Sacramento City Council
February 7, 2023

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-02268 2/7/2023 Public Hearing Item 20.
(City Council/Housing Authority) Authorization to Execute a Conditional Loan Commitment in the Amount of $2,545,000 and Disposition and Development Agreement for the Properties at 5266-5340 Young Street and 5700 Stockton Blvd. with San Juan Mutual Housing Associates, L.P. for the San Juan Apartments by Mutual Housing Apartments Project (Noticed on 01/24/2023)
File ID: 2022-02268
Location: 5266-5340 Young Street, District 6, Represented by Vice Mayor Eric Guerra Recommendation: Adopt a 1) a City Council Resolution authorizing the Sacramento Housing and Redevelopment Agency (SHRA) to amend its budget, execute a Conditional Loan Commitment which includes $2 million in the City Housing Trust Funds administered by SHRA for the acquisition, construction and permanent financing of the San Juan by Mutual Housing Apartments Project with San Juan Mutual Housing Associates, L.P or related entity, 2) a Housing Authority Resolution authorizing the execution of a Disposition and Development Agreement for the properties located at 5266-5340 Young Street and 5700 Stockton Blvd. with San Juan Mutual Housing Associates L.P. for the San Juan by Mutual Housing Apartments Project and the execution of a Conditional Loan Commitment which includes Seller Carry Back financing in the amount of $545,000 for the acquisition, construction and permanent financing of the San Juan by Mutual Housing Apartments Project with San Juan Mutual Housing Associates, L.P or related entity, and 3) a Housing Authority Resolution authorizing cooperation with the Housing Authority of the County of Sacramento with respect to the issuance of Revenue Bonds for the San Juan by Mutual Housing Project.

Contact: Christine Weichert, Director of Housing Finance, (916) 440-1353, [email protected]; Sacramento Housing and Redevelopment Agency
Presenter: Christine Weichert, Director of Housing Finance, (916) 440-1353, [email protected]; Sacramento Housing and Redevelopment Agency
Attachments:
01-Description/Analysis
02- Council Resolution - Conditional Loan Commitment
03-Exhibit A - Conditional Loan Commitment
04- Housing Authority Resolution - DDA
05-Exhibit A - DDA
06-Exhibit B - Conditional Loan Commitment

File ID: 2022-02268 2/7/2023 Public Hearing Item 20.
07-Housing Authority Resolution - Cooperation Acknowledgement 08-Vicinity Map
09-Site Plan
10- Rendering
11-Project Summary
12-Cash Flow Proforma
13- Maximum Income and Rent Limits
Additional Description/Analysis
Issue Detail: The San Juan site is comprised of eight parcels located on Stockton Boulevard and Young Street, totaling 5.5 acres just south of Fruitridge Road (Site) including 5266, 5280, 5300, 5320, 5340 Young Street located in the City and 5258 Young Street and 5700, 5716 Stockton Blvd. located in the County. The parcels were purchased with former redevelopment and Neighborhood Stabilization Program (NSP) funds to eliminate the blighting influence caused by the former San Juan Motel and Mobile Home Park and to assemble a larger site for a high-quality development project.

Upon the dissolution of Redevelopment, the parcels were conveyed to the Housing Authority of the City and County with the exception of 5700 Stockton which was originally transferred to the County but later, via special state legislation, was transferred to the City Housing Authority. In November 2016, SHRA received approval from the Housing Authority for a Vacant Lot Disposition strategy which included the San Juan site. The strategy for San Juan was to issue a Request for Proposal (RFP) to solicit an affordable housing developer for the site.

In August 2020, an RFP for affordable housing development was released for the San Juan site (Site). On October 7, 2020, three affordable housing developers submitted proposals to SHRA. The selection panel awarded the project to Mutual Housing California (Mutual Housing) in December 2020. Their proposal included a family, workforce, and permanent supportive housing (PSH) development.

On March 1, 2022, Mutual Housing submitted a funding application to SHRA for the acquisition, construction, and permanent financing of the Site. Given funding limitations, the project has been phased to address feasibility issues. The first phase, and the subject of this report, is referred to as San Juan Apartments by Mutual Housing (Project) and includes seven parcels, five of which are located in the City of Sacramento and two of which are located in the County. The parcels include 5258, 5226, 5280, 5300, 5320, 5340 Young Street, and 5700 Stockton Blvd. The Phase 1 site is 4.2 acres of which 3.55 acres are located in the county and .65 are located in the City. The second phase includes the remaining parcel at 5716 Stockton Blvd. which is located in the County. Phase 2 is anticipated to be a garden-style walk-up building that will include approximately 70 units of permanent supportive housing project (PSH) comprised of studio and 1-bedroom units. Staff anticipates seeking approval from the County for the second phase of the project in 2023-early 2024.

Below is a table of the proposed phasing, jurisdiction, and ownership of the San Juan Site.

File ID: 2022-02268 2/7/2023 Public Hearing Item 20.

Address Ownership Jurisdiction
Phase 1: San Juan
Apartments by Mutual
Housing
5258 Young Street Housing Authority of the
County (HACOS)
County
5266 Young Street Housing Authority of the City
(HACS)
City
5280 Young Street Housing Authority of the City
(HACS)
City
5300 Young Street Housing Authority of the City
(HACS)
City
5320 Young Street Housing Authority of the City
(HACS)
City
5340 Young Street Housing Authority of the City
(HACS)
City
5700 Stockton Blvd. Housing Authority of the City
(HACS)
County
Phase 2: Subsequent
Approvals
5716 Stockton Blvd. Housing Authority of the
County (HACOS)
County
Given the ownership of the properties, both the Housing Authority of the City and the Housing Authority of the County will need to approve Disposition and Development Agreements (DDA). The HACS DDA includes the conveyance of 5266, 5280, 5300, 5320, 5340 Young Street, and 5700 Stockton Blvd at fair market value.

Prior to the sale of the Housing Authority parcels to the Developer, SHRA will remove the soil contaminated with lead attributed to the former commercial uses surrounding the site. The contamination is limited to the parcels located in the jurisdiction of the County. The environmental remediation will cost approximately $1 million and is anticipated to be completed by Fall 2023.

Subject to City and Housing Authority approval of staff recommendations, SHRA will immediately

File ID: 2022-02268 2/7/2023 Public Hearing Item 20.

Subject to City and Housing Authority approval of staff recommendations, SHRA will immediately begin the bidding for remediation work on the Housing Authority owned parcels; and the Developer will apply for bond and four percent Low-Income Housing Tax Credits in February 2023. If successful, construction would begin in Fall 2023, and the project would be complete by late 2025.

Project Description
San Juan Apartments by Mutual Housing is a multifamily, workforce-family housing development composed of three-story garden-style walk-up buildings with tuck-under parking. The site and includes a total of eleven (11) residential buildings and one mixed-use building that houses the community center, management unit, and nine (9) residential units. There will be a total of 113 one, two, and three-bedroom units. Amenities on-site include landscaped courtyards, picnic tables, laundry facility, and dedicated parking spaces. The development includes a community room with kitchen, management resident services offices, restrooms, and playground for school-aged youth as well as a swimming pool. The proposed new construction of San Juan Apartments by Mutual Housing will be structured as a four percent Low-Income Housing Tax Credit (LIHTC) transaction and will serve residents between 30% and 60% of the Area Median Income. The Vicinity Map, Site Plan, and Project Rendering are included as Attachments 8, 9, and 10.

Entitlements
: The project has received design review approval from the City of Sacramento and project approval from the County of Sacramento.

Developer: San Juan Apartments by Mutual Housing will be developed by the limited partnership formed by Mutual Housing California (Developer). The Developer is a nonprofit public benefit corporation dedicated to developing affordable housing and has completed 24 affordable properties in California, including 16 properties in Sacramento.

Property Management: Mutual Housing Management (MHM) will manage the San Juan Apartments by Mutual Housing developments. MHM manages 24 properties in California. SHRA staff has reviewed MHM’s qualifications and management plan and has found that the proposed property management agent and management plan meet SHRA requirements.

Resident Services: Resident Services will be provided by Mutual Housing California. A minimum of 20 hours per week of on-site services will be available to all residents and will include after- school, education, and enrichment programs. An on-site coordinator will be assigned to the property. SHRA staff has reviewed Mutual Housing’s qualifications and resident services plan and has found that the proposed resident services provider and resident services plan meet SHRA requirements.

Security Plan
: SHRA staff has reviewed and approved the security plan which includes security patrol services available from 7:30 PM- 5:30 AM seven days a week; installation of web-based security cameras and recording equipment; and installation of exterior lighting perimeter gating. Additionally, one management staff will live at the development.

Project Financing : The Developer applied to SHRA for, predevelopment, acquisition, construction, and permanent financing. The financing for the proposed San Juan Apartments by Mutual Housing project includes Mortgage Revenue Bonds, LIHTC, a conventional loan, SHRA predevelopment, acquisition, construction, and permanent financing loan using the following sources: Home Investment Partnership (HOME), County Housing Trust Fund (HTF), State Local Housing Trust Fund, County Affordable Housing Fund (AHF), Housing Authority of the County Seller Carryback financing (HACOS), Housing Authority of the City Seller Carryback (HACS), City Housing Trust Fund (HTF),

File ID: 2022-02268 2/7/2023 Public Hearing Item 20.
(HACOS), Housing Authority of the City Seller Carryback (HACS), City Housing Trust Fund (HTF), general partnership equity, and a deferred developer fee. In total, a commitment of $22,668,000 in County and City resources will be made to the project. Financing requested from the City includes $2,545,000 which is comprised of $2 million in Housing Trust Funds and $545,000 in the form of a Seller Carry Back Loan. The remaining $20,123,000 will originate from County resources inclusive of a $500,000 predevelopment loan. The law firm of Orrick, Herrington, and Sutcliffe LLP, will serve as Bond Counsel. Although the project properties are located in both the City and County, there can only be one bond issuer. Accordingly, HACOS will issue bonds on behalf of the project.

Funding sources and uses for the Project are provided in the Project Summary as Attachments 11. A Proforma is provided as Attachment 12 and Maximum Income and Rent Limits are included as Attachment 13. The following table summarizes the SHRA and Housing Authority financing of the Project:

PROGRAM FUNDS NOT TO EXCEED

AMOUNTS
City Funding
Housing Authority of the City (HACs) Seller Carryback Loan (5266, 5280, 5300, 5320, 5340 Young Street, and 5700 Stockton Blvd.)
$ 545,000
SHRA City Housing Trust Fund Loan $ 2,000,000
Total City Funding $2,545,000
County Funding
SHRA County Home Investment Partnership (HOME) Loan $ 4,300,000 SHRA County Housing Trust Fund Predevelopment Loan $ 500,000 SHRA County Housing Trust Fund Loan $ 4,750,000
State Housing Trust Fund Loan $ 4,750,000
SHRA County Affordable Housing Fund $ 5,700,000
Housing Authority of the County (HACOS) Seller Carryback Loan (5258 Young Street)
$ 123,000
Total County Funding $ 20,123,000
TOTAL COUNTY AND CITY LOAN $ 22,668,000
The anticipated affordability requirements are summarized in the following table:

SAN JUAN APARTMENTS BY MUTUAL HOUSING
AFFORDABILITY RESTRICTIONS (55 YEARS)
UNITS % OF UNITS
Extremely Low Income (30% AMI) 15 13%
Very-Low Income (40% AMI) 15 13%
Very-Low Income (50% AMI) 37 33%
Low Income (60% AMI) 45 40%
Management Unit (Exempt) 1 1%
TOTAL 113 100%

File ID: 2022-02268 2/7/2023 Public Hearing Item 20.

SAN JUAN APARTMENTS BY MUTUAL HOUSING
AFFORDABILITY RESTRICTIONS (55 YEARS)
UNITS % OF UNITS
Extremely Low Income (30% AMI) 15 13%
Very-Low Income (40% AMI) 15 13%
Very-Low Income (50% AMI) 37 33%
Low Income (60% AMI) 45 40%
Management Unit (Exempt) 1 1%
TOTAL 113 100%
Policy Considerations: The recommended actions are also consistent with: a) SHRA Multifamily Lending and Mortgage Revenue Bond Policies adopted by the Council in December of 2019; and b) the 2021-2029 Housing Element, Goals H-2.1 Provide Opportunities for Affordable Housing Throughout the City and H- 2.2 Maximize Use of Public Properties for Affordable Housing and Shelters.

Economic Impacts: This multifamily residential project is expected to create 574 total jobs (323 direct jobs and 251 jobs through indirect and induced activities) and create $50,387,000 in total economic output ($30,965,735 of direct output and another $19,421,265 of output through indirect and induced activities). The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input- output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.

Environmental Considerations: California Environmental Quality Act (CEQA): The project is statutorily exempt pursuant to California Environmental Quality Act (CEQA) Guidelines Section 21155 (Transit Priority project requirements). National Environmental Policy Act (NEPA): Pursuant to the provisions of the National Environmental Policy Act (NEPA), an Environmental Assessment (EA) is in the process of being prepared for the project, and it is anticipated that the project will not result in a significant impact on the quality of the human environment, with mitigation measures incorporated.

Sustainability: The Project has been reviewed for consistency with the goals, policies, and targets of the 2035 General Plan. If approved, the project will advance the following goals, policies, and targets that will directly or indirectly conserve energy resources and reduce greenhouse gas emissions, in part, from the 2035 General Plan: a) Housing Element - Strategies and Policies for Conserving Energy Resources - Climate Action Plan, subsection 7.2: improving the energy efficiency in new buildings; and b) Environmental Resources - Air Quality and Climate Change sub-section 6.1.7:
reduce greenhouse gas emissions from new development, promoting water conservation and recycling, promoting development that is compact, mixed-use, pedestrian friendly, and transit- oriented; and promoting energy-efficient building design and site planning.

Commission/Committee Action: Sacramento Housing and Redevelopment Commission: At its meeting on February 1, 2023, it is anticipated that the Sacramento Housing and Redevelopment Commission will recommend approval of the attached resolution(s). In the event it fails to do so, Staff will advise the Council at the meeting.

Rationale for Recommendation: The project will provide needed affordable housing units and

File ID: 2022-02268 2/7/2023 Public Hearing Item 20.
services and will eliminate the blighting influence caused by the former San Juan Motel and Mobile Home Park in this neighborhood.

Financial Considerations: SHRA will receive an annual payment for monitoring the regulatory restrictions and administration of the loan in the amount of 0.125 percent of the bond issuance amount. SHRA will also receive a $100 annual administrative fee for each assisted unit. The total administrative fee will not exceed $25,000 annually for the affordable units during the regulatory term.

The SHRA commitment to San Juan Apartments by Mutual Housing will result in the following City loans to the property: 1) Housing Authority seller carryback loan of $545,000 funds with an interest rate of 3% and a term of 55 years after the construction period is complete 2) an SHRA loan of $2 million in Housing Trust Funds, with an interest rate of 3% and a term of 55 years after the construction period is complete.

Local Business Enterprise (LBE): LBE requirements do not apply to this report. Minority and Women’s Business Enterprise requirements and Section 3 will be applied to all activities to the greatest extent feasible and as required by federal funding.

RESOLUTION NO. 2023 -
Adopted by the Sacramento City Council
on date of
SAN JUAN APARTMENTS (PROJECT): APPROVAL OF LOAN COMMITMENT AND

APPROVAL TO EXECUTE LOAN COMMITMENT AND RELATED DOCUMENTS WITH SAN JUAN MUTUAL HOUSING ASSOCIATES, L.P. OR RELATED ENTITY; RELATED BUDGET AMENDMENT; RELATED FINDINGS; AND ENVIRONMENTAL

FINDINGS

BACKGROUND
A. The San Juan site is comprised of eight parcels located on Stockton Boulevard and Young Street, just south of Fruitridge Road. The parcels, located in both the City and County, were purchased to eliminate the blighting influence caused by the former San Juan Motel and Mobile Home Park on Stockton Boulevard and to assemble a larger site for a high-quality development project.

B. In November 2016 the Housing Authority of the City of Sacramento (Housing Authority) approved a Vacant Lot Disposition Strategy for vacant Housing Authority-owned parcels and was given the authorization to release the Housing Authority-owned San Juan parcels (Site) as an Opportunity Site.

C. In November 2016, the Site was identified to be exempt surplus land and directed to be used as an affordable housing site with restrictions consistent with California Government Code 25539.4.

D. In August 2020, the Sacramento Housing and Redevelopment Agency (Agency) released a Request for Proposals for an Affordable Housing Development for the Site.

E. In December 2020, Mutual Housing California was selected to become the developer of the Site based on and s ubmitted an application that included the following parcels:

1. 5258 Young Street (APN 026-0073-0003), located in County owned by Housing Authority of the County of Sacramento

2. 5266 Young Street (APN 026-0073-0004), located in the City and owned by the Housing Authority of the City of Sacramento

3. 5280 Young Street (APN 026 -0073-0005), located in City and owned by Housing Authority of the City of Sacramento

4. 5300 Young Street (APN 0026-0073-0006), located in City owned by Housing Authority of the City of Sacramento

5. 5320 Young Street (APN 0026-0073-0007), located in City owned by Housing Authority of the City of Sacramento

6. 5340 Young Street (APN 0026 -0073-0008) located in City owned by Housing Authority of the City of Sacramento

7. 5700 Stockton Blvd. (APN 026-0073-014), located in County owned by Housing Authority of the City of Sacramento.

8. 5716 Stockton Blvd. (APN 026-0073-017), located in the County owned by the Housing Authority of the County.

F. The Site has been spilt into two phases or projects for feasibility purposes. Phase 1 will include properties 1-7 (as referenced above) and is called the Project. Phase 2 will include 5716 Stockton Blvd and will be part of a subsequent action.

G. Mutual Housing California has worked on behalf of the Housing Authority to obtain entitlements for the site to be developed as affordable multifamily housing. There will be a tota l of 113 units comprised of one, two, and three -bedroom units.

Amenities on-site include landscaped courtyards, picnic t ables, a laundry facility, and dedicated parking spaces. The development includes a community room with a kitchen, management and resident services offices, restrooms , and playground for school-aged youth as well as a swimming pool.

H. Mutual Housing California applied for $2,000,000 of City funding from the Agency to develop the site for the acquisition, construction, and permanent financing of the Project (Loan Commitment).

I. The project is statutorily exempt pursuant to California Environmental Quality Act Guidelines Section 21155 (Transit Priority project requirements).

J. Pursuant to the provisions of the National Environmental Policy Act, an Environmental Assessment is in the process of being prepared for the project, and it is anticipated that the project will not result in a significant impact on the quality of the human environment, with mitigation measures incorporated.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. All evidence presented having been duly considered, the findings, including environmental findings regarding this action, as stated above, are found to be true and accurate and are hereby approved adopted.

Section 2. The Loan Commitment letter attached as Exhibit A and incorporated into this resolution by this reference for the financing of the San Juan by Mutual Housing Project is approved in the amount of $2,000,000 in City funding ($2,000,000 in Housing Trust Funds) for the construction and permanent financing of the Project.

Section 3. The Agency is authorized to enter into and execute the Loan Commitment and related documents and transmit to San Juan Mutual Housing Associates L.P., or related entity, as approved to form by t h e Agency’s Office of the General Counsel and perform other actions necessary to fulfill the intent of the Loan Commitment that accompanies this resolution, in accordance with its terms. The Agency will return to the Board for approval of loan documents.

Section 4. The Agency is authorized to ame nd its budget and allocate $2,000,000 in Housing Trust construction and permanent financing of the Project.

Section 5. The Project is approved pursuant to Chapter 1 of Part 2 of Division 24 of the Health and Safety Code of the State of California, including the issuance of bonds and the making or acquisition of mortgage loans in connection therewith by the Housing Authority of the County of Sacramento (collectively, the “Bond Financing”). The City will have n o responsibilities relating to the Bond Financing and this Section 5 shall not bind the City to any financial obligation or credit risk or allow any repayment recourse to the City and nothing in this Section 5 shall be deemed to bind the City to make any e xpenditure or to incur indebtedness in connection with the Bond Financing.

Table of Contents:

Exhibit A: Loan Commitment

Exhibit A

Effective Date: February 7, 2023

San Juan Mutual Housing Associates, L.P.,
c/o Mutual Housing California
Roberto Jimenez, CEO, Vice President
3321 Power Inn Road, Suite 320
Sacramento, CA 95826

RE: Conditional Loan Commitment for San Juan Apartments by Mutual Housing

Dear Mr. Jimenez,:

On behalf of the Sacramento Housing and Redevelopment Agency (SHRA) , Housing Authority of the County (HACOS) County, and Housing Authority of the City of Sacramento (HACS) (collectively, Agency), we are pleased to advise you of this Conditional Loan Commitment (Commitment) of acquisition, construction, and permanent loan funds (Loan) in the amount not to exceed $22,668,000 for the purpose of financing the acquisition, new construction, and permanent financing of that certain real property known as San Juan Apartments by Mutual Housing located at 5700 Stockton Blvd. 5258, 5266, 5280, 5300, 5320, 5340 Young Street, Sacramento, California 95824 (Property). The Agency's decision is based on your application, and all representations and information supplied by you to it. If these representations and information change in a material manner without written approval of the Agency, this Commitment is void. Agency's obligation to make the Loan is subject to the satisfaction of all the following terms and conditions and Borrower's execution of documentation that is in a form and in substan ce satisfactory to the Agency.

PROGRAMS FUNDS NOT TO EXCEED

AMOUNTS
County Funding
SHRA County Home Investment Partnership (HOME) Loan $ 4,300,000 SHRA County Housing Trust Fund (HTF) Predevelopment Loan* $ 500,000 SHRA County Housing Trust Fund (HTF) Loan $ 4,750,000 State Local Housing Trust Fund Loan $ 4,750,000
SHRA County Affordable Housing Fund (AHF) Loan $ 5,700,000 Housing Authority of the County (HACOS) Seller Carryback Loan $ 123,000 Total County Funding $ 20,123,000
City Funding
Housing Authority of the City (HACS) Seller Carryback Loan $ 545,000

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

SHRA City Housing Trust Fund (HTF) Loan $ 2,000,000
Total City Funding $ 2,545,000
TOTAL FUNDS $ 22,668,000
*The terms of the Predevelopment Loan are incorporated in Section 7 of this Commitment.

The Loan shall be made on standard Agency loan documents. Loan terms not in this Commitment and the attached loan document forms shall not be included in the final loan documents without additional environmental review and governing board approval. In the event of any discrepancies between terms stated in this C ommitment and the loan documents, the terms stated in th is Commitment shall be deemed to be terms of this Commitment.

Unless otherwise agreed in writing by the Agency in exercise of its absolute discretion, the following shall be considered conditions to Agency approval of a financing commitment. The Agency may, in exercise of its absolute discretion, modify its requirements upon written notice to Borrower given at least sixty (60) days prior to close of escrow for the Property.

This Commitment will expire June 30, 2024, unless a mutually agreed upon extension is made.

1. PROJECT DESCRIPTION : San Juan Apartments by Mutual Housing development is composed of three story residential walk-up buildings with tuck under parking. The development will and include a total of twelve (12) buildings, 131 on-grade parking spaces, and 113 units comprised of 1-bedroom, 2-bedroom, 3-bedroom units. The Project will also contain amenities that include a community center with kitchen, management offices, pool, landscaped courtyards, and a school aged and toddler play areas.

2. BORROWER: The name of the Borrower for the Loan is San Juan Mutual Housing Associates, L. P , a California limited partnership with Mutual Housing California , or related entity as the lead development partner.

3. PURPOSE OF LOAN : The Loan is to be used by Borrower solely to pay the costs of acquisition, construction , permanent financing and for such other purposes as Agency expressly agrees to in the loan agreement for the Loan, and such other agreements as may be generally required by the Agency for the use of the funding source for the Loan.

4. PRINCIPAL AMOUNT: The combined principal amount of the Loan will be the lesser of the following:

a. Twenty-Two Million, Six Hundred and Sixty -Eight Thousand Dollars and No Cents ($22,668,000.00), or
b. an amount to be determined prior to close of the Loan based on a project budget approved by Agency.

5. TERM OF LOAN : The Maturity Date of the Loan is 57 years or 6 84 months from the closing date, at which point any and all unpaid principal and interest on the loan will be due and payable.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

6. INTEREST RATE: The Loan will bear simple interest at three percent (3%) per annum.

Interest shall be calculated on the basis of a 36 5-day year and actual number of days elapsed.

7. PREDEVELOPMENT LOAN
The following terms and conditions will apply to the Predevelopment Loan:
a. Project: San Juan Apartments by Mutual Housing
b. Borrower: San Juan Mutual Housing Associates, L.P, or related entity. c. Predevelopment Loan: The principal amount of the Agency’s Predevelopment Loan is comprised of HTF program funds associated 5700 Stockton Blvd. 5258 , 5266, 5280, 5300, 5320, 5340 Young Street, Sacramento, California 95824 is Five Hundred Thousand Dollars and No Cents ($500,000.00) with a zero percent interest rate (0.00%).
d. The Maturity Date for the Predevelopment Loan shall be the date which is the earlier to occur of: (i) June 30, 2024 or extended upon mutual agreement; or (ii) the close of the $22,668,000 construction and permanent loan from Lender to Borrower for the Project (“Construction Loan”). Upon Borrower’s satisfaction of all conditions precedent to the funding of that Construction Loan for the Property, all funds advanced by Lender pursuant to this Loan Agreement and the Note not yet repaid to Lender shall become part of the outstanding principal amount of such Construction Loan and secure d by the security instruments, if any, executed by Borrower in connection therewith and shall be repaid pursuant to the terms of the documents evidencing such Construction Loan. Subject to the funding of the Construction Loan, the Note will be cancelled . For the avoidance of doubt, the $22,668,000 Construction Loan is inclusive of the $500,000 Predevelopment Loan proceeds.

8. ANNUAL REPAYMENT: Annual principal and interest payments shall be deferred during the initial 15-year period following conversion to permanent financing and thereafter made according to the structured payment schedule contained in the final Loan Agreement and as calculated to achieve a minimum annual debt service coverage ratio of

1.2:1. Payments shall be applied first to outstanding interest accrued and unpaid and then to principal. All outstanding principal and interest is due and payable on the Maturity Date.

9. SOURCE OF LOAN FUNDS: Agency is making the Loan from the following sources of funds, and the Loan is subject to all requirements related to the use of such, whether Agency requirements or otherwise: County Home Investment Partnership (Home), County Housing Trust Fund (HTF), State Local Housing Trust Fund, County Affordable Housing Fund (AHF), Housing Authority of the County Seller Carryback (HACOS), Housing Authority of the City Seller Carryback (HACS), City Housing Trust Fund (HTF). This Loan is conditioned upon Borrower’s acceptance of Agency’s requirements and conditions related to such lending programs and funding sources, including among others, the required forms of agreements for the Loan; the requirements for covenants, conditions and restrictions upon the Property; and insurance and indemnity requirements.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

10. Borrower acknowledges that, as a condition of the Agency’s making of the Loan, the Property will be subject to restrictions on future sales and rentals which may result in less income to Borrower than could otherwise be realized, and that such restrictions run with the land, and during their operational term, will bind all successors in interest.

___________ (Borrower Initial)

11. ACCELERATION: Agency shall have the right to accelerate repayment of the Loan in the event of a default under any Loan Document or upon sale, transfer or alienation of the Property except as specifically provided for in the Loan documents.

12. SECURITY: The Loan shall be evidenced by promissory note(s) secured by a deed of trust with assignment of rents against the fee and/or leasehold interest in the Property and Improvements, which shall be a lien upon the Property and Improvements subject only to liens senior to the Agency’s lien securing loans from a conventional lender or other lender and such other items as the Agency may approve in writing. The Loan shall also be secured by security agreements. The Agency may subordinate said deeds of trust in ord er to accommodate completion of the development of the Property. The Agency will not subordinate the regulatory agreement(s) to said deeds of trust in order to preserve the affordable housing covenants.

13. LEASE AND RENTAL SCHEDULE: All leases of the Property and Improvements shall be subject to Agency's review and approval prior to execution. Borrower shall not deviate from the rental schedule presented in Borrower's application for the Loan without Agency's prior written approval ; provided, however, that such approval shall not be required for annual adjustments to rental rates as permitted by the California Tax Credit Allocation Committee.

14. PROOF OF EQUITY : Borrower shall provide proof of equity for the Property and Improvements in the amount of no less than $30,000,000 in Low Income Housing Tax Credit Equity and no less than $5,500,000 in deferred developer fee or General Partner contribution. If LIHTC equity goes below $30,000,000 the equity must be offset by an increase in deferred developer fee or other non-Agency funding source.

15. OTHER FINANCING: Borrower, as a requirement of the Loan, shall procure and deliver to Agency evidence satisfactory to Agency that Borrower has obtained the following described financing which may be secured by a lien upon the Property and Improvements superior or subordinate to Agency's liens, and which shall be otherwise on terms and conditions acceptable to Agency:

a. As a condition precedent to disbursement of the remainder of the Agency loan, construction financing from a private lender(s) in an amount(s) sufficient to complete construction of the Property according to a scope of work as approved by Agency and made for a term not less than that specified in the Schedule of Performances for completio n of construction, and in any event not less than the

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

time necessary to fulfill all conditions precedent to funding of the permanent financing.
b. Commitments for permanent financing sufficient to “take out” all liens senior to the Agency’s lien.
c. Such commitments for financing shall not require modification of Agency loan documents, or any term of this commitment letter.
d. Such commitments shall not be based upon sources and uses of Project funds that are different from those approved by Agency for the pr oject or be subject to conditions which require amendment of the DDA, OPA or other agreements.

16. EVIDENCE OF FUNDS : Prior to the first disbursement of the Loan, Borrower must demonstrate evidence of adequate and assured funding to complete the development of the Project in accordance with the Agency's requirements. Borrower's evidence of available funds must include only one or more of the following: a) Borrower equity; b) firm and binding commitments for the Project from financial institution(s) or from ot her lender(s) approved by Agency in its absolute discretion; and c) Agency’s contribution, provided, however, that Agency is not obligated by this letter to make any contribution not stated in the terms of the letter.

17. SOILS AND TOXIC REPORTS : Pursuant to the Disposition and Development Agreement, the Agency has prepared a hazardous substances report made in accordance with the American Society for Testing and Materials "Standard Practice for Environmental Site Assessments; Phase I Environmental Site Assessment Process" (Designation E1527 - 13) prepared by a licensed or registered environmental engineer or other qualified party prior to Loan closing. As a condition of the transfer of the Agency owned property and disbursement of Loan funds, assurances must be provided that hazardous materials are not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitor ing such remediation . Borrower will be responsible for any mitigation measures after the conveyance of the property.

18. LOAN IN BALANCE: Borrower will be required to maintain the Loan "in balance". The Loan is "in balance" whenever the amount of the undisbursed Loan funds, the remaining sums to be provided by the Borrower and the loan funds from other project lenders or the equity investor are sufficient, in the sole judgement of the Agency, to pay for the remainder of the work to be done on the project as required by written agreement with the Agency.

Should the Agency determine that the Loan is not "in balance", the Agency may declare the Loan to be in default.

19. PLANS AND SPECIFICATION : Final plans and specification s, if any, for the project must be in accord with the proposal approved as part of the Loan application. Final plans and specifications will be subject to Agency's final ap proval prior to the disbursal of Agency Loan funds. Borrower must obtain Agency's prior written consent to any change in the approved plans and specifications or any material deviation in construction of the project. The final plans shall incorporate all related mitigation measure s, environmental conditions required, if any, for compliance with approvals under CEQA, and/or NEPA, or

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

the U.S. Department of Housing and Urban Development as conditions of approval of the project.

20. ARCHITECTURAL AGREEMENT: The architectural agreement (Agreement) , if any, for the preparation of the plans and specifications and other services shall be subject to Agency's approval. Agency may require an assignment of Borrower's interest in and to the Agreement as security for the Loan.

21. CONSTRUCTION CONTRACT: The construction contract ( Contract), if any, and any change orders issued thereunder, and the contractor (Contractor) to be retained by Borrower to construct the Improvements shall be subject to Agency's approval. Agency may require an assignment of Borrower's interest in and to the Contract as security for the Loan. Agency may require Contractor to provide a performance and payment bond in a form acceptable to Agency for the amount of the Contract.

22. ECONOMIC OPPORTUNITY EMPLOYMENT REQUIREMENTS : The Loan will require that to the greatest extent fea sible, opportunities for training and employment be given to lower income residents in and around the area of the project. Borrower will instruct its Contractor and its subcontractors to utilize lower income project area residents as employees to the greatest extent feasible.

23. RETENTION AMOUNT: The Agency shall retain ten percent (10.0%) of the total amount of the Loan as retention and shall be released when the Agency determines all conditions to final disbursement of the Loan have been satisfied.

24. COST BREAKDOWN: Borrower shall deliver to Agency for Agency's approval prior to commencement of work a detailed cost breakdown of the cost of constructing, financing and other costs of developing the Improvements, which breakdown conforms to the project plans and specification and the budget approved with this C ommitment. Borrower shall also deliver a list of all contractors and subcontractors to be employed in connection with the construction of the Improvements. If required by the Agency , Borrower shall also submit copies of all bids received for each item of work to be performed as well as copies of executed contracts and subcontracts with acceptable bidders.

All contracts, subcontracts, contractors, and subcontractors shall be subject to Agency's approval prior to close of the Loan. Agency also reserves the right to require performance and material payment bonds on any or all contractors, or in lieu of bond a letter of credit acceptable to Agency.

Agency shall make disbursements of the Loan based on a c ost breakdown that lists line items in cost categories. Agency shall require that Borrower provide documentation supporting all requests for disbursement of Loan funds, including proof of work done and actual expenditure. Agency shall conduct inspections of the Property to assure that the work was done before making a disbursement.

25. COST SAVINGS: At completion of construction, Borrower shall submit to Agency a cost certification prepared by a qualified, independent auditor acceptable to Agency, which cost

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

certification shall indicate the amounts actually spent for each item in the cost breakdown and shall indicate the final sources of funding. If there is an aggregate savings, in the total of all such cost breakdown items from the cost breakdown items in the original budget approved by the Agency, after adjusting for any decrease in any funding source including any loss of any equity investment due to an adjustment in the allowable tax credits, the Agency shall withhold for itself as loan repayment, one -half of such savings from the amount of retention then held by the Agency, and the Loan balance shall be reduced by the amount so withheld. The Agency, in its sole discretion, shall determine any reduction and/or repayment of the Agency loan based upon this cost certification and the original approved budget for the project.

26. START OF CONSTRUCTION : Borrower shall commence construction at the earliest possible date subject to the conditions of this Agency and other involved lenders, but no later than sixty (60) days following the close of construction financing.

27. OTHER LENDER DRAW: “Other Lender Draw” means a draw request or other request for disbursement submitted to another lender for the Project. Borrower shall concurrently submit to Agency any Other Lender Draw. Delivery of such Other Lender Draw shall be made in the same manner as any other notice, except that it shall also be marked “OTHER LENDER DRAW REQUEST” and delivered to the person named in writing by Agency as the recipient of such requests or, in the absence thereof, to Agency’s Portfolio Management office. Borrower shall provide Agency with true, accurate and correct copies of each Other Lender Draw, if any, including without limitation all supporting information, documents, and other required submittals. Agency shall have the right to reject an Other Lender Draw, for failing to comply with the Loan, for changing the Project in any material way, or for impairing the ability of Agency to enjoy the practical realization of its rig hts under the Loan and its related instruments. If Agency rejects an Other Lender Draw, Borrower shall withdraw the notice for such Other Lender Draw and shall not accept and shall return to Agency any disbursement on account of such Other Lender Draw.

28. COMPLETION OF CONSTRUCTION: Borrower shall complete the construction of the Improvements no later than twenty-four (24) months following the close of construction financing.

29. SECURITY CAMERAS AND OUTSIDE LIGHTING : Project shall include installation of a security camera system at vehicular driveways and additional exterior lighting, and security patrols, all as approved by the Agency.

30. INSURANCE PROVIDER : Each policy of insurance required under the Loan shall be obtained from a provider licensed to do business in California and having a current Best's Insurance Guide rating of A VII, which rating has been substantially the same or increasing for the last five (5) years, or such other equivalent rating, as may reason ably be approved by Agency's legal counsel.

31. PROPERTY INSURANCE: Borrower shall procure and maintain property insurance and during construction Builder's Risk completed value insurance in a form and substance approved by Agency. Coverage shall be for protection against loss of, or damage to the

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Improvements or materials for their construction to their full insurable value. Borrower shall also procure and maintain insurance against specific hazards a ffecting Agency's security for the Loan as may be required by Agency, governmental regulations, or any permanent lender. All such policies shall contain a standard mortgagee loss payable clause in favor of Agency. The insurance required shall be written with a deductible of not more than $25,000.00.

32. COMMERCIAL GENERAL LIABILITY AND OTHER INSURANCE:

Borrower shall carry insurance as set forth below effective prior to the disbursement of the Loan, and such insurance shall be maintained in full force and effect at all times and work is performed in connection with the project. Such insurance coverage must list the Agency as an additional insured, and must be approved in writing by Agency prior to the disbursement of the Loan.
a. Commercial general liability insurance, in Insurance Services Office (ISO) policy form CG 00 01 or equivalent, with limits of liability not less than: $1,000,000 per occurrence, and $5,000,000 general aggregate, all per location of the project, such coverage to include contractual liability to include bodily injury, property damage and personal injury;
b. Personal injury insurance with the employment exclusion deleted, unless the Agency gives prior written approval for the employment exclusion to remain in the policy;
c. Commercial automobile liability insurance for any vehicle used for or in connection with the project, in an amount not less than $1,000,000 and approved in writing by Agency; and
d. Workers’ compensation and all other insurance required under applicable law, in the amount required by applicable law or by Agency, whichever amount is greater.

33. TITLE COMPANY: Borrower must procure a Title Company in the Sacramento region.

Title Company is the insurer of title and the escrow holder. The Title Company is Placer Title Company located at 301 University Avenue, Suite 120, Sacramento, CA 95825.

34. TITLE INSURANCE: Borrower must procure and deliver to Agency a n ALTA Lender's Policy of Title Insurance, together with such endorsements as Agency may require, including but not limited to ALTA endorsement nos. 9.6 and 9.7 (or CLTA endorsement nos. 100 and 116) and CLTA endorsement nos. 102.5/102.7 insuring Agency in an amount equal to the principal amount of the Loan and covenants, conditions or restrictions of the Loan, that Agency's Deed of Trust constitutes a third lien or charge upon the Property and Improvements subject only to such items as shall have been approved by Agency. There must be no exceptions permitted for mechanics liens. Title insurance for the Loan must be issued by a title insurer approved by Agency.

35. ORGANIZATIONAL AGREEMENTS: Borrower must submit to Agency certified copies of all of Borrower’s organizational documents, including all amendments, modifications or terminations: if a corporation, Borrower's Articles of Incorporation and By -Laws; if a partnership, its Partnership Agreement and, as applicable, Certificate of Limited Partnership or Statement of Partnership; if a Limited Liability Company, its Articles of

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Organization and its Operating Agreement; and in all cases with all exhibits and amendments to such documents, fictitious business name statements, other related filings or recorded documents and such related documents as Agency may request. If it is a corporation, Borrower must submit a corporate borrowing resolution referencing this Loan.

If Borrower is other than a corporation, Borrower must submit such proof of authority to enter this Loan as may be required under the organizational documents.

36. PURCHASE OF PROPERTY : Borrower shall provide Agency with copies of all documents relating to Borrower's purchase of the Property.

37. FINANCIAL INFORMATION: During the term of the Loan, Borrower shall deliver to Agency within 120 days of the end of each fiscal year an audited income and expense statement, a balance sheet, and a statement of all c hanges in financial position signed by authorized officers of Borrower. Prior to close of the Loan and during its term, Borrower must deliver to Agency such additional financial information as may be requested by Agency. Agency reserves the right to revi ew and approve financial statements and other credit information and references prior to closing. During the term of the Loan, Borrower must deliver to Agency a monthly rent -roll including household composition information and operating statements with respect to the Property and Improvements, as Agency may request.

38. MANAGEMENT AGREEMENT: Prior to execution, Borrower must submit to Agency any agreement providing for the management or operation of the Property or Improvements by a third party which agreement is subject to Agency Approval.

39. AFFIRMATIVE FAIR MARKETING : Borrower agrees to follow the Agency’s Affirmative Marketing Policies that require outreach to groups least likely to apply for the housing based on local demographic information, providing sufficient marketing time prior to lease Up (as defined in the Affirmative Marketing Policies), and lotteries or other method for initial Lease Up and initial waiting list creation, as agreed upon by the Agency and Borrower prior to the start of Lease Up.

40. RESIDENT SERVICES AGREEMENT : Prior to execution, Borrower must submit to Agency any agreement providing for the resident services by a third party which agreement is subject to Agency Approval. The agreement must include on -site resident services according to the following minimum schedule of twenty (20) hours per week:

a. Coordinator: Six (6) hours per week (maximum)
b. After School Programming: Eight (8) hours per week (two hours per day and four days per week, minimum)
c. Additional Programming: Balance of minimum three ( 6) hours per week shall include, but are not limited to:
i. Workforce development support and activities.
ii. Education classes such as nutrition, exercise, health resources, health insurance application assistance, Annual onsite health fair and ESL classes. iii. Socialization activities such as bingo, gardening and community building events.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

iv. Other services such as transportation assistance, counseling assistance and employee readiness and job search assistance.

41. LOW INCOME HOUSING TAX CREDITS (LIHTC): Borrower represents that as a condition of closing this Loan it is applying for an allocation of LIHTC’s and agrees to perform all actions and to meet all requirements to maintain the LIHTC allocation if granted.

42. SMOKE-FREE ENVIRONMENT: 100% of the buildings and units must be smoke free (including all forms of smoking that create secondhand smoke that impacts the health of nonsmokers). In addition, all indoor common areas must be smoke-free. Clearly-marked designated smoking areas must be provided.

43. DOCUMENTATION: This letter is not intended to describe all of the requirements, terms, conditions and documents for the Loan, which shall also include customary provisions and documents for an Agency transaction of this type. All documents to be delivered to or approved by Agency must be satisfactory to Agency in all respects. Borrower must promptly deliver to Agency any further documentation that may be required by Agency.

44. CONSISTENCY OF DOCUMENTS: As a material obligation under this C ommitment, Borrower shall assure that the loan documents for the Project are consistent with lender's commitment approved by the Agency and comply, in all respects, with this Commitment.

45. CHANGES OR AMENDMENTS: No documents or contracts which are to be delivered to Agency or are subject to Agency's review or approval shall be modified or terminated without the prior written approval of Agency.

46. ACCEPTANCE OF THIS COMMITMENT: Borrower’s acceptance of this Commitment shall be evidenced by signing and deliv ering to Agency the enclosed copy of this letter.

Until receipt of such acceptance by Agency, Agency shall have no obligation under this letter. Agency may withdraw this Commitment at any time prior to Borrower’s acceptance.

Signatures appear on the following page.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Sincerely,

__________________________________
La Shelle Dozier, Executive Director

The undersigned acknowledges and accepts the terms and conditions of the Commitment and Scope of Development and Rental Property Minimum Construction Standards (Exhibit 1), and has executed this Commitment as of the Effective Date.

BORROWER:

San Juan Mutual Housing Associates, L.P.,
a California limited partnership

By: San Juan Mutual Housing Association LLC,
a California limited liability company,
its co-general partner

By: Mutual Housing California,
a California nonprofit public benefit corporation,
its sole member/manager

By: _____________________________
Roberto Jimenez
Chief Executive Officer

Attachment:

Exhibit 1 - Scope of Development and Rental Property Minimum Construction Standards

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Exhibit 1 - Scope of Development

I. Project Description

San Juan Apartments by Mutual Housing is located at 5700 Stockton Boulevard in Sacramento, and consists of seven parcels, some of which are located within the City of Sacramento, and some of which are located within the unincorporated Sacramento County. The new construction project will bring 113 units of affordable housing to South Sacramento. The Project will comply with the American with Disabilities Act (ADA).

Construction materials will be new, excepting recycled items with written pre-approval from SHRA. All building and site improvements will adhere to SHRA’s minimum construction standards.

II. Site Improvements

1. Landscaping: Project will be designed in accordance with County requirements and subject to SHRA approval.

2. Irrigation System: The automated irrigation system incorporates a “SMART controller” that senses rain to reduce water use. Irrigation piping and fixtures shall be installed with new system that includes appropriate water efficient fixtures.

3. Playground Equipment: A playground with equipment suitable for children up to age 12, and equipment suitable for toddlers, will be installed onsite.

4. Pedestrian and Fire-access Gates: Gates will meet code requirements.

5. Site Accessories: Bike racks, tables, benches, barbeques, etc., will be included in the development. A swimming pool in a size to be approved by SHRA will also be included.

6. Perimeter Fence: The site will include full perimeter wrought iron fencing.

7. Asphalt Parking Lot and Drive Aisles: Parking lot and drive aisles will be designed in accordance with geotechnical recommendations. The parking lot will meet current code and ADA requirements, with respect to including required ADA van accessible parking.

III. Building Exterior Improvements

8. Roof: The roofing of all buildings have a minimum 20-year warranty Asphalt Composition Shingles.

9. Gutters, Downspouts and Downspout Extensions: All gutters, downspouts and downspout extensions will be new and connected to a storm drain system and/or routed to surface drain to site bio-retention planters.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

10. Balcony and Patio Enclosures: 21 ground floor apartments will have private patios on grade; while 20 upper level apartments will have balconies with composite decking.

11. Paint: Building will have interior and exterior painting. Non-habitable structures on the property will match the habitable buildings.

12. Windows and Sliders: All windows will be energy-efficient windows. Windows will be designed to open and will have screens. Operable windows will have functional locks, and will be operable without excessive effort.

13. Trash Enclosures: The site will contain two trash enclosures with concrete aprons.

14. Lighting: The exterior wall light fixtures will feature energy efficient wallpacks to increase visibility. Site pole lights will have LED fixtures.

15. Sidewalks and Ramps: The sidewalks and ramps will meet current code and ADA requirements throughout the Project.

16. Mailbox Units: N/A

17. Stairways, Railings and Landings: Common area stairs will meet current accessible codes for treads and risers, guardrails and handrails. Bottom of stairs will either be closed off for storage or provided with cane rails. Stairways in common areas will include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

18. Signage: Monument signage, buildings, apartments, garages, parking, ADA, and property signage throughout as required by current code.

19. Security: New CCTV system with web-based cameras at primary automobile entrances, parking, common areas, mailboxes and community room(s).

20. Exterior Building Systems: Exterior mounted electrical, mechanical, and plumbing systems will be protected from vandalism

IV. Building Interior

1. ADA units: The project will contain fully accessible units and hearing/visual equipped units at or above the minimum number required by building code, SHRA, or other state agency.

2. Kitchens: All kitchens will have new solid-surface counters, cabinets, drawers, refrigerator/freezer combination appliances, free-standing electric range/oven combination appliances, ventilation hood appliances, dishwashers, sinks, garbage disposals, angle stops, low-flow faucets and finishes. All appliances will be EnergyStar or better. All kitchens will have adequate counter space and cabinet space. Shelving for microwaves will be provided in non-ADA units.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

3. Bathrooms: All bathrooms will have solid-surface counters, sinks, tubs and surrounds, accessories (i.e., toilet paper holders, towel racks, shower rods and curtains), low-flow showerheads, low-flow toilets and low-flow faucets. Vanities will have cabinets and drawers. A humidistat fan will be installed in all bathrooms. Tub surrounds will be one single solid surface per wall.

4. Ceilings and Walls: All interior walls and ceilings will have a drywall finish. In select areas of common areas (lobbies, community room, office areas, etc.) higher grade finishes (wood, tile, etc.) and acoustic panels / clouds may be used.

5. Doors: All doors will be new and will meet current egress standards. All door hardware will have matching finishes. Exterior doors will have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware will have single action hardware to release deadbolt and latch assembly. All sliding exterior doors will have screen doors and shall have functional locks and must operate freely without excessive effort.

6. Flooring: New vinyl sheet flooring will be installed in all residential unit bathrooms and living rooms. New LVP flooring (minimum 20 millimeter layer) will be installed in the kitchens. Carpet will be installed in bedrooms.

7. Windows: New window blinds will be installed on all windows and sliders.

8. Paint: Paint will be applied to all walls, ceilings, and trim, in all rooms, closets and storage rooms.

9. Electrical: GFI outlets will be installed to code. New hardwired smoke and CO detectors will be installed in the hallways of all units. New hardwired smoke detectors will be installed in the bedrooms of all units. Broadband infrastructure will be provided.

10. Lighting: All kitchens, dining rooms, bedrooms, bathrooms and hallways will have new energy efficient light fixtures installed.

V. Community Areas

1. Community Room, Office, Kitchen and Restroom:

a) The community building will contain a multipurpose room with shared kitchen, offices, and other community space.

b) The kitchen will have solid-surface counters, refrigerator/freezer combination appliance, free-standing electric range/oven combination appliances, micro-hood combination appliance, dishwasher, sink, garbage disposal and low-flow faucets. All appliances will be EnergyStar or better. Furniture, fixtures, and cabinets will be

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

installed.

c) The restrooms will meet current code and ADA requirements.

d) Flooring in common areas will be LVP (minimum 20 mil wear layer) or carpet.

VI. Laundry Facilities:

1. All laundry facilities will meet code and ADA requirements. New vinyl sheet flooring, windows, doors, washer and dryer appliances, counter for folding laundry, lighting fixtures, humidistat

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Attachment 1: Rental Property Minimum Construction Standards are on the following page.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Attachment 1: Lender’s Minimum Construction Standards
This attachment is from Exhibit 2 from the Lender’s Multifamily Lending and Mortgage Revenue Bond Policies.

RENTAL PROPERTY MINIMUM CONSTRUCTION STANDARDS

The following is a list of the required minimum construction standards that must be incorporated into projects participating in SHRA’s Multifamily Financing and/or Mortgage Revenue Bond programs. All rental units and sites associated with these projects must meet or exceed these standards. Exceptions to these standards may be made for properties subject to U.S. Department of Housing and Urban Development replacement reserve requirements that allow for renovation over time rather than at recapitalization (e.g., Rental Assistance Demonstration conversions for conventional public housing).

Note: For rehabilitation projects, all of the following standards shall apply. The non-rehabilitation sections below shall apply to new construction projects.

Useful Life Expectancy – Rehabilitation only

SHRA shall reference the current edition of FannieMae’s “Instructions for Performing a Multifamily Property Condition Assessment, Appendix F. Estimated Useful Life Tables” in determining the useful life for all building components and systems located within the project. A remaining useful life of 15 years or m ore is required for all building components and systems located within the approved complex. All items on the FannieMae tables with useful lives indicated to be less than 15 years shall be replaced.

General Requirements

A. All materials funded under this loan must be new unless previously approved. Recycled items must be approved in writing by SHRA prior to their use.

B. All work shall comply with Federal and State ADA accessibility requirements, as well as any other requirements stipulated by the funding source(s). When there are differences the stricter of the two shall apply.

The developer is responsible for notifying their architect and/or engineer of all funding sources used on the project. The architect and/or engineer must indicate these funding require ments in the project’s plans/scope.

C. All units shall be approved for occupancy by the local Building Department or any other Agency Having Jurisdiction (AHJ) at the conclusion of the work and prior to occupancy.

D. Web-based security cameras and the equipment to record events are required for primary ingress/egress points to and from the site and for the principal parking and indoor and outdoor common areas where people will be congregating.

E. Site lighting is required for all parking and outside public spaces, and shall be of LED or similarly energy efficient type. The lenses on the exterior lights shall be cleaned with all oxidation removed or replaced. Light poles shall be new or painted, and shall be structurally sound and stable.

F. The developer’s architect is responsible for providing an Operating Procedure Outline Sheet (OPOS) for window washing systems where applicable, per Cal-OSHA requirements.

G. SHRA encourages the use of energy and water-efficient systems wherever they may be incorporated into the project.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

General Requirements – Rehabilitation only

A. Any component of the project which does or may present a health or safety hazard to the public or tenants shall be corrected to the satisfaction of the local Building Department or AHJ.

B. A clear pest inspection report will be required at the conclusion of the construction work for rehabilitation projects.

C. For all structures where disturbance of any hazardous materials (e.g. lead, asbestos, mold, etc.) will occur, a clearance report from an environmental consultant is required.

D. Projects deemed historically significant landmark by either the City of Sacramento or the National Register of Historic Places shall consult with the State Historic Preservation Officer (SHPO), and shall conform to the Secretary of the Interior Standards for the Treatment of Historic Properties.

Site Work

A. Trees and large shrubs must be trimmed, grass areas must be mowed, and all planter areas must be weed -free.

The landscape design shall incorporate a sustainable design appropriate for the Sacramento Valley. Vegetation that assists in minimizing crime and enhances public safety is preferred. Trees compromising building envelope materials (roofing, siding, windows, etc.) and/or structural integrity (including foundations) must b e removed.

An arborist shall be consulted for an opinion on trees prior to major branch trimming, root cutting or tree removal. All trees, bushes and other plants that are to be removed shall have the root ball removed by grinding or by mechanical means. A landscape plan describing the above must be provided to SHRA for approval.

B. All landscaped areas must be served by a programmable automated irrigation system. The irrigation controller shall be a “Smart Controller” that senses rain to reduce water use. Irrigation shall be designed to use bubblers and other water saving measures. Irrigation must not spray on building. Sprinklers should minimize overspray that runs to storm drain drop inlets. Areas that show evidence of erosion of soil shall be landscaped to eliminate problems. The landscape plan must be approved by SHRA and applied.

C. For gated communities containing swinging vehicle gates, driveways shall be striped to show the area under the gate swings for safety purposes.

D. All projects shall contain trash enclosures with concrete aprons. Trash enclosures shall be made of cinder block or stucco. Trash enclosures shall be accessible to all tenants. Provisions for tenants with disabilities must be addressed in the project Scope of Development or the project plans.

E. All projects shall meet the parking requirements of the local Agency Having Jurisdiction (AHJ) over the project. "Grandfathered Projects" will need to show that they are in fact “Grandfathered” or otherwise exempted by the local AHJ. Otherwise, all projects shall meet the governing ADA requirements for parking.

F. A two percent (2%) slope shall be maintained for a distance of five feet from all structures and no standing water shall remain on the site. Provide an on- site drainage system if necessary.

G. Stairways in common areas must include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

H. Exterior mounted electrical, mechanical, and plumbing systems must be protected from vandalism.

I. For family projects of 50 or more units, a minimum of one school age-appropriate play structure is required. For family projects of 100 or more units, a minimum of one school age and one toddler -appropriate play structure is required.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Site Work – Rehabilitation only

A. All landscaping and irrigation systems must be in a well-maintained condition.

B. All fencing must be in good and serviceable condition. Existing fencing that is to remain shall be free of flaking paint, rust, or any other signs of failure. If existing fencing shows any signs of failure, it shall be repaired, painted and restored to look new. All chain link fencing must be removed and replaced with fencing of another approved material. All pedestrian gates hardware must be functional and in new or near -new condition. Access Control systems are required at exterior pedestrian gates.

C. All driveways and sidewalks must be in good condition. All cracked or uplifted areas (more than ¼”) shall be repaired or replaced.

D. The asphalt shall be in good condition, with no alligator cracking, longitudinal cracking, potholes, or standing water. Repairs to portions of parking lots not suitable for new coatings shall be performed by removing and replacing damaged paving. A new seal-coat or slurry-coat shall then be applied to the entire parking lot surface.

Parking spaces shall be restriped, including ADA aisles and other applicable striping/painting.

E. All site accessories (bollards, benches, tables, play equipment, bike racks, mailboxes, shade structures, BBQs, sheds, etc.) shall be replaced or in good repair (cleaned, painted and/or re-coated).

Building Envelope and Moisture Protection – Rehabilitation only

A. All areas exposed to moisture must be sealed and watertight. Buildings showing evidence of water intrusion shall have the areas inspected by a licensed architect/engineer or by a certified water intrusion expert. A water intrusion report shall be submitted to SHRA, and shall include the cause of the issue and a resolution to eradicate the water intrusion. If the inspection cannot be completed until the demolition phase of the project, the report shall describe a procedure to inspect the issue during demolition.

B. Roofing must have 15 years or more of remaining life with no visible signs of leakage. For roofs containing composition shingles, a maximum of two layers of shingles are allowed (including any proposed new layers).

Provide evidence that the roof system has a 15-year life remaining on the manufacturer’s warranty.

C. All siding must have 15 years or more of remaining life. Hairline cracks in stucco must be sealed and painted with elastomeric paint. If requested by SHRA, a statement by a licensed architect and/or engineer that the existing siding contains at least 15 years of useful life remaining shall be provided.

D. Fireplaces must be clean and meet applicable air quality standards. Chimneys shall be clean and must be inspected by a certified chimney inspector for structural integrity. All recommended structural repairs shall be performed.

Doors and Windows

A. All dwelling/tenant units must have screens on all windows that are designed to open. Windows designed to open must have functional locks and must operate freely without excessive effort. All windows must be dual - paned (minimum), and shall meet or exceed the State of California’s currently applicable efficiency standards, and any other efficiency standards that may be dictated by the funding source or other governing bodies for the project.

B. All doors must have matching hardware finishes.

C. All exterior doors must have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware shall have single action hardware to release deadbolt and latch assembly.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

D. All sliding exterior doors shall have screen doors and shall have functional locks and must operate freely without excessive effort.

E. All doors and windows must meet current egress standards.

Doors and Windows – Rehabilitation only
A. Any windows showing signs of condensation or leakage of any kind shall be replaced. SHRA allows window replacement using retrofit windows when those windows are installed by trained professionals following manufacturer’s specifications. Retrofit windows must have a similar useful life as “new, construction” (i.e., nail fin) windows.

B. All doors and doorjambs must be in good condition. No damaged or worn doorjambs or doors are allowed.

Doors and/or jambs beyond their useful life shall be replaced.

Casework

A. New cabinet boxes shall be made of plywood or solid wood. No particle board boxes will be allowed.

B. All counter tops shall be of solid surface or granite, and in very good condition with no significant scratches, burns or other imperfections.

C. Face frames, doors and drawer faces shall be solid hardwood. No plastic laminate finishes will be allowed.

Casework – Rehabilitation only

A. All cabinets shall be replaced or in very good condition, within their 15 year useful life, both structurally and in appearance.

Finishes

A. All dwelling unit kitchens shall contain luxury vinyl plank (LVP) flooring. Bathrooms must be floored with LVP, sheet vinyl or ceramic tile to provide a cleanable, impervious surface. Bedrooms, hallways, and living and dining rooms may be floored with carpeting, LVP or hardwood. Wear layer of LVP shall be at least 12 mils inside dwelling units. Tenant unit entries shall be floored with LVP or ceramic tile.

B. In common areas, corridors may be floored with LVP, glue-down carpeting, or carpet tiles. Community rooms and kitchens shall be floored with LVP. Wear layer of LVP in common/commercial areas shall be a minimum of 20 mils thick.

C. Carpet shall meet or exceed the minimum standards as set by HUD’s UM-44D bulletin.

Finishes – Rehabilitation only

A. Floor coverings must be in good, useable condition - no holes, tears, rips, or stains.

B. All exterior and interior surfaces must be painted. No peeling, cracking, chipping, or otherwise failing paint will be allowed. All painted surfaces must be new, or in near new condition and appearance.

C. Acoustic (popcorn) ceiling texture must be removed and refinished with new texture to match wall texture.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Equipment

A. Dishwashers, refrigerator/freezer, oven, stoves and garbage disposals are required in all dwelling unit kitchens.

All appliances must be new or in very good operating condition. All appliances must be Energy Star rated, as applicable. Appliances slated for ADA units shall be per code requirements.

B. SRO projects are encouraged to provide the appliances listed above and will be reviewed and approved on a case-by-case basis.

C. All kitchens must have adequate cabinet and counter space. Installation of shelving for microwaves is required if over-the-range microwaves are not used, with the exception of ADA units.

Furnishings

A. Dwelling units must have window coverings on all windows.

Special Construction

A. Non-habitable structures on property must be painted to match primary buildings and must be structurally sound.

B. Laundry facilities must, at a minimum, be consistent with CTCAC requirements of one washer and dryer for every ten dwelling units for family housing and one for every 15 units for senior and special needs projects. Ten percent of the total number of washer/dryers must be ADA-accessible machines (unless the ADA units contain their own laundry facilities). Solid surface countertops will be required within laundry rooms and countertops shall meet all ADA requirements.

C. Public pool areas shall have self-closing gate(s). Fences and gates at pool areas shall meet applicable current codes and standards. Joints between coping and concrete deck shall be appropriately caulked. Existing pools shall have no cracks in plaster or tile grout joints. The Developer is responsible for ensuring pool and surroundings meet all applicable current codes and standards. If a project contains two or more pools, at least one must remain following rehabilitation.

Mechanical/Plumbing

A. Water heaters must be installed per current applicable codes.

B. All common areas and tenant units must have heating and air conditioning. Wall mount (i.e. PTAC units) or central systems are acceptable. Evaporative coolers are not acceptable. HVAC units should be protected from vandalism, pursuant to discretion of SHRA.

C. Toilets, showerheads, faucets, and mixing valves shall be new and meet current water conservation codes.

D. Tub surrounds must be one unbroken piece per wall and must be of solid surfaces (such as “Swanstone” or other solid acrylic materials, quartz composites), or other similar materials. Fiberglass/acrylic surrounds are acceptable.

Mechanical/Plumbing – Rehabilitation only

A. All toilets, sinks, and tubs shall be chip and stain free.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Electrical

A. All units must have smoke/carbon monoxide detectors installed per current code.

B. Wiring from telephone/data/cable suppliers shall be installed within walls, attic spaces, and/or crawl spaces. No conduits are allowed to be mounted on the exterior of the buildings in new construction.

C. Broadband infrastructure meeting the requirements of 24 CFR 5.100* is required in all new construction projects of 4 or more units.

*Broadband infrastructure means cables, fiber optics, wiring, or other permanent (integral to the structure) infrastructure, including wireless infrastructure, that is capable of providing access to Internet connections in individual housing units, and that meets the definition of “advanced telecommunications capability” determined by the Federal Communications Commission under section 706 of the Telecommunications Act of 19 96 (47 U.S.C. 1302).

Electrical – Rehabilitation only

A. All electrical panels shall meet current code.

B. Any rehabilitation projects with un-grounded electrical systems shall be re-wired with grounded systems to meet current code.

C. For rehabilitation projects, switches, outlets and light fixtures shall be replaced with devices that meet current applicable codes.

D. Wiring mounted on the exterior of the surface may be allowed if it is concealed in conduit and conduit is painted to match exterior siding. For projects where exterior siding will be removed, this wiring shall be installed within walls, attic spaces, and/or crawl spaces.

Resident Services Community Space

All properties, regardless of project type (i.e. senior, family, or large family), must devote a minimum of 1,200 s.f. to actual resident services/community space. Resident services space includes common kitchens, computer rooms, meeting rooms and general gathering space. It does not include public restrooms, leasing offices, laundry facilities and lobbies. Common kitchens are required, including refrigerator, stove, garbage disposal, and dishwasher.

For existing buildings, these requirements shall apply unless SHRA deems there to be significant physical constraints.

End of Scope of Development.

RESOLUTION NO. 2023 -

Adopted by the Housing Authority of the City of Sacramento

on date of

SAN JUAN APARTMENTS BY MUTUAL HOUSING (PROJECT): A RESOLUTION OF

THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO (HOUSING

AUTHORITY) APPROVING THE CONDITIONAL LOAN COMMITMENT AND DISPOSITION AND DEVELOPMENT AGREEMENT; EXECUTION OF THE

CONDITIONAL LOAN COMMITMENT AND DISPOSITION AND DEVELOPMENT

AGREEMENT AND RELATED DOCUMENTS WITH SAN JUAN MUTUAL HOUSING ASSOCIATED L.P. OR RELATED ENTITY; RELATED BUDGET AMENDMENT; RELATED FINDINGS; AND ENVIRONMENTAL FINDINGS

BACKGROUND

A. The San Juan site is comprised of eight parcels located on Stockton Boulevard and Young Street, just south of Fruitridge Road. The parcels, located in both the City and County, were purchased to eliminate the blighting influence caused by the former San Juan Motel and Mobile Home Park on Stockton Boulevard and to assemble a larger site for a high-quality development project.

B. In November 2016, the Housing Authority appr oved the City’s Vacant Lot Disposition Strategy and was given the authorization to release the Housing Authority-owned San Juan parcels (Site) as a Housing Opportunity Site.

C. In November 2016, the Site was identified to be exempt surplus land and directed to be used as an affordable housing site with restrictions consistent with California Government Code 25539.4.

D. In August 2020, the Sacramento Housing and Redevelopment Agency released a Request for Proposals for an Affordable Development for the Site.

E. In December 2020, Mutual Housing California was selected to become the developer of the Site based on an application that included the following properties:

1. 5258 Young Street (APN 026-0073-003), located in County and owned by the Housing Authority of the County of Sacramento

2. 5266 Young Street (APN 026-0073-0004), located in the City and owned by the Housing Authority of the City of Sacramento

3. 5280 Young Street (APN 026 -0073-0005), located in City and owned by the Housing Authority of the City of Sacramento

4. 5300 Young Street (APN 0026 -0073-0006), located in City owned by the Housing Authority of the City of Sacramento

5. 5320 Young Street (APN 0026 -0073-0007), located in City owned by the Housing Authority of the City of Sacramento

6. 5340 Young Street (APN 0026 -0073-0008) located in City owned by the Housing Authority of the City of Sacramento

7. 5700 Stockton Blvd. (APN 026 -0073-014), located in County owned by the Housing Authority of the City of Sacramento

8. 5716 Stockton Blvd. (APN 026-0073-017), located in the County owned by the Housing Authority of the County

F. The Site has been spilt into two phases or projects for feasibility purposes , and Phase 1 will include properties 1-7 (as referenced above) and called the Project.

Phase 2 will include 5716 Stockton Blvd. and will be part of a subsequent action.

G. Mutual Housing California has worked on behalf of the Housing Authority to obtain entitlements for the Site and will develop the Site as affordable multifamily housing.

H. The Project will be a total of 113 units comprised of one, two, and three-bedroom units. Amenities on -site include landscaped courtyards, picnic tables, a laundry facility, and 114 parking spaces. The development includes a community room with a kitchen, management and resident services offices, restrooms, and a playground for school-aged youth as well as a swimming pool.

I. The Housing Authority and San Juan Mutual Housing Associates L.P., or related entity desire to enter into a Disposition and Development Agreement ( DDA) for 5266 Young Street, 5280 Young Street, 5300 Young Street, 5320 Young Street, 5340 Young Street, and 5700 Stockton Blvd.

J. The Housing Autho rity will dispose of 5266 Young Street, 52 80 Young Street, 5300 Young Street, 5320 Young Street, 5340 Young Street, and 5700 Stockton Blvd. Street at fair market value and provide seller carryback financing.

K. The public hearing required for the disposition of housing authority property under Health and Safety Code section 34312.3(b) was held on February 7, 2023.

L. The project is statutorily exempt pursuant to California Environmental Quality Act Guidelines Section 21155 (Transit Priority project requirements).

M. Pursuant to the provisions of the National Environmental Policy Act, an Environmental Assessment is in the process of being prepared for the project, and it is anticipated that the project will not result in a significant impact on the quality of the human environment, with mitigation measures incorporated.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO RESOLVES AS FOLLOWS:

Section 1. All evidence presented having been duly considered, the findings, including environmental findings regarding this action, as stated above, are found to be true and accurate and are hereby approved adopted.

Section 2. The Disposition and Development Agreement attached as Exhibit A and incorporated into this resolution for financing the Project is approved and the Executive Director, or her designee, is authorized to enter into, execute and transmit the D isposition and Development Agreement to San Juan

Mutual Housing Associates, L.P., or a partnership of which Mutual Housing California (Developer) or a related entity to the Developer is the general partner.

Section 3. The Executive Director, or her designee, is authorized to enter into, execute, and amend as needed the Disposition and Development Agreements and all other documents and agreements deemed necessary, as approved to form by its Office of the General Counsel, as well as amend the budget, perform other actions deemed necessary to ensure proper repayment of the Housing Authority funds including, without limitation, extensions and restructuring of loans consistent with the Housing Authority adopted policies and with this resolution.

Section 4. The Loan Commitment letter attached as Exhibit B and incorporated in this resolution by this reference for the financing of the San Juan by Mutual Housing Project is approved and includes in seller carryback funding for $545,000 for the acquisition of 5266 Young Street, 5280 Young Street, 5300 Young Street, 5320 Young Street, 5340 Young Street, and 5700 Stockton Blvd. Street included in the San Juan Apartments by Mutual Housing Project and the Executive Director, or her designee, is authorized to enter into, execute and transmit the Loan Commitment to San Juan Mutual Housing Associates, L.P., or a partnership of which Developer or a related entity to the Developer is the general partner.

Table of Contents:

Exhibit A: Disposition and Development Agreement
Exbibit B: Loan Commitment Letter

NO FEE DOCUMENT:

Entitled to free recording
per Government Code 27383.

When recorded, return to:

SACRAMENTO HOUSING AND REDEVELOPMENT AGENCY
801 12th Street
Sacramento, CA 95814

DISPOSITION AND DEVELOPMENT AGREEMENT
5700 STOCKTON BLVD; 5266, 5280, 5300, 5320, 5340 YOUNG STREET

SAN JUAN APARTMENTS BY MUTUAL HOUSING

HOUSING AUTHORITY OF THE CITY OF SACRAMENTO
SAN JUAN MUTUAL HOUSING ASSOCIATES, L.P.
***Effective Date***
Disposition and Development Agreement

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DISPOSITION AND DEVELOPMENT AGREEMENT
5700 Stockton Blvd; 5266, 5280, 5300, 5320, 5340 Young Street San Juan Apartments by Mutual Housing

THE HOUSING AUTHORITY OF THE CITY OF (“Agency”), and SAN JUAN MUTUAL HOUSING ASSOCIATES, L.P. (“Developer”) enter into this Disposition and Development Agreement (this “DDA”), as of ***Effective Date*** and expires on June 30, 2025 unless extended upon mutual agreement (“Expiration Date”). For purposes of this DDA, the capitalized terms shall have the meanings assigned in Section 18.

RECITALS

A. Agency is the owner of real property l ocated at 5700 Stockton Blvd; 5266, 52 80, 5300, 5320, 5340 Young Street in the City of Sacramento, State of California, more particularly described in the Property Description.

B. Developer intends to purchase the Property from Agency . In accordance with Hea lth & Safety Code Section 34312.3(b), Agency has held, or will hold, a public hearing to disclose the disposition of the Property. Upon disposition of the Property, proceeds will be used directly to assist the development of low income housing within Agency’s boundaries.

C. Agency will transfer Agency's interests in the Property to Developer upon the express condition that Developer will develop the Property in accordance with the Scope of Development for the uses described in this DDA. This DDA is intended to assure that the Developer will develop the Property and that the Developer is not merely speculating in land.

D. Developer desires to purchase and develop the Property, and Agency desires to sell the Property for development, on the terms and conditions in this DDA.

AGREEMENT

NOW THEREFORE, the parties acknowledge that the foregoing Recitals are true and correct, and based upon such Recitals and in consideration of the following mutual covenants, obligations and agreements and for other good and valuabl e consideration, the receipt and adequacy of which are acknowledged, the parties agree as follows:

1. PERFORMANCE. The parties shall perform their obligations at the times and in the manner specified in this DDA. The time for performance is stated in this DDA and in the Schedule of Performances; provided, however that such times shall be extended for periods of Unavoidable Delay.

2. PROJECT DESCRIPTION. Agency is entering into this DDA and conveying the Property to Developer solely for the purposes of develo ping the San Juan Apartments by Mutual Housing Disposition and Development Agreement

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Project. The Project will consist of 4.3 acres of land, including seven (7) parcels located at the intersection of Stockton B oulevard and Young Street. Five (5) of the seven (7) parcels are located in the City and two (2) are located in the County. Developer will develop a new 113-unit family affordable housing project.

3. PURCHASE AND SALE. Agency agrees to sell and Developer agrees to purchase the Property subject to the terms and conditions in this DDA. This DDA, if executed by Developer only, constitutes Developer’s offer to purchase the Property on the terms and conditions contained in this DDA and subject to the covenants, conditions and restrictions contained in the Regulatory Agreement to be executed by Agency and Developer and recorded on the Property upon conveyance of the Property to Developer.

3.1. PURCHASE PRICE. The Purchase Price for the Property shall be Five Hundred Forty - Five Thousand Dollars and No Cents ($545,000) and shall be payable pursuant t o the Funding Agreement as described in Section 4, below

3.2. ESCROW. Developer and Agency have opened, or within ten (10) days after the Effective Date, shall open, the Escrow account.

3.3. CONDITIONS TO AGENCY'S PERFORMANCE. Agency's obligation to perform und er this DDA is subject to all of the following conditions:

3.3.1. Developer has performed all of the obligations that it is required to perform pursuant to this DDA, including without limitation, obtaining all required approvals of the Plans; obtaining building permits sufficient to commence Project construction; providing all required budgets, reports and evidence of funding and insurance; and providing required construction contracts.

3.3.2. The closing conditions as defined in the Escrow Instructions are fulfilled as of Close of Escrow.

3.3.3. Developer’s representations and warranties in this DDA are true and correct as of the date of this DDA and will continue to be true and correct in all material respects at all times until the termination of this DDA.

3.3.4. This DDA is in full force and effect, no default on the part of Developer having occurred under this DDA, and no event having occurred, which, with the giving of notice or the passage of time, will constitute default by Developer under this DDA.

3.4. CONDITIONS TO DEVELOPER'S PERFORMANCE. Developer's obligation to perform under this DDA is subject to satisfaction of all of the following conditions:

3.4.1. The closing conditions as defined in the Escrow Instructions are fulfilled as of Close of Escrow.

Disposition and Development Agreement

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3.4.2. Agency’s representations and warranties in this DDA are true and correct as of the date of this DDA and as of the Close of Escrow.

3.4.3. This DDA is in full force and effect, no default on the part of Agency having occurred under this DDA, and no event having occurred, which, with the g iving of notice or the passage of time, will constitute default by Agency under this DDA.

3.5. GENERAL COVENANTS AND REPRESENTATIONS AND WARRANTIES. The parties make the following covenants, representations and warranties regarding the Property and the Project.

3.5.1. AGENCY'S REPRESENTATIONS AND WARRANTIES. Agency represents and warrants to Developer that as of the date of this DDA and as of the Close of Escrow, the date for which is set forth on the Schedule of Performances, to the actual knowledge of Agency’s Executive Director, Office of the General Counsel, and staff with responsibility for development of the Property:

a) Agency has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Property are in violation of any applicable laws regarding Hazardous Substances, or informing Agency that the Property is subject to investigation or inquiry regarding Hazardous Substances on the Property;

b) Agency has caused a Phase I and Phase II environmental study to be performed for Property. Agency has provided Developer with a copy of said study and Developer agrees that as to this study, Developer acquires no rights against either Agency or those individuals or firms who prepared the study. To the extent, if any, that Developer relies on the study, Developer does so at Developer’s own risk;

c) There is no pending or threatened litigation, administrative proceeding, or other legal or governmental action with respect to t he Property or with respect to Agency that would affect the Property;

d) This DDA and all other documents delivered for the Close of Escrow have been duly authorized, executed, and delivered by Agency; are binding obligations of Agency; and do not violate the provisions of any agreements to which Agency is a party.

3.5.2. AGENCY'S COVENANTS. Commencing with the full execution of this DDA by both parties and until the Close of Escrow:

a) Agency shall promptly notify Developer of any facts that would cause any of th e representations contained in this DDA to be untrue as of the Close of Escrow;

b) Agency shall not permit any liens, encumbrances, or easements to be placed on the Property, other than the approved exceptions named as acceptable in the Escrow Instructions o r as identified and approved in this DDA;
Disposition and Development Agreement

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c) From and after the Effective Date, Agency shall not, without Developer’s written consent, enter into any agreement regarding the sale, rental, management, repair, improvement, or any other matter affecting the Pro perty that would be binding on Developer or the Property after the Close of Escrow without the prior written consent of Developer

d) Agency shall not permit any act of waste or act that would tend to diminish the value of the Property for any reason, other than ordinary wear and tear; and

e) Agency shall convey the Property to Developer pursuant to the terms and conditions contained in this DDA;

3.5.3. DEVELOPER’S REPRESENTATIONS AND WARRANTIES. Developer, for itself and its principals, represents and warrants to Agency that as of the date of this DDA and as of the Close of Escrow:

a) Developer has reviewed the condition of the Property, including without limitation, the physical condition of the Property (above and below the surface) and issues regarding land use and development of the Property, and if Developer closes Escrow for the acquisition of the Property, Developer shall be deemed to be satisfied that the Property is suitable in all respects for its intended development and uses;

b) Developer’s agreement to clos e the Escrow for the acquisition of the Property serves as Developer’s representation that Developer has obtained all additional information regarding the Property that Developer considers necessary for its due diligence in acquiring the Property;

c) To the best of Developer’s knowledge, there is no pending or threatened litigation, administrative proceeding or other legal or governmental action with respect to Developer which would affect its ability to fulfill its obligations under this DDA and acquire the Property or which may constitute a lien against Developer’s equity or Developer’s interests in the Property, now or in the future;

d) Any information that Developer has delivered to Agency, either directly or through Developer’s agents, is, to the best of D eveloper’s knowledge, accurate, and Developer has disclosed all material facts concerning the operation, development, or condition of the Property;

e) Developer has the financial capacity, the equity and the financing necessary to fulfill its obligations und er this DDA and acquire the Property. Developer represents that any equity and funding commitments represented by Developer to Agency as available to the Project are unencumbered and that Developer has not represented to any other party that it will use s uch funds for any purpose other than the Project (and covenants that it will not use them for any other purpose) without prior written Agency consent; and

Disposition and Development Agreement

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f) This DDA and all other documents delivered for the Close of Escrow have been duly authorized, execut ed, and delivered by Developer; are binding obligations of Developer, and do not violate the provisions of any agreements to which Developer is a party.

3.5.4. DEVELOPER’S COVENANTS. Commencing with the full execution of this DDA by both parties and until the Close of Escrow:

a) Developer covenants by and for itself and assigns, and all persons claiming under or through it, that it shall not discriminate on the basis of race, color, ancestry, religion, creed, sex, marital status, or national origin in the sale, l ease or rental or in the use or occupancy of the Property and the Project;

b) Developer shall promptly notify Agency of any facts that would cause any of the representations contained in this DDA to be untrue as of the Close of Escrow;

c) Developer shall not c ause any liens, encumbrances, or easements to be placed on the Property prior to Close of Escrow, except as otherwise permitted by this DDA or approved in writing by Agency;

d) Developer shall not cause any act of waste or act that would tend to diminish the value of the Property for any reason, except that caused by ordinary wear and tear;

e) Developer shall be solely responsible for the cost and acquisition of the remaining parcels of the Project Site;

f) Developer shall complete the development of the Project at Developer’s cost and without requesting or receiving additional Agency or City contributions to the Project other than as provided in this DDA; and

g) Developer shall comply with all provisions of the Regulatory Agreement and cause any subsequent purchaser of the Property to so comply.

3.5.5. CLOSE OF ESCROW. The Escrow shall not close, and the Property shall not be conveyed to Developer unless the preceding conditions have been satisfied together with all other conditions stated in the Escrow Instructions for Close of Escrow. The Escrow shall close on or about the date shown on the Schedule of Performances.

3.6. DAMAGE, DESTRUCTION AND CONDEMNATION BEFORE CLOSE OF ESCROW. If, prior to the Close of Escrow: (a) damage occurs to any portion of the Property by earth quake, mudslide, fire, release of or exposure to any Hazardous Substances, or any other casualty (other than any damage caused by Developer or its employees, agents, Contractor or subcontractors) resulting in repairs or remediation costs that will exceed t wenty percent (20%) of the Purchase Price; or (b) any portion of the Property is taken by eminent domain or otherwise, or is the subject of a threatened or pending taking action resulting in a twenty percent (20%) or more decrease in the after-taking value of the Property, Agency shall notify Developer in writing of the damage, Disposition and Development Agreement

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destruction or condemnation. Developer may, within fifteen (15) days after such notice, elect to terminate this DDA by written notice to Agency.

3.6.1. If this DDA is to continue in ful l force and effect after any such damage or destruction, Agency shall do one of the following:

a) Agency shall pay or assign to Developer any amount due from or paid by any insurance company or any other party as a result of the damage; and the amount of an y deductible under Agency's insurance policy; or

b) Agency shall pay to Developer through credit in Escrow against the cash portion of the Purchase Price for the cost of repairing or correcting such damage not covered by insurance, provided, however, that th e amount of any payment of such credit against the Purchase Price pursuant to this clause shall not exceed thirty percent (30%) of the Purchase Price. If this DDA is to continue in full force and effect after such condemnation action, Agency shall pay any amounts received on account of, and assign to Developer all of Agency’s rights regarding, any awards for such taking.

3.6.2. COMMISSIONS. Agency is not responsible, by this DDA or otherwise, to pay commissions on the sale of the Property or any related transaction.

4. AGENCY FUNDING. Agency shall provide funding for the Project as provided in the Funding Agreement. All terms regarding Agency funding are in the Funding Agreement, including without limitation, the source and use of funds.

5. RESERVED

6. PREPARATION A ND APPROVAL OF PLANS AND RELATED DOCUMENTS. Agency shall have the right, but not the obligation, to review Plans to assure their conformity with the provisions of this DDA. Based upon such review Agency shall have the right to approve or reject the Plans for reasonable cause.

6.1. EXTENT AND CHARACTER OF PLAN REVIEW. Agency's right of review includes, without limitation, the right to review architectural and engineering plans and specifications, off - site plans and specifications, and landscaping designs and specifications. Agency's approval of Plans is neither a representation of nor an assurance of their adequacy or correctness. Agency has reserved approval rights solely (a) to assure that the Plans are consistent with the Scope of Development; (b) to ass ure that the Final Plans conform to the Plans; and (c) to assure that Agency’s purposes are fulfilled and any Agency funds which may be obligated under this DDA are used as intended by Agency. This DDA is a financing document and not a land use or planning document. Approval of the Project and Plans under this DDA is only an approval by Agency of the Project design “concept ” as presented in this DDA. Such approval by Agency is not and shall not be considered an approval of land use entitlements, structur al design of the Project, or the aesthetic design of the Project. Developer shall comply with all applicable land use, planning and design laws, rules and regulations of each governmental agency acting in Disposition and Development Agreement

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proper exercise of its respective jurisdiction, in cluding without limitation, departments, staff, boards and commissions of the City.

6.2. CONCURRENT REVIEW. Agency agrees that its review of the Final Plans shall occur before or concurrently with City’s review of such plans, so as not to delay the commencemen t and progress of Project development.

6.3. PLANS. Developer has provided Agency with Plans, and Agency has approved the Plans concurrently with this DDA. Agency has been induced to undertake its obligations under this DDA by Developer's promise to develop t he Project in accordance with the Plans, the Scope of Development and the provisions of this DDA.

6.4. PREPARATION OF FINAL PLANS AND RELATED DOCUMENTS. Developer shall prepare the Final Plans that shall include all construction plans, drawings, specification s and other documents necessary to obtain all required building permits for the construction of the Project.

Developer shall submit the Final Plans to Agency for Agency's review. The Final Plans shall conform in all material respects to this DDA, includi ng without limitation, Plans and the Scope of Development. To the extent that this DDA has insufficient detail or is unclear, this DDA shall be deemed to provide that the Project shall contain high -quality materials, and shall conform to all applicable la ws, regulations, zoning, design and usage guidelines. The Final Plans shall be considered to include all changes or corrections approved as provided in this DDA. The Final Plans shall incorporate all related mitigation measures required for compliance wit h approvals under CEQA and any conditions of City approval of the project, unless otherwise fulfilled .

Developer agrees that it will comply with the requirements of the City of Sacramento Design Review/Preservation Board to the extent of its jurisdiction.

6.5. DELIVERY. Developer shall deliver the Final Plans or changes to the Final Plans for Agency review as soon as available. Said delivery shall be made to the office of the Director, Housing Finance at the address for notices and shall have clearly marked o n its exterior "URGENT: SAN JUAN APARTMENTS BY MUTUAL HOUSING PROJECT PLAN REVIEW" or the equivalent.

6.5.1. DEEMED APPROVAL. If duly marked and delivered, the Final Plans or changes to the Final Plans shall be deemed approved unless disapproved in whole or i n part, in writing, within thirty (30) days after their proper delivery to Agency.

6.5.2. AGENCY DISAPPROVAL. If Agency disapproves, in whole or in part, the Final Plans or any change to the Final Plans, Agency shall state, specifically and in writing, at the t ime of disapproval, the reasons for disapproval and the changes that Agency requests to be made.

Agency's reasons for disapproval and such Agency -requested changes shall be consistent with this DDA, including without limitation, the Plans, the Final Plans, the Scope of Development and with any items previously approved in accordance with this DDA. If Agency rejects the proposed Final Plans, Developer shall obtain no rights to develop the Property under this DDA and Agency shall have no obligations regardin g the Project until such time as Developer has Disposition and Development Agreement

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modified the proposed Final Plans and received Agency's approval of the Final Plans as modified.

6.6. GOVERNMENTAL CHANGES. If any revisions or corrections of the Final Plans shall be required by any government of ficial, agency, department or bureau in exercise of its proper jurisdiction, the Developer shall inform Agency. If Agency and Developer concur in writing with the required change, Developer shall incorporate the change and it shall be deemed approved by A gency. If Agency or Developer reasonably disagrees with the required change, they shall reasonably cooperate with the governmental agency requiring the change in efforts to develop a mutually acceptable alternative.

6.7. APPROVAL OF SUBSTANTIAL CHANGES TO FINAL PLANS. If the Developer desires to make any substantial changes in the Final Plans, Developer shall submit such proposed changes, in writing, to Agency for its approval. Agency shall approve or disapprove the proposed change as soon as practicable. T he Final Plans shall be construed to include any changes approved in the same manner as approval of the original Final Plans under this section. Nothing in this Section shall be construed to relieve Developer of its obligations under all applicable laws regarding such changes.

6.7.1. SUBSTANTIAL CHANGE. A substantial change in the Final Plans shall include, without limitation, the following changes, excluding those items generally considered to be tenant improvements:

a) Material changes in the layout, elevation design, functional utility or square footage;

b) Material changes in use of exterior finishing materials substantially affecting architectural appearance or functional use and operation;

c) Any change that reduces the effectiveness of any mitigation measure re quired for CEQA and NEPA approval of the Project;

d) Material changes in site development items for the Property that are specified in the Final Plans;

e) Material changes in the type, location, visibility, accessibility, size, design or artist for any artwor k shown in the Final Plans or otherwise accepted by Agency under the Art in Public Places Program;
f) Material changes in quality of project or landscaping materials;

g) Any change in public amenities specified in the Final Plans;

h) Any changes requiring approval of, or any change required by, any city, county or state board, body, commission or officer; and

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i) Any change that would preclude or materially reduce the ability to use the Project as intended by this DDA.

6.7.2. MISREPRESENTATION. If Agency’s approval of the Final Plans is reasonably based upon a material misrepresentation to Agency by Developer or by anyone on Developer’s behalf, Agency may, within a reasonable time after discovery of the misrepresentation, take any action permitted by law with regard to any such misrepresentation, notwithstanding Agency’s prior approval, including without limitation, rescission of the approval or such other equitable remedies as may then be appropriate to such rescission.

7. DEVELOPMENT PROVISIONS. As stated in detail in this Section 6, Developer shall construct and manage the Project according to the requirements established in this DDA, which includes, without limitation, the Scope of Development, the Schedule of Performances and the Plans.

Developer shall promptly begin, diligently prosecute and timely complete the construction of the Project.

7.1. NOTICE TO PROCEED. Developer shall not enter the Property or begin work on the Project until Agency has issued to Developer a written notice to proceed with the work. Agency will i ssue a notice to proceed after Agency approval of the Final Plans, City's issuance of a building permit for substantially more than the Project foundations, Developer's compliance with all governmental requirements for start of construction, Developer's pr ovision of required policies of insurance, and Developer's provision of proof of construction financing in an amount adequate to begin the Project work.

7.2. CONSTRUCTION CONTRACTS. Developer shall submit to Agency the construction contract or contracts for t he Project. Agency's review of the construction contract shall be only for determining its compliance with this DDA. If the cost of construction of the Project or any part of the Project exceeds the costs projected by Developer, Developer shall, neverthel ess, bear the responsibility to complete, at Developer's cost, the construction of the Project in accordance with this DDA. If the property is revested in Agency pursuant to Section 14.1, Developer shall assign all rights under the construction contracts to Agency.

7.3. GOVERNMENTAL REVIEW PROCESS. Notwithstanding any other provision of this DDA, Developer is subject to all building, planning, design and other plan review requirements that are otherwise applicable to the project, including without limitation those of the City of Sacramento.

7.4. ART IN PUBLIC PLACES EXEMPTION. The Project improves and increases the stock of affordable housing in the community. Imposition of the Art in Public Places Program would increase the cost of the Project substantially and reduce either the number of affordable units available in the Project or the affordability of those units. Therefore, the Aesthetic Improvement Policy requirements are not applicable.

7.5. SUBSTANTIAL CHANGES. Developer covenants and agrees that Developer shall not make or permit to be made any construction of the Project which incorporates a substantial Disposition and Development Agreement

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change in the Final Plans, as described in Section 6.7, without Agency approval of such changes as provided in Section 6.7.

7.6. LOCAL, STATE AND FEDERAL LAWS. The Developer shall assure that the construction of the Project is carried out in conformity with all applicable laws and regulations, including all applicable federal and state labor standards. Before commencement of construction or development of any buildings, structures or other work of improvement upon the Property, Developer shall at its own expense secure an y and all certifications and permits which may be required by any governmental agency having jurisdiction over such construction, development or work. Agency shall cooperate in securing certifications and permits which require consent of the owner of the property. Developer shall permit only persons or entities which are duly licensed in the State of California, County of Sacramento and City of Sacramento, as applicable, to perform work on or for the Project.

7.7. PREVAILING WAGES. In accordance with Labor Co de Section 1720(c)(6)(E)), so long as the public subsidy for the Project consists of below market rate loans, and the Project restricts occupancy on at least 40% of the units for at least 20 years to individuals or families earning no more than 80% of the area median income, the Project is not subject to prevailing wages.

Developer represents to Agency that Developer has obtained public subsidy for the Project that does meet such criteria. If Developer obtains another non -qualifying public subsidy, Develo per shall pay prevailing wages for the Project. Therefore, Developer indemnifies, holds harmless and defends Agency from all additional wages, benefits, fees, penalties, fines, legal fees, court costs, arbitration costs, and other costs arising from the i mproper application of California prevailing wage laws to the Project by Developer or Contractor or both of them. Unless stated otherwise above, Agency advises Developer that the Project is subject to the payment of prevailing wages under California law. Developer shall inform the Contractor and shall require the Contractor to inform all subcontractors and materialmen furnishing goods or services to the Project of Agency’s determination of the applicability of California prevailing wage requirements. Developer and Contractor have had the opportunity to meet with their respective legal counsel and to request a determination of the matter before the California Department of Industrial Relations and any other appropriate governmental bodies. Developer and Co ntractor have made their own independent determinations of the applicability of prevailing wage laws and have independently implemented such determinations. Developer indemnifies, holds harmless and defends Agency from all additional wages, benefits, fees , penalties, fines, legal fees, court costs, arbitration costs, and other costs arising from the improper application of California prevailing wage laws to the Project by Developer or Contractor or both of them.

7.8. PUBLIC SAFETY PROTECTIONS. Developer shall assure that all necessary steps are taken (including the erection of fences, barricades and warning devices) to protect private contractors and their employees and the public from the risk of injury arising out of the condition of the Property or Develop er's activities in connection with the Property, including without limitation, fire, or the failure, collapse or deterioration of any improvements or buildings.

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7.9. NO DISCRIMINATION DURING CONSTRUCTION. Developer for itself, the Contractor and their respective successors and assigns, agrees that the following provisions shall apply to, and be contained in all contracts and sub-contracts for the construction of the Project.

7.9.1. EMPLOYMENT. Developer shall not discriminate against any employee or applicant for e mployment because of sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation. The Developer will take affirmative action to ensure that applicants are employed, and that employees are tre ated during employment, without regard to their sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation. Such action shall include, but not be limited to, the following: employment; upgra ding; demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by Agency setting forth the provisions of this nondiscrimination clause.

7.9.2. ECONOMIC OPPORTUNITY EMPLOYMENT REQUIREMENTS. This DDA requires that to the greatest extent feasible, opportunities for t raining and employment be given to lower income residents in and around the area of the project. The Developer shall fulfill its obligations imposed by this Section by instructing its Contractor and its subcontractors to utilize lower income Project area residents as employees to the greatest extent feasible by:
a) Identifying the number of positions in the various occupational categories including skilled, semi-skilled, and unskilled labor, needed to perform each phase of the Project; b) Identifying, within the positions identified in subparagraph (a) of this Section, the number of positions in the various occupational categories which are currently occupied by regular, permanent employees;
c) Identifying, within the positions identified in subparagraph (a) of th is Section, the number of positions in the various occupational categories which are not currently occupied by regular, permanent employees;
d) Establishing the positions identified in subparagraph (c) of this Section, a goal which is consistent with the purp ose of this subsection within each occupational category of the number of positions to be filled by lower income Project area residents; and e) Making a good faith effort to fill all of the positions established in subparagraph (d) of this Section with lower income Project area residents, first and foremost, through the First Source Program, Greater Sacramento Urban League, Sacramento Works, Sacramento Employment Training Agency, or similar local workforce agencies.

7.9.3. ADVERTISING. Developer will, in all solicitations or advertisements for employees placed by or on behalf of the Developer, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, creed, sex, marital status, national origin, ancestry, familial status, or disability.

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7.9.4. MONITORING PROVISIONS. Developer, Contractor and subcontractors shall comply with the requirements of Agency for monitoring the anti -discrimination and all applicable labor requirements.

7.10. PUBLIC IMPROVEMENTS. Developer shal l, at Developer's expense, undertake and complete any modification, construction, relocation or improvement of public facilities, improvements and utilities for the development of the Property.

7.11. AGENCY ACCESS TO THE PROPERTY. Developer shall permit Agency representatives access, without charge, to the entire Property at any time and for any purpose which Agency reasonably considers necessary to carry out its obligations and protect its interests under this DDA. Purposes for Agency entry may include, witho ut limitation, inspection of all work being performed in connection with the construction of the Project.

7.12. PROJECT SIGN. If Developer places a sign on the Property during construction stating the names of the Project participants, it shall also name the “Sacramento Housing and Redevelopment Agency” as a participant in the Project. Agency nam e on the sign shall be in letters not less than the size of letters used to name any of the other participants.

7.13. CERTIFICATE OF COMPLETION. After Agency has determine d that Developer has completed the construction of the Project in accordance with the Final Plans and Developer's obligations under this DDA, Agency will furnish the Developer with the Certificate of Completion certifying such completion. Agency’s issuanc e of the Certificate of Completion shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this DDA with respect to the obligations of the Developer to construct the Project as of the Completion Date specified in the Schedules of Performances, subject to any qualifications or limitations stated in such certification. Agency shall prepare and execute the Certificate of Completion in a form suitable for recording in the Official Records of Sacramento County.

7.13.1. The Certificate of Completion shall not constitute evidence of compliance with any governmental requirements regarding the Project other than those of Agency or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance all or any part of the Project. The Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any provision of this DDA that is not related to construction of the Project.

7.13.2. If Agency fails to provide a Certificate of Completion within fifteen (15) days after written request by Developer, Agency shall, within an additional fifteen (15) days after a second written request by the Developer, provide the Developer with a written sta tement, indicating in adequate detail in what respects the Developer has failed to complete the Project in accordance with the provisions of this DDA, or is otherwise in default, and what measure or acts it will be necessary, in the opinion of Agency, for the Developer to take or perform in order to obtain such certification.

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7.14. CONSTRUCTION PERIOD EXTENSION FEE. If Developer does not complete the construction of the Project on or before the completion date set forth in the Schedule of Performances, Developer shall pay to Agency, monthly, in advance, on the first day of each month beginning the calendar month following said completion date, a construction period extension fee of Twenty -Five Dollars and No Cents ($ 25.00) for each day by which the completion of construction is delayed beyond said completion date. Such construction period extension fees due for days of delay occurring prior to the first payment date shall be paid in arrears at the time of the first payment under this Section. The number of days used in computation of the construction period extension fee shall be reduced by the number of days of Unavoidable Delay. Failure to pay such construction period extension fee when due is a material default of this DDA. Any unearned portion of an advanc e payment of any such extension fee shall be refunded by Agency within thirty (30) days of completion of construction, or of termination of this DDA. Agency shall have the option to terminate, upon ten (10) days prior written notice, Developer's rights to such unpaid construction extension fee and to declare Developer in material default of this DDA. In any event, such construction extension fees shall not be accepted for a time period greater than six (6) months excluding any period of Unavoidable Delay, at which time Developer shall be deemed in material default of this DDA.

7.15. REPORTS. During the period of construction, the Developer shall submit to Agency a written report of the progress of the work as and when reasonably requested by Agency, but not more often than once each month.

7.16. NOTIFICATION OF CONTRACTORS, ARCHITECTS AND ENGINEERS. Developer shall assure notification of the Contractors, architects and engineers for the Project of the requirements of this DDA. Developer shall include, where applicabl e, the provisions of this DDA in construction contracts, subcontracts, materials and supplies contracts and services and consulting contracts for the Project, and Developer shall undertake the enforcement of such provisions.

7.17. PROPERTY CONDITION. Developer, at Developer's expense, shall conduct any Property investigation beyond those provided by Agency under this DDA and which Developer may consider necessary to determine the condition of the Property for the development of the Project.

As between Agency a nd Developer, Developer shall be solely responsible for the adequacy of such investigations. Except as provided in this DDA, if the condition of the Property is not in all respects entirely suitable for the use or uses to which the Property will be put, i t is the sole responsibility and obligation of the Developer to take such reasonable actions as may be necessary to place the condition of the Property in a condition which is entirely suitable for its development in accordance with the construction plans and drawings approved by Agency.

Agency shall not be responsible for removing any surface or subsurface obstructions, or structures of any kind on or under the Property.

7.18. ZONING OF THE PROPERTY. Agency exercises no authority with regard to zoning of the Property. Developer shall assure that zoning of the Property at the time of development shall be such as to permit the development and construction, use, operation and maintenance of the Project in accordance with the provisions of this DDA.

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7.19. HAZARDOUS SUBSTANCES. Agency has obtained a Phase I and Phase II Hazardous Substances assessment, and has delivered them to Developer. In any event, Developer shall obtain such Hazardous Substances assessments as Developer deems reasonably necessary to assure the de velopment of the Project in accordance with all applicable laws, rules and regulations; provided, however that such assessments are prepared by a qualified environmental specialist in accordance with nationally recognized standards to determine the existence of and to quantify the extent of Hazardous Substances on the Property. As between Agency and Developer, Developer shall be solely responsible for the adequacy of any Hazardous Substances investigations obtained by Developer.

7.20. If Hazardous Substances are known to be on the Property, Agency shall remediate such Hazardous Substances on the Property as and to the extent required by any federal, state or local agency having jurisdiction regarding Hazardous Substances standards or remediation and as may be necessary to avoid incurring liability or further liability under any federal, State and local law or regulation (the “Agency Remedial Work”) and shall use best efforts to complete the Agency Remedial Work on or before the date set forth in the Schedule o f Performance; provided, however, Agency and Developer acknowledge and agree the Agency Remedial Work shall not include any soil vapor remediation at the Property, which, in the event Closing occurs, shall be undertaken by the Developer at Developer’s sole cost and expense. In the event the Agency fails to complete the Agency Remedial Work as set forth on the Schedule of Performance, Agency and/or Developer may elect to terminate this Agreement. Agency shall deliver to Developer a remedial action plan (“RAP”), which RAP shall be approved by the oversight public agency.

7.21. If Hazardous Substances are discovered on the Property after conveyance to Developer and have not been released on the Property after conveyance to Developer, Developer shall remediate all Hazardous Substances on the Property as and to the extent required by any federal, state or local agency having jurisdiction regarding Hazardous Substances standards or remediation and as may be necessary to avoid incurring liability or further liability u nder any federal, State and local law or regulation. If Hazardous Substances are discovered on the Property after conveyance to Developer and have not been released on the Property after conveyance to Developer and the cost to remediate such Hazardous Sub stances is reasonably estimated to exceed One Hundred Thousand Dollars ($100,000.00), Developer may elect to terminate this DDA, upon reconveyance of the Property to Agency and return of all monies and properties delivered pursuant to or in furtherance of this DDA. Developer shall bear the 100 percent of the costs related to such remediation if the DDA is not terminated and remediation is required.

7.22. DEVELOPER ACCESS TO PROPERTY. Prior to the conveyance of the Property by Agency to Developer, Agency shall permit representatives of Developer to have access, without charge, to the Property, at all reasonable times for the purpose of obtaining data and making various tests necessary to carry out Developer's obligations under this DDA; provided, however, that Developer shall not enter the Property except (a) after execution by Dev eloper and Agency of Agency’s standard "Permit for Entry" and (b) after Developer has obtained insurance coverage then required by Agency. No work shall be performed on the Property un til a “Notice of Nonresponsibility” has been recorded and posted in accordance with applicable laws, assuring Disposition and Development Agreement

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that Agency interest in the Property shall not be subject to mechanic's liens related to such work.

Developer shall not commence any work on the Property without Agency's written approval of the work to be done, and in any event, Developer shall not commence any work which might be construed as commencement of the work of the Project for establishment of mechanic's lien rights.

7.23. COOPERATION AND ACCESS. Developer shall cooperate fully with Agency in complying with such relocation laws, including without limitation, providing Agency access to all tenants of the Property, to all books and records related to the tenants of the Property and to all prop erties offered for temporary or permanent relocation. Prior to taking any action with respect to relocation of tenants, Developer shall meet with Agency to establish reasonable protections for tenants and related reporting requirements for Developer.

7.24. DEVELOPER AS RELOCATION AGENT. With the approval of Agency, Developer may act as Agency’s agent in accomplishing such relocation. Agency and Developer by memorandum in writing shall establish their respective duties related to such relocation. If Agency an d Developer agree that Developer will act as Agency’s agent for purposes of this DDA, Developer may enter into agreements for the provision of relocation services, or Developer may perform such services directly. Developer shall, by provisions in its agre ements or by direction to its staff, assure that the entity performing the relocation services: (a) complies with all applicable laws; (b) fully informs Agency of all relocation activities; (c) makes all requests for direction or clarification to Agency; a nd (d) responds to and follow Agency’s instruction and direction.

8. DEVELOPMENT FINANCING. Except as specifically provided in this DDA, Developer shall be responsible for and shall pay all costs of developing the Project in accordance with this DDA.

As a condition precedent to Agency’s conveyance of the site to Developer, Developer shall provide Agency with a complete and firm Project budget including all proposed sources and uses of funds, all "hard" and "soft" costs and contingencies and reflecting, as possible, firm bids or accepted contracts and with evidence of sufficient funds to meet all budget requirements. To the extent that funds specified in this DDA for the Project are insufficient to fully fund the Project, the Developer shall provide evidenc e, satisfactory to Agency, of the additional required construction and permanent financing. Except as expressly provided in this DDA, no party shall have the right of reimbursement for any funds expended by them for the Project, whether prior to execution of this DDA or otherwise. Agency is not obligated by this DDA or otherwise to make any contribution beyond its obligations stated in this DDA.

8.1. EVIDENCE OF AVAILABLE FUNDS. Unless otherwise approved by Agency, Developer's evidence of available funds, as required in the preceding section, must include only the following: (a) Developer equity (as provided in Section 8.3); (b) firm and binding loan commitments (as provided in Section 8.2) from each Lender, in form and substance satisfactory to Agency; and (c) Agency contribution, if any, as specified in this DDA. Within ten (10) days after Agency’s request, Developer shall provide all additional information requested b y Agency Disposition and Development Agreement

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for evaluation of the actual availability of funds included in such evidence, including without limitation, requests for clarification, further evidence or audited financial reports.

8.2. COMMITMENT AND LOAN REQUIREMENTS. As a material obligation und er this DDA, Developer shall assure that the loan documents for the Project are consistent with the Lender's commitment approved by Agency and comply, in all respects, with this DDA. Agency may reject a loan commitment unless such commitment: (a) is subje ct only to Lender’s reasonable conditions of title and Developer’s execution of standard loan documents (copies of which have been previously provided to and approved by Agency); (b) contains only usual, customary, and commercially reasonable loan terms; ( c) continues in effect until a time when financing is reasonably expected to be required; and (d) for construction financing, provides for a construction loan term not less than that specified in the Schedule of Performances for completion of construction and any additional time necessary to fulfill all conditions precedent to funding of permanent financing. Agency may also reject any commitment if it is based upon sources and uses of Project funds that are different from those approved by Agency for the Project. Agency may also reject any commitment that requires changes to the Project which conflict with this DDA, that require amendment of this DDA or that require Agency to enter into agreements with any Lender, guarantor, equity partner or any other third-party.

8.3. EVIDENCE OF DEVELOPER EQUITY. Unless otherwise agreed in writing by Agency, Developer may provide evidence of equity in the amount of Twenty Million Dollars and No Cents ($20,000,000.00) by any one of the following actions: (a ) deposit of the required equity in a joint account with Agency, which funds shall be released only upon the joint signatures of Agency and the Developer; (b) delivery to Agency of an unconditional, irrevocable letter of credit in the amount of the required equity, in form and substance as provided by Agency, which letter of credit shall provide that Agency may draw to fulfill any Developer obligation related to the development of the Project and necessary to assure its timely and proper completion; or (c) a executed Limited Partnership Agreement that includes the Developer indicating the provision of equity associated with a Low Income Housing Tax Credit Reservation (d) Developer's provision of financial statements prepared by a certified public accountant which show liquid assets available to the Project (and not subject to other existing or contingent claims) in the amount of One Hundred and Fifty Percent (150%) of the amount of the required equity. Developer shall not provide evidence of equity that includes funds not ava ilable at the commencement of construction or that claims as equity any funds to be generated by development of the Project, including without limitation, anticipated Developer profit or fees or Developer contribution of services to the Project. Agency, i n its sole and absolute discretion, may reject any submitted evidence of equity if Agency has any reason to believe that such funds may not be available to the Project.

9. INDEMNIFICATION FOR HAZARDOUS SUBSTANCES. Developer shall indemnify, protect and defend Agency, its officers, directors, council members and supervisors, employees, advisory committee members, and agents, and hold them harmless from any and all liability, costs, fees, fines, penalties and claims (including without limitation court, mediat ion or arbitration costs, attorneys’ fees, witnesses’ fees, and investigation fees) related to the existence of Hazardous Substances on the Property that were not on the Property prior to Agency’s transfer of possession Disposition and Development Agreement

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of the Property to Developer or that were related to the removal or discharge of Hazardous Substances by Developer, or its employees, agents or contractors, during Developer's remediation of the Property pursuant to this Section.

Agency shall indemnify, protect and defend Developer, its of ficers, directors, employees, and agents, and hold them harmless from any and all liability, costs, fees, penalties and claims (including without limitation court, mediation or arbitration costs, attorneys’ fees, witnesses’ fees, and investigation fees) re lated to Hazardous Substances discharged on the Property during Agency’s ownership of the Property or related to the removal or discharge of Hazardous Substances by Agency or its employees, agents or contractors.

10. INDEMNIFICATION. Developer shall indemnif y, protect, defend and hold harmless Agency, its officers, directors, commission members, employees, advisory committee members, and agents from any and all liability from any claims, bodily injury, death and property damage caused by or resulting from the acts or omissions of Developer, its officers, employees, agents or independent contractors and for any and all costs incurred by Agency arising from or in connection with such claims, including attorney's fees, except for injury, death or property damage caused by the negligent act or willful misconduct of Agency.

This indemnification provision shall survive the termination of this DDA.

11. COMMERCIAL GENERAL LIABILITY AND OTHER INSURANCE. With regard to this DDA, the Developer shall obtain and maintain fo r the life of the Regulatory Agreements, and require the Contractor and subcontractors for the Project to obtain and maintain for the term of the development of the Project, insurance in at least the amounts set forth below in this Section, subsections a t hough d. Such insurance coverage must list the Agency as an additional insured, and must be approved in writing by Agency prior to the Close of Escrow.

11.1. Commercial general liability insurance, in Insurance Services Office (ISO) policy form CG 00 01 or equ ivalent, with limits of liability not less than: $1,000,000 per occurrence, and $5,000,000 general aggregate, all per location of the project, such coverage to include contractual liability to include bodily injury, property damage and personal injury;

11.2. Personal injury insurance with the employment exclusion deleted, unless the Agency gives prior written approval for the employment exclusion to remain in the policy;

11.3. Commercial automobile liability insurance for any vehicle used for or in connection with the project, in an amount not less than $1,000,000 and approved in writing by Agency; and

11.4. Workers’ compensation and all other insurance required under applicable law, in the amount required by applicable law or by Agency, whichever amount is greater.

12. PROPERTY INSURANCE. Borrower shall procure and maintain property insurance and during construction Builder’s Risk completed value insurance in a form and substance approved by Agency. Coverage shall be for protection against loss of, or damage to the Improvem ents or Disposition and Development Agreement

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materials for their construction to their full insurable value. Borrower shall also procure and maintain insurance against specific hazards affecting Agency's security for the DDA as may be required by Agency, governmental regulations, or any perma nent lender. All such policies shall contain a standard mortgagee loss payable clause in favor of Agency. The insurance required shall be written with a deductible of not more than Twenty-Five Thousand Dollars ($25,000.00).

13. INSURANCE PROVISIONS. Each p olicy of insurance required under this DDA shall be obtained from a provider licensed to do business in California and having a current Best's Insurance Guide rating of A VII or better, which rating has been substantially the same or increasing for the las t five (5) years, or such other equivalent rating, as may reasonably be approved by Lender's legal counsel. Each policy shall contain the following provisions as applicable, unless otherwise approved by Lender's legal counsel in writing in advance.

13.1.1. ADDITIONAL INSURED. Developer shall obtain a policy in ISO form CG 20 33 or better, naming Agency as additional insured under the Commercial General Liability Policy.

13.1.2. SINGLE PROJECT INSURANCE. It is the intent of the parties that the Project have available all the specified insurance coverages. Developer shall not provide insurance coverages that are considered in aggregate with other Projects which Developer or its Contractor might have concurrently under construction. Agency may at its discretion permit an aggregate policy if and only if Developer or the respective Contractor or subcontractor has fully disclosed to Agency other projects which will or may be considered in aggregate with the Project, and thereafter, Developer shall immediately inform Agency of the change in or addition to any such projects.

Nevertheless, Agency may at any time require that the insurance coverage be provided solely for the Project.

13.1.3. CERTIFIED POLICY COPY. Developer shall provide Agency with a certified copy of each required policy of insurance. Pending delivery of the certified policy, Developer shall provide Agency with a Certificate of Insurance for each policy on the applicable ACORD form.

The ACORD form shall not substitute for the policy. ACORD 25 -S “Certificate of L iability Insurance shall be used for liability insurance deleting the sentence in the top right -hand block immediately below the title (commencing with “This certificate is issued as a matter of information . . .) and in the bottom right -hand box above the authorized representative signature, deleting the words “endeavor to” and “but failure to do so shall impose not obligation or liability of any kind upon the insurer, its agents or representatives.”

13.1.4. CANCELLATION. Each policy shall bear an endorsement pr ecluding cancellation or termination of the policy or reduction in coverage unless Agency has been given written notice of such intended action at least thirty (30) days prior to its effective date.

13.1.5. FAILURE TO MAINTAIN. If Developer fails to obtain or maintain, or cause to be obtained and maintained, any insurance required by this DDA, Agency shall have the right, but not the obligation, to purchase the insurance on Developer’s behalf, and Developer shall promptly reimburse the full cost of such insuran ce to Agency. If Developer fails to reimburse Agency for insurance, the amount of unpaid reimbursement shall bear interest at the maximum Disposition and Development Agreement

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rate permissible under the law until paid. Failure to maintain the insurance required by this Section 10 shall be a default under this DDA (see Section 11.3, below).

13.1.6. BLANKET COVERAGE. Developer’s obligation to carry insurance as required under this Section 10 may be satisfied by coverage under a “blanket” policy or policies of insurance (as the term is customarily use d in the insurance industry); provided, however, that Agency shall nevertheless be named as an additional insured under such blanket policy or policies to the extent required by this Section, the coverage afforded Agency will not be reduced or diminished thereby, and all of the other requirements of this Section 11 with respect to such insurance shall otherwise be satisfied by such blanket policy.

14. DEFAULTS AND REMEDIES. Except as otherwise provided in this DDA, if either party defaults in its obligations under this DDA, the defaulting party shall immediately commence and diligently proceed to cure the default within thirty (30) days after written notice of default from the other party or, if reasonable, such lon ger time as is reasonably necessary to remedy such default if such default cannot reasonably be cured within thirty (30) days for reasons beyond the control of the defaulting party, provided that the defaulting party shall promptly begin and diligently pursue such cure to completion. If the defaulting party does not promptly begin and diligently cure the default within a reasonable time, the other party may institute proceedings to cure the default, including without limitation, proceedings to compel specific performance by the defaulting party. Subject to any extension of time permitted by this DDA, a failure or delay by a party to perform any term or provision of this DDA constitutes a default of this DDA. As a condition precedent to termination of this DDA under this Section, each party shall first tender the return of all property or funds received from or on behalf of the other party, other than funds properly retained as liquidated damages. After such return of property and funds and termination of this DDA, neither Agency nor Developer shall have any further rights against or liability to the other under this DDA except as expressly set forth in this DDA to the contrary.

14.1. REVESTING TITLE IN AGENCY. Notwithstanding any other provisions of this DDA and in addition to any other rights and remedies of Agency, after conveyance of any part of the Property to Developer and prior to issuance of a Certificate of Completion, if Developer defaults in its obligations related to the Project development, abandons or unreasonably suspends Project construction work, permits any unauthorized encumbrance or lien (including tax liens) and fails to discharge any such unauthorized lien or encumbrance, or permits any transfer of all or any part of the Property, then Agenc y shall have, for a period of ten years following the Effective Date, the right to re -enter and take possession of the Property, or any part of the Property conveyed to Developer, and to terminate and revest in Agency the estate so conveyed. It is the intent of this DDA that the conveyance of the Property to Developer shall be made upon, and that the Grant Deed shall contain, a condition subsequent to the effect that in the event of any default, failure, violation, or other action or inaction by the Develo per specified in this Section, failure on the part of Developer to remedy, end, or abrogate such default, failure, violation, or other action or inaction, within the period and in the manner stated in this DDA, Agency at its option may declare a termination in favor of Agency of the title, and of all the rights and interest in the Property conveyed by the Grant Deed to Developer, and that such title and all rights and interests of Developer, and any assigns or successors in interest to and in the Property, shall Disposition and Development Agreement

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revert to Agency. Such condition subsequent and any such revesting of title in Agency shall always be subject to and limited by the lien or security interest authorized by this DDA, and any rights or interests provided in this DDA for the protection of the Lenders; and shall not apply to individual parts or parcels of the Property on which the Project have been completed in accordance with this DDA and for which a Certificate of Completion issued as provided in this DDA. Such condition subsequent sh all conform to the provisions of Civil Code Sections 885.010 through 885.070.

14.2. RESALE OF REACQUIRED PROPERTY. Upon the revesting of title to the Property in accordance with Section 11.1, Agency shall use its best efforts to resell the Property, as soon a nd in such manner as Agency shall find feasible and consistent with the objectives of the Scope of Development; to a qualified and responsible party, as determined by Agency, who will assume the obligation of completing the Project or such other improvemen ts in their stead as shall be satisfactory to Agency. Upon such resale of the Property, the resale proceeds (after repayment of any liens and encumbrances which have previously been approved by Agency in writing) shall be applied as follows:

14.2.1. AGENCY REIMBURSEMENT. Upon such resale of the Property, the resale proceeds shall be paid first to Agency to reimburse Agency for all costs and expenses incurred by Agency, including legal costs, attorney's fees and salaries of personnel, in connection with the recapture, management, and resale of the Property (but less any net income derived by Agency from the Property after such revesting); all taxes, assessments, and water and sewer charges with respect to the Property, or in the event the Property is exempt from s uch taxation or assessment during Agency's ownership, an amount equal to such taxes, assessment, or charges (as determined by local assessing authorities) as would have been payable if the Property were not so exempt; any payments necessary to discharge an y encumbrances or liens existing on the Property at the time of such revesting or to discharge or prevent any subsequent encumbrances or liens due to obligations, defaults, or acts of the Developer; any expenditures made or obligations incurred with respect to completion of the Project; and any amounts otherwise owing Agency by the Developer.

14.2.2. DEVELOPER REIMBURSEMENT. After payment to Agency of the sum specified herein, said proceeds shall be paid to Developer to reimburse Developer in an amount not to exceed: (1) the sum of the purchase price paid by Developer for the Property and the cash actually expended by it in actual construction of any of the Project, including without limitation fees and expenses paid to any governmental agency on account of the Pr oject, mitigation or development fees, the costs and expenses of all third -party architects, engineers, or similar design professionals, hard and soft costs of construction expended in construction of the Project, and Lender’s interest, loan fees and other fees and charges on account of the loan; less (2) any gains or income withdrawn or made by it from this DDA or the Property and any amounts, including interest on loans, then due from Developer to Agency.

14.2.3. BALANCE TO AGENCY. Any balance remaining after such reimbursements shall be retained by Agency as its property.

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14.3. LIQUIDATED DAMAGES. IF DEVELOPER FAILS TO CO MPLETE THE PURCHASE OF THE

PROPERTY AS PROVIDED IN THIS DDA BY REASON OF ANY DE FAULT OF DEVELOPER, AGENCY

SHALL BE RELEASED FR OM AGENCY'S OBLIG ATION TO SELL THE PROPERTY TO DEVELOPER, AND

AGENCY MAY ALSO PROCE ED AGAINST DEVELOPER UPON ANY CL AIM OR REMEDY THAT AGENCY MAY HAVE IN LAW . IF THE PROPERTY HAS BEEN CON VEYED TO DEVELOPER, DEVELOPER HAS COMMITTED A DEFAULT SUFFICIENT FOR REVES TMENT OF THE PROPERTY UNDER SECTION 14.1,

AND DEVELOPER HAS NOT VOL UNTARILY RECONVEYED THE PROPERTY TO AGENCY, AGENCY MAY

REVEST THE PROPERTY OR TAKE ANY AVAILABLE ACTION TO RECONVEY THE PROPERTY TO AGENCY. IN SUCH EVENT , AGENCY MAY ALSO PROCE ED AGAINST DEVELOPER UPON ANY CL AIM OR REMEDY THAT AGENCY MAY HAVE IN LA W OR EQUITY ; PROVIDED, HOWEVER, THAT, BY

INITIALING THIS SECTION, DEVELOPER AND AGENCY AGREE THAT IN THE EVENT THAT DEVELOPER FAILS TO PURCHASE TH E PROPERTY: (A) IT WOULD BE IMPRACTIC AL OR EXTREMELY DIFF ICULT TO FIX ACTUAL DAMAGES R ELATED TO THE FAILUR E TO PURCHASE THE PROPERTY; (B) AN AMOUNT

EQUAL TO THE DEPOSIT SHALL CONSTITUTE LI QUIDATED DAMAGES PAY ABLE TO AGENCY ON ACCOUNT OF THE FAILU RE TO PURCHASE THE PROPERTY; (C) THE PAYMENT OF THE LIQUIDATED

DAMAGES TO AGENCY SHALL CONSTITU TE THE EXCLUSIVE REM EDY OF AGENCY FOR THE FAILUR E OF DEVELOPER TO PURCHASE THE PROPERTY; (D) AGENCY MAY RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES; AND (E) PAYMENT OF THOSE SUMS TO AGENCY AS LIQUIDATED DAMAGES IS

NOT INTENDED AS A FO RFEITURE OR PENALTY WITHIN THE MEANING O F CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT INSTEAD , IS INTENDED TO CONS TITUTE LIQUIDATED DA MAGES TO AGENCY PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE.

________ Developer’s Initials ________ Agency’s Initials

14.4. OTHER RIGHTS AND REMEDIES. Upon the occurrence of any default not subject to the preceding liquidated damages provision, and the expiration of any applicable notice and cure period without a cure having occurred within the specified cure period, the non -defaulting party shall have the right to institute such actions as it may deem desirable to remedy a default of this DDA as allowed under this DDA, at law or in equity.

14.5. NONLIABILITY OF AGENCY OFFICIALS AND EMPLOYEES. No member, official or employee of Agency shall be personally liable under this DDA to Developer, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Developer or its successors, or on any obligations under the terms of this DDA.

14.6. FEES AND COSTS ARISING FROM DISPUTE. If an action is commenced between the parties, the prevailing party in that action shall be entitled to recover from the nonprevailing party all reasonable attorney fees and costs, witness fees, arbitrator’s fees, and court and arbitration costs. "Prevailing party" shall include without limitation a party who dismisses an action in exchange for sums allegedly due; the party who receives perfor mance from the other party for an alleged breach of contract or a desired remedy where the performance is substantially equal to the relief sought in an action; the party who receives any award for relief through arbitration; or the party determined to be the prevailing party by a court of law.

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15. ENCUMBRANCE OF PROPERTY AND LENDER PROTECTIONS. Before issuance of a Certificate of Completion, if Developer has obtained Agency’s prior written approval, which approval Agency may withhold in exercise of its reaso nable discretion and in consideration of the commercially reasonable protection of its interests under this DDA, the Developer may obtain a loan and encumber the Property as security for the loan, provided either that the proceeds of the loan are used solely for construction of the Project improvements upon usual and customary and commercially reasonable terms or that the loan is permanent project financing made upon usual and customary and commercially reasonable terms. Each lender shall be a federal or s tate chartered financial institution, a pension fund, an insurance company or such other lender which Agency may approve in writing in advance. After issuance of a Certificate of Completion, Agency shall have no rights of approval regarding financing secu red by the Property. As a condition to Agency’s approval of a loan, Developer shall provide Agency with a conformed copy of all documents related to the loan. Agency acknowledges that a Lender will rely upon this DDA in making the loan and that Agency’s obligations under this DDA are inducements to Lender’s making of the loan.

15.1. NOTICES. If Agency gives any notice of default to Developer under this DDA, Agency shall contemporaneously give a copy of such notice to each Lender who has requested such notice in the following form of request for notice at the address stated in such request for notice.

Any such default notice that is not so delivered to Lender shall not be effective or binding with regard to Lender or otherwise affect Lender, but failure to del iver such default notice to Lender shall not affect its validity with respect to Developer. Lender shall use the following form for requesting notice:

[Date]
The undersigned, whose address for notices is stated immediately below its signature, does hereby certify that it is the Lender as such term is defined in that certain Disposition and Development Agreement dated _______ between the Housing Authority of the City of Sacramento and San Juan Mutual Housing Associates, L.P. (“DDA”). Lender requests, in accordance with this DDA, that if any default notice shall be given to Developer under this DDA, a copy of such default notice shall be given to Lender. [Lender Name and Address for Notice]

15.2. ASSIGNMENTS AND TRANSFERS OF THE LOAN. Agency shall not be bound to recognize any assignment of Lender’s loan or related encumbrance of the Property and such assignment of Lender’s loan shall be void ab initio unless and until Lender has given Agency written notice of the name and address of the assignee (and if more t han one person is an assignee, the designated name and address for notices) and such assignee qualifies as a Lender under this DDA. Thereafter, such assignee shall be considered a Lender with respect to the loan and the related encumbrance on the Property.

15.3. LENDER NOT OBLIGATED TO CONSTRUCT. Notwithstanding any of the provisions of this DDA, Lender shall not be obligated by the provisions of this DDA to construct or complete the Project. Nothing in this Section or any other provision of this DDA shall be construed to Disposition and Development Agreement

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permit or authorize Lender to devote the Property to any uses, or to construct any improvements on the Property, other than those uses or improvements provided or permitted in this DDA.

15.4. LENDER'S OPTION TO CURE DEFAULTS. After any default of Developer's obligations under this DDA, each Lender shall have the right, at its option, to cure or remedy such default, within the time for cure allowed to Developer, and to add the cost of such cure to the debt and the lien secured by the Property. Age ncy shall accept such performance as if it had been performed by Developer; provided, however , that such Lender shall not be subrogated to the rights of Agency by undertaking such performance. If the breach or default relates to construction of the Projec t, however, Lender shall not undertake or continue the construction of the Project (beyond the extent necessary to conserve or protect Project or construction already made) unless Lender assumes, in writing satisfactory to Agency, Developer's obligations t o complete the Project on the Property in the manner provided in this DDA. Any Lender who properly completes the Project as provided in this DDA shall be entitled, upon written request made to Agency, to a Certificate of Completion from Agency in a manner provided in this DDA.

Such certification shall mean that any remedies or rights with respect to the Property that Agency may have because of Developer's failure to cure any default with respect to the construction of the Project on other parts of the Pro perty, or because of any other default of this DDA by the Developer shall not apply to the part of the Property to which such Certification relates. Nothing in this Section shall be deemed to limit, modify or release any claim or remedy that Agency may have against the Developer for such default.

15.5. DEFAULT BY DEVELOPER. In the event of a default by Developer, Agency shall not terminate this DDA unless and until Agency has given notice to Lender of such default, and Lender has failed to cure such default.

15.5.1. If such default cannot practicably be cured by the Lender without taking possession of the Property, then the Schedule of Performances (and, therefore, Agency’s right to terminate this DDA) shall be tolled if and so long as, all of the following are true: (a) Lender has delivered to Agency, prior to the date on which Agency is entitled to give notice of termination of this DDA, a written instrument satisfactory to Agency in which Lender or its designee unconditionally agrees that it will commence the cure o f such default immediately upon Lender or its designee taking possession of the Property and will thereafter diligently pursue such cure to completion; provided, however, that neither the Lender nor its designee shall be obligated to pay damages to Agency on account of such default, except to the extent of any monies due and unpaid from Developer; (b) Lender or its designee has rights to obtain possession of the Property (including possession by receiver) through foreclosure, deed in lieu of foreclosure or otherwise, and Lender or its designee promptly commences and diligently proceeds to obtain possession of the Property; (c) if Lender is prevented by court action or by any statutory stay from prosecuting foreclosure proceedings, that Lender is diligently s eeking relief from such action or stay; and (d) upon receiving possession of the Property, Lender or its designee promptly commences and diligently proceeds to cure such default in accordance with this DDA.

15.5.2. From and after the cure of such Developer defaul t, Lender or its designee is not required to obtain possession or to continue in possession of the Property. Nothing in this Disposition and Development Agreement

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Section shall preclude Agency from exercising any of its rights or remedies with respect to Developer during any period of such forbearance.

15.6. FORECLOSURE. Foreclosure of any encumbrance securing the loan of Lender, or any sale under such encumbrance, whether by judicial proceedings or by virtue of any power contained in such encumbrance, or any conveyance of the Property from the De veloper to the Lender or its designee through, or in lieu of, foreclosure or other appropriate proceedings in the nature of foreclosure, shall not require the consent of Agency. Upon such foreclosure, sale or conveyance, Agency shall recognize the resulti ng purchaser or other transferee as the Developer under this DDA, provided that such purchaser or transferee expressly assumes each and every obligation of the Developer under this DDA (except for the obligation to pay damages except to the extent of any m onies due and unpaid from Developer under this DDA) by assumption agreement satisfactory to Agency. If any Lender or its designee acquires Developer’s right, title and interest under this DDA as a result of a judicial or nonjudicial foreclosure under any power contained in such encumbrance, or any conveyance of the Property from the Developer to the Lender or its designee through, or in lieu of, foreclosure or other appropriate proceedings in the nature of foreclosure, such Lender or its designee shall hav e the right to assign or transfer Developer’s right, title and interest under this DDA to an assignee; provided, however, that the assignee or transferee shall thereafter be subject to all of the terms and conditions of this DDA.

15.7. MODIFICATIONS. No modifi cation or amendment to this DDA which materially and adversely affects the Lender’s interest in the Property shall be valid and effective unless the Lender’s written consent to such modification or amendment has first been obtained, which consent shall not be unreasonably withheld.

15.8. FURTHER ASSURANCES TO LENDERS. Agency and Developer shall in good faith consider making such reasonable modifications to this DDA and executing such further instruments and agreements between them as a Lender may reasonably req uest, provided such modifications, instruments and agreements do not materially, adversely affect any party's expectations or benefit, rights or obligations under this DDA and provided such modifications, instruments, and agreements serve a material economic purpose.

15.9. ESTOPPEL CERTIFICATE. Any party may, at any time, request in writing of any other party to certify in writing that, to the knowledge of the certifying party, (i) this DDA is in full force and effect and a binding obligation of the parties; (i i) this DDA has not been amended or modified, or, if so amended, identifying the amendments; and (iii) the requesting party is not in default in the performance of its obligations under this DDA, or, if in default, describing the nature and extent of any such defaults. A party receiving such a request shall execute and return such certificate to the requesting party, or give a detailed written response explaining why it will not do so, within ten (10) days following its receipt. Agency’s designee shall be authorized to execute any such certificate requested by Developer from Agency.

15.10. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER. In reliance on the financial capability and experience of Developer, substantial public financing and other public aids have been made available by law and by the federal and local governments to make development of Disposition and Development Agreement

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the Property possible. Developer shall not, prior to issuance of a Certificate of Completion, assign Developer's interests or obligations under this DDA or undertake a ny act or transaction resulting in a significant change in the interests of the principals of Developer or the degree of their control of Developer without the prior written consent of Agency. Any assignment or other such prohibited act or transaction tak en by Developer shall be void ab initio. The transfer or assignment, pursuant to this Section, requires the transferee or assignee to execute and deliver to Agency a valid, binding, written assumption of all obligations of Developer. Such a transfer as permitted in this Section shall not relieve Developer, or any other party bound in any way by this DDA, from any of its obligations under this DDA. With respect to this provision, the Developer and the parties signing this DDA on behalf of the Developer re present that they have the authority of all of Developer’s principals to agree to and bind them to this provision.

16. CONCURRENT AGREEMENTS. The following agreements are to be executed and delivered to each party at Close of Escrow:

16.1. LOAN AGREEMENT. The Funding Agreement governing the Seller Carryback loan.

16.2. PROMISSORY NOTE. The promissory note evidencing the loan.

16.3. DEED OF TRUST. The deed of trust securing the obligations of the Seller Carryback loan.

16.4. REGULATORY AGREEMENT. The Regulatory Agreement sets out certain provisions of this DDA which shall survive the completion of the Improvements.

17. DOCUMENT INTERPRETATION. This DDA shall be interpreted in accordance with the following rules.

17.1. ENTIRE DDA; SEVERABILITY. This DDA integrates all of the terms and conditions related or incidental to its subject matter and supersedes all negotiations or previous agreements between the parties with respect to its subject matter. If any term or provision of this DDA shall, to any extent, be held invalid or unenforcea ble, the remainder of this DDA shall not be affected; provided that the intent of this DDA may then be reasonably fulfilled.

17.2. WAIVERS AND AMENDMENTS. All waivers of the provisions of this DDA must be in writing and signed by Agency or Developer, as applic able, and all amendments to this DDA must be in writing and signed by Agency and Developer. Any delay by Agency in asserting any rights in this DDA shall not operate as a waiver of such rights or to deprive Agency of or limit such rights in any way. Any waiver in fact made by Agency with respect to any specific default of this DDA by Developer shall not be considered as a waiver of the rights of Agency with respect to any other defaults of this DDA by Developer or with respect to the particular default except to the extent specifically waived in writing.

17.3. CAPTIONS, GENDER AND NUMBER. The section headings, captions and arrangement of this DDA are for the convenience of the parties to this DDA. The section headings, captions and Disposition and Development Agreement

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arrangement of this instrum ent do not in any way affect, limit, amplify or modify the terms and provisions of this DDA. The singular form shall include plural, and vice versa, and gender references shall be construed to include all genders.

17.4. DRAFTER. This DDA shall not be constru ed as if it had been prepared by one of the parties, but rather as if both parties have prepared it. Unless otherwise indicated, all references to sections are to this DDA. All exhibits referred to in this DDA are attached to it and incorporated in it by this reference.

17.5. NO MERGER. All of the terms, provisions, representations, warranties, and covenants of the parties under this DDA shall survive the Close of Escrow and shall not be merged in the Grant Deed or other documents.

17.6. TIME FOR PERFORMANCE. In determining time for performance, it shall be construed that Agency and Developer shall each do the actions required of them, promptly and when specified in this DDA, and that each action specified in the Schedule of Performances shall be performed by the responsible party on or before the date scheduled for its completion.

17.7. GOVERNING LAW. This DDA shall be governed and construed in accordance with California law.

17.8. NO JOINT VENTURE, PARTNERSHIP, OR OTHER RELATIONSHIP. Nothing contained in this DDA or in any other document executed in connection with this DDA shall be construed as creating a joint venture or partnership between Agency and Developer. Each Party is acting as an independent entity and not as an agent of the other in any respect. No relation ship exists as between Agency and Developer other than that of a governmental entity regulating the development of private property, and the owner of such private property.

17.9. NO THIRD PARTIES BENEFITED. This DDA is made and entered into for the sole protection and benefit of the parties and their permitted successors and assigns, and no other person will have any right of action or any rights to any property, benefits or funds at any time on deposit in the Construction Account or the Impound Account, if established.

17.10. INSPECTION OF BOOKS AND RECORDS. Agency has the right, at all reasonable times, to inspect the books and records of Developer regarding the Property as reasonably necessary to carry out its purposes under this DDA.

17.11. OWNERSHIP OF DATA. If this DDA is terminated, for any reason, prior to the completion of the Project, Developer shall deliver to Agency any and all data acquired for development of the Property. Agency shall have full ownership and rights to use such data.

17.12. NOTICES. All notices to be given under this DDA shall be in writing and sent to the following addresses by one or more of the following methods:

17.12.1. Addresses for notices are as follows:

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a) Agency: Housing Authority of the City of Sacramento , 801 12th Street, Sacramento, California 95814, Attention: Jeree Glasser-Hedrick.

b) Developer: San Juan Mutual Housing Associates, L.P. , 3321 Power Inn Road, Suite 320, Sacramento, CA 95826, Attention: Parker Evans.

17.12.2. Notices may be delivered by one of the following methods:

a) Certified mail, return receipt requested, in which case notice shall be deemed delivered three (3) business days after deposit, postage prepaid in the United States Mail;

b) A nationally recognized overnight courier, by priority overnight service, in which case notice shall be deemed delivered one (1) business day after deposit with that courier;

c) Hand delivery with signed receipt for delivery from a person at the place of business of the receiving party and authorized to accept delivery for the receiving party, in which case notice shall be deemed delivered upon receipt, or

d) Telecopy or facsimile, if a copy of the notice is also sent the same day by United States Certified Mail, in which case notice shall be deemed delivered one (1) business day after transmittal by telecopier, pr ovided that a transmission report is automatically generated by the telecopier reflecting the accurate transmission of the notices to receiving party at the “Fax Number” given in the Escrow Attachment or to such other address as Developer or Agency may respectively designate by written notice to the other.

17.13. SUCCESSORS. This DDA shall inure to the benefit of and shall be binding upon the parties to this DDA and their respective successors, and assigns.

18. DEFINITIONS. The following definitions shall apply for the purposes of this DDA:

18.1. “Agency” is the Housing Authority of the City of Sacramento . Agency is a public body, corporate and politic , exercising governmental functions and powers, and organized and existing under the Laws of the State of California. Th e principal office of Agency is located at 801 12th Street, Sacramento, California 95814. Agency as used in this DDA includes the Housing Authority of the City of Sacramento and any assignee of or successor to its rights, powers and responsibilities.

18.2. “Art in Public Places Program” is the commonly used name for the program implementing Agency's Aesthetic Improvement Policy. Aesthetic Improvement Policy is Agency's policy for the creation and display of artwork in public areas. The policy was adopted by Agency Resolution Number 2865, October 16, 1979. The policy as implemented is known as the Art in Public Places Program.

18.3. “Certificate of Completion” is the certificate issued by Agency certifying Developer's completion of the Project and termination of the revestment provisions.

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18.4. “City” is the City of Sacramento in the State of California.

18.5. "Close of Escrow" is the time for the close of the Escrow as provided in the Escrow Instructions.

18.6. “Contractor” is the contractor or contractors with whom Developer ha s contracted for the construction of the Project.

18.7. “Completion Date” is the date for completion of construction of the Project to the satisfaction of Agency, which date shall be not sooner than the issuance of a certificate of occupancy for the entire Proj ect. The Completion Date is stated in the Schedule of Performances.

18.8. “DDA” is this Disposition and Development Agreement including the attachments to this DDA consisting of the exhibits named in and attached to this DDA, the Preliminary Plans the Final Pl ans and any other item expressly incorporated in this DDA, all of which are incorporated in this DDA as if included in full as provisions in the body of this DDA. A default of any of the items incorporated in this DDA by reference is a default of this DDA.

18.9. “Developer” is San Juan Mutual Housing Associates, L.P.. , a California limited partnership. The principal office of the Developer is located at 3321 Power Inn Road, Suite 320, Sacramento, CA 95826. The principal of Developer is Roberto Jimenez.

18.10. “Escrow” is the escrow for the transfer of the Property and for all requirements related to the transfer. The Title Company is the holder of the Escrow.

18.11. "Escrow Instructions" are the escrow instructions for the close of the Escrow for this DDA.

18.12. “Final Plans” are the full and final plans, drawings and specifications for the Project as described in, and approved by Agency under this DDA. The Final Plans include all construction plans, drawings, specifications and other documents required to obtain all require d building permits for the construction of the Project. The Final Plans may refer, as the context may indicate, to partial Final Plans prepared and submitted in accordance with this DDA. The Final Plans shall incorporate all applicable mitigation measure s which may be required for compliance with approvals under the California Environmental Quality Act (commencing at Public Resources Code Section 21000), the National Environmental Policy Act (commencing at United States Code Title 42, Section 4321), and t he rules and regulations promulgated under such acts. The Final Plans shall specifically include changes or corrections of the Final Plans approved as provided in this DDA. The Final Plans shall include all landscaping, on - and off- site work and artwork related to the Project. Except as approved by Agency, the Final Plans shall conform in all material respects to all provisions of this DDA.

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18.13. “Funding Agreement” is the document that states the terms of 55 year loan.

18.14. “Grant Deed” is the grant deed for the transfer of the Property to Developer under this DDA. The Grant Deed contains covenants that run with the land, easements and a reverter provision.

18.15. “Hazardous Substances” as used in this DDA shall include, without limitation to, all substances, wastes and materials designated or defined as hazardous or toxic pursuant to any of the following statutes, as they may be amended or superseded, from time to time: the Clean Water Act (33 U.S.C. 1321 et. seq.); the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. 9601 et seq.); the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.); the United States Department of Transportation Hazardous Materials Table (49 CFR 172.101); the Environmental Protection Agency li st of hazardous materials (40 CFR Part 302) and California Health and Safety Code Sections 25115, 25117, 25122.7, 25140 (Hazardous Waste Control Law), 25316 (Carpenter -Presley-Tanner Hazardous Substances Account Act), 25501 (Hazardous Materials Release Res ponse Final Plans and Inventory) and 25281 (Underground Storage of Hazardous Substances); all applicable local regulations; and all rules and regulations promulgated pursuant to said laws.

18.16. “Lender” shall mean all holders of any lien or encumbrance as sec urity for a loan on all or any part of the Property which loan is made in accordance with this DDA or otherwise approved by Agency in writing.

18.17. “Plans” are the Project designs and elevations, prepared by the Project architect Mogavero and dated December 12, 2022, a portion of which (consisting of various elevations) is attached to the staff report for approval of this DDA. Agency has approved the Plans concurrently with the approval of this DDA.

18.18. “Project” is the development of the Property as described in this DDA for the uses stated in this DDA. The Project includes all improvements rehabilitated and constructed on the Property in accordance with this DDA.

18.19. Reserved

18.20. “Property” is the real property to be developed under this DDA by Developer, as more particularly described in the Property Description. The Property includes all improvements contained within the Property.

18.21. “Property Description” is the legal description of the various parcels of real property affected by this DDA. The Property Desc ription is attached as Exhibit 1: Property Description.

18.22. “Purchase Price” is the purchase price for the Property as set out in Section 3.

18.23. Reserved
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18.24. “Regulatory Agreement” is the agreement, which sets out the certain provisions of this DDA that shall survive the completion of the Project.

18.25. “Schedule of Performances” is the schedule that establishes the dates by which obligations of the parties under this DDA must be performed and on which conditions must be satisfied. The Schedule of Performances is attached as Exhibit 2: Schedule of Performances.

18.26. “Scope of Development” is the detailed description of the construction parameters for the Project. The Scope of Development is attached as Exhibit 3: Scope of Development.

18.27. “Title Company” is Placer Title Company. Title Company is the insurer of title under this DDA and the Escrow holder. The Title Company address is 301 University Avenue, Suite 120, Sacramento, CA 95625.

18.28. “Unavoidable Delay” is a delay in the performance by a party of any obligation which delay is unforeseeable and beyond the control of such party and without its fault or negligence.

Unavoidable Delay shall include acts of God, acts of the public enemy, acts of the Federal Government, acts of the o ther party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather (as for example, floods, tornadoes, or hurricanes) or delays of subcontractors due to such causes. In the event of the occurrence of an y such enforced delay, the time or times for performance of such obligations of the parties shall be extended for the period of the enforced delay, as determined by Agency, provided that the party seeking the benefit of the provisions of this Section shall , within thirty (30) days after it has or should have knowledge of any such enforced delay, have first notified the other party, in writing, of the delay and its cause, and requested an extension for the period of the enforced delay.

THE PARTIES HAVE EXEC UTED THIS DDA in Sacramento, California, on the following dates, effective as of the date first written above.

Disposition and Development Agreement

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DEVELOPER :

SAN JUAN MUTUAL HOUSING ASSOCIATES,
L.P.

By: San Juan Mutual Housing
Association LLC, a California
limited liability company, its co-
general partner

By: Mutual Housing California,
a California nonprofit public
benefit corporation, its sole
member/manager

By: _______________________
Roberto Jimenez
Chief Executive Officer

Approved as to form:

_________________________
Developer Counsel

AGENCY:

THE HOUSING AUTHORITY OF THE CITY OF

SACRAMENTO

By:
___________________________________
LaShelle Dozier, Executive Director

Date: ____________

Approved as to form:

_________________________
Agency Counsel

Disposition and Development Agreement

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[NOTARIZED ACKNOWLEDGEMENTS]
Disposition and Development Agreement

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EXHIBIT 1

Property Description

The land described herein is situated in the State of California, County of Sacramento, City of Sacramento, described as follows:

Lot 24, as shown on the "Plat of Young's Subdivision", recorded in the office of the County recorder of Sacramento County on June 11, 1946, in Book 23 of Maps, Map No. 26.

APN: 026-0073-004-0000

Lot 25, as shown on the "Plat of Young's Subdivision", recorded in the office of the County recorder of Sacramento County on June 11, 1946, in Book 23 of Maps, Map No. 26.

APN: 026-0073-005-0000

Lot 26, as shown on the "Plat of Young's Subdivision", Filed in Book 23 of Maps, Page 26, Sacramento County records.

APN: 026-0073-006-0000

Lot 27 and the West 0.05 feet of Lot 28, as shown on the "Plat of Young's Subdivision", Filed in Book 23 of Maps, Page 26, Sacramento County records.

APN: 026-0073-007-0000

Lot 28, as shown on the "Plat of Young's Subdivision", Filed in the office of the County recorder of Sacramento County on June 11, 1946, in Book 23 of Maps, Map No. 26.

EXCEPTING THEREFROM the West .50 feet of said Lot 28.

APN: 026-0073-008-0000

BEGINNING AT A POINT ON THE WEST LINE OF THE STATE HIGHWAY KNOWN AS "UPPER STOCKTON ROAD", MARKING THE NORTHEAST CORNER OF SAID LOT NUMBER 2; THENCE WESTERLY, ALONG THE NORTH LINE OF SAID LOT NUMBER 2, A DISTANCE OF SIX HUNDRED THIRTY-NINE AND 75/100 FEET, MORE OR LESS, TO THE NORTHWEST CORNER OF SAID LOT NUMBER 2; THENCE SOUTH ALONG THE WEST LINE OF SAID LOT NUMBER 2,
Disposition and Development Agreement

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A DISTANCE OF ONE HUNDRED SIXTY-FOUR AND 61/100 FEET, TO A POINT ON SAID LINE DISTANT NORTH 0° 21' WEST ONE HUNDRED FORTH-NINE AND 54/100 FEET FROM THE SOUTHWEST CORNER OF SAID LOT NUMBER 2,

SAID POINT MARKING THE NORTHWEST CORNER OF A TRACT OF LAND CONVEYED BY P.J. KLINE AND IRENE KLINE, HIS WIFE, TO JAMES W.

WARDELL AND VICTORIA WARDELL, HIS WIFE, BY DEED DATED MAY 19, 1927, AND RECORDED IN BOOK 127 OF OFFICIAL RECORDS, AT PAGE 383, SACRAMENTO COUNTY RECORDS; THENCE EASTERLY, ALONG THE NORTH

LINE OF THE LAND OF SAID WARDELL, A DISTANCE OF SEVEN HUNDRED ONE AND 06/100 FEET, MORE OR LESS, TO THE WEST RIGHT OF WAY LINE OF THE STATE HIGHWAY KNOWN AS "UPPER STOCKTON ROAD"; THENCE NORTH 20° 00' WEST, ALONG SAID RIGHT OF WAY LINE, BEING THE EAST LINE OF SAID LOT NUMBER 2, AS DELINEATED ON PLAT OF R.A. PRICE-20 ACRES, A DISTANCE OF ONE HUNDRED SEVENTY-FOUR AND 22/100 FEET, MORE OR LESS TO THE POINT OF BEGINNING.

APN: 026-0073-014-0000

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EXHIBIT 2

Schedule of Performances

This schedule shall be updated in a manner mutually agreed by the parties if tax credits are not awarded in the Summer of 2023 and the Expiration Date as defined in the DDA.

Milestone Schedule
Agency Delivers Remedial Action Plan to Developer Winter 2023 Developer submits CDLAC and 4% TCAC Application Winter 2023 Developer receives Bonds and 4% TCAC Allocation Summer 2023 Completion of Agency Remedial Work Fall 2023 (Must be prior to CDLAC’s closing
Deadline)
Developer provides Building Permits/Readiness Letter Fall 2023 Agency Notice to Proceed Fall 2023
Close of Escrow Fall 2023
Developer begins Construction Fall 2023
Developer begins Lease-up Summer 2025
Developer completes Construction/Certificate of Occupancy Fall/Winter 2026

Disposition and Development Agreement

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EXHIBIT 3

Scope of Development

I. Project Description

San Juan Apartments by Mutual Housing is located at 5700 Stockton Boulevard in Sacramento, and consists of seven parcels, some of which are located within the City of Sacramento, and some of which are located within the unincorporated Sacramento County. The new construction project will bring 113 units of affordable housing to South Sacramento. The Project will comply with the American with Disabilities Act (ADA).

Construction materials will be new, excepting recycled items with written pre-approval from SHRA. All building and site improvements will adhere to SHRA’s minimum construction standards.

II. Site Improvements

1. Landscaping: Project will be designed in accordance with County requirements and subject to SHRA approval.

2. Irrigation System: The automated irrigation system incorporates a “SMART controller” that senses rain to reduce water use. Irrigation piping and fixtures shall be installed with new system that includes appropriate water efficient fixtures.

3. Playground Equipment: A playground with equipment suitable for children up to age 12, and equipment suitable for toddlers, will be installed onsite.

4. Pedestrian and Fire-access Gates: Gates will meet code requirements.

5. Site Accessories: Bike racks, tables, benches, barbeques, etc., will be included in the development.

6. Perimeter Fence: The site will include full perimeter fencing

7. Asphalt Parking Lot and Drive Aisles: Parking lot and drive aisles will be designed in accordance with geotechnical recommendations. The parking lot will meet current code and ADA requirements, with respect to including required ADA van accessible parking.

III. Building Exterior Improvements

8. Roof: The roofing of all buildings have a minimum 20-year warranty Asphalt Composition Shingles.

9. Gutters, Downspouts and Downspout Extensions: All gutters, downspouts and Disposition and Development Agreement

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downspout extensions will be new and connected to a storm drain system and/or routed to surface drain to site bio-retention planters.

10. Balcony and Patio Enclosures: 21 ground floor apartments will have private patios on grade; while 20 upper level apartments will have balconies with composite decking.

11. Paint: Building will have interior and exterior painting. Non-habitable structures on the property will match the habitable buildings.

12. Windows and Sliders: All windows will be energy-efficient windows. Windows will be designed to open and will have screens. Operable windows will have functional locks, and will be operable without excessive effort.

13. Trash Enclosures: The site will contain two trash enclosures with concrete aprons.

14. Lighting: The exterior wall light fixtures will feature energy efficient wallpacks to increase visibility. Site pole lights will have LED fixtures.

15. Sidewalks and Ramps: The sidewalks and ramps will meet current code and ADA requirements throughout the Project.

16. Mailbox Units: N/A

17. Stairways, Railings and Landings: Common area stairs will meet current accessible codes for treads and risers, guardrails and handrails. Bottom of stairs will either be closed off for storage or provided with cane rails. Stairways in common areas will include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

18. Signage: Monument signage, buildings, apartments, garages, parking, ADA, and property signage throughout as required by current code.

19. Security: New CCTV system with web-based cameras at primary automobile entrances, parking, common areas, mailboxes and community room(s).

20. Exterior Building Systems: Exterior mounted electrical, mechanical, and plumbing systems will be protected from vandalism

IV. Building Interior

1. ADA units: The project will contain fully accessible units and hearing/visual equipped units at or above the minimum number required by building code, SHRA, or other state agency.

2. Kitchens: All kitchens will have new solid-surface counters, cabinets, drawers, refrigerator/freezer combination appliances, free-standing electric range/oven Disposition and Development Agreement

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combination appliances, ventilation hood appliances, dishwashers, sinks, garbage disposals, angle stops, low-flow faucets and finishes. All appliances will be EnergyStar or better. All kitchens will have adequate counter space and cabinet space. Shelving for microwaves will be provided in non-ADA units.

3. Bathrooms: All bathrooms will have solid-surface counters, sinks, tubs and surrounds, accessories (i.e., toilet paper holders, towel racks, shower rods and curtains), low-flow showerheads, low-flow toilets and low-flow faucets. Vanities will have cabinets and drawers. A humidistat fan will be installed in all bathrooms. Tub surrounds will be one single solid surface per wall.

4. Ceilings and Walls: All interior walls and ceilings will have a drywall finish. In select areas of common areas (lobbies, community room, office areas, etc.) higher grade finishes (wood, tile, etc.) and acoustic panels / clouds may be used.

5. Doors: All doors will be new and will meet current egress standards. All door hardware will have matching finishes. Exterior doors will have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware will have single action hardware to release deadbolt and latch assembly. All sliding exterior doors will have screen doors and shall have functional locks and must operate freely without excessive effort.

6. Flooring: New vinyl sheet flooring will be installed in all residential unit bathrooms kitchens and living rooms. New LVP flooring will be installed in the kitchens. Carpet will be installed in bedrooms.

7. Windows: New window blinds will be installed on all windows and sliders.

8. Paint: Paint will be applied to all walls, ceilings, and trim, in all rooms, closets and storage rooms.

9. Electrical: GFI outlets will be installed to code. New hardwired smoke and CO detectors will be installed in the hallways of all units. New hardwired smoke detectors will be installed in the bedrooms of all units. Broadband infrastructure will be provided.

10. Lighting: All kitchens, dining rooms, bedrooms, bathrooms and hallways will have new energy efficient light fixtures installed.

V. Community Areas

1. Community Room, Office, Kitchen and Restroom:

a) The community building will contain a multipurpose room with shared kitchen, offices, and other community space.

Disposition and Development Agreement

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b) The kitchen will have solid-surface counters, refrigerator/freezer combination appliance, free-standing electric range/oven combination appliances, micro-hood combination appliance, dishwasher, sink, garbage disposal and low-flow faucets. All appliances will be EnergyStar or better. Furniture, fixtures, and cabinets will be installed.

c) The restrooms will meet current code and ADA requirements.

d) Flooring in common areas will be LVP (minimum 20 mil wear layer) or carpet.

VI. Laundry Facilities:

1. All laundry facilities will meet code and ADA requirements. New vinyl sheet flooring, windows, doors, washer and dryer appliances, counter for folding laundry, lighting fixtures, humidistat

Exhibit B

Effective Date: February 7, 2023

San Juan Mutual Housing Associates, L.P.,
c/o Mutual Housing California
Roberto Jimenez, CEO, Vice President
3321 Power Inn Road, Suite 320
Sacramento, CA 95826

RE: Conditional Loan Commitment for San Juan Apartments by Mutual Housing

Dear Mr. Jimenez,:

On behalf of the Sacramento Housing and Redevelopment Agency (SHRA) , Housing Authority of the County (HACOS) County, and Housing Authority of the City of Sacramento (HACS) (collectively, Agency), we are pleased to advise you of this Conditional Loan Commitment (Commitment) of acquisition, construction, and permanent loan funds (Loan) in the amount not to exceed $22,668,000 for the purpose of financing the acquisition, new construction, and permanent financing of that certain real property known as San Juan Apartments by Mutual Housing located at 5700 Stockton Blvd. 5258, 5266, 5280, 5300, 5320, 5340 Young Street, Sacramento, California 95824 (Property). The Agency's decision is based on your application, and all representations and information supplied by you to it. If these representations and information change in a material manner without written approval of the Agency, this Commitment is void. Agency's obligation to make the Loan is subject to the satisfaction of all the following terms and conditions and Borrower's execution of documentation that is in a form and in substan ce satisfactory to the Agency.

PROGRAMS FUNDS NOT TO EXCEED

AMOUNTS
County Funding
SHRA County Home Investment Partnership (HOME) Loan $ 4,300,000 SHRA County Housing Trust Fund (HTF) Predevelopment Loan* $ 500,000 SHRA County Housing Trust Fund (HTF) Loan $ 4,750,000 State Local Housing Trust Fund Loan $ 4,750,000
SHRA County Affordable Housing Fund (AHF) Loan $ 5,700,000 Housing Authority of the County (HACOS) Seller Carryback Loan $ 123,000 Total County Funding $ 20,123,000
City Funding
Housing Authority of the City (HACS) Seller Carryback Loan $ 545,000

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

SHRA City Housing Trust Fund (HTF) Loan $ 2,000,000
Total City Funding $ 2,545,000
TOTAL FUNDS $ 22,668,000
*The terms of the Predevelopment Loan are incorporated in Section 7 of this Commitment.

The Loan shall be made on standard Agency loan documents. Loan terms not in this Commitment and the attached loan document forms shall not be included in the final loan documents without additional environmental review and governing board approval. In the event of any discrepancies between terms stated in this C ommitment and the loan documents, the terms stated in th is Commitment shall be deemed to be terms of this Commitment.

Unless otherwise agreed in writing by the Agency in exercise of its absolute discretion, the following shall be considered conditions to Agency approval of a financing commitment. The Agency may, in exercise of its absolute discretion, modify its requirements upon written notice to Borrower given at least sixty (60) days prior to close of escrow for the Property.

This Commitment will expire June 30, 2024, unless a mutually agreed upon extension is made.

1. PROJECT DESCRIPTION : San Juan Apartments by Mutual Housing development is composed of three story residential walk-up buildings with tuck under parking. The development will and include a total of twelve (12) buildings, 131 on-grade parking spaces, and 113 units comprised of 1-bedroom, 2-bedroom, 3-bedroom units. The Project will also contain amenities that include a community center with kitchen, management offices, pool, landscaped courtyards, and a school aged and toddler play areas.

2. BORROWER: The name of the Borrower for the Loan is San Juan Mutual Housing Associates, L. P , a California limited partnership with Mutual Housing California , or related entity as the lead development partner.

3. PURPOSE OF LOAN : The Loan is to be used by Borrower solely to pay the costs of acquisition, construction , permanent financing and for such other purposes as Agency expressly agrees to in the loan agreement for the Loan, and such other agreements as may be generally required by the Agency for the use of the funding source for the Loan.

4. PRINCIPAL AMOUNT: The combined principal amount of the Loan will be the lesser of the following:

a. Twenty-Two Million, Six Hundred and Sixty -Eight Thousand Dollars and No Cents ($22,668,000.00), or
b. an amount to be determined prior to close of the Loan based on a project budget approved by Agency.

5. TERM OF LOAN : The Maturity Date of the Loan is 57 years or 6 84 months from the closing date, at which point any and all unpaid principal and interest on the loan will be due and payable.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

6. INTEREST RATE: The Loan will bear simple interest at three percent (3%) per annum.

Interest shall be calculated on the basis of a 36 5-day year and actual number of days elapsed.

7. PREDEVELOPMENT LOAN
The following terms and conditions will apply to the Predevelopment Loan:
a. Project: San Juan Apartments by Mutual Housing
b. Borrower: San Juan Mutual Housing Associates, L.P, or related entity. c. Predevelopment Loan: The principal amount of the Agency’s Predevelopment Loan is comprised of HTF program funds associated 5700 Stockton Blvd. 5258 , 5266, 5280, 5300, 5320, 5340 Young Street, Sacramento, California 95824 is Five Hundred Thousand Dollars and No Cents ($500,000.00) with a zero percent interest rate (0.00%).
d. The Maturity Date for the Predevelopment Loan shall be the date which is the earlier to occur of: (i) June 30, 2024 or extended upon mutual agreement; or (ii) the close of the $22,668,000 construction and permanent loan from Lender to Borrower for the Project (“Construction Loan”). Upon Borrower ’s satisfaction of all conditions precedent to the funding of that Construction Loan for the Property, all funds advanced by Lender pursuant to this Loan Agreement and the Note not yet repaid to Lender shall become part of the outstanding principal amount of such Construction Loan and secured by the security instruments, if any, executed by Borrower in connection therewith and shall be repaid pursuant to the terms of the documents evidencing such Construction Loan. Subject to the funding of the Construction Loan, the Note will be cancelled . For the avoidance of doubt, the $22,668,000 Construction Loan is inclusive of the $500,000 Predevelopment Loan proceeds.

8. ANNUAL REPAYMENT: Annual principal and interest payments shall be deferred during the initial 15-year period following conversion to permanent financing and thereafter made according to the structured payment schedule contained in the final Loan Agreement and as calculated to achieve a minimum annual debt service coverage ratio of

1.2:1. Payments shall be applied first to outstanding interest accrued and unpaid and then to principal. All outstanding principal and interest is due and payable on the Maturity Date.

9. SOURCE OF LOAN FUNDS: Agency is making the Loan from the following sources of funds, and the Loan is subject to all requirements related to the use of such, whether Agency requirements or otherwise: County Home Investment Partnership (Home), County Housing Trust Fund (HTF), State Local Housing Trust Fund, County Affordable Housing Fund (AHF), Housing Authority of the County Seller Carryback (HACOS), Housing Authority of the City Seller Carryback (HACS), City Housing Trust Fund (HTF). This Loan is conditioned upon Borrower’s acceptance of Agency’s requirements and conditions related to such lending programs and funding sources, including among others, the required forms of agreements for the Loan; the requirements for covenants, conditions and restrictions upon the Property; and insurance and indemnity requirements.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

10. Borrower acknowledges that, as a condition of the Agency’s making of the Loan, the Property will be subject to restrictions on future sales and rentals which may result in less income to Borrower than could otherwise be realized, and that such restrictions run with the land, and during their operational term, will bind all successors in interest.

___________ (Borrower Initial)

11. ACCELERATION: Agency shall have the right to accelerate repayment of the Loan in the event of a default under any Loan Document or upon sale, transfer or alienation of the Property except as specifically provided for in the Loan documents.

12. SECURITY: The Loan shall be evidenced by promissory note(s) secured by a deed of trust with assignment of rents against the fee and/or leasehold interest in the Property and Improvements, which shall be a lien upon the Property and Improvements subject only to liens senior to the Agency’s lien securing loans from a conventional lender or other lender and such other items as the Agency may approve in writing. The Loan shall also be secured by security agreements. The Agency may subordinate said deeds of trust in ord er to accommodate completion of the development of the Property. The Agency will not subordinate the regulatory agreement(s) to said deeds of trust in order to preserve the affordable housing covenants.

13. LEASE AND RENTAL SCHEDULE: All leases of the Property and Improvements shall be subject to Agency's review and approval prior to execution. Borrower shall not deviate from the rental schedule presented in Borrower's application for the Loan without Agency's prior written approval ; provided, however, that such approval shall not be required for annual adjustments to rental rates as permitted by the California Tax Credit Allocation Committee.

14. PROOF OF EQUITY : Borrower shall provide proof of equity for the Property and Improvements in the amount of no less than $30,000,000 in Low Income Housing Tax Credit Equity and no less than $5,500,000 in deferred developer fee or General Partner contribution. If LIHTC equity goes below $30,000,000 the equity must be offset by an increase in deferred developer fee or other non-Agency funding source.

15. OTHER FINANCING: Borrower, as a requirement of the Loan, shall procure and deliver to Agency evidence satisfactory to Agency that Borrower has obtained the following described financing which may be secured by a lien upon the Property and Improvements superior or subordinate to Agency's liens, and which shall be otherwise on terms and conditions acceptable to Agency:

a. As a condition precedent to disbursement of the remainder of the Agency loan, construction financing from a private lender(s) in an amount(s) sufficient to complete construction of the Property according to a scope of work as approved by Agency and made for a term not less than that specified in the Schedule of Performances for completio n of construction, and in any event not less than the

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

time necessary to fulfill all conditions precedent to funding of the permanent financing.
b. Commitments for permanent financing sufficient to “take out” all liens senior to the Agency’s lien.
c. Such commitments for financing shall not require modification of Agency loan documents, or any term of this commitment letter.
d. Such commitments shall not be based upon sources and uses of Project funds that are different from those approved by Agency for the pr oject or be subject to conditions which require amendment of the DDA, OPA or other agreements.

16. EVIDENCE OF FUNDS : Prior to the first disbursement of the Loan, Borrower must demonstrate evidence of adequate and assured funding to complete the development of the Project in accordance with the Agency's requirements. Borrower's evidence of available funds must include only one or more of the following: a) Borrower equity; b) firm and binding commitments for the Project from financial institution(s) or from ot her lender(s) approved by Agency in its absolute discretion; and c) Agency’s contribution, provided, however, that Agency is not obligated by this letter to make any contribution not stated in the terms of the letter.

17. SOILS AND TOXIC REPORTS : Pursuant to the Disposition and Development Agreement, the Agency has prepared a hazardous substances report made in accordance with the American Society for Testing and Materials "Standard Practice for Environmental Site Assessments; Phase I Environmental Site Assessment Process" (Designation E1527 - 13) prepared by a licensed or registered environmental engineer or other qualified party prior to Loan closing. As a condition of the transfer of the Agency owned property and disbursement of Loan funds, assurances must be provided that hazardous materials are not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitor ing such remediation . Borrower will be responsible for any mitigation measures after the conveyance of the property.

18. LOAN IN BALANCE: Borrower will be required to maintain the Loan "in balance". The Loan is "in balance" whenever the amount of the undisbursed Loan funds, the remaining sums to be provided by the Borrower and the loan funds from other project lenders or the equity investor are sufficient, in the sole judgement of the Agency, to pay for the remainder of the work to be done on the project as required by written agreement with the Agency.

Should the Agency determine that the Loan is not "in balance", the Agency may declare the Loan to be in default.

19. PLANS AND SPECIFICATION : Final plans and specification s, if any, for the project must be in accord with the proposal approved as part of the Loan application. Final plans and specifications will be subject to Agency's final ap proval prior to the disbursal of Agency Loan funds. Borrower must obtain Agency's prior written consent to any change in the approved plans and specifications or any material deviation in construction of the project. The final plans shall incorporate all related mitigation measure s, environmental conditions required, if any, for compliance with approvals under CEQA, and/or NEPA, or

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

the U.S. Department of Housing and Urban Development as conditions of approval of the project.

20. ARCHITECTURAL AGREEMENT: The architectural agreement (Agreement) , if any, for the preparation of the plans and specifications and other services shall be subject to Agency's approval. Agency may require an assignment of Borrower's interest in and to the Agreement as security for the Loan.

21. CONSTRUCTION CONTRACT: The construction contract ( Contract), if any, and any change orders issued thereunder, and the contractor (Contractor) to be retained by Borrower to construct the Improvements shall be subject to Agency's approval. Agency may require an assignment of Borrower's interest in and to the Contract as security for the Loan. Agency may require Contractor to provide a performance and payment bond in a form acceptable to Agency for the amount of the Contract.

22. ECONOMIC OPPORTUNITY EMPLOYMENT REQUIREMENTS : The Loan will require that to the greatest extent fea sible, opportunities for training and employment be given to lower income residents in and around the area of the project. Borrower will instruct its Contractor and its subcontractors to utilize lower income project area residents as employees to the greatest extent feasible.

23. RETENTION AMOUNT: The Agency shall retain ten percent (10.0%) of the total amount of the Loan as retention and shall be released when the Agency determines all conditions to final disbursement of the Loan have been satisfied.

24. COST BREAKDOWN: Borrower shall deliver to Agency for Agency's approval prior to commencement of work a detailed cost breakdown of the cost of constructing, financing and other costs of developing the Improvements, which breakdown conforms to the project plans and specification and the budget approved with this C ommitment. Borrower shall also deliver a list of all contractors and subcontractors to be employed in connection with the construction of the Improvements. If required by the Agency , Borrower shall also submit copies of all bids received for each item of work to be performed as well as copies of executed contracts and subcontracts with acceptable bidders.

All contracts, subcontracts, contractors, and subcontractors shall be subject to Agency's approval prior to close of the Loan. Agency also reserves the right to require performance and material payment bonds on any or all contractors, or in lieu of bond a letter of credit acceptable to Agency.

Agency shall make disbursements of the Loan based on a c ost breakdown that lists line items in cost categories. Agency shall require that Borrower provide documentation supporting all requests for disbursement of Loan funds, including proof of work done and actual expenditure. Agency shall conduct inspections of the Property to assure that the work was done before making a disbursement.

25. COST SAVINGS: At completion of construction, Borrower shall submit to Agency a cost certification prepared by a qualified, independent auditor acceptable to Agency, which cost

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

certification shall indicate the amounts actually spent for each item in the cost breakdown and shall indicate the final sources of funding. If there is an aggregate savings, in the total of all such cost breakdown items from the cost breakdown items in the original budget approved by the Agency, after adjusting for any decrease in any funding source including any loss of any equity investment due to an adjustment in the allowable tax credits, the Agency shall withhold for itself as loan repayment, one -half of such savings from the amount of retention then held by the Agency, and the Loan balance shall be reduced by the amount so withheld. The Agency, in its sole discretion, shall determine any reduction and/or repayment of the Agency loan based upon this cost certification and the original approved budget for the project.

26. START OF CONSTRUCTION : Borrower shall commence construction at the earliest possible date subject to the conditions of this Agency and other involved lenders, but no later than sixty (60) days following the close of construction financing.

27. OTHER LENDER DRAW: “Other Lender Draw” means a draw request or other request for disbursement submitted to another lender for the Project. Borrower shall concurrently submit to Agency any Other Lender Draw. Delivery of such Other Lender Draw shall be made in the same manner as any other notice, except that it shall also be marked “OTHER LENDER DRAW REQUEST” and delivered to the person named in writing by Agency as the recipient of such requests or, in the absence thereof, to Agency’s Portfolio Management office. Borrower shall provide Agency with true, accurate and correct copies of each Other Lender Draw, if any, including without limitation all supporting information, documents, and other required submittals. Agency shall have the right to reject an Other Lender Draw, for failing to comply with the Loan, for changing the Project in any material way, or for impairing the ability of Agency to enjoy the practical realization of its rig hts under the Loan and its related instruments. If Agency rejects an Other Lender Draw, Borrower shall withdraw the notice for such Other Lender Draw and shall not accept and shall return to Agency any disbursement on account of such Other Lender Draw.

28. COMPLETION OF CONSTRUCTION: Borrower shall complete the construction of the Improvements no later than twenty-four (24) months following the close of construction financing.

29. SECURITY CAMERAS AND OUTSIDE LIGHTING : Project shall include installation of a security camera system at vehicular driveways and additional exterior lighting, and security patrols, all as approved by the Agency.

30. INSURANCE PROVIDER : Each policy of insurance required under the Loan shall be obtained from a provider licensed to do business in California and having a current Best's Insurance Guide rating of A VII, which rating has been substantially the same or increasing for the last five (5) years, or such other equivalent rating, as may reason ably be approved by Agency's legal counsel.

31. PROPERTY INSURANCE: Borrower shall procure and maintain property insurance and during construction Builder's Risk completed value insurance in a form and substance approved by Agency. Coverage shall be for protection against loss of, or damage to the

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Improvements or materials for their construction to their full insurable value. Borrower shall also procure and maintain insurance against specific hazards a ffecting Agency's security for the Loan as may be required by Agency, governmental regulations, or any permanent lender. All such policies shall contain a standard mortgagee loss payable clause in favor of Agency. The insurance required shall be written with a deductible of not more than $25,000.00.

32. COMMERCIAL GENERAL LIABILITY AND OTHER INSURANCE:

Borrower shall carry insurance as set forth below effective prior to the disbursement of the Loan, and such insurance shall be maintained in full force and effect at all times and work is performed in connection with the project. Such insurance coverage must list the Agency as an additional insured, and must be approved in writing by Agency prior to the disbursement of the Loan.
a. Commercial general liability insurance, in Insurance Services Office (ISO) policy form CG 00 01 or equivalent, with limits of liability not less than: $1,000,000 per occurrence, and $5,000,000 general aggregate, all per location of the project, such coverage to include contractual liability to include bodily injury, property damage and personal injury;
b. Personal injury insurance with the employment exclusion deleted, unless the Agency gives prior written approval for the employment exclusion to remain in the policy;
c. Commercial automobile liability insurance for any vehicle used for or in connection with the project, in an amount not less than $1,000,000 and approved in writing by Agency; and
d. Workers’ compensation and all other insurance required under applicable law, in the amount required by applicable law or by Agency, whichever amount is greater.

33. TITLE COMPANY: Borrower must procure a Title Company in the Sacramento region.

Title Company is the insurer of title and the escrow holder. The Title Company is Placer Title Company located at 301 University Avenue, Suite 120, Sacramento, CA 95825.

34. TITLE INSURANCE: Borrower must procure and deliver to Agency a n ALTA Lender's Policy of Title Insurance, together with such endorsements as Agency may require, including but not limited to ALTA endorsement nos. 9.6 and 9.7 (or CLTA endorsement nos. 100 and 116) and CLTA endorsement nos. 102.5/102.7 insuring Agency in an amount equal to the principal amount of the Loan and covenants, conditions or restrictions of the Loan, that Agency's Deed of Trust constitutes a third lien or charge upon the Property and Improvements subject only to such items as shall have been approved by Agency. There must be no exceptions permitted for mechanics liens. Title insurance for the Loan must be issued by a title insurer approved by Agency.

35. ORGANIZATIONAL AGREEMENTS: Borrower must submit to Agency certified copies of all of Borrower’s organizational documents, including all amendments, modifications or terminations: if a corporation, Borrower's Articles of Incorporation and By -Laws; if a partnership, its Partnership Agreement and, as applicable, Certificate of Limited Partnership or Statement of Partnership; if a Limited Liability Company, its Articles of

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Organization and its Operating Agreement; and in all cases with all exhibits and amendments to such documents, fictitious business name statements, other related filings or recorded documents and such related documents as Agency may request. If it is a corporation, Borrower must submit a corporate borrowing resolution referencing this Loan.

If Borrower is other than a corporation, Borrower must submit such proof of authority to enter this Loan as may be required under the organizational documents.

36. PURCHASE OF PROPERTY : Borrower shall provide Agency with copies of all documents relating to Borrower's purchase of the Property.

37. FINANCIAL INFORMATION: During the term of the Loan, Borrower shall deliver to Agency within 120 days of the end of each fiscal year an audited income and expense statement, a balance sheet, and a statement of all c hanges in financial position signed by authorized officers of Borrower. Prior to close of the Loan and during its term, Borrower must deliver to Agency such additional financial information as may be requested by Agency. Agency reserves the right to revi ew and approve financial statements and other credit information and references prior to closing. During the term of the Loan, Borrower must deliver to Agency a monthly rent -roll including household composition information and operating statements with respect to the Property and Improvements, as Agency may request.

38. MANAGEMENT AGREEMENT: Prior to execution, Borrower must submit to Agency any agreement providing for the management or operation of the Property or Improvements by a third party which agreement is subject to Agency Approval.

39. AFFIRMATIVE FAIR MARKETING : Borrower agrees to follow the Agency’s Affirmative Marketing Policies that require outreach to groups least likely to apply for the housing based on local demographic information, providing sufficient marketing time prior to lease Up (as defined in the Affirmative Marketing Policies), and lotteries or other method for initial Lease Up and initial waiting list creation, as agreed upon by the Agency and Borrower prior to the start of Lease Up.

40. RESIDENT SERVICES AGREEMENT : Prior to execution, Borrower must submit to Agency any agreement providing for the resident services by a third party which agreement is subject to Agency Approval. The agreement must include on -site resident services according to the following minimum schedule of twenty (20) hours per week:

a. Coordinator: Six (6) hours per week (maximum)
b. After School Programming: Eight (8) hours per week (two hours per day and four days per week, minimum)
c. Additional Programming: Balance of minimum three ( 6) hours per week shall include, but are not limited to:
i. Workforce development support and activities.
ii. Education classes such as nutrition, exercise, health resources, health insurance application assistance, Annual onsite health fair and ESL classes. iii. Socialization activities such as bingo, gardening and community building events.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

iv. Other services such as transportation assistance, counseling assistance and employee readiness and job search assistance.

41. LOW INCOME HOUSING TAX CREDITS (LIHTC): Borrower represents that as a condition of closing this Loan it is applying for an allocation of LIHTC’s and agrees to perform all actions and to meet all requirements to maintain the LIHTC allocation if granted.

42. SMOKE-FREE ENVIRONMENT: 100% of the buildings and units must be smoke free (including all forms of smoking that create secondhand smoke that impacts the health of nonsmokers). In addition, all indoor common areas must be smoke-free. Clearly-marked designated smoking areas must be provided.

43. DOCUMENTATION: This letter is not intended to describe all of the requirements, terms, conditions and documents for the Loan, which shall also include customary provisions and documents for an Agency transaction of this type. All documents to be delivered to or approved by Agency must be satisfactory to Agency in all respects. Borrower must promptly deliver to Agency any further documentation that may be required by Agency.

44. CONSISTENCY OF DOCUMENTS: As a material obligation under this C ommitment, Borrower shall assure that the loan documents for the Project are consistent with lender's commitment approved by the Agency and comply, in all respects, with this Commitment.

45. CHANGES OR AMENDMENTS: No documents or contracts which are to be delivered to Agency or are subject to Agency's review or approval shall be modified or terminated without the prior written approval of Agency.

46. ACCEPTANCE OF THIS COMMITMENT: Borrower’s acceptance of this Commitment shall be evidenced by signing and deliv ering to Agency the enclosed copy of this letter.

Until receipt of such acceptance by Agency, Agency shall have no obligation under this letter. Agency may withdraw this Commitment at any time prior to Borrower’s acceptance.

Signatures appear on the following page.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Sincerely,

__________________________________
La Shelle Dozier, Executive Director

The undersigned acknowledges and accepts the terms and conditions of the Commitment and Scope of Development and Rental Property Minimum Construction Standards (Exhibit 1), and has executed this Commitment as of the Effective Date.

BORROWER:

San Juan Mutual Housing Associates, L.P.,
a California limited partnership

By: San Juan Mutual Housing Association LLC,
a California limited liability company,
its co-general partner

By: Mutual Housing California,
a California nonprofit public benefit corporation,
its sole member/manager

By: _____________________________
Roberto Jimenez
Chief Executive Officer

Attachment:

Exhibit 1 - Scope of Development and Rental Property Minimum Construction Standards

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Exhibit 1 - Scope of Development

I. Project Description

San Juan Apartments by Mutual Housing is located at 5700 Stockton Boulevard in Sacramento, and consists of seven parcels, some of which are located within the City of Sacramento, and some of which are located within the unincorporated Sacramento County. The new construction project will bring 113 units of affordable housing to South Sacramento. The Project will comply with the American with Disabilities Act (ADA).

Construction materials will be new, excepting recycled items with written pre-approval from SHRA. All building and site improvements will adhere to SHRA’s minimum construction standards.

II. Site Improvements

1. Landscaping: Project will be designed in accordance with County requirements and subject to SHRA approval.

2. Irrigation System: The automated irrigation system incorporates a “SMART controller” that senses rain to reduce water use. Irrigation piping and fixtures shall be installed with new system that includes appropriate water efficient fixtures.

3. Playground Equipment: A playground with equipment suitable for children up to age 12, and equipment suitable for toddlers, will be installed onsite.

4. Pedestrian and Fire-access Gates: Gates will meet code requirements.

5. Site Accessories: Bike racks, tables, benches, barbeques, etc., will be included in the development. A swimming pool in a size to be approved by SHRA will also be included.

6. Perimeter Fence: The site will include full perimeter wrought iron fencing.

7. Asphalt Parking Lot and Drive Aisles: Parking lot and drive aisles will be designed in accordance with geotechnical recommendations. The parking lot will meet current code and ADA requirements, with respect to including required ADA van accessible parking.

III. Building Exterior Improvements

8. Roof: The roofing of all buildings have a minimum 20-year warranty Asphalt Composition Shingles.

9. Gutters, Downspouts and Downspout Extensions: All gutters, downspouts and downspout extensions will be new and connected to a storm drain system and/or routed to surface drain to site bio-retention planters.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

10. Balcony and Patio Enclosures: 21 ground floor apartments will have private patios on grade; while 20 upper level apartments will have balconies with composite decking.

11. Paint: Building will have interior and exterior painting. Non-habitable structures on the property will match the habitable buildings.

12. Windows and Sliders: All windows will be energy-efficient windows. Windows will be designed to open and will have screens. Operable windows will have functional locks, and will be operable without excessive effort.

13. Trash Enclosures: The site will contain two trash enclosures with concrete aprons.

14. Lighting: The exterior wall light fixtures will feature energy efficient wallpacks to increase visibility. Site pole lights will have LED fixtures.

15. Sidewalks and Ramps: The sidewalks and ramps will meet current code and ADA requirements throughout the Project.

16. Mailbox Units: N/A

17. Stairways, Railings and Landings: Common area stairs will meet current accessible codes for treads and risers, guardrails and handrails. Bottom of stairs will either be closed off for storage or provided with cane rails. Stairways in common areas will include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

18. Signage: Monument signage, buildings, apartments, garages, parking, ADA, and property signage throughout as required by current code.

19. Security: New CCTV system with web-based cameras at primary automobile entrances, parking, common areas, mailboxes and community room(s).

20. Exterior Building Systems: Exterior mounted electrical, mechanical, and plumbing systems will be protected from vandalism

IV. Building Interior

1. ADA units: The project will contain fully accessible units and hearing/visual equipped units at or above the minimum number required by building code, SHRA, or other state agency.

2. Kitchens: All kitchens will have new solid-surface counters, cabinets, drawers, refrigerator/freezer combination appliances, free-standing electric range/oven combination appliances, ventilation hood appliances, dishwashers, sinks, garbage disposals, angle stops, low-flow faucets and finishes. All appliances will be EnergyStar or better. All kitchens will have adequate counter space and cabinet space. Shelving for microwaves will be provided in non-ADA units.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

3. Bathrooms: All bathrooms will have solid-surface counters, sinks, tubs and surrounds, accessories (i.e., toilet paper holders, towel racks, shower rods and curtains), low-flow showerheads, low-flow toilets and low-flow faucets. Vanities will have cabinets and drawers. A humidistat fan will be installed in all bathrooms. Tub surrounds will be one single solid surface per wall.

4. Ceilings and Walls: All interior walls and ceilings will have a drywall finish. In select areas of common areas (lobbies, community room, office areas, etc.) higher grade finishes (wood, tile, etc.) and acoustic panels / clouds may be used.

5. Doors: All doors will be new and will meet current egress standards. All door hardware will have matching finishes. Exterior doors will have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware will have single action hardware to release deadbolt and latch assembly. All sliding exterior doors will have screen doors and shall have functional locks and must operate freely without excessive effort.

6. Flooring: New vinyl sheet flooring will be installed in all residential unit bathrooms and living rooms. New LVP flooring (minimum 20 millimeter layer) will be installed in the kitchens. Carpet will be installed in bedrooms.

7. Windows: New window blinds will be installed on all windows and sliders.

8. Paint: Paint will be applied to all walls, ceilings, and trim, in all rooms, closets and storage rooms.

9. Electrical: GFI outlets will be installed to code. New hardwired smoke and CO detectors will be installed in the hallways of all units. New hardwired smoke detectors will be installed in the bedrooms of all units. Broadband infrastructure will be provided.

10. Lighting: All kitchens, dining rooms, bedrooms, bathrooms and hallways will have new energy efficient light fixtures installed.

V. Community Areas

1. Community Room, Office, Kitchen and Restroom:

a) The community building will contain a multipurpose room with shared kitchen, offices, and other community space.

b) The kitchen will have solid-surface counters, refrigerator/freezer combination appliance, free-standing electric range/oven combination appliances, micro-hood combination appliance, dishwasher, sink, garbage disposal and low-flow faucets. All appliances will be EnergyStar or better. Furniture, fixtures, and cabinets will be

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

installed.

c) The restrooms will meet current code and ADA requirements.

d) Flooring in common areas will be LVP (minimum 20 mil wear layer) or carpet.

VI. Laundry Facilities:

1. All laundry facilities will meet code and ADA requirements. New vinyl sheet flooring, windows, doors, washer and dryer appliances, counter for folding laundry, lighting fixtures, humidistat

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Attachment 1: Rental Property Minimum Construction Standards are on the following page.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Attachment 1: Lender’s Minimum Construction Standards
This attachment is from Exhibit 2 from the Lender’s Multifamily Lending and Mortgage Revenue Bond Policies.

RENTAL PROPERTY MINIMUM CONSTRUCTION STANDARDS

The following is a list of the required minimum construction standards that must be incorporated into projects participating in SHRA’s Multifamily Financing and/or Mortgage Revenue Bond programs. All rental units and sites associated with these projects must meet or exceed these standards. Exceptions to these standards may be made for properties subject to U.S. Department of Housing and Urban Development replacement reserve requirements that allow for renovation over time rather than at recapitalization (e.g., Rental Assistance Demonstration conversions for conventional public housing).

Note: For rehabilitation projects, all of the following standards shall apply. The non-rehabilitation sections below shall apply to new construction projects.

Useful Life Expectancy – Rehabilitation only

SHRA shall reference the current edition of FannieMae’s “Instructions for Performing a Multifamily Property Condition Assessment, Appendix F. Estimated Useful Life Tables” in determining the useful life for all building components and systems located within the project. A remaining useful life of 15 years or more is required for all building components and systems located within the approved complex. All items on the FannieMae tables with useful lives indicated to be less than 15 years shall be replaced.

General Requirements

A. All materials funded under this loan must be new unless previously approved. Recycled items must be approved in writing by SHRA prior to their use.

B. All work shall comply with Federal and State ADA accessibility requirements, as well as any other requirements stipulated by the funding source(s). When there are differences the stricter of the two shall apply.

The developer is responsible for notifying their architect and/or engineer of all funding sources used on the project. The architect and/or engineer must indicate these funding requirements in the project’s plans/scope.

C. All units shall be approved for occupancy by the local Building Department or any other Agency Having Jurisdiction (AHJ) at the conclusion of the work and prior to occupancy.

D. Web-based security cameras and the equipment to record events are required for primary ingress/egress points to and from the site and for the principal parking and indoor and outdoor common areas where people will be congregating.

E. Site lighting is required for all parking and outside public spaces, and shall be of LED or similarly energy efficient type. The lenses on the exterior lights shall be cleaned with all oxidation removed or replaced. Light poles shall be new or painted, and shall be structurally sound and stable.

F. The developer’s architect is responsible for providing an Operating Procedure Outline Sheet (OPOS) for window washing systems where applicable, per Cal-OSHA requirements.

G. SHRA encourages the use of energy and water-efficient systems wherever they may be incorporated into the project.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

General Requirements – Rehabilitation only

A. Any component of the project which does or may present a health or safety hazard to the public or tenants shall be corrected to the satisfaction of the local Building Department or AHJ.

B. A clear pest inspection report will be required at the conclusion of the construction work for rehabilitation projects.

C. For all structures where disturbance of any hazardous materials (e.g. lead, asbestos, mold, e tc.) will occur, a clearance report from an environmental consultant is required.

D. Projects deemed historically significant landmark by either the City of Sacramento or the National Register of Historic Places shall consult with the State Historic Preservation Officer (SHPO), and shall conform to the Secretary of the Interior Standards for the Treatment of Historic Properties.

Site Work

A. Trees and large shrubs must be trimmed, grass areas must be mowed, and all planter areas must be weed -free.

The landscape design shall incorporate a sustainable design appropriate for the Sacramento Valley. Vegetation that assists in minimizing crime and enhances public safety is preferred. Trees compromising building envelope materials (roofing, siding, windows, etc.) and/or structural integrity (including foundations) must be removed.

An arborist shall be consulted for an opinion on trees prior to major branch trimming, root cutting or tree removal. All trees, bushes and other plants that are to be removed shall have the root ball removed by grinding or by mechanical means. A landscape plan describing the above must be provided to SHRA for approval.

B. All landscaped areas must be served by a programmable automated irrigation system. The irrigation controller shall be a “Smart Controller” that senses rain to reduce water use. Irrigation shall be designed to use bubblers and other water saving measures. Irrigation must not spray on building. Sprinklers should minimize overspray that runs to storm drain drop inlets. Areas that show evidence of erosion of soil shall be landscaped to eliminate problems. The landscape plan must be approved by SHRA and applied.

C. For gated communities containing swinging vehicle gates, driveways shall be striped to show the area under the gate swings for safety purposes.

D. All projects shall contain trash enclosures with concrete aprons. Trash enclosures shall be made of cinder block or stucco. Trash enclosures shall be accessible to all tenants. Provisions for tenants with disabilities must be addressed in the project Scope of Development or the project plans.

E. All projects shall meet the parking requirements of the local Agency Having Jurisdiction (AHJ) over the project. "Grandfathered Projects" will need to show that they are in fact “Grandfa thered” or otherwise exempted by the local AHJ. Otherwise, all projects shall meet the governing ADA requirements for parking.

F. A two percent (2%) slope shall be maintained for a distance of five feet from all structures and no standing water shall remain on the site. Provide an on- site drainage system if necessary.

G. Stairways in common areas must include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

H. Exterior mounted electrical, mechanical, and plumbing systems must be protected from vandalism.

I. For family projects of 50 or more units, a minimum of one school age-appropriate play structure is required. For family projects of 100 or more units, a minimum of one school age and one toddler -appropriate play structure is required.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Site Work – Rehabilitation only

A. All landscaping and irrigation systems must be in a well-maintained condition.

B. All fencing must be in good and serviceable condition. Existing fencing that is to remain shall be free of flaking paint, rust, or any other signs of failure. If existing fencing shows any signs of failure, it shall be repaired, painted and restored to look new. All chain link fencing must be removed and replaced with fencing of another approved material. All pedestrian gates hardware must be functional and in new or near-new condition. Access Control systems are required at exterior pedestrian gates.

C. All driveways and sidewalks must be in good condition. All cracked or uplifted areas (more than ¼”) shall be repaired or replaced.

D. The asphalt shall be in good condition, with no alligator cracking, longitudinal cracking, potholes, or standing water. Repairs to portions of parking lots not suitable for new coatings shall be performed by removing and replacing damaged paving. A new seal-coat or slurry-coat shall then be applied to the entire parking lot surface.

Parking spaces shall be restriped, including ADA aisles and other applicable striping/painting.

E. All site accessories (bollards, benches, tables, play equipment, bike racks, mailboxes, shade structures, BBQs, sheds, etc.) shall be replaced or in good repair (cleaned, painted and/or re -coated).

Building Envelope and Moisture Protection – Rehabilitation only

A. All areas exposed to moisture must be sealed and watertight. Buildings showing evidence of water intrusion shall have the areas inspected by a licensed architect/engineer or by a certified water intrusion expert. A water intrusion report shall be submitted to SHRA, and shall include the cause of the issue and a resoluti on to eradicate the water intrusion. If the inspection cannot be completed until the demolition phase of the project, the report shall describe a procedure to inspect the issue during demolition.

B. Roofing must have 15 years or more of remaining life with no visible signs of leakage. For roofs containing composition shingles, a maximum of two layers of shingles are allowed (including any proposed new layers).

Provide evidence that the roof system has a 15-year life remaining on the manufacturer’s warranty.

C. All siding must have 15 years or more of remaining life. Hairline cracks in stucco must be sealed and painted with elastomeric paint. If requested by SHRA, a statement by a licensed architect and/or engineer that the existing siding contains at least 15 years of useful life remaining shall be provided.

D. Fireplaces must be clean and meet applicable air quality standards. Chimneys shall be clean and must be inspected by a certified chimney inspector for structural integrity. All recommended structural repai rs shall be performed.

Doors and Windows

A. All dwelling/tenant units must have screens on all windows that are designed to open. Windows designed to open must have functional locks and must operate freely without excessive effort. All windows must be dual- paned (minimum), and shall meet or exceed the State of California’s currently applicable efficiency standards, and any other efficiency standards that may be dictated by the funding source or other governing bodies for the project.

B. All doors must have matching hardware finishes.

C. All exterior doors must have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware shall have single action hardware to release deadbolt and latch assembly.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

D. All sliding exterior doors shall have screen doors and shall have functional locks and must operate freely without excessive effort.

E. All doors and windows must meet current egress standards.

Doors and Windows – Rehabilitation only
A. Any windows showing signs of condensation or leakage of any kind shall be replaced. SHRA allows window replacement using retrofit windows when those windows are installed by trained professionals following manufacturer’s specifications. Retrofit windows must have a similar useful life as “new, construction” (i.e., nail fin) windows.

B. All doors and doorjambs must be in good condition. No damaged or worn doorjambs or doors are allowed.

Doors and/or jambs beyond their useful life shall be replaced.

Casework

A. New cabinet boxes shall be made of plywood or solid wood. No particle board boxes will be allowed.

B. All counter tops shall be of solid surface or granite, and in very good condition with no significant scratches, burns or other imperfections.

C. Face frames, doors and drawer faces shall be solid hardwood. No plastic laminate finishes will be allowed.

Casework – Rehabilitation only

A. All cabinets shall be replaced or in very good condition, within their 15 year useful life, both structurally and in appearance.

Finishes

A. All dwelling unit kitchens shall contain luxury vinyl plank (LVP) flooring. Bathroom s must be floored with LVP, sheet vinyl or ceramic tile to provide a cleanable, impervious surface. Bedrooms, hallways, and living and dining rooms may be floored with carpeting, LVP or hardwood. Wear layer of LVP shall be at least 12 mils inside dwelling units. Tenant unit entries shall be floored with LVP or ceramic tile.

B. In common areas, corridors may be floored with LVP, glue-down carpeting, or carpet tiles. Community rooms and kitchens shall be floored with LVP. Wear layer of LVP in common/commercial areas shall be a minimum of 20 mils thick.

C. Carpet shall meet or exceed the minimum standards as set by HUD’s UM-44D bulletin.

Finishes – Rehabilitation only

A. Floor coverings must be in good, useable condition - no holes, tears, rips, or stains.

B. All exterior and interior surfaces must be painted. No peeling, cracking, chipping, or otherwise failing paint will be allowed. All painted surfaces must be new, or in near new condition and appearance.

C. Acoustic (popcorn) ceiling texture must be removed and refinished with new texture to match wall texture.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Equipment

A. Dishwashers, refrigerator/freezer, oven, stoves and garbage disposals are required in all dwelling unit kitchens.

All appliances must be new or in very good operating condition. All appliances must be Energy Star rated, as applicable. Appliances slated for ADA units shall be per code requirements.

B. SRO projects are encouraged to provide the appliances listed above and will be reviewed and approved on a case-by-case basis.

C. All kitchens must have adequate cabinet and counter space. Installation of shelving for microwaves is required if over-the-range microwaves are not used, with the exception of ADA units.

Furnishings

A. Dwelling units must have window coverings on all windows.

Special Construction

A. Non-habitable structures on property must be painted to match primary buildings and must be structurally sound.

B. Laundry facilities must, at a minimum, be consistent with CTCAC requirements of one washer and dryer for every ten dwelling units for family housing and one for every 15 units for senior and special needs projects. Ten percent of the total number of washer/dryers must be ADA-accessible machines (unless the ADA units contain their own laundry facilities). Solid surface countertops will be required within laundry rooms and countertops shall meet all ADA requirements.

C. Public pool areas shall have self-closing gate(s). Fences and gates at pool areas shall meet applicable current codes and standards. Joints between coping and concrete deck shall be appropriately caulked. Existing pools shall have no cracks in plaster or tile grout joints. The Developer is responsible for ensuring pool and surroundings meet all applicable current codes and standards. If a project contains two or more pools, at least one must remain following rehabilitation.

Mechanical/Plumbing

A. Water heaters must be installed per current applicable codes.

B. All common areas and tenant units must have heating and air conditioning. Wall mount (i.e. PTAC units) or central systems are acceptable. Evaporative coolers are not acceptable