developer.
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(d) Permits. Developer shall have satisfied all conditions to obtaining all Building Permits to be obtained excepting for the payment of building permit fees for all of the Site (the payment of which shall be made by Developer after Closing in conformity with City practices customarily applied to development within the corporate limits of City). Developer acknowledges and agrees that the plans prepared for the Onsite Improvements shall be subject to City’s normal planning review process.
(e) Land Use Approvals. Developer shall have obtained each of the land use approvals for the Onsite Improvements which is set forth in Sections 4.2 hereof and the City shall be ready to issue building permits for the construction of the Onsite Improvements upon the payment of the applicable fees by Developer.
(f) Title Insurance. Authority shall have received a pro forma lender’s policy of title insurance with all requested endorsements , together with the commitment of the Title Company that it is prepared to issue the lender’s policy of title insurance referenced in Section 2. 5 hereof.
(g) Insurance. Authority shall have received evidence, satisfactory to Executive Director, that all of the insurance policies, endorsements, and certificates required by Section
4.5, below, are in full force and effect.
(h) Corporate Resolution. Developer shall deliver or shall have delivered to Authority a certified copy of a resolution of Developer’s board of directors authorizing (or ratifying) the execution of the Project Documents (“Developer’s Resolution”). (i) Development Plans. Authority shall have approved the Development Plans for the Project prepared and submitted by Developer as being in substantial conformity with the Scope of Development, this Agreement, and the City Codes. (j) Reimbursement Agreement for Offsite Improvements ; Plans and Specifications; Construction Contract for Construction of Offsite Improvements. Developer shall have prepared and submitted, and Authority shall have approved the Plans and Specifications for the Offsite Improvements. Further, Developer shall have presented to Authority and Authority shall have approved the form of the contract to be entered into between Developer and the selected contractor for construction of the Offsite Improvements.
(i) Construction Contract for Offsite Improvements . Authority shall be received for review and approval, the form of the Construction Contract for Developer to undertake through completion the Offsite Improvements.
(k) Representations and Warranties. The representations and warranties of Developer contained in this Agreement shall be correct as of the Close of Escrow as to each of the Site as though made on and as of that date, and Executive Director shall have received a certificate to that effect signed by an officer of Developer.
(l) No Default under Agreement. No Event of Default by Developer shall have occurred under this Agreement, no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default by Developer under this
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Agreement, and Executive Director shall have received a certificate to that effect addressed to each of Authority and City signed by an officer of Developer.
All conditions set forth in this Section 2.3.3, or to Authority’s obligations hereunder, are for Authority (and City) benefit only and Executive Director may extend time for performance, or waive, all or any part of such rights by written notice to Developer and Escrow Holder.
2.3.4 Developer’s Conditions of Authority Developer Closing . Developer’s obligation to proceed with the acceptance of conveyance of the Site is subject to the fulfillment or waiver by Developer of each and all of the conditions precedent (a) through (d), inclusive, described below (“Developer Conditions Precedent”), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the time periods provided for herein:
(a) Review and Approval of Title . Developer shall have reviewed and approved the condition of title of the Site, as provided herein. (b) Title Policy . The Title Company shall, upon payment of Title Company’s regularly scheduled premium, have agreed to Developer Owner’s Policy for the Site upon close of escrow, in accordance with Section 2.5 hereof. (c) Review and Approval of Property Condition. Developer shall have approved the condition of the Site pursuant to Section 2.2 hereof. (d) Construction Contract for Offsite Improvements . The Construction Contract to undertake the Offsite Improvements shall be duly executed by the parties thereto. (e) Authority Conveyance Developer Certificate. Developer shall have delivered an Authority Conveyance Developer Certificate to the Executive Director.
2.4 Escrow. The parties shall open an escrow (“ Authority Escrow”) with the Escrow Holder within forty-five (45) days after the Date of Agreement for the sale and disposition of the Site, issuance of the Authority Loan and Closing of Financing. Authority and Developer agree to execute such supplemental escrow instructions as may be reasonably required to implement this Section 2.4 .
Developer shall arrange for and cause the Title Company to issue the Authority Loan Policy to reflect (i) the Authority Loan Amount under the Authority Loan Note as secured by the Authority Deed of Trust, (ii) reflect the condition of title with such exceptions, if any, as may be approved by the Executive Director acting in his/her sole and absolute discretion. Developer shall be responsible to pay any premium, fees, costs and expenses for the Authority Loan Policy. Developer shall additionally pay, at its cost, any amounts necessary to effect recording, escrow charges, and any costs necessary to cause the condition of title for the Authority Loan Policy to conform to those conditions set forth in the Authority Loan Policy.
2.5 Title Insurance. Concurrent with the recordation of the Authority Grant Deed, the Title Company shall be prepared to issue, and shall issue:
(a) to Developer a standard owner’s ALTA owner’s policy of title insurance (“Developer Owner’s Policy”) insuring that the title to the Site is vested in Developer in the condition required by this Agreement . The Title Company shall provide Authority a copy of the Owner’s Title Policy; and
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(b) to Authority a , ALTA loan policy of title insurance with endorsements as requested by Authority ensuring the beneficial interest of the Authority under the Authority Deed of Trust (“Authority Loan Policy”).
All premiums, costs for endorsements, and related costs for Developer Owner’s Policy and the Authority Loan Policy shall be borne by Developer.
2.6 Repayment. Following the recording of the Authority Deed of Trust and execution by Developer and delivery to the Authority the Authority Loan Note, the entire balance due under the Authority Loan Note shall be paid to Authority, or otherwise satisfied as provided below, upon the first to occur of (each an “Event of Default”): ( a) Developer’s transfer, sale, or other conveyance of the Site or portion thereof contrary to this Agreement; (b) Developer’s uncured breach of the Authority Loan Note, Authority Deed of Trust , or other terms and conditions of this Agreement; ( c) failure to complete construction of the Project within twenty-four (24) months after the Date of Agreement.
2.6.1 Authorized Sales of Affordable Homes . Notwithstanding Section 2.6(a) above, the sale of each and all of the seven subdivided parcels that comprise the Site once developed with the Affordable Home s and thereafter conveyance to the Initial Homebuyers in conformity with Section 6., et seq. hereof is an authorized transfer affecting the Site.
2.6.2 Partial Reconveyances and Partial Terminations . Provided there are no uncured defaults, in connection with each sale of an Affordable Home, Authority will provide to Escrow Holder (a) a partial reconveyance of the Authority Loan Deed of Trust, and (b) a partial termination of the Authority Regulatory Agreement, each of (a) and (b) encumber the subject Affordable Home being sold to an Initial Homebuyer accomplished in strict conformity with Section 6.1, et seq. hereof.
2.6.3 Authority Loan Note Forgiveness . Upon close of escrow and sale of the 7th Affordable Home to a Qualified Homebuyer as the 7 th Initial Homebuyer pursuant to all requirements herein, in particular pursuant to Section 6. et seq., and the Homebuyer Loan Agreement and Homebuyer Covenants, Authority agrees to cancel and forgive the Authority Loan Note and cause reconveyance of the Authority Loan Deed of Trust.
2.7 No Assumption of Authority Note. Authority Loan Note shall not be assignable or assumable by successors and assigns of Developer without the prior written consent of the Authority, which consent may be withheld in Authority’s sole and complete discretion.
2.8 Recordation. At the Closing of Financing, the Escrow Holder shall be prepared to record certain of the Project Documents in the following order: (a) Memorandum of Agreement, (b) Authority Regulatory Agreement, (c) deed of trust securing the Primary Construction Loan, (d) Authority Loan Deed of Trust, (e) Request for Notice, and (f) other documents, if any, required to be recorded against the Site pursuant to the terms of this Agreement and the Project Documents.
2.9 Lobbying. Developer hereby certifies that: (a ) no Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal
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contract, grant, loan, or cooperative agreement; (b) if any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a M ember of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions; and (c ) it will require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and (d) Developer shall certify and disclose accordingly that certain Lobbying Certification: (i) this certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into, (ii) submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S.C (iii) any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure; and (iv) in the event that legal matters arise pertaining to this Agreement, legal venue for a federal action shall be in the District Court of the Central District of California, or for a state action in the Superior Court for the County of Riverside.
2.10 Uses. Developer covenants and agrees to devote, use, operate, and maintain the Site in accordance with the Authority Grant Deed, Authority Regulatory Agreement, and this Agreement.
All uses conducted on the Site, including, without limitation, all activities undertaken by Developer pursuant to this Agreement, shall conform to Governmental Requirements including all applicable provisions of the Moreno Valley Municipal Code, and the recorded documents pertaining to and running with the Site.
3. DEVELOPER ACTIVITIES FOLLOWING CONVEYANCE OF THE SITE TO
DEVELOPER
3.1 Property Taxes and Assessments. Ad valorem taxes and assessments levied, assessed or imposed on the Site for the period after the Authority Conveyance shall be borne by Developer.
3.2 Developer’s Obligations after the Authority Conveyance . After the sale and disposition of the Site , Developer shall, at its sole cost and expense, promptly take: (a ) all actions required by any federal, state or local governmental entity or political subdivision or any Governmental Requirements with respect to the Site pursuant to this Agreement; (b) all actions necessary to prepare the soil on the Site for the development required hereunder; and (c ) all actions necessary to make full use of the Site for the development of affordable housing pursuant to this Agreement for the purposes described in this Agreement, which actions, requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials regardless of when such Hazardous Materials were introduced to the S ite and regardless of who is responsible for introducing such Hazardous Materials to the Site. Developer shall take all actions necessary to promptly restore the Site to an environmentally sound condition for uses contemplated by this Agreement, notwithstanding any lesser standard of remediation allowable under applicable Governmental Requirements. The obligations under this Section 3.2 shall survive the issuance of the Certificate of Completion of Construction.
3.2.1 Duty to Prevent Hazardous Material Contamination . After the Authority Conveyance, Developer shall take all reasonably necessary precautions to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Developer shall install
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and utilize such equipment and implement and adhere to such procedures as are consistent with Governmental Requirements as respects the disclosure, storage, use, removal and disposal of Hazardous Materials.
3.2.2 “As Is” Conveyance . Developer expressly understands and agrees that Developer shall purchase the Site from Authority in an “AS IS” condition as of Closing. As of the Closing, Authority (and City) specifically disclaim the making of any representations or warranties, expressly, impliedly, directly and/or indirectly , regarding the Site or matters affecting the Site, including without limitation, the presence of Hazardous Materials on the Site, or the condition of the soil, its geology, the presence of known or unknown seismic faults, or the suitability of the Site for the development purposes intended hereunder.
4. SCOPE OF DEVELOPMENT; INSURANCE AND INDEMNITY, FINANCING
4.1 Scope of Development. Developer shall develop the Onsite Improvements in accordance with the Scope of Development , and the approved Development Plans for the Onsite Improvements. The Onsite Improvements shall generally consist of the seven (7) single-family houses (each an Affordable Home) constructed on the seven (7) separate subdivided parcels designated in the recorded Parcel Map, as more particularly set forth in the Scope of Development. In the event of any inconsistency between the Scope of Development and the plans for the Onsite Improvements that have been approved by Authority and/or City, the approved Development Plans shall control. Subject to the Homebuyer Covenants , this Agreement shall not prevent an owner of Affordable Home from making improvements to an Affordable Home at a time after the Affordable Home has been conveyed to such owner; neither the Authority (nor the City) shall have any responsibilities expressly, impliedly, directly and/or indirectly regarding any such future improvements.
4.1.1 Construction of Offsite Improvements. In addition to the construction and development of the Project on the Site, Developer agrees to cause the completion of the Offsite Improvements pursuant to the terms and conditions of that certain Reimbursement Agreement for Public Improvements (Lantana Court Affordable Housing Project) (“Reimbursement Agreement”). The Offsite Improvements shall be constructed in accordance with the Reimbursement Agreement and the contract between MECH and the selected lowest responsible bidder for construction of such Offsite Improvements. Under the Reimbursement Agreement, Authority will pay and reimburse Developer up to a maximum not to exceed amount of One Million Two Hundred Thousand Dollars ($1,200,000).
4.2 Design Review.
4.2.1 Developer Submissions. Before commencement of construction of the Onsite Improvements or other works of improvement upon the Site, Developer shall submit to Authority any plans and drawings (collectively, the “Design Project Drawings”) that may be required by Authority (or City) with respect to any permits and entitlements which are required to be obtained to develop the Onsite Improvements. Developer shall also be responsible to comply with any conditions of approval.
Developer, on or prior to the date set forth in the Schedule of Performance, shall submit to Authority (and City) such plans for the Onsite Improvements as required by Authority (and City) in order for Developer to obtain building permits for the Onsite Improvements . Within thirty (30) days after the Authority (and City ) disapproval or conditional approval of such plans, Developer shall revise the portions of such plans identified by Authority (and City) as requiring revisions and resubmit the revised plans to Authority (and City).
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4.2.2 MoVal Review and Approval . MoVal shall have all rights to review and approve or disapprove all Design Project Drawings and other required submittals in accordance with the Municipal Code, and nothing set forth in this Agreement shall be construed to constitute MoVal’s approval of any or all of the Design Project Drawings or to limit or affect Authority (and/or City’s) review and right to approve, approve subject to conditions, or disapprove Design Project Drawings, plans, drawings, applications, or submittals.
4.2.3 Revisions. Any and all change orders or revisions required by MoVal and their inspectors that are required under the Municipal Code and all other applicable Uniform Codes (e.g. Building, Housing, Plumbing, Fire, Electrical, etc.) and under other applicable laws and regulations shall be included by Developer in its Design Project Drawings and other required submittals and shall be completed during the construction of the Onsite Improvements.
4.2.4 Defects in Plans. The Authority (and City) shall not be responsible either to Developer or to third parties in any way for any defects in the Design Project Drawings, nor for any structural or other defects in any work done according to the approved Design Project Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 4.2.4.
4.2.5 Land Use Approvals. Before commencement of construction of the Onsite Improvements or other works of improvement upon the Site, Developer shall, at its own expense, secure or cause to be secured any and all land use and other entitlements, permits, and approvals which may be required for the Onsite Improvements by any governmental agency affected by or having jurisdiction over such construction or work. Except as otherwise expressly set forth in the Reimbursement Agreement, Developer shall, without limitat ion, apply for and secure, and pay all costs, charges and fees associated therewith, all permits and fees required by City, County, and other governmental agencies with jurisdiction over the Onsite Improvements.
4.3 Time of Performance; Progress Reports . Developer shall undertake the approved Development Plan, commence and complete all construction of the Onsite Improvements, and satisfy all other obligations and conditions of this Agreement within the times established therefor in this Agreement. Construction of the Onsite Improvements and Offsite Improvements shall be commenced within thirty (30) days after the earlier to occur of: (i) the recording of the Authority Grant Deed, or (ii) the initial disbursement of any funds to or on behalf of Developer pursuant to this Agreement under the Authority Loan. Following the Date of Agreement , once construction is commenced, it shall continuously and diligently be pursued to completion and without cessation for more than fifteen (15) days subject to the force majeure provisions herein . During the course of construction and prior to issuance of the Certificate of Completion of Construction, Developer shall provide timely reports of the progress of construction when request ed by the Executive Director. Developer shall complete construction of all of the Onsite Improvements on the Site by the time established therefor in the Schedule of Performance.
4.4 Construction Contract. All costs of planning, designing, developing, obtaining permits for (including permit fees), and constructing the Onsite Improvements shall be borne solely by Developer; the Authority investment of HOME Funds and LMIHAF funds cumulatively and in total for the Onsite Improvement shall not exceed $1,810,750. As to the Offsite Improvements, Authority will fund up to but not exceeding $1,200,000 of the costs to complete such Offsite Improvements and all costs, if any, exceeding $1,200,000 shall be borne by Developer.
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4.4.1 Construction Contracts . Drafts of all contracts to be executed between Developer and each Contractor for the Construction of all work Onsite Improvements and Offsite Improvements shall be certified by Developer to be true and correct copies thereof. Each such contract shall include reference to this Agreement and such Contractor’s specific obligation to carry out the construction and completion of the Construction (or part thereof) in conformity with the HOME Regulations, HAL, Dissolution Law, CRL, and other applicable federal, state, and local laws and regulations. Such Construction Contract(s) shall include: (i ) a full recitation of the Section 3 Clause with an express acknowledgement and agreement by each Contractor to fully comply with the Section 3 Clause, (ii) specifications in the form provided by the Authority relating to compliance with Section 3, a requirement to include such specifications in every subcontract entered into between the Contractor and each subcontractor, and an express reference t o the Section 3 Plan, (iii ) an express acknowledgement and agreement by each Contractor that as a condition precedent to the final payment under its contract, Contractor and each subcontractor performing work at the Project shall provide written evidence and a certification to Authority, showing that Contractor and each subcontractor has complied with the Section 3 Clause in completing the Construction, and (iv) express reference to all other applicable federal regulations and laws to which such Contractor must comply in undertaking the work of the Construction for Developer; provided, it is understood by the parties that it is and shall remain Developer’s primary obligation to obtain and submit all required Section 3 Clause documentation. In furtherance of evidencing Section 3 Clause compliance during the Construction, Developer expressly acknowledges and agrees under this Agreement that it shall cause each Contractor to provide evidence, in a form reasonably satisfactory to Executive Director and/or HUD, t hat the Section 3 Clause checklist(s) and other forms related thereto (as such forms may be provided by Authority to Developer) have been fully completed and all back up information has been submitted to the Executive Director. The form of each Construction Contract shall be reasonably satisfactory to Executive Director and shall be approved within the applicable time periods set forth in the Schedule of Performance.
4.5 Insurance Requirements. Until the Certificate of Completion of Construction has been issued upon completion of all of the Onsite Improvements and all seven (7) Affordable Home s have been sold to Qualified Homebuyers as the Initial Homebuyers , Developer shall maintain at Developer’s sole expense, with insurers reasonably approved by City, the following policies of insurance in form and substance reasonably satisfactory to the Executive Director and City risk management staff:
(i) workers’ compensation insurance and any other insurance required by law in connection with the Onsite Improvements; (ii) upon commencement of the earlier to occur of clearing, demolition, or construction of the Onsite Improvements by Developer and at all times prior to completion of the Onsite Improvements , builder’s risk-all risk insurance covering 100% of the replacement cost of all Improvements (including offsite materials) during the course of construction in the event of fire, lightning, windstorm, vandalism, earthquake, malicious mischief and all other risks normally covered by “all risk” coverage policies in the area where the Si te is located (including loss by flood if the Site is in an area designated as subject to the danger of flood); (iii) following completion of the Onsite Improvements , fire and hazard “all risk” insurance covering 100% of the replacement cost of the Onsite Improvements in the event of fire, lightning, windstorm, vandalism, earthquake (if available at commercially reasonable rates), malicious mischief and all other risks normally covered by “all risk” coverage policies in the
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area where the Site is located (including loss by flood if the Site is in an area designated as subject to the danger of flood);
(iv) public liability insurance in amounts reasonably required by the Executive Director from time to time, and in no event less than $2,000,000 for “single occurrence;” and
(v) property damage insurance in amounts reasonably required by the Executive Director from time to time, and in no event less than $2,000,000.
All such insurance shall provide that it may not be canceled or materially modified without thirty (30) days prior written notice to the Authority and to the City. The policies required under subparagraphs (b) and (c) shall include a “lender’s loss payable endorsement” (Form 438BFU) in form and substance satisfactory to Authority, showing Authority and City as encumbrancers. Each of Authority and City shall be an additional insured in the policies required under subparagraphs (d) and (e). No such insuran ce shall include deductible amounts to which Authority and City have not previously consented in writing. Certificates of insurance for the above policies (and/or original policies, if required by MoVal) shall be delivered to Authority and City from time to time within ten (10) days after demand therefor. All policies insuring against damage to the Onsite Improvements shall contain an agreed value clause sufficient to eliminate any risk of co-insurance. No less than thirty (30) days prior to the expirati on of each policy, Developer shall deliver to Authority (and City ) evidence of renewal or replacement of such policy reasonably satisfactory to the Executive Director.
The insurance requirements as set forth in this Section 4.5 may be modified from time to time upon mutual written agreement of the Executive Director and legal counsel (for City and the Authority) and Developer. It is contemplated that the construction lender may direct the use of insurance proceeds related to damage that occurs during construction so long as Developer demonstrates that one of the following is assured: (i ) retention by Authority of all net proceeds of sale from all the Affordable Homes; or (ii ) completion of the Onsite Improvements and completion of the Affordable Home s to Low Income Homebuyers at a price that constitutes Affordable Housing Cost.
Coverage provided hereunder by Developer shall be primary insurance and not be contributing with any insurance maintained by Authority or City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waive r of subrogation for the benefit each of Authority and City. None of the above -described policies shall require Developer to meet a deductible or self -insured retention amount of more than Five Thousand Dollars ($5,000.00) unless approved in writing by the Executive Director. All policies shall be written by good and solvent insurers qualified to do business in California and shall have a policyholder’s rating of A or better in the most recent edition of “Best’s Key Rating Guide -- Site and Casualty.” The required certifica te shall be furnished by Developer at the time set forth herein.
4.5.2 Waiver of Subrogation. Developer hereby waives all rights to recover against each of Authority and City (or MoVal officer, employee, agent or representative) for any loss incurred by Developer from any cause insured against or required by any Project Document to be insured against; provided, however, that this waiver of subrogation shall not be effective with respect to any insurance policy if the coverage thereunder would be materially reduced or impaired as a result.
Developer shall use its best efforts to obtain only policies which permit the foregoing waiver of subrogation.
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4.6 Obligation to Repair and Restore Damage Due to Casualty. If during the period of construction or prior to conveyance of an Affordable Home to a n Initial Homebuyer, the Onsite Improvements shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Developer, Developer shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Onsite Improvements to substantially the same condition as the Onsite Improvements are required to be constructed pursua nt to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Developer shall complete the same as soon as possible thereafter so that the each and all of the seven (7) Affordable Homes can be sold and occupied as affordable ownership housing in accordance with this Agreement. In no event shall the repair, replacement, or restoration period exceed twelve (12) months from the date Developer obtains insurance proceeds unless the Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Authority shall cooperate with Developer, at no expense to Authority (or City), in obtaining any governmental permits required for the repair, replacement, or restoration.
If, however, the then-existing laws of any other governmental agencies with jurisdiction over the Site do not permit the repair, replacement, or restoration, Developer may elect not to repair, replace, or restore the Onsite Improvements by giving notice to Authority (in which event Developer will be entitled to all insurance proceeds but Developer shall be required to remove all debris from the applicable portion of the Site) or Developer may reconstruct such other improvements on the Site as are consistent with appli cable land use regulations and approved in the sole discretion of Authority, City, and the other governmental entity or agencies with jurisdiction, and Authority (and/or City) may pursue remedies of its choosing under this Agreement, including without limitation termination.
4.7 Indemnity. Developer shall defend (by counsel satisfactory to Authority and City), indemnify and save and hold harmless each of Authority and City and their respective officers, contractors, agents and employees (collectively, the “Indemnitees”) from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without limitation, attorneys’ fees and court costs) arising from or relating to: (i) this Agreement; (ii) the making of the Authority Loan; (iii) the Site and the conveyance thereof; (iv) a claim, demand or cause of action that any person has or asserts against Developer; (v) any act or omission of Developer, any contractor, subcontractor or material supplier, engineer, architect or other person with respect to the Site or construction of the Onsite Improvements; or (vi) the ownership, occupancy or use of the Site; provided that, as long as Developer has completed the Onsite Improvements and conveyed the Site in strict conformity with this Agreement (including without limitation provisions concerning affordable housing cost and income limitations of Initial Homebuyers), liability with respect to this item (vii) shall be limited to the period during which Developer owns the Site (or applicable portion thereof).
Notwithstanding the foregoing portion of this Section 4.7, Developer shall not be obligated to indemnify Authority (or City) with respect to the consequences of any act of sole gross negligence or willful misconduct of Authority or City. Developer’s obligations under this Section 4.7 shall survive the satisfaction of the Authority Loan Note , the release and reconveyance of the Authority Deed of Trust and the Authority Deed of Trust , issuance of the series of seven (7) partial Certificate s of Completion of Construction (except that the issuance of each such Certificate shall constitute conclusive evidence that construction of the applicable Affordable Home has been completed), and termination of this Agreement. Authority (and City) will not unreasonably withhold approval of counsel proposed by an insurer under a policy provided under this Agreement.
In the event of a default or breach under this Agreement that is caused or contributed to by Developer, Developer shall reimburse Authority (and City) immediately upon written demand for all
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costs reasonably incurred by Authority (and/or City) (including the reasonable fees and expenses of attorneys, accountants, appraisers and other consultants, whether the same are independent contractors or employees of Authority and/or City) in connection with the enforcement of the Project Documents and all related matters including the following: (a) Authority’s (or City’s) commencement of, appearance in, or defense of any action or proceeding purporting to affect the rights or obligations of the parties to any Project Document, and (b) all claims, demands, causes of action, liabilities, losses, commissions and other costs against which Authority (or City) is indemnified under the Project Documents. Such reimbursement obligations shall bear interest from the date occurring ten (10) days after Authority (or City) gives written demand to Developer at the same rate as is provided in this Agreement for the Authority Loan Note, and shall be deemed to be secured by the Authority Loan Deed of Trust. Such reimbursement obligations shall survive the satisfaction of the Authority Loan Note, the Authority Deed of Trust, the release and reconveyance of the Authority Deed of Trust , the issuance of the final Certificate of Completion of Construction, and termination of this Agreement.
Developer shall indemnify each of the Authority and City from any real estate commissions or brokerage fees which may arise from this Agreement or the Site, including without limitation the acquisition of the Site by Developer, or the sale or marketing of Affordable Home s and Affordable Homes. Developer represents that it has not engaged any broker, agent, or finder in connection with this transaction, and Developer agrees to hold each of the Authority and City harmless from any claim by any broker, agent or finder in connection with this Agreement, the activities by Developer, or the Site. The parties acknowledge that Developer may utilize brokers in connection with the sale of the Affordable Homes and, with the prior written approval of the Executive Director upon consultation with Developer, as to one or more of the Affordable Homes.
4.8 Rights of Access . Prior to the issuance of the seventh (7 th) final Certificate of
Completion of Construction for the Affordable Homes, for purposes of assuring compliance with this Agreement, representatives of Authority (and City ) shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Onsite Improvement s so long as MoVal representatives comply with all safety rules. MoVal representatives shall, except in emergency situations, notify Developer prior to exercising its rights pursuant to this Section 4.8. The rights of Authority (and City) under this Section 4.8 are in addition to and do not limit City’s police power or exercise thereof.
4.9 Compliance with Laws . Developer shall carry out the design, construction and operation of the Onsite Improvements in conformity with all applicable Rules and Regulations and all applicable laws, including all applicable state labor standards and federal prevailing wage laws (including without limitation provisions for payment of prevailing wages in connection with al l construction of the Onsite Improvements to the extent applicable), City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Code, and the Fair Housing Act, 42 U.S.C. Section 3601 et seq. (and 24 C.F.R. Part 100), federal Affirmatively Furthering Fair Housing (AFFH) rules and regulations, State of California AFFA statutes and policies, the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq ., Government Code Section 4450, et seq., Government Code Section 11135, et seq., the Unruh Civil Rights Act, Civil Code Section 51, et seq., and the California Building Standards Code, Health and Safety Code Section 18900, et seq . Developer, including but not limited to its contractors and subcontractors, shall comply with applicable provisions of the California Labor Code Section 1720, et seq., and its implementing regulations, regarding the payment of prevailing wages (“ State Prevailing Wage Law”) and, if applicable, federal prevailing wage law (“Federal Prevailing Wage Law” and,
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together with State Prevailing Wage Law, “Prevailing Wage Laws”) with regard to the construction of the Onsite Improvements, but only if and to the extent such sections are applicable to the development of the Onsite Improvements. In addition, Developer shall be responsible for compliance with Section 3 and shall include a Section 3 clause in its construction contracts for both the Onsite Improvements and Offsite Improvements . Developer shall be solely responsible for determining and effectuating compliance with the Prevailing Wage Laws, and Authority (or City) makes no representation or warranty, expressly or impliedly, as to the applicability or non-applicability of the Prevailing Wage Laws to the Onsite Improvements, or any part thereof. Developer hereby releases from liability, and agrees to indemnify, defend, assume all responsibility for and hold each and all Indemnitees harmless from any and all claims, demands, actions, suits, proceedings, fines, penalties, damages, expenses resulting from, arising out of, or based upon Developer’s acts or omissions pertaining to the compliance with the Prevailing Wage Laws and Section 3 as the same relate to the Project, Onsite Improvements, and Offsite Improvements . Developer covenants hereunder to comply with the HAL, CRL, 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 he reunder shall conform to the following: (1) the housing developed hereunder does and shall qualify as affordable housing under 24 CFR §92.254 because each Affordable Home shall be sold at a price that complies with the HOME Rules and Dissolution Law; and (2) this Agreement 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.
Without limitation as to Section 4.7 of this Agreement, Developer shall indemnify, protect, defend and hold harmless each of the Authority, City and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to the City Attorney, from and against any and all loss, liability, damage, claim, cost, expense and/or “increased costs” (including reasonable attorneys’ fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, cons truction, and/or operation of the Onsite Improvements , including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (1) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limi tation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages and/or federal prevailing wages); (2) the implementation of Section 1781 of the Labor Code, as the same may be amended from time to time, or any other similar law; and/or (3) failure by Developer to provide any required disclosure or identification as required by Labor Code Section 1781, as the same may be amended from time to time, or any other similar law. It is agreed by the parties that, in connection with the development of the Onsite Improvements, including, without limitation, any and all public works (as defined by applicable law), Developer shall bear all risks of payment or non- payment of prevailing wages under California law and/or the implementation of Labor Code Section 1781, as the same may be amended from time to time, and/or any other similar law. “Increased costs,” as used in this Section 4.9, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after completion of the construction and development of the Onsite Improvements by Developer.
Developer shall also comply with the provisions referenced in Sections 4.15 through 4.18 hereof, include all portions thereof.
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4.10 Nondiscrimination in Employment. Developer certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, nationa l origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability.
4.11 Property Taxes and Assessments. Ad valorem taxes and assessments, if any, on the Site, levied, assessed or imposed for any period prior to the Authority Conveyance shall be borne by the Authority (or the City on behalf of the Authority); ad valorem taxes and assessments levied, assessed or imposed on the Site for the period after the Conveyance of an Affordable Home shall not be the responsibility of Authority (or City).
Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site. Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof which is owned or leased by Developer, or assure the satisfaction thereof within a reasonable time, but in no event to exceed sixty (60) days. Developer shall additionally defend, indemnify, and hold harmless the Indemnitees from and against any taxes, assessments, mechanic’s liens, claims of materia lmen and suppliers, or other claims by private parties in connection with (a) activities undertaken by Developer or (b) the Site.
4.12 Liens and Stop Notices. Developer shall not allow to be placed on the Site or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Onsite Improvements Developer shall within thirty (30) days of such recording or service or within five (5) days of Authority’s demand whichever last occurs:
(i) pay and discharge the same; or
(ii) affect the release thereof by recording and delivering to Authority a surety bond in sufficient form and amount, or otherwise; or (iii) provide Authority (and City) with indemnification from the Title Company against such lien or other assurance which Authority deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of Authority (and City) from the effect of such lien or bonded stop notice.
4.13 Certificate of Completion of Construction. For each sale of an Affordable Home to a Qualified Homebuyer as an Initial Homebuyer, upon receipt of written request therefor from Developer, Authority shall furnish Developer with a partial Certificate of Completion of Construction as to that applicable Affordable Home. Promptly upon and after the seventh (7 th) and last sale of the
Affordable Homes and upon receipt of written request therefor from Developer, Authority shall furnish Developer with a final Certificate of Completion of Construction. Each p artial Certificate of Completion of Construction shall be a conclusive determination of satisfactory completion of construction of that applicable Affordable Home and shall so state. If Authority refuses or fails to furnish a partial Certificate of Completion of Construction as to an Affordable Home after written request from Developer, Authority shall, within thirty (30) days of written request therefor, provide Developer with a written statement of the reasons Authority refused or failed to furnish the p artial Certificate of Completion of Construction. The statement shall also contain Authority’s opinion of the actions Developer must take to obtain the partial Certificate of Completion of Construction for the
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applicable Affordable Home. Each partial Certificate of Completion of Construction is not a notice of completion as referred to in Section 3093 of the California Civil Code.
4.14 Further Assurances. Developer shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to Authority all documents, and take all actions, reasonably required by Authority from time to time to confirm the rights created or now or hereafter intended to be created under the Project Documents, to protect and further the validity, priority and enforceability of the Project Documents, each Homebuyer Loan Agreement (including the attachments thereto), or otherwise to carry out the purposes of the Project Documents.
4.15 HOME Program. Because the funding for development of the Onsite Improvements will be derived in part from moneys under the HOME Program , Developer shall carry out the Construction of the Affordable Homes and the operation of the Project in compliance with the HOME Regulations.
4.15.1 Federal Funding of Authority Loan. Due to the source of funding, in part, for the Authority Loan from HOME Program funds, which is a federal revenue source, Developer shall comply with all applicable Federal Program Limitations, including without limitation, the following federal provisions.
4.15.2 Property Standards . Developer agrees to ensure that Construction of the Project will comply with all applicable requirements of the HOME Regulations, including 24 CFR §92.251, including the following requirements:
(i) State and Local Requirements. The Project and all Affordable Homes shall meet all applicable State and local codes, ordinances, and zoning requirements, including all applicable requirements set forth in the City Codes and all applicable State and local residential and building codes. The Project and all Affordable Home s at the Site must meet all such applicable requirements upon Project completion.
(ii) HUD Requirements. The Project and all Affordable Homes shall also meet the requirements described in paragraphs (i) through (iv) of this Section 4.15.2(b):
(A) Accessibility. As to one of seven (1 of 7) Affordable Homes, that home shall meet appliable ADA and UFAS requirements. Overall, the Project shall meet the accessibility requirements of 24 CFR part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), and Titles II and III of the Americans with Disabilities Act (42 U.S.C. 12131-12189) implemented at 28 CFR parts 35 and 36, as applicable. (B) Disaster Mitigation . Where relevant, the Project must be constructed to mitigate the impact of potential disasters (e.g., earthquakes, hurricanes, flooding, and wildfires), in accordance with State and local codes, ordinances, or other State and local requirements, or such other requirements as HUD may establish. (C) Written Cost Estimates, Construction Contracts and
Construction Documents. The Construction Contract(s) and Development Plans must describe the construction work to be undertaken in adequate detail so that the Authority (and City) can conduct inspections in accordance with the HOME Regulations. Developer shall also provide written cost estimates for c onstruction for Authority’s review; Authority shall determine whether such cost
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estimates are reasonable.
(b) Construction Progress Inspections . Developer shall permit and facilitate progress and final inspections of construction by Authority (and City) to ensure that work, both Onsite Improvements and Offsite Improvements, is done in accordance with the applicable codes, the Construction Contract(s), and Development Plans.
(c) Ongoing Property Condition Standards . Authority has established property standards as required by the HOME Program (“HOME Property Standards”), which standards include all inspectable items and inspectable areas specified by HUD based on the HUD physical inspection procedures (Uniform Physical Condition Standards (UPCS)) prescribed by HUD pursuant to 24 CFR 5.705. Developer shall ensure that the Project, including all Affordable Homes and all appurtenances shall comply with the Authority’s Property Standards throughout the Affordability Period. In accordance with the Authority’s Property Standards, Developer (during the period Developer owns the Site and, thereafter, each Homebuyer as to each Affordable Home shall maintain their properties (land and improvements): (i ) as decent, safe, and sanitary housing in good repair, (ii) free of all health and safety defects and life -threatening deficiencies, and (iii) in compliance with the lead-based paint requirements in 24 CFR Part 35.
(i) Inspections; Corrective and Remedial Actions . In accordance with the HOME Regulations, Authority shall undertake ongoing inspections of the Project in accordance with §92.504(d). Authority has developed written inspection procedures and procedures for ensuring that timely corrective and remedial a ctions are taken by Developer to address identified deficiencies.
4.15.3 Labor Standards. Requirements for and compliance with applicable federal and state Prevailing Wage Laws is set forth , the Construction Contracts for the Onsite Improvements and Offsite Improvements work shall contain a provision requiring that not less than the wages prevailing in the locality, as predetermined by the Secretary of the United States Department of Labor pursuant to the Davis-Bacon Act (40 U.S.C. §276a–276a-5), will be paid to all laborers and mechanics employed in the Construction work, and such contract(s) shall also be subject to the overtime provisions, as applicable, of the Contract Work Hours and Safety Standards Act (40 U.S.C. §3701, et seq.). Participating contractors, subcontractors, and other participants must comply with regulations issued under these Acts and with other federal laws and regulations pertaining to labor standards and HUD Handbook 1344.1 (Federal Labor Standards Compliance in Housing and Community Project Programs), as applicable. Developer shall supply to Authority certification, in form and substance satisfactory to HUD and Executive Director, as to compliance with the provisions of this Section 4.15.2 before receiving any disbursement of federal funds for the Construction work. Developer shall require the General Contractor and Subcontractors to implement and enforce all applicable prevailing wage and labor laws, including California Labor Code Section 1720, Davis -Bacon, and other applicable labor laws and regulations including, e.g., the requirement that all workers sign in and sign out of the job site.
4.15.4 Handicapped Accessibility. Developer shall comply with (a ) Section 504 of the Rehabilitation Act of 1973, and implementing regulations at 24 CFR 8C governing accessibility of projects assisted with federal funds; and (b) the Americans with Disabilities Act of 1990, and implementing regulations at 28 CFR 35–36 in order to provide handicapped accessibility to the extent readily achievable; and (c ) the Uniform Federal Accessibility Standards (UFAS) pursuant to the Architectural Barriers Act of 1968, 42 U.S.C. 4151-4157, as amended.
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4.15.5 Use of Debarred, Suspended, or Ineligible Participants. Developer shall comply (and cause the General Contractor to comply) with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. The Contractor, each subcontractor, and any other contractors or subcontractors or agents of Developer (subject to compliance with 24 CFR part 135) sha ll have provided to Authority the certification in appendix B of 24 CFR Part 24 that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation from this Project, and Authority shall be responsible for determining whether each contractor has been debarred.
4.15.6 Maintenance of Drug-Free Workplace. Developer shall certify that Developer will provide a drug-free workplace in accordance with 2 CFR 2429.
4.15.7 Lead-Based Paint. Authority, as a recipient of federal funds, has modified and conformed all of its federally funded housing programs to the Lead- Based Paint Poisoning Prevention Act, Title X of the 1992 Housing and Community Project Act, 42 U.S.C. §4800, et seq., specifically §§4821 4846, and the implementing regulations thereto. In this regard, Developer shall comply with all applicable federal requirements relating to lead-based paint.
4.15.8 Affirmative Marketing. Developer shall adopt and implement affirmative marketing procedures and requirements at the Site in accordance with Section 92.351 of the HOME Regulations.
4.15.9 Nondiscrimination, Equal Opportunity and Fair Housing. Developer shall carry out the Project and perform its obligations under this Agreement in compliance with all of the federal laws and regulations regarding nondiscrimination equal opportunity and fair housing described in 24 CFR 92.350 and 24 CFR 5.105.
4.15.10 Energy Conservation Standards . As applicable to the Project, Developer shall cause the Site to meet the cost -effective energy conservation and effectiveness standards in 24 CFR 965 and 24 CFR 990.185.
4.15.11 AFFH. Developer shall comply with all HUD regulations and notices affecting and implementing AFFH.
4.15.12 Requests for Disbursements of Funds. Developer may not request disbursements of funds hereunder until the funds are needed for payment of eligible costs of the Project.
The amount of each request shall be limited to the amount needed for the acquisition of the Site and the Construction as set forth in the Final Budget.
4.15.13 Eligible Costs. Developer shall only use HOME Program funds to pay costs defined as “eligible costs” under Federal Program Limitations.
4.15.14 Records and Reports. Developer shall maintain and from time to time submit to Authority such records, reports and information as Executive Director may reasonably require in order to permit Authority to meet the recordkeeping and reporting requirements required of them pursuant to 24 CFR 92.508. Without limiting the following, Developer shall maintain records and submit annual reports as required by this Agreement and Attachment No. 19.
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4.15.15 Conflict of Interest. Developer shall comply with and be bound by the conflict of interest provisions set forth at 24 CFR 570.611.
4.15.16 Conflicts between and among Federal Program Limitations and State of California Laws . If and to the extent applicable for any source of federal revenue expended to implement the Project and in the event of any conflict or inconsistency between applicable Federal Program Limitations and/or the HAL, Dissolution Law, CRL or other State of California laws and regulations, then the more stringent requirement(s) shall control.
4.15.17 Layering Review . Developer acknowledges that a layering review will be performed in accordance with Federal Program Limitations. For each and any required layering review, Developer agrees to notify Authority in the event that it applies for or proposes to use governmental funds, other than as listed in the previous sentence, for the Site or the Onsite Improvements thereto.
4.16 Compliance with Laws. Developer shall comply with all applicable federal, state and local statutes, ordinances, regulations and laws, (including the Governmental Requirements) with respect to Developer’s ownership and the Construction and the operation and management of the Site by Developer (all of which comprises the Project hereunder). Developer shall carry out the design, construction and completion of Improvements, and operation and management of the Project, in conformity with all applicable laws, including all applica ble federal, state, and local labor standards, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Codes, Government Code Section 4450, et seq., Government Code Section 11135, et seq., Government Code Section 8899.50, et seq., and the Unruh Act, Civil Code Section 51, et seq.
4.17 Federal and State Prevailing Wage Laws . Developer shall carry out the Construction through completion of the Project and the overall development of the Site in conformity with all applicable federal, state and local labor laws and regulations as set forth above, including without limitation, the applicable, if any, requirements to pay prevailing wages under federal law (the Davis Bacon Act, 40 U.S.C. Section 3141, et seq.. The parties acknowledge that due to less than eleven HOME units, Davis-Bacon will not apply to the Project; however, the parties agree affirmatively that the requirements of California law (Labor Code Section 1720, et seq . shall apply to all Onsite Improvements and Offsite Improvements work of construction because this Agreement, the Project, and construction work do not meet any exemptions or exce ptions set forth in California Labor Code Section 1720, et seq.
Notwithstanding the foregoing, Developer expressly acknowledges and agrees that Developer shall be solely responsible, expressly or impliedly, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, labor laws and standards, and Authority makes no representations, either legally or financially, as to the applicability or non-applicability of any federal, state or local laws to the Project or any part thereof, both for Onsite Improvements and Offsite Improvements construction work.
Developer knowingly and voluntarily agrees that Developer shall have the obligation to provide any and all disclosures or identifications as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation.
Developer shall indemnify, protect, pay for, defend (with legal counsel acceptable to Authority) and hold harmless the Indemnitees, with counsel reasonably acceptable to Authority, and their elected and
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appointed public officials, employees and agents, from and against any and all loss, liability, damage, claim, cost, expense and/or “increased costs” (including reasonable attorneys’ fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, Construction (as defined by applicable law) and/or operation of the Project, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following:
(i) the noncompliance by Developer of any applicable local, state and/or federal law or regulation, including, without limitation, any applicable federal and/or state labor laws or regulations (including, without limitation, if applicable, the requirement to pay state and/or federal prevailing wages); (ii) the implementation of Section 1781 of the Labor Code and/or Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation; and/or (iii ) failure by Developer to provide any required disclosure or identification as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation. It is agreed by the parties that, in connection with the developm ent and construction (as defined by applicable law or regulation) of the Project, including, without limitation, any and all public works (as defined by applicable law or regulation), Developer shall bear all risks of payment or non-payment of prevailing wages under applicable federal, state and local law or regulation and/or the implementation of Labor Code Section 1781 and/or Davis Bacon, as the same may be amended from time to time, and/or any other similar law or regulation. “Increased costs,” as used in this Section 4.17, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after completion of the Constructi on and development of the Project by Developer. At the request of Developer, Authority shall cooperate with and assist Developer in its defense of any such claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense; provided that Authority shall not be obligated to incur any expense in connection with such cooperation or assistance.
4.18 Labor Compliance; Consultant; Construction Security. (i) Labor Compliance Consultant . Developer shall hire, or shall require its General Contractor(s) to hire, a “Labor Compliance Consultant” that has been reasonably approved by the Executive Director, to oversee compliance by the General Contractor(s) and Subcontractor(s) with all applicable labor laws and prevailing wage laws. Developer will cause the approved Labor Compliance Consultant to submit all labor -related reports including certified payroll records for review by the Authority (or a consultant hired by Authority in the Authority’s sole discretion) not less frequently than once per month. In the event the Authority is required to conduct an audit of Developer’s, General Contractor’s or Subcontractor’s labor compliance activities and/or records to evaluate noncompliance with labor laws evidenced in Developer’s submittals pursuant to this Section 4.18, Developer shall pay the Authority’s third party costs incurred in accordance with such labor compliance audit. In the event Authority becomes aware of any noncompliance with Section 3, Labor Code Section 1720, et seq., (Davis-Bacon, if applicable) or other applicable labor or prevailing wage requirements, Authority (and City) shall have the right to require Developer to set aside into a third party escrow account moneys in an amount reasonably determined by Authority to be sufficient to remedy such noncompliance.
(ii) Construction Security; Completion and Labor Compliance Guaranty. At the Closing, Developer shall deliver to Authority the required Construction Security of payment and performance bonds to ensure completion of both the Onsite Improvements and Offsite Improvements in a form and content acceptable to Authority and legal counsel, with the Authority and City expressly named as dual obligees thereunder.
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4.19 Section 3 Compliance. Based on the HOME Program funds committed to the Project, Developer agrees to comply with and to cause the Contractor, each subcontractor, and any other contractors and/or subcontractors or agents of Developer to comply with the requirements of Section 3 of the Housing and Urban Project Act of 1968, as amended, 12 U.S.C. §1701u, and the implementing regulations, in connection with the construction of the Project to the extent applicable. Developer shall submit to Authority each Construction Contract (for Onsite Improvements and Offsite Improvements) with appropriate provisions providing for the construction of the Project in conformance with the terms of this Agreement, including the Section 3 Clause. The General Contractor(s) and all Subcontractor(s) shall register with the City’s Workforce Center.
Developer hereby acknowledges and agrees to take all responsibility for compliance with all Section 3 Clause federal requirements as to Developer, general contractor, subcontractors, or other contractor(s), subcontractor(s), and other agents. Developer shall provide or cause to be provided to the Contractor and each subcontractor, and each of its other contractor(s), subcontractor(s) and agents the checklist for compliance with the Section 3 Clause federal requirements provided by Authority, to obtain from the Contractor, each subcontractor, and other contractor(s), subcontractor(s), and agents all applicable items, documents, and other evidence of compliance with the items, actions, and other provisions within the checklist, and to submit all such completed Section 3 Clause documentation and proof of compliance to the Executive Director. To the extent applicable, Developer shall comply and/or cause compliance with all Section 3 Clause requirements for the Project. For example, when and if Developer or its contractor(s) hire(s) full time employees, rather than volunteer labor or materials, Section 3 is applicable and all disclosure and reporting requirements apply.
5. DEVELOPER’S GENERAL REPRESENTATIONS AND WARRANTIES.
As a material inducement to each of Authority to enter into this Agreement, Developer represents and warrants to City that:
5.1 Formation, Qualification and Compliance. Developer (a) is a California nonprofit corporation validly existing and in good standing under the laws of the State of California; (b) has all requisite authority to conduct its business and own, purchase, improve and sell its properties.
Developer is in compliance in all material respects with all laws applicable to its business and has obtained all approvals, licenses, exemptions and other authorizations from, and has accomplished all filings, registrations and qualifications with any governmental City that are necessary for the transaction of its business; (c) Developer has and will in the future duly authorize, execute and deliver this Agreement and any and all other agreements and documents required to be executed and delivered by Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement; (d) Developer does not have any material contingent obligations or any material contractual agreements which could mater ially adversely affect the ability of Developer to carry out its obligations hereunder; (e) There are no material pending or, so far as is known to Developer, threatened, legal proceedings to which Developer is or may be made a party or to which any of its property is or may become subject, which have not been fully disclosed by Developer to City in this Agreement which could materially adversely affect the ability of Developer to carry out its obligations hereunder; and (f) There is no action or proceeding pending or, to Developer’s best knowledge, threatened, looking toward the dissolution or liquidation of Developer and there is no action or proceeding pending or, to Developer’s best knowledge, threatened by or against Developer which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of Developer to carry out its obligations hereunder.
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Each of the foregoing items (a) to (f), inclusive, shall be deemed to be an ongoing representation and warranty. Developer shall advise City in writing if there is any change pertaining to any matters set forth or referenced in the foregoing items (a) to (f), inclusive.
5.2 Execution and Performance of Project Documents . Developer has all requisite authority to execute and perform its obligations under the Project Documents. The execution and delivery by Developer of, and the performance by Developer of its obligations under, each Project Document has been authorized b y all necessary action and do not and will not violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorporation, by- laws or other governing document applicable to Developer.
5.3 Covenant Not to Transfer Except in Conformity. Developer shall not sell, lease, or otherwise transfer or convey all or any part of the Site, or any interest therein, unless Developer has first obtained the prior written consent of the Executive Director, which consent shall be given as to transfers to homebuyers proposed to be made in conformity with this Agreement (but, as to other transfers, may be withheld in the Executive Director’s sole and absolute discretion). Any sale, lease, transfer or conveyance without such consent shall, at Authority’s option, be void. In connection with the foregoing consent requirement, Developer acknowledges that Authority relied upon Developer’s particular expertise in entering into this Agreement and continues to rely on such expertise to ensure the satisfactory completion of all of the Onsite Improvements , and the marketing and sale of the Affordable Homes to Low Income Homebuyers each at a price which does not exceed Affordable Housing Cost to afford the community a substantial long-term, quality affordable housing resource.
5.4 Nondiscrimination. Developer by and for itself and any successors in interest covenants that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disabi lity or medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site.
The foregoing covenants shall run with the land.
All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
(a) In deeds : “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
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(b) In leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
“That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.”
(c) In contracts: “There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this Agreement, nor shall the grantee or any person claiming under or through h im or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The fore going covenants shall run with the land.”
Developer further covenants, by and for itself, its successors and assigns, and all persons claiming under or through them, not to inquire about the sexual orientation or gender identity of an applicant for, or occupant of, any Affordable Home, for the purpose of determining eligibility for occupancy of such housing units or otherwise making such units available. This prohibition on inquiries regarding sexual orientation or gender identity does not prohibit any individual from voluntarily self-identifying sexual orientation or gender identity. Further, determinations of eligibility for occupancy of the Affordable Homes shall be made in accordance with the eligibility requirements provided for such program by HUD, and such units shall be made available without regard to actual or perceived sexual orientation, gender identity, or marital status.
The covenants established in this Section 5.4 shall, without regard to technical classification and designation, be binding for the benefit and in favor of Authority and City and their successors and assigns, and shall remain in effect in perpetuity.
6. SALE OF THE AFFORDABLE HOMES ; AFFORDABLE HOUSING PROGRAM
PARTICIPANT DOCUMENTS
6.1 Sale at Affordable Housing Cost to Low Income Qualified Homebuyers; Homebuyer Documents.
6.1.1 Affordable Housing . Developer covenants to develop or to cause the development and use of the Site and seven (7) Affordable Homes constructed and completed thereon for owner-occupancy by Qualified Homebuyers in conformity with this Agreement. Developer covenants and agrees that each of the Affordable Homes shall be sold to an Initial Homebuyer and
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shall be restricted with the income and affordability requirements as set forth herein. Developer covenants and agrees that the above-referenced ownership, owner-occupancy, affordability and resale requirements governing the Affordable Homes shall bind and be enforceable against each of the Affordable Homes and the respective applicable Homebuyer throughout the Affordability Period.
6.1.2 Sale of the Affordable Homes . As set forth in the foregoing portion of Section 6.1, Developer agrees to sell each of the Affordable Homes to qualified Initial Homebuyers at a price which, in each and every case, does not exceed Affordable Housing Cost and which, further, does not exceed the Maximum Allowable Cost . During the Affordability Period each subsequent resale of an Affordable Home by the then-owner thereof shall be only to a Qualified Homebuyer at a price which does not exceed Affordable Housing Cost and Maximum Allowable Cost. All sales and resales of the Affordable Homes shall be in compliance with this Section 6.1 and each purchaser and successor purchaser shall be reviewed by Authority and must execute the Homebuyer Loan Agreement, Homebuyer Covenants, Homebuyer Loan Note, Homebuyer Loan Deed of Trust, and the same shall be assigned to and assumed by each successor-in -interest Qualified Homebuyer during the Affordability Period. Developer covenants and agrees that no sales of the Affordable Homes shall be made to any of its employees or to persons or families related, within the fourth degree of consanguinity, to any shareholder, partner or member of Developer entity or anyone related by blood or marriage to any such shareholder, partner or member. Further, no resale of an Affordable Home shall occur to a relative of the Homebuyer, as seller, to a prospective purchaser, as buyer, which relative is related by blood or marriage, within the fourth degree of consanguinity, to the Homebuyer, as seller, of an Affordable Home; provided however, in the event of the death of a spouse of a vested Homebuyer couple, as owner, the surviving spouse may continue to own and occupy the home , including vesting ownership as a widow or widower, and such event is not considered a resale of the Affordable Home. (a) Upon completion of the Project required to be constructed under this Agreement, and provided that the Conditions to Sale to Q ualified Homebuyers have been satisfied, Developer shall convey by grant deed an Affordable Home to each Initial Homebuyer; provided that such sale shall have been accomplished in strict conformity with all requirements of this Agreement and the applicable Homebuyer Loan Agreement and related attachments, including without limitation that all of the conditions to Developer’s Sale to Qualified Homebuyer, as set forth in Section 6.4, have been satisfied, and further provided that: (i) the Qualified Homebuyer executes and deposits with the Homebuyer Escrow Holder the Homebuyer Purchase and Sale Agreement, (ii ) the Homebuyer Loan Agreement and all applicable attachments, are executed, recorded, and delivered to Authority ; (iii) the Qualified Homebuyer duly executes and causes to be delivered to Authority the Homebuyer Note and the Homebuyer Deed of Trust, and (iv) the Qualified Homebuyer executes, and causes to be recorded and delivered to Authority each of the instruments that comprise the Homebuyer Covenants, Homebuyer Note, H omebuyer Deed of Trust , Purchase Money Loan documents, then Authority will, as to the corresponding Affordable Home (but not as to the remainder of the Site), issue a partial release the corresponding Affordable Home from the Authority Deed of Trust and a partial termination of the Authority Regulatory Agreement. (b) In connection with each sale of a n Affordable Home to a Qualified Homebuyer, Authority shall prepare and Developer shall approve escrow instructions requiring the following order of recordation: (i ) a partial release and reconveyance of the Authority Deed of Trust (as to the corresponding Affordable Home ); (ii) partial termination of Authority Regulatory Agreement; (iii) grant deed conveying title as to the corresponding Affordable Home from Developer to such Initial Homebuyer, which shall be subject to restrictions then of record; then (iv) Homebuyer Covenants; then (v) Purchase Money Deed of Trust (which affirmatively states that it
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is subject and subordinate to the Homebuyer Covenants), (vi) Homebuyer Deed of Trust; then (vii) then, if applicable, (vi ii) deed(s) of trust securing other Down Payment Assistance Loan(s) or other subordinate financing expressly approved by the Executive Director. (i) Each Initial Homebuyer, and all subsequent successor Qualified Homebuyers, shall fully cooperate in providing to the staff members or consultant designated by the Executive Director applications and information from the prospective homebuyer household in sufficient detail, legibility, and completeness for Authority to review and confirm that the incomes of the prospective homebuyer household, loan amounts, and prices conform to this Agreement (as to Initial Homebuyers), the Homebuyer Covenants and Homebuyer Loan Agreement (as to all Homebuyers). Each original sale, and each resale and transfer of a n Affordable Home shall be transacted through the Escrow Holder and in conformity herewith and therewith.
6.1.3 Homebuyer Price; Amount of Homebuyer Loan. Developer agrees that the price that to be charged to acquire an Affordable Home in connection with the original sale and each resale of an Affordable Home will not be greater than the lesser of (a) during the HOME Compliance Period, a price at or below the HUD HOME Program Single-Family Homeownership Value Limits for One-Unit 95% Medial Sales Price Limit for Riverside County in effect at the time of the applicable pending sale (or resale) of an Affordable Home, or (b) Affordable Housing Cost of such unit as applicable to Low Income Homebuyers as determined under HSC Sections 50052.5. And, after the HOME Compliance Period each resale shall be to a Low Income Homebuyer at Affordable Housing Cost pursuant to HSC Sections 50052.5. It is contemplated by Authority and Developer that the Qualified Homebuyer’s purchase price will be remitted from the following funds: (i) down payment by the Qualified Homebuyer’s own funds, (ii) proceeds of a Purchase Money Loan that shall be a fully amortized 30-year fixed rate mortgage with monthly payments that comply with HSC Section 50052.5, and (iii) principal amount of the Homebuyer Loan Note. The principal amount of the Purchase Money Loan shall be the difference between the Homebuyer Price and the Homebuyer Note, less Down Payment Assistance Loan(s) or grants , if any, for the sale of the Affordable Home to the Initial Homebuyer and to each successor-in-interest Homebuyer upon resale of the Affordable Home.
6.1.4 Pricing Protocol . The purchase price that may be charged each Qualified Homebuyer under this Agreement and each applicable Homebuyer Loan Agreement is constricted by the applicable laws, regulations, and requirements applicable to the multiple funding sources that comprise the Authority Assistance, including Former Agency funds expended to acquire and assemble the Site, and HOME Program funds, and LMIHAF funds that are the cash subsidy component thereof.
While the Site Purchase Price evidences a land write-down and grant of value, the pricing protocol for each and all initial sales and resales of the Affordable Homes shall not exceed the lesser of Affordable Housing Cost or the Maximum Allowable Price. Not less than forty-five (45) days prior to any closing (a) for each sale by Developer to an Initial Homebuyer, and (b) for each resale by selling owner/Homebuyer, shall deliver to Authority a complete application for each prospective homebuyer, including evidence as to household size and income , with tax returns and bank statements, as well as current employment and assets as to all adult members of the household. For each Initial Homebuyer, Authority will, after conferring with Developer, determine the amount of the Homebuyer Loan, Purchase Money Loan, Down Payment Assistance Loan(s) and/or grants, if any. The foregoing shall constitute the “Pricing Protocol.” Developer shall cooperate fully with City regarding the implementation of this Section 6.1.4.
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6.2 Process to Complete First Transfer by S ale of Affordable Home by Developer to an Initial Homebuyer . Upon the first sale of each Affordable Home by Developer, the following procedures shall apply:
(a) Qualifications of Proposed Transferee . No sale of a n Affordable Home shall occur unless and until Developer first determines that the proposed transferee: (i) intends to occupy the corresponding Affordable Home as the proposed transferee’s principal residence; and (ii) is a Low Income Homebuyer. For resales, the selling owner/Homebuyer and their proposed transferee prospective buyer shall submit a Proposed Transferee’s Application to Authority (and City) certifying its intent with regard to the occupancy of the corresponding Affordable Home and as to the truth and accuracy of all information supplied as to the gross income (calculated as set forth in 25 Cal.
Code of Regs., Section 6914) of the proposed transferee. (b) Sales Price. Each Affordable Home shall be sold at an Affordable Housing Cost. In determining Affordable Housing Cost, the family size of the proposed Transferee shall be deemed and assumed pursuant to HSC Section 50052.5 (4 persons for a 3-bedroom unit and 5 persons for a 4-bedroom unit.) In addition, Authority’s calculation of the Affordable Housing Cost in connection with each respective Affordable Home shall be based upon the following assumptions:
(i) the provisions of both Homebuyer Loan and Purchase Money Loan; and (ii) reasonable amounts for utilities, property taxes and assessments, fire and casualty insurance covering replacement value of property improvements, and homeowner association fees (if any). (c) Certificates from Parties . With respect to each sale of each Affordable Home to the Initial Homebuyer, Developer shall submit to Authority, not later than fourteen (14) business days prior to close of escrow on the sale of the corresponding Affordable Home , a certificate that (i) Developer has made the affirmative determinations required by Section 6.1.4 above and (ii) the sales price conforms to Section 6.1.4 above. The certificate shall be substantially in the form of Developer Sale Certificate. Developer shall concurrently submit to Authority the Proposed Transferee’s Application and all attachments thereto, the sales contract, and all other documents or material with regard to information required by Sections 6.1.4 whether or not relied on by Developer.
Further, Developer and proposed transfe ree each shall certify in writing, in a form acceptable to Authority, that the sale shall be closed in accordance with this Agreement (including without limitation the Rules and Regulations and the other Governmental Requirements), 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 Developer has been fully disclosed to City. The written certificate shall also include a provision that, in the event a transfer is made in violation of the terms of this Agreement or false or misleading statements or material omissions, are made in any documents or certificate submitted to Authority (on behalf of each of Authority and City) for its approval of the transfer, Authority as well as the City shall have the right to file an acti on at law or in equity to seek termination and/or rescission of the sales contract and/or declare the sale void, notwithstanding the fact that the transfer may have closed and become final as between Developer and its transferee. In the event Developer fails to comply with Sections 6.1 above, any costs, liabilities or obligations incurred by Developer and its transferee for the return of any monies paid or received or for any costs and legal expenses, shall be borne jointly and severally by Developer (or s elling owner/Homebuyer) and its transferee and such parties shall hold each of the Authority and City harmless and reimburse their expenses, legal fees and costs for any action Authority and/or City take in enforcing the terms of this Section 6.2.
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(d) Delivery of Documents. In addition to the documents required to be provided by Section 6.1 and 6.2 above, upon the close of the proposed transfer, Developer and transferee, as applicable, shall provide Authority (on behalf of each of Authority and City) and Developer with a copy of the final sales contract, settlement statement, escrow instructions, a fully executed set of Qualified Homebuyer Documents and any other documents which Authority (and City) may reasonably request.
6.3 Affordable Home Disposition Conditions Precedent ; Conditions to Developer’s Sale to Initial Homebuyers. The sale of each Affordable Home by Developer to an Initial Homebuyer (“Conditions to Sale to Initial Homebuyers”) shall be subject to the satisfaction or waiver by the Executive Director (which waiver will be effective only if it is an express waiver m ade in writing by the Executive Director), of the following conditions precedent:
(i) Improvements Completed. The improvements for the corresponding Affordable Home shall have been completed as determined in good faith by the Executive Director, following issuance of a certificate of occupancy by City as to the Affordable Home located thereon. (ii) Purchase and Sale Agreement . Developer and the corresponding Initial Homebuyer shall have entered into a MECH Homebuyer Purchase and Sale Agreement which strictly conforms to the requirements and provisions of this Agreement. (iii) Escrow Instructions . The Executive Director shall have approved the instructions for such escrow.
(iv) Lien Priorities, Title Insurance and Documents among Interested Parties. The Initial Homebuyer shall have agreed to assume the obligations of buyer and borrower under the Homebuyer Loan Agreement and all attachments, and shall obtain a new Purchase Money Loan and shall have additionally agreed to conform to all requirements under the MECH Grant Deed, Homebuyer Covenants. The Homebuyer Covenants shall be and remain the senior, nonsubordinate encumbrances, then follows the (i) Purchase Money Loan Deed of Trust, (ii) Homebuyer Dee d of Trust, (iii) other subordinate liens, if any, approved by Authority. (v) Insurance. Authority shall have received sufficient evidence of the issuance of a homeowner’s insurance policy with a guaranteed replacement provision for the corresponding Affordable Home, and a lender’s loss payable endorsement in favor of Authority. (vi) Affordability and Income Requirements . The Executive Director shall be satisfied that the Initial Homebuyer qualifies as a Low Income Household, and that the purchase price of the corresponding Affordable Home is at a price that does not exceed an Affordable Housing Cost.
Each Initial Homeb uyer and Developer shall cooperate in furnishing the Executive Director with complete information and legible, verifiable supporting documentation in the form sought by Authority for the purposes of verifying income eligibility and affordability. (vii) Other Matters . Authority shall have received such other documents and information as the Executive Director may reasonably request. (viii) Representations and Warranties . The representations and warranties of Developer contained in this Agreement shall be correct as of the close of the Homebuyer Escrow as
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though made on and as of that date, and Executive Director shall have received a certificate to that effect signed by an officer of Developer.
(ix) Authority Conveyance Conditions Precedent . All Authority Conveyance Conditions Precedent shall remain satisfied.
(x) Certificate. Developer shall have delivered to Executive Director a Developer Sale Certificate as to the Affordable Home proposed to be sold by Developer. (xi) No Default. No Event of Default by Developer shall have occurred, and no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default by Developer, and Executive Director shall have received a certi ficate to that effect, in form and substance reasonably satisfactory to the Executive Director, signed by an officer of Developer.
All conditions set forth in this 6.3 are for Authority’s (and City’s) benefit only and Executive Director may waive all or any part of such rights by written notice to Developer and Escrow Holder.
6.4 Homebuyer Escrows . Upon Developer having received Authority approval of an Initial Homebuyer, Developer shall open an escrow as to the corresponding Affordable Home (each a “Homebuyer Escrow”) with the Escrow Holder. Authority and Developer agree to execute such escrow instructions as may be reasonably required to implement this Section 6.4 with respect to each such escrow. The process set forth in this Section 6. et seq. will be repeated as to each Initial Homebuyer that acquires an Affordable Home.
6.4.1 Costs of Escrow. Developer shall pay, or shall arrange for Developer and the Homebuyer (as buyer) to pay, their respective portions of the premium for the title policies as set forth herein, Developer shall pay for the documentary transfer taxes, if any, and Developer shall pay, or shall arrange for Developer and the Initial Homebuyer to each pay one-half of all other usual fees, charges, and costs which arise from the corresponding Homebuyer Escrow. No costs shall be borne by the Authority (or the City).
6.4.2 Escrow Instructions. This Section 6.4.2, including all subparts hereof, constitutes the escrow instructions of Developer, Authority, and, once executed, the Initial Homebuyer and the Escrow Holder to whom these instructions are delivered is hereby empowered to act under this Section 6.4. Insurance policies for fire or casualty are not to be transferred. All funds received in the Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account.
Developer, Initial Homebuyer, Authority or the lender issuing the Purchase Money Loan may submit supplemental escrow instructions; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control. The conveyance shall take place when the Conditions to Sale to Initial Homebuyers have been satisfied as to each corresponding Initial Homebuyer, as confirmed by Authority. Escrow Holder is instructed to release escrow closing statements to the Developer, Initial Homebuyer, and Authority.
Closing shall be subject to Executive Director confirming to the Escrow Holder that the Affordable Home Disposition Conditions Precedent have been satisfied.
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6.4.3 Authority of Escrow Holder. Escrow Holder is authorized to, and shall:
(a) Pay and charge Developer and, if applicable, the Initial Homebuyer (but not the Authority or City) for their respective shares of the premium of the Owner’s Title Policy, Homebuyer Loan Policy, Purchase Money Loan Policy, and any amount necessary to place title in the condition necessary to satisfy the condition of title as described herein. (i) Pay and charge Developer and the corresponding Initial Homebuyer (but not the Authority or City) for their respective shares of any escrow fees, charges, and costs payable under this Agreement.
(ii) Pay and charge Developer and the corresponding Initial Homebuyer (but not the Authority or City) for their respective requested title policies, premiums, endorsements for Title Company to issue: an owner title policy to Homebuyer, a loan policy to Authority for the Homebuyer Loan, and loan policy to the institutional lender issuing the Purchase Money Loan.
(b) Disburse funds, deliver and record the following as prepared or approved by Authority in relation to each sale of an Affordable Home to an Initial Homebuyer:
(i) MECH Homebuyer Grant Deed, (ii) partial reconveyance of one -seventh (1/7th) of the Authority Deed of Trust, (iii) partial termination of the Authority Regulatory Agreement as to the applicable Affordable Home parcel, (i v) Homebuyer Covenants, (v) Purchase Money Loan documents, (vi) Homebuyer Loan, including Homebuyer Note and Homebuyer Deed of Trust, (vii) deed(s) of trust for Downpayment Assistance Loan(s), if any, and (viii) deliver to Authority the Homebuyer Note, and return the Homebuyer Deed of Trust, when the Authority Conveyance Conditions Precedent have been fulfilled or waived by Authority. If there are downpayment subordinate deeds of trust in connection with the provision of subordinate loans by third parties that are approved by the Executive Director, such as from providers of Down Payment Assistance Loan(s) or grants, or similar assistance, Authority will submit supplemental escrow instructions to address deeds of trust and other documentation associated with such other subordinate loans.
(c) Do such other actions as necessary to fulfill its obligations under this Agreement.
(d) Within the discretion of Escrow Holder, direct Authority and Developer to execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the provisions of FIRPTA and any similar state act and regulation promulgated thereunder. Authority agrees to execute a Certificate of Non-Foreign Status by individual transferor and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by Escrow Holder, on the form to be supplied by Escrow Holder. (e) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms are provided for or required by law.
(f) The Authority Regulatory Agreement and Authority Deed of Trust that secured the Authority Note shall be reconveyed as to Lot A, the new cul de sac street concurrent with the dedication and notice of completion of the Offsite Improvements.
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6.5 Review of Title. Developer shall cause the Title Company to deliver to the prospective purchaser a standard preliminary title report (“Report”) with respect to the title to the corresponding Affordable Home (as mutually designated by Developer and Authority), together with legible copies of the documents underlying the exceptions (“Exceptions”) set forth in the Report, with at least fifteen (15) days to review. The prospective Homebuyer shall have the right to reasonably approve or disapprove the Exceptions; provided, however, that the prospective Homebuyer must approve the following Exceptions (together, “Homebuyer Condition of Title.”):
(i) The Redevelopment Plan;
(ii) The lien of any non-delinquent property taxes and assessments (to be prorated at close of Escrow);
(iii) The provisions of the MECH Grant Deed, Homebuyer
Covenants, Purchase Money Deed of Trust, and Homebuyer Deed of Trust. (iv) Any incidental easements or other matters affecting title which do not materially impact the purchaser’s use of the corresponding Affordable Home as a single family owner-occupied primary residence.
6.6 Title Insurance for Conveyance to Initial Homebuyers . Title insurance shall be provided in conformity with this Agreement. The cost for all title policies, including those provided for the benefit of Authority as beneficiary, shall be borne by Developer.
6.7 Homebuyer Closings. The conveyance of the Affordable Home by Developer and delivery of documents related thereto and the close for each escrow (each a “Homebuyer Closing”) shall occur within ninety (90) days of the parties’ satisfaction of all of Conditions to Sale to Qualified Homebuyer. The term Homebuyer Closing shall mean the time and day a deed conveying title to a Homebuyer is filed for record among Official Records. The “Homebuyer Closing Date” shall mean the day on which the corresponding Homebuyer Closing occurs.
6.7.1 Termination of Escrow . If escrow for disposition of each sale of an Affordable Home is not in condition to close by the time established therefor in supplemental escrow instructions (and, if no such time is specified, then on the sixtieth (60 th) day following opening of escrow), then the Initial Homebuyer, Developer and Authority may, in writing, demand the return of money or property and terminate the escrow. If such party makes a written demand for return of documents or properties, escrow shall not terminate until five (5) days after Escrow Holder shall have delivered copies of such demand to all other parties. If any objections are raised within said five (5) day period, Escrow Holder is authorized to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties to such escrow (namely, Authority, Developer and the corresponding Initial Homebuyer).
6.7.2 Closing Procedure. Escrow Holder shall close escrow for the transfer of the corresponding Affordable Home from Developer to the Initial Homebuyer as follows:
(a) Record first (i) the grant deed conveying title subject to resale restrictions, then (ii) Homebuyer Covenants, then (iii) Homebuyer Purchase Money Loan deed of trust, and (iii) Homebuyer Deed of Trust The foregoing encumbrance priorities in the foregoing order of recordation shall constitute the “Designated Homebuyer Lien Priorities.” If additional deeds of trust
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are recorded, the original(s) shall be delivered to the beneficiary thereunder (with a copy to each of Developer, Initial Homebuyer, and Authority). Authority will execute and deliver to escrow a request for partial release and reconveyance of the Authority Loan Deed of Trust and partial termination of the Authority Regulatory Agreement as to the corresponding Affordable Home in connection with each sale of an Affordable Home accomplished in conformity with this Agreement. Any recording fees or charges associated with the recording of such releases shall be borne by Developer. (i) Instruct the Title Company to deliver (A) an owner’s policy of Title Insurance to the Homebuyer, with a copy to each of Authority and Developer, and (B) a loan policy of title insurance for the Homebuyer Loan to Authority, both as further described in Section
6.7.3 below);
(ii) File any informational reports required by Internal Revenue Code Section 6045(e), as amended, and any other applicable requirements; (iii) Deliver the FIRPTA Certificate, if any, to Developer (with a copy to Authority);
(iv) Disburse the purchase price as directed by Authority and Developer; and
(v) Forward to each of Developer, Initial Homebuyer, and Authority a separate accounting of all funds received and disbursed for all parties and copies of all executed and recorded or filed documents deposited into the Transfer Escrow, with such recording and filing date and information endorsed thereon.
6.7.3 Title Insurance, Disposition to Initial Homebuyers; Home Warranty. (a) Concurrently with recordation of the conveyance of an Affordable Home to the corresponding Initial Homebuyer, there shall be issued to Initial Homebuyer a CLTA owner’s policy of title insurance (“Homebuyer Title Insurance Policy”), together with such endorsements as are reasonably requested by such purchaser, issued by the Title Company insuring that the title to the corresponding Affordable Home is vested in the Initial Homebuyer in the condition described herein. The Title Company shall provide each of D eveloper and Authority with a copy of the Homebuyer Title Insurance Policy. The Homebuyer Title Insurance Policy shall be based upon the lesser of (i) the amount of the Homebuyer Price, or (ii) the largest amount for which the Title Company will provide s uch title insurance. Developer shall pay that portion of the premium for the Owner’s Title Policy equal to the cost of a CLTA standard coverage title policy in the amount based upon the Homebuyer Price. Any additional costs, including the cost of an ALTA policy or any endorsements requested by the corresponding Initial Homebuyer, shall be borne by such Initial Homebuyer upon to the sum of Five Hundred Dollars ($500.00), with any costs in excess of such amount to be borne by Developer.
(b) The Title Company shall additionally provide to Authority an ALTA lender’s policy of title insurance for the Homebuyer Deed of Trust (“Homebuyer Loan Policy”), based upon the original face amount of the corresponding Homebuyer Note, as set forth in the Hom ebuyer Loan Agreement authorized by Authority to be used for the corresponding Initial Homebuyer, as purchaser, in conformity with the Designated Homebuyer Lien Priorities, and subject only to encumbrances, if any, approved in writing by the Executive Director. The Title Company shall provide
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to lender of the Purchase Money Loan (lender or purchaser’s cost) a lender’s policy of title insurance for the Purchase Money Deed of Trust (“Purchase Money Loan Policy”), based upon the corresponding Purchase Money Note.
(c) In addition, Developer shall arrange for provision of a home warranty plan to remain in effect for not less than one (1) year (“ Home Warranty Plan”) as to each Affordable Home, to be delivered at closing the corresponding Homebuyer. The Home Warranty Plan as to each Affordable Home shall be obtained at Developer’s cost.
6.8 Process to Obtain Approval of Transfer of each Affordable Home after the Original Sale of an Affordable Home. The process for obtaining Authority approval of the transfer of each Affordable Home during the Affordability Period and following the first transfer of such Affordable Home by the selling Homebuyer is set forth in the Homebuyer Covenants of record against each and all Affordable Homes and the Homebuyer Loan Agreement that will be assumed by the prospective Homebuyer in connection with each resale of the Affordable Home.
6.8.1 Right of First Refusal . Prior to any sale or resale of a n 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).
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6.9 Effect of Violation of the Terms and Provisions of this Agreement after Completion of Construction . The covenants established in this Agreement and the deeds shall, without regard to technical classification and designation, be binding for the benefit and in favor of Authority, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Agreement shall remain in effect for the periods of time specified therein. The covenants against discrimination shall remain in effect in perpetuity.
Authority is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of Authority, without regard to whether Authority has been, remains or is an owner of any la nd or interest in the Site. Authority shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled.
After issuance of a Certificate of Completion of Construction for all of the Onsite Improvements required by this Agreement to be developed on the corresponding parcel of the Affordable Home, all of the terms, covenants, agreements and conditions set forth in this Agreement relating to the construction and development thereon shall cease and terminate as to such Affordable Home. All of the other applicable terms, covenants, and conditions set forth in this Agreement relating to use, operation, ownership, and maintenance of the Site shall survive and shall remain in full force and effect.
7. DEFAULTS AND REMEDIES
7.1 Events of Default. The occurrence of any of the following, whatever the reason therefor, shall constitute an Event of Default by Developer:
(a) Developer fails to make payment under the Authority Loan Note , if any, when due, and such failure is not cured within five (5) days after Developer’s receipt of written notice that such payment was not received when due; or
(b) At any time prior to the closing of the seventh (7 th) and last sale of the Affordable Homes, Developer has provided Authority with written notice that Developer does not intend to proceed with this transaction and desires to terminate this Agreement; or (c) Developer elects to terminate on the basis that the development of the Onsite Improvements in accordance with this Agreement has become impracticable under the terms and conditions of this Agreement; or
(d) Developer elects to terminate on the basis that the development of the Offsite Improvements in accordance with this Agreement has become impracticable under the terms and conditions of this Agreement; or
(e) In the event of any default of Authority prior to the conveyance of the Site which has not been cured; or
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(f) Developer fails to perform any obligation under any Project Document, and such failure is not cured within fourteen (14) days after Developer’s receipt of written notice from Authority that such obligation was not performed; provided that, if cure cannot reasonably be effected within such 14 -day day period, such failure shall not be an Event of Default so long as Developer (in any event, within ten (10) days after receipt of such notice) commences to cure, and thereafter diligently (in any event within sixt y (60) days after receipt of such notice) prosecutes such cure to completion; or
(g) Any representation or warranty in any Project Document proves to have been incorrect in any material respect when made; or (h) Affirmative construction w ork on the Onsite Improvements or the Offsite Improvements ceases for thirty (30) consecutive days for any reason (other than governmental orders, decrees or regulations, acts of God, strikes or other causes beyond Developer’s control, provided that the same do not, in the aggregate and in the Executive Director’s reasonable judgment, threaten to delay the completion of the Onsite Improvements beyond the required completion date set forth in this Agreement); or
(i) Developer is enjoined or otherwise prohibited by any governmental entity from constructing and/or occupying the Onsite Improvements and such injunction or prohibition continues unstayed for thirty (30) days or more for any reason; or (j) Developer transfers or conveys the Site (or attempts to transfer or convey the Site) in any manner that is not in conformity with this Agreement; or (k) Developer provides any certification to Executive Director (or City Manager), including without limitation a Developer Sale Certificate that contains any information that is false, misleading, or contains material omission(s) of fact; or (l) Developer is dissolved, liquidated or terminated, or all or substantially all of the assets of Developer are sold or otherwise transferred without the Executive Director’s prior written consent; or
(m) Developer is the subject of an order for relief by a bankruptcy court, or is unable or admits its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Developer applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitate or similar officer for it or any part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of Developer and the appointment continues undischarged or unstayed for ninety (90) days; or Developer institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservat orship, liquidation, rehabilitation or similar proceeding relating to it or any part of its property; or any similar proceeding is instituted without the consent of Developer and continues undismissed or unstayed for ninety (90) days; or any judgment, writ, warrant of attachment or execution, or similar process is issued or levied against any property of Developer is not released, vacated or fully bonded within ninety (90) days after its issue or levy;
then, at the option of Authority, thirty (30) days after written notice thereof is delivered to Developer, this Agreement shall be terminated, and thereafter neither party shall have any further rights against
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the other under this Agreement, excepting that if the Conveyance of the Site has already occurred, Developer shall immediately quitclaim to Authority all right, title and interest of Developer in the Site (including without limitation fee title and any beneficial interests under deeds of trust, promissory notes, and agreements in respect to the Site). The setting forth of events as grounds for termination shall not limit the ability of Authority (and/or City) to seek remedies in the event this Agreement ha s not been terminated. The termination of this Agreement shall not limit the rights of the Authority (or City) to enforce the Authority Note, Authority Deed of Trust, Authority Regulatory Agreement, or, as and if applicable any Homebuyer Loan Agreement (i ncluding instruments executed in connection thereunder).
7.2 Additional Remedies upon Event of Default by Developer. Upon the occurrence of any Event of Default, Authority (and/or City) may, at its respective option and in its sole and absolute discretion, do any or all of the following:
(a) By written notice to Developer, declare the principal of all amounts owing under the Project Documents, together with all accrued interest and other amounts owing in connection therewith, to be immediately due and payable, regardless of any other specified due date; (b) In its own right or by a court -appointed receiver, take possession of the Site, enter into contracts for and otherwise proceed with the completion of the Onsite Improvements on the Site (or portions thereof) by expenditure of its own funds; (c) Exercise any of its rights under the Project Documents and any rights provided by law, including the right to foreclose on any security and exercise any other rights with respect to any security, all in such order and manner as Authority elects in its sole and absolute discretion; and/or (d) Seek and obtain an order for specific performance.
7.2.2 No Abrogation of Authority and City of Moreno Valley’s Governmental Powers. While the Authority Loan Deed of Trust and then the Purchase Money Deed of Trust each may be a senior monetary lien against the Site, then the applicable Affordable Home, for the Construction Loan issued by the Primary Construction Lender, and then for each Purchase Money Loan the lender shall agree and the loan documents shall expressly acknowledge and affirmatively state that nothing in such 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.
7.3 Cumulative Remedies; No Waiver. Authority’s respective rights and remedies under the Project Documents are cumulative and in addition to all rights and remedies provided by law from time to time. The exercise by Authority (or City) of any right or remedy shall not constitute a cure or waiver of any default, nor invalidate any notice of default or any act done pursuant to any such notice, nor prejudice Authority (or City) in the exercise of any other right or remedy. No waiver of any default shall be implied from any omission by Authority to take action on account of such default if such default persists or is repeated. No waiver of any default shall affect any default other than the default expressly waived, and any such waiver shall be operative only for the time and to the extent stated. No waiver of any provision of any Project Document shall be construed as a waiver of any subsequent breach of the same provision. Authority’s consent to or approval of any act by Developer requiring
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further consent or approval shall not be deemed to waive or render unnecessary Authority’s consent to or approval of any subsequent act. Authority’s acceptance of the late performance of any obligation shall not constitute a waiver by Authority of the right to require prompt performance of all further obligations; Authority’s acceptance of any performance following the sending or filing of any notice of default shall not constitute a waiver of Authority’s right to proceed with the exercise of its remedies for any unfulfilled obligations; and Authority’s acceptance of any partial performance shall not constitute a waiver by Authority of any rights relating to the unfulfilled portion of the applicable obligation.
7.4 Event of Default by Authority. The occurrence of any of the following, whatever the reason therefor, shall constitute an Event of Default by Authority:
Authority fails to perform any obligation under any Project Document, and such failure is not cured within fourteen (14) days after Authority’s written notice from Developer that such obligation was not performed; provided that, if cure cannot reasonably be effected within such 14-day day period, such failure shall not be an Event of Default so long as Authority (in any event, within ten (10) days after receipt of such notice) commences to cure, and thereafter diligently (in any event within sixty (60) days after receipt of such notice) prosecutes such
7.4.1 Remedies upon Event of Default by Authority. Upon the occurrence of any Event of Default, Developer may, at its option do any or all of the following:
(a) Exercise any of its rights under the Project Documents and any rights provided by law; and/or
(b) Seek and obtain an order for specific performance.
8. MISCELLANEOUS.
8.1 Transfers of Interest in Site or Agreement.
8.1.1 Prohibition. The qualifications and identity of Developer are of particular concern to Authority (and City). It is because of those qualifications and identity that Authority has entered into this Agreement with Developer. Accordingly, for the period commencing upon the Date of Agreement and until the seventh (7 th) sale of the Affordable Homes, (a) no voluntary or involuntary successor-in -interest of Developer shall acquire any rights or powers under this Agreement, (b) neither Developer nor any successor or assign thereof shall make any total or partial sale, transfer, conveyance, assignment, refinancing or lease of the whole or any part of the Site or the Onsite Improvements thereon (collectively referred to herein as a “Transfer”), without the prior written approval of Authority, except to the extent otherwise ex pressly set forth in Section 8.1.2 hereof.
Authority agrees that it shall not unreasonably withhold approval of any transfer to a Low Income Affordable Homebuyer at an Affordable Housing Cost upon submittal of documentation acceptable to Authority that such transfer satisfies all requirements of this Agreement.
8.1.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, Authority approval of a Transfer shall not be required in connection with the conveyance or dedication of any portion of the Site to City or the granting of easements or permits to facilitate construction of the Onsite Improvements.
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8.1.3 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon Developer and its permitted successors and assigns. Whenever the term “Developer” is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided.
8.1.4 Assignment by Authority . Authority may assign or transfer any of its interests hereunder to City at any time without the consent of Developer.
8.2 Enforced Delay; Extension of Times of Performance . In addition to specific provisions of this Agreement, performance by a party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; litigation; unusually severe weather; acts or omissions of the other party; acts or failures to ac t of a public agency or governmental entity; or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform.
Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other parties within thirty (30) days of the commencement of the cause. Any requests for extension shall be in writing. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Authority and Developer.
Notwithstanding the foregoing portion of this Section 8.2, Developer is not entitled pursuant to this Section 8.2 to an extension of time to perform because of past, present, or future difficulty in obtaining suitable temporary, construction, or permanent financing for the acquisition, development or operation of the Site, in determining qualified purchasers who are Initial Homebuyers, or in accomplishing sale of all seven (7) Affordable Homes by the time established therefor on the Schedule of Performance.
Provided that Developer is exercising diligent efforts toward obtaining financing and further provided that Developer demonstrates to the reasonable satisfaction of the Executive Director that Developer is making progress toward obtaining financing and that Developer is likely to obtain financing commitments for construction and that it is likely that Developer will develop and sell seven (7) Affordable Home s to Low Income Homebuyers at prices to the homebuyers which are consistent with Affordable Housing Cost as provided under this Agreement, the Authority will reasonably consider extensions of up to four (4) months in the aggregate (in addition to such other extensions as may be otherwise allowed under this Agreement) upon receipt of request therefor by Developer, so long as such extension(s) meet HOME Program and HOME Regulations for timely completion of construction.
8.3 Nonliability of Officials and Employees of City. No member, official or employee of Authority or City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Authority (or City) or for any amount which may become due to Developer or its successors, or on any obligations under the terms of this Agreement.
8.4 Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of Authority to Developer, or any other claim by Developer against Authority (or City), in connection with the Site or otherwise, Developer hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Developer’s
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obligations under this Agreement (including without limitation the attachments hereto), or (b) to claim that the existence of any such outstanding obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under the Project Documents.
8.5 Notices. All notices, demands, approvals and other communications provided for in the Project Documents shall be in writing and be delivered to the appropriate party at its address as follows:
If to Developer: Mary Erickson Community Housing
24681 La Plaza #240
Dana Point, California 92629
Attention: Executive Director
If to Authority: Moreno Valley Housing Authority
14177 Frederick Street
Moreno Valley, CA 92552
Attention: Executive Director
With copy to: City of Moreno Valley
14177 Frederick Street
Moreno Valley, CA 92552
Attention: City Clerk and City Attorney
Addresses for notice may be changed from time to time by written notice to all other parties.
All communications shall be effective when actually received; provided, however, that nonreceipt of any communication as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication.
8.6 Survival of Representations and Warranties. All representations and warranties in the Project Documents shall survive the conveyance of the Site and have been or will be relied on by Authority notwithstanding any investigation made by Authority.
8.7 No Third Parties Benefited. This Agreement is made for the purpose of setting forth rights and obligations of Developer and Authority; provided however, the City is an intended third party beneficiary, with rights but no obligations hereunder. In this regard, no other person or entity shall have any rights hereunder or by reason hereof, nor are there any other third party beneficiaries of this Agreement.
8.8 Use of Consultants by Authority. Authority (and/or City) may engage consultants to assist Authority in connection with matters to be undertaken or reviewed under this Agreement, such as in connection with the calculation of allowable housing costs or Back End Ratios. Developer shall cooperate fully with any such consultants.
8.9 Binding Effect; Assignment of Obligations . This Agreement shall bind, and shall inure to the benefit of, Developer and Authority and their respective successors and assigns. Developer shall not assign any of its rights or obligations under any Project Document without the prior written consent of the Executive Director, which consent may be withheld in the Executive Director’s sole and absolute discretion. Any such assignment without such consent shall, at Authority ’s option, be void.
In connection with the foregoing consent requirement, Developer acknowledges that Authority relied
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upon Developer’s particular expertise in entering this Agreement and continues to rely on such expertise to ensure the satisfactory completion of the Onsite Improvements and the qualification of eligible buyers and each Affordable Home in conformity with this Agreement.
8.10 Counterparts. Provided that the written approval of the Executive Director is first obtained, any Project Document, other than the Authority Loan Note and the Authority Loan Deed of Trust, may be executed in counterparts, all of which, taken together, shall be deemed to be one and the same document.
8.11 Superiority of Agreement. Developer agrees and acknowledges that any agreements between Developer and a purchaser of an Affordable Home , or third parties, shall be subject and subordinate in all cases to this Agreement (including, without limitation, the Attachments hereto) and that in the event of conflict, this Agreement (including, without limitation, the Attachments hereto) shall control.
8.12 Prior Agreements; Amendments; Consents. This Agreement (together with the other Project Documents) contains the entire agreement between Authority and Developer with respect to the Site and Improvements to be constructed thereon, and all prior negotiations, understandings and agreements with respect to such matters are superseded by this Agreement and such other Project Documents. No modification of any Project Document (including waivers of rights and conditions) shall be effective unless in writing and signed by the party against whom enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 66 and Attachments 1 through 16 (which attachments are incorporated herein by reference), plus the Reimbursement Agreement referenced herein relating to the Offsite Improvements, constitute the entire understanding and agreement of the parties.
This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof.
All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Authority and Developer, and all amendments hereto must be in writing by the appropriate authorities of the Authority and Developer; provided that afte r conveyance of the Site to Developer, only the consent of Authority shall be required.
Where action is to be taken by Authority under this Agreement, such action may be taken by the Executive Director unless otherwise expressly provided hereunder or required by law or by context.
Where action stated to be taken by City under this Agreement, such action may be taken by the City Manager unless otherwise expressly provided hereunder or required by law or by context.
8.13 Governing Law. All of the Project Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California. Developer irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Riverside or the United States District Court of the Central District of California, as Authority may deem appropriate, in connection with any legal action or proceeding arising out of or relating to this Agreement or the o ther Project Documents. Assuming proper service of process, Developer also waives any objection regarding personal or in rem jurisdiction or venue.
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8.14 Severability of Provisions. No provision of any Project Document that is held to be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of the Project Documents are hereby declared to be severable.
8.15 Headings. Article and section headings are included in the Project Documents for convenience of reference only and shall not be used in construing the Project Documents.
8.16 Conflicts. In the event of any conflict between the provisions of this Agreement and those of any other Project Document, this Agreement shall prevail; provided however that, with respect to any matter addressed in both such documents, the fact that one document provides for greater, lesser or different rights or obligations than the other shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed.
8.17 Time of the Essence. Time is of the essence of all of the Project Documents.
8.18 Conflict of Interest. No member, official or employee of Authority (or City) shall have any direct or indirect financial interest in this Agreement, nor participate in any decision relating to the Agreement which is prohibited by law.
8.19 Warranty against Payment of Consideration . Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement.
8.20 Real Estate Commissions. Authority and Developer represent to the other party that it has not engaged the services of any finder or broker and that it is not liable for any real estate commissions, broker’s fees, or finder’s fees which may accrue by means of the acquisition of all or part of the Site, and agrees to hold harmless the other party from such commissions or fees as are alleged to be due from the party making such representations.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth.
S-67
4863-6414-1611v8/200382-0007
DEVELOPER:
MARY ERICKSON COMMUNITY HOUSING,
a California nonprofit corporation
By:
Susan McDevitt
Its: Executive Director
[Signatures continue on next page]
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[Signatures continue from prior page]
AUTHORITY:
MORENO VALLEY HOUSING AUTHORITY,
a public body, corporate and politic
By:
Ulises Cabrera, Mayor
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. 1
Site Map
4871-0487-2146v4/200382-0007
ATTACHMENT NO. 1
SITE MAP
[See attached page]
Attachment No. 1
Site Map
4871-0487-2146v4/200382-0007
Attachment No. 2
Legal Description of Site
4871-0487-2146v4/200382-0007
ATTACHMENT NO. 2
LEGAL DESCRIPTION OF THE SITE
THAT PORTION OF PARCEL 3 OF PARCEL MAP NO. 28871 IN THE CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED IN BOOK 194, PAGES 50 & 51 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
PARCEL 1:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 3; THENCE NORTH 00°27’09” EAST 14.00 FEET ALONG THE WEST LINE OF SAID PARCEL 3 TO A POINT IN A LINE PARALLEL WITH AND 14.00 FEET NORTHERLY OF THE SOUTH LINE OF SAID PARCEL 3 AND THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID WEST LINE NORTH 00°27’09” EAST 85.50 FEET; THENCE SOUTH 89°33’47” EAST 74.01 FEET PARALLEL WITH SAID SOUTH LINE; THENCE SOUTH 00°26’13” WEST 81.46 FEET; THENCE
SOUTH 45°26’13” WEST 5.71 FEET TO A POINT ON SAID LINE PARALLEL WITH AND
14.00 FEET NORTH OF THE SOUTH LINE OF SAID LOT 3; THENCE NORTH 89°33’47” WEST 70.00 FEET ALONG SAID PARALLEL LINE TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,321 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 2:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 3; THENCE NORTH 00°27’09” EAST 99.50 FEET ALONG THE WEST LINE OF SAID PARCEL 3 TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID WEST LINE NORTH 00°27’09” EAST 90.57 FEET; THENCE SOUTH 82°32’32” EAST 84.50 FEET; THENCE
SOUTH 07°27’28” WEST 80.85 FEET TO A POINT ON A LINE PARALLEL WITH THE SOUTH LINE OF SAID LOT 3; THENCE
NORTH 89°33’47” WEST 74.01 FEET ALONG SAID PARALLEL LINE TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,768 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
Attachment No. 2
Legal Description of Site
4871-0487-2146v4/200382-0007
PARCEL 3:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 3; THENCE NORTH 00°27’09” EAST 190.07 FEET ALONG THE WEST LINE OF SAID PARCEL 3 TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID WEST LINE NORTH 00°27’09” EAST 110.10 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 3; THENCE
SOUTH 49°02’53” EAST 128.14 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 45°49’14” WEST; THENCE
SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 36°43’18” AN ARC DISTANCE OF 28.84 FEET; THENCE
SOUTH 07°27’28” WEST 11.66 FEET; THENCE
NORTH 82°32’32” WEST 84.50 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,898 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 4:
BEGINNING AT THE NORTHWEST CORNER OF SAID PARCEL 3; THENCE SOUTH 89°33’45” EAST 130.01 FEET ALONG THE NORTH LINE OF SAID PARCEL 3; THENCE SOUTH 00°26’13” WEST 69.36 FEET TO A POINT IN A CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 00°32’39” EAST; THENCE
SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 46°21’53” AN ARC DISTANCE OF 36.41 FEET; THENCE
NORTH 49°02’53” WEST 128.14 FEET TO THE POINT OF BEGINNING.
CONTAINING 6,455 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 5:
BEGINNING AT THE NORTHWEST CORNER OF SAID PARCEL 3; THENCE SOUTH 89°33’45” EAST 130.01 FEET ALONG THE NORTH LINE OF SAID PARCEL 3 TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID NORTH LINE SOUTH 89°33’45” EAST 134.02 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 3; THENCE
SOUTH 51°38’52” WEST 131.46 FEET TO A POINT IN A CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 45°06’27” EAST; THENCE
Attachment No. 2
Legal Description of Site
4871-0487-2146v4/200382-0007
NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 44°33’48” AN ARC DISTANCE OF 35.00 FEET; THENCE
NORTH 00°26’13” EAST 69.36 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,536 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 6:
BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 3; THENCE SOUTH 00°27’04” WEST 102.59 FEET ALONG THE EAST LINE OF SAID PARCEL 3; THENCE SOUTH 83°17’30” WEST 89.78 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 89°40’15” EAST; THENCE
NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 44°33’48” AN ARC DISTANCE OF 35.00 FEET; THENCE
NORTH 51°38’52” EAST 131.46 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,651 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 7:
BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 3; THENCE SOUTH 00°27’04” WEST 102.59 FEET ALONG THE EAST LINE OF SAID PARCEL 3 TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID EAST LINE SOUTH 00°27’04” WEST 67.59 FEET TO THE NORTHEAST CORNER OF PARCEL 1 OF SAID PARCEL MAP; THENCE NORTH 89°33’47” WEST 140.00 FEET ALONG THE NORTH LINE OF PARCELS 1 AND 2 OF SAID PARCEL MAP TO THE NORTHWEST CORNER OF SAID PARCEL 2; THENCE NORTH 59°48’03” EAST 33.55 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 45.00 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 60°07’48” AN ARC DISTANCE OF 47.23 FEET; THENCE
NORTH 83°17’30” EAST 89.78 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,396 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
Attachment No. 2
Legal Description of Site
4871-0487-2146v4/200382-0007
LOT A:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 3; THENCE NORTH 00°27’09” EAST 14.00 FEET ALONG THE WEST LINE OF SAID PARCEL 3 TO A POINT ON A LINE PARALLEL WITH AND 14.00 FEET NORTHERLY OF THE SOUTH LINE OF SAID PARCEL 3; THENCE
ALONG SAID PARALLEL LINE SOUTH 89°33’47” EAST 70.00 FEET; THENCE NORTH 45°26’13” EAST 5.71 FEET; THENCE
NORTH 00°26’13” EAST 81.46 FEET; THENCE
NORTH 07°27’28” EAST 92.51 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 45.00 FEET; THENCE
NORTHEASTERLY, EASTERLY AND SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 232°20’36” AN ARC DISTANCE OF 182.48 FEET; THENCE SOUTH 59°48’03” WEST 33.55 FEET TO THE NORTHWEST CORNER OF PARCEL 2 OF SAID PARCEL MAP; THENCE
SOUTH 00°27’04” WEST 130.00 FEET ALONG THE WEST LINE OF SAID PARCEL 2 TO THE SOUTHWEST CORNER OF SAID PARCEL 2; THENCE
NORTH 89°33’47” WEST 124.04 FEET ALONG THE SOUTH LINE OF SAID PARCEL 3 TO THE POINT OF BEGINNING.
CONTAINING 15,032 SQUARE FEET, MORE OR LESS.
Assessor Parcel: APNs 481-270-065 thru -071 (formerly APN: 481-270-058)
Attachment No. 3
Schedule of Performance
4871-0487-2146v4/200382-0007
ATTACHMENT NO. 3
SCHEDULE OF PERFORMANCE
For the purposes of this Schedule of Performance, the “Date of Agreement” is June 17, 2025 .
The Executive Director may extend by not more than [ninety (90) days] the time under this Schedule of Performance by which any obligation of Developer shall be performed.
1. Developer Opens Escrow for the
Authority Conveyance. Developer shall
cause the opening of Escrow for the
Authority Conveyance and concurrent
Closing of Financing of Developer
construction loan for the Project.
Within five (5) [________] (__)] days after the
Date of Agreement
2. Satisfaction of Authority Conveyance
Conditions Precedent. Developer shall
satisfy the Authority Conveyance
Conditions Precedent.
Not later than [________] (__)] days after the
Date of Agreement.
3. Closing. The Site is conveyed to the
Developer, and the Authority Note is
executed and delivered to the Authority,
and the Homebuyer Covenants and the
Authority Deed of Trust are recorded and
delivered to the Authority.
Within thirty (30) days after the satisfaction of
the Authority Conveyance Conditions Precedent
and not later than the [________] day after the
Date of Agreement.
4. Commencement of Construction. The
Director shall commence construction of
the Onsite Improvements and Offsite
Improvements in one phase (seven (7)
Affordable Homes and related
Improvements.
Within [________] (__)] days after the Date of
Agreement.
5. Completion of Construction. Developer
shall complete construction of the
Improvements.
Within one hundred [________] (__)] days after
the earlier of (i) the commencement of
construction or (ii) the time established in this
Schedule of Performance for the commencement
of construction of the Onsite Improvements and
Offsite Improvements.
6. Review of Eligibility of Homebuyers.
The Executive Director reviews eligibility.
Within [________] (__)] days after receipt of a
complete package sufficient for Authority to
review prospective buyers’ qualifications to
acquire an Affordable Home at an Affordable
Housing Cost. Authority determinations of
eligibility are valid for six (6) months from the
date made by Authority.
Attachment No. 3
Schedule of Performance
4871-0487-2146v4/200382-0007
7. Conveyances to Initial Homebuyers. The
conveyances to the Initial Homebuyers are
accomplished in conformity with this
Agreement.
Within [________] (__)] days after the Date of
Agreement.
Attachment No. 4
Authority Loan Note
4871-0487-2146v4/200382-0007
ATTACHMENT NO. 4
AUTHORITY LOAN NOTE
PROMISSORY NOTE SECURED BY DEED OF TRUST
[$3,446,961.00] Moreno Valley, California _____________, 202_ FOR VALUE RECEIVED, MARY ERICKSON COMMUNITY HOUSING , a California nonprofit public benefit corporation (“Developer” or “Maker”), promises to pay to the MORENO VALLEY HOUSING AUTHORITY, a public body corporate and politic (“Authority ” or “Holder”), at its offices at 14177 Frederick Street, Moreno Valley, California 92552, or at such other place as City may from time to time designate in writing, (a) the principal sum of Three Million Four Hundred Forty-Six Thousand Nine Hundred Sixty-One Dollars ($3,446,961) that includes $1,686,961 HOME Funds, up to $850,000 Measure A funds, up to $550,000 LMIHAF, and $360,000 in kind professional services; and (b) all costs and expenses payable hereunder.
R E C I T A L S
A. This Promissory Note Secured (“Note”) is made pursuant to that certain HOME Investment Partnership and Affordable Housing Agreement by and between the Developer and the Authority dated as of June 17, 2025 (“Agreement”).
B. Capitalized terms not described herein shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, Developer agrees as follows:
1. Agreement. The principal sums hereunder have been and are being loaned by Authority to Developer in accordance with and pursuant to the Agreement, which is a public record on file in the office of the Authority Secretary/City Clerk. The terms of the Agreement are incorporated herein and made a part hereof to the same extent and with the same force and effect as if fully set forth herein. A default under any of the provisions of the Agreement shall be a default hereunder, and a default hereunder shall be a default under the Agreement. This Note shall be a nonrecourse note. Maker and Holder agree and acknowledge that in the event Developer fully performs under the Agreement, the result would be that payment will not be required under this Note, the overriding purpose of this Note being to provide assurance for the performance by the Developer under the Agreement. This Note shall be nonrecourse.
2. Interest. Interest shall accrue on the unpaid principal amount of this Note at the rate of one percent (1%) simple interest per annum, subject to the Alternate Rate described in Section 9 . herein, in lawful money of the United States of America.
3. Payment. The entire balance due under this Note shall be paid to the Authority , or otherwise satisfied as provided below, upon the uncured Event of Default of Developer under the Agreement, Authority Regulatory Agreement, this Note, or the Authority Deed of Trust. Concurrent with the conveyance of each Affordable Home to each I nitial Homebuyer in conformity with the Agreement and the corresponding Homebuyer Loan Agreement, the Authority shall release the Attachment No. 4
Authority Loan Note
4871-0487-2146v4/200382-0007
Developer from that certain prorata portion (one-seventh (1/7 th)) of the Developer’s liability under this Note and the Authority Deed of Trust and the amount of the this Note shall be deemed to be reduced by one-seventh (1/7th) for each Affordable Home sold to an Initial Homebuyer in conformity with the Agreement until no balance remains under the Authority Note. The release of Developer as to one Affordable Home shall not effect a release as to any other Affordable Homes or any other portion of the Site; each release shall be handled on a per-Affordable Home basis.
4. Form of Payments . All amounts due hereunder are payable in immediatel y available funds and lawful monies of the United States of America.
5. Application of Payments . All payments shall be applied first to costs and fees owing hereunder, second to the payment of accrued interest and third to the payment of principal.
6. Prepayment. At any time, Developer may prepay in whole or in part the outstanding principal balance under this Note, together with all accrued and unpaid fees, costs and expenses payable hereunder, without penalty.
7. Security. This Note is secured by the Authority Deed of Trust, which is both monetary and performance security of Developer’s obligations under the Agreement . The terms of the Authority Deed of Trust are incorporated herein and made a part hereof to the same extent and with the same force and effect as if fully set forth herein. To the extent any unpaid balance hereunder is so secured by t he Authority Deed of Trust, a default under any of the provisions of the Authority Deed of Trust shall be a default hereunder, and a default hereunder shall be a default under the Authority Deed of Trust.
8. Acceleration and Other Remedies . Upon: (a) the occurrence of an Event of Default or (b) Developer selling, contracting to sell, giving an option to purchase, conveying, leasing, encumbering, or alienating the Site, or any interest in the Site, or suffering its title, or any interest in the Site to be divested, whether voluntarily or involuntarily, other than sales to the Initial Homebuyers of the Affordable Homes in conformity with the Agreement, without the prior written consent of the Authority, Authority may, at Authority’s option, declare the outstanding principal amount of this Note, together with the then accrued and unpaid interest thereon and other charges hereunder, and all other sums secured by the Authority Deed of Trust, to be due and payable immediately, and upon such declaration, such principal and interest and other sums shall immediately become and be due and payable without demand or notice, all as further set forth in the Authority Deed of Trust. All costs of collection, including, but not limited to, reasonable attorneys’ fees and all expenses incurred in connection with protection of, or realization on, the security for this Note, may be added to the principal hereunder, and shall accrue interest as provided herein. Authority shall at all times have the right to proceed against any portion of the security for this Note in such order and in such manner as such Authority may consider appropriate, without waiving any rights with respect to any of the security. Any delay or omission on the part of the Authority in exercising any right hereunder, under the Agreement or under the Authority Deed of Trust shall not operate as a waiver of such right, or of any other right. No single or partial exercise of any right or remedy hereunder or under the Agreement or any other document or agreement shall preclude other or further exercises thereof, or the exercise of any other right or remedy. The acceptance of payment of any sum payable hereunder, or part thereof, after the due date of such payment shall not be a waiver of City’s right to either require prompt payment when due of all other sums payable hereunder or to declare an Event of Default for failure to make prompt or complete payment.
Attachment No. 4
Authority Loan Note
4871-0487-2146v4/200382-0007
9. Alternate Rate. Upon the occurrence of any 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 maturity and after judgment and until collection, at the “Alternate Rate”, such rate being the highest interest rate then permitted by law by a c ity 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. Developer agrees that in the event of any Event of Default, Authority will incur additional expense in servicing the loan evidenced by this 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, Developer 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 Authority, and Developer agrees to pay such sum on demand.
10. Waivers . Developer and all endorsers, guarantors and sureties hereof jointly and severally waive presentment, protest, notice of protest, notice of dishonor, diligence in collection, and the benefit of any exemption under any homestead exemption laws, if applicable.
11. Consents. Developer and all endorsers, guarantors and sureties consent to: (a) a ny
renewal, extension or modification (whether one or more) of the terms of the Agreement or the terms or time of payment under this Note, (b) the release or surrender or exchange or substitution of all or any part of the security, whether real or personal, or direct or indirect, for the payment hereof, (c) the granting of any other indulgences to Developer, and (d) the taking or releasing of other or additional parties primarily or contingently liable hereunder. Any such renewal, extension, modification, release, surrender, exchange or substitution may be made without notice to Developer or to any endorser, guarantor or surety hereof, and without affecting the liability of said parties hereunder.
12. Successors and Assigns. Whenever “ Authority” is referred to in this Note, such reference shall be deemed to include the Moreno Valley Housing Authority and its successors and assigns, including, without limitation, any subsequent assignee or holder of this Note. All covenants, provisions and agreements by or on behalf of Developer, and on behalf of any makers, endorsers, guarantors and sureties hereof which are contained herein shall inure to the benefit of the Authority and Authority’s successors and assigns.
13. Usury. It is the intention of Developer and Authority to conform strictly to the Interest Law, as defined below, applicable to this loan transaction. Accordingly, it is agreed that notwithstanding any provision to the contrary in this Note, or in any of the documents securing payment hereof or otherwise relating hereto, the aggregate of all interest and any other charges or consideration constituting interest under the applicable Interest Law that is taken, reserved, contracted for, charged or received under this Note, or under any of the other aforesaid agreements or otherwise in connection with this loan transaction, shall under no circumstances exceed the maximum amount of interest allowed by the Interest Law applicable to this loan transaction. If any excess of interest in such respect is provided for in this Note, or in any of the documents securing payment hereof or otherwise relating hereto, then, in such event:
Attachment No. 4
Authority Loan Note
4871-0487-2146v4/200382-0007
(a) the provisions of this paragraph shall govern and control; (b) neither Developer nor Developer’s heirs, legal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest allowed by the Interest Law applicable to this loan transaction; (c) any excess shall be deemed canceled automatically and, if theretofore paid, shall be credited on this Note by Authority or, if this Note shall have been paid in full, refunded to Developer; and
(d) the effective rate of interest shall be automatically subject to reduction to the Maximum Legal Rate of Interest (as defined below), allowed under such Interest Law, as now or hereafter construed by courts of appropriate jurisdiction. To the extent permitted by the Interest Law applicable to this loan transaction, all sums paid or agreed to be paid to Authority for the use, forbearance or detention of the indebtedness evidenced hereby shall be amortized, prorated, allocated and spread throughout the full term of this Note. For purposes of this Note, “Interest Law” shall mean any present or future law of the State of California, the United States of America, or any other jurisdiction which has application to the interest and other charges under this Note. The “Maximum Legal Rate of Interest” shall mean the maximum rate of interest that Authority may from time to time charge Developer, and under which Developer would have no claim or defense of usury under the Interest Law.
14. Costs of Enforcement. Developer agrees to pay upon demand all reasonable costs and expenses, including attorneys’ fees and disbursements (including appeals), incurred by the Authority (inclusive of the City) to implement and/or enforce the terms and conditions of this Note .
In addition to the foregoing award of attorneys’ fees, Authority shall be entitled to its attorneys’ fees and costs incurred in any post-judgment proceedings to enforce any judgment in connection with this Note. This provision is separate and several and shall survive the merger of this provision into any judgment.
15. Miscellaneous. Time is of the essence hereof. If this Note is now, or hereafter shall be, signed by more than one party or person, it shall be the joint and several obligation of such parties or persons (including, without limitation, all makers, endorsers, guarantors and sureties), and shall be binding upon such parties and upon their respective successors and assigns. This Note shall be governed by and construed under the laws of the State of California. Developer irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Riverside or the United States District Court of the Central District of California, as Authority hereof may deem appropriate, in connection with any legal action or proceeding arising out of or relating to this Note. Developer also waives any objection regarding personal or in rem jurisdiction or venue.
(signatures on following page)
Attachment No. 4
Authority Loan Note
4871-0487-2146v4/200382-0007
“DEVELOPER”
MARY ERICKSON COMMUNITY HOUSING,
a California nonprofit public benefit corporation
By:
Susan McDevitt, Executive Director
Attachment No. 5
Authority Loan Deed of Trust
4871-0487-2146v4/200382-0007
ATTACHMENT NO. 5
AUTHORITY LOAN DEED OF TRUST
Recording Requested By and
When Recorded Mail To:
Moreno Valley Housing Authority
14177 Frederick Street
Moreno Valley, California 92552
Attn: Executive Director
APN: 481-270-065 thru -071 and Lot A 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.)
AUTHORITY LOAN DEED OF TRUST WITH ASSIGNMENT OF RENTS
(SHORT FORM)
This AUTHORITY LOAN DEED OF TRUST WITH ASSIGNMENT OF RENTS (“Deed of Trust”) is made as of [____________________, 2025] between MARY ERICKSON COMMUNITY HOUSING , a California nonprofit public benefit corporation (“Trustor”), whose address is 24681 La Plaza, #240, Dana Point, California 92629, [ ] TITLE COMPANY OF CALIFORNIA (“Trustee”), and the MORENO VALLEY HOUSING AUTHORITY, a public body corporate and politic (“Beneficiary”).
A. This Deed of Trust is made pursuant to that certain HOME Investment Partnership and Affordable Housing Agreement by and between the Developer and the Authority dated as of June 17, 2025 (“Agreement”).
B. This Deed of Trust secures such Agreement and that certain Authority Loan Note, Promissory Note Secured by Deed of Trust dated of even date with this Deed of Trust.
C. All capitalized terms not defined herein shall have the meanings established therefore under the Agreement unless the context requires otherwise. The Property is defined in the Agreement as the “Site”. Copies of the Agreement , Authority Loan Note , and Authority Regulatory Agreement are on file with the Beneficiary as public records.
WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that certain real property in the City of Moreno Valley, County of Riverside, State of California, (“Property”) 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 under the Authority Loan Note, made by Trustor in favor of
Attachment No. 5
Authority Loan Deed of Trust
4871-0487-2146v4/200382-0007
Beneficiary in the principal sum of Three Million Three Hundred Ninety-Six Nine Hundred Sixty-One U.S. Dollars ($3,446,961), and extensions or renewals thereof with the balance of the indebtedness, due and payable on occurrence of an event of acceleration as defined in the Note, and (2) performance of the terms, conditions and performance obligations of under the Agreement by Trustor, which are incorporated by reference or contained herein or therein, Agreement; (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) performance under the Agreement and the Authority Regulatory Agreement recorded of even date herewith, and (5) performance under Exhibit B that is attached hereto and incorporated herein by reference.
To protect the security of this Deed of Trust, and with respect to the real 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 above as well as 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.
IN WITNESS WHEREOF, Trustor has duly executed this Deed of Trust as of the date first above written.
“Trustor”
MARY ERICKSON COMMUNITY HOUSING,
a California nonprofit public benefit corporation
By:
Susan McDevitt, Executive Director
Attachment No. 5
Exhibit A to Authority Loan Deed of Trust
4871-0487-2146v4/200382-0007
EXHIBIT A
LEGAL DESCRIPTION
THAT PORTION OF PARCEL 3 OF PARCEL MAP NO. 28871 IN THE CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED IN BOOK 194, PAGES 50 & 51 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
PARCEL 1:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 3; THENCE NORTH 00°27’09” EAST 14.00 FEET ALONG THE WEST LINE OF SAID PARCEL 3 TO A POINT IN A LINE PARALLEL WITH AND 14.00 FEET NORTHERLY OF THE SOUTH LINE OF SAID PARCEL 3 AND THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID WEST LINE NORTH 00°27’09” EAST 85.50 FEET; THENCE SOUTH 89°33’47” EAST 74.01 FEET PARALLEL WITH SAID SOUTH LINE; THENCE SOUTH 00°26’13” WEST 81.46 FEET; THENCE
SOUTH 45°26’13” WEST 5.71 FEET TO A POINT ON SAID LINE PARALLEL WITH AND
14.00 FEET NORTH OF THE SOUTH LINE OF SAID LOT 3; THENCE NORTH 89°33’47” WEST 70.00 FEET ALONG SAID PARALLEL LINE TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,321 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 2:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 3; THENCE NORTH 00°27’09” EAST 99.50 FEET ALONG THE WEST LINE OF SAID PARCEL 3 TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID WEST LINE NORTH 00°27’09” EAST 90.57 FEET; THENCE SOUTH 82°32’32” EAST 84.50 FEET; THENCE
SOUTH 07°27’28” WEST 80.85 FEET TO A POINT ON A LINE PARALLEL WITH THE SOUTH LINE OF SAID LOT 3; THENCE
NORTH 89°33’47” WEST 74.01 FEET ALONG SAID PARALLEL LINE TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,768 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
Attachment No. 5
Exhibit A to Authority Loan Deed of Trust
4871-0487-2146v4/200382-0007
PARCEL 3:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 3; THENCE NORTH 00°27’09” EAST 190.07 FEET ALONG THE WEST LINE OF SAID PARCEL 3 TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID WEST LINE NORTH 00°27’09” EAST 110.10 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 3; THENCE
SOUTH 49°02’53” EAST 128.14 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 45°49’14” WEST; THENCE
SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 36°43’18” AN ARC DISTANCE OF 28.84 FEET; THENCE
SOUTH 07°27’28” WEST 11.66 FEET; THENCE
NORTH 82°32’32” WEST 84.50 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,898 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 4:
BEGINNING AT THE NORTHWEST CORNER OF SAID PARCEL 3; THENCE SOUTH 89°33’45” EAST 130.01 FEET ALONG THE NORTH LINE OF SAID PARCEL 3; THENCE SOUTH 00°26’13” WEST 69.36 FEET TO A POINT IN A CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 00°32’39” EAST; THENCE
SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 46°21’53” AN ARC DISTANCE OF 36.41 FEET; THENCE
NORTH 49°02’53” WEST 128.14 FEET TO THE POINT OF BEGINNING.
CONTAINING 6,455 SQUARE FEET, MORE OR LESS.
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES AS DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 5:
BEGINNING AT THE NORTHWEST CORNER OF SAID PARCEL 3; THENCE SOUTH 89°33’45” EAST 130.01 FEET ALONG THE NORTH LINE OF SAID PARCEL 3 TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID NORTH LINE SOUTH 89°33’45” EAST 134.02 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 3; THENCE
SOUTH 51°38’52” WEST 131.46 FEET TO A POINT IN A CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 45°06’27” EAST; THENCE
NORTHWESTERLY ALONG SAID CURVE T HROUGH A CENTRAL ANGLE OF 44°33’48” AN ARC DISTANCE OF 35.00 FEET; THENCE
NORTH 00°26’13” EAST 69.36 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,536 SQUARE FEET, MORE OR LESS.
TOGETHER W ITH AN EASEMENT F OR INGRESS, EGRESS AND PUBLIC UT ILITIES A S DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 6:
BEGINNING AT T HE NOR THEAST C ORNER OF S AID PARCEL 3; T HENCE S OUTH 00°27’04” WEST 102.59 FEET ALONG THE EAST LINE OF SAID PARCEL 3; THENCE SOUTH 83°17’30” WEST 89.78 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 89°40’15” EAST; THENCE
NORTHWESTERLY ALONG SAID CURVE T HROUGH A CENTRAL ANGLE OF 44° 33’48” AN ARC DISTANCE OF 35.00 FEET; THENCE
NORTH 51°38’52” EAST 131.46 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,651 SQUARE FEET, MORE OR LESS.
TOGETHER W ITH AN EASEMENT F OR INGRESS, EGRESS AND PUBLIC UT ILITIES A S DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
PARCEL 7:
BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 3; THENCE SOUTH 00°27’04” WEST 102.59 FEET ALONG THE EAST LINE OF SAID PARCEL 3 TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG S AID EAST LINE S OUTH 00°27’04” W EST 67.59 FEET T O THE NORTHEAST CORNER OF PARCEL 1 OF SAID PARCEL MAP; THENCE NORTH 89°33’47” WEST 140.00 FEET ALONG THE NORTH LINE OF PARCELS 1 AND 2 OF SAID PARCEL MAP TO THE NORTHWEST CORNER OF SAID PARCEL 2; THENCE NORTH 59°48’03” EAST 33.55 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 45.00 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE T HROUGH A CENTRAL ANGLE OF 60 °07’48” AN ARC DISTANCE OF 47.23 FEET; THENCE
NORTH 83°17’30” EAST 89.78 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 6,396 SQUARE FEET, MORE OR LESS.
TOGETHER W ITH AN EASEMENT F OR INGRESS, EGRESS AND PUBLIC UT ILITIES A S DESCRIBED AND SHOWN AS LOT A HEREINAFTER.
LOT A:
BEGINNING AT T HE SOUTHWEST C ORNER OF S AID PARCEL 3; T HENCE NOR TH 00°27’09” EAST 14.00 FEET ALONG THE WEST LINE OF SAID PARCEL 3 TO A P OINT ON Attachment No. 5
Exhibit A to Authority Loan Deed of Trust
4871-0487-2146v4/200382-0007
Attachment No. 5
Exhibit A to Authority Loan Deed of
Trust Page 4 of 4
4871-0487-2146v4/200382-0007
A LINE PARALLEL WITH AND 14.00 FEET NORTHERLY OF THE SOUTH LINE OF SAID PARCEL 3; THENCE
ALONG SAID PARALLEL LINE SOUTH 89°33’47” EAST 70.00 FEET; THENCE NORTH 45°26’13” EAST 5.71 FEET; THENCE
NORTH 00°26’13” EAST 81.46 FEET; THENCE
NORTH 07°27’28” EAST 92.51 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 45.00 FEET; THENCE
NORTHEASTERLY, EASTERLY AND SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 232°20’36” AN ARC DISTANCE OF 182.48 FEET; THENCE SOUTH 59°48’03” WEST 33.55 FEET TO THE NORTHWEST CORNER OF PARCEL 2 OF SAID PARCEL MAP; THENCE
SOUTH 00°27’04” WEST 130.00 FEET ALONG THE WEST LINE OF SAID PARCEL 2 TO THE SOUTHWEST CORNER OF SAID PARCEL 2; THENCE
NORTH 89°33’47” WEST 124.04 FEET ALONG THE SOUTH LINE OF SAID PARCEL 3 TO THE POINT OF BEGINNING.
CONTAINING 15,032 SQUARE FEET, MORE OR LESS.
Assessor Parcel: APNs 481-270-065 thru -071 (formerly APN: 481-270-058)
Attachment No. 5
Exhibit B to Authority Loan Deed of Trust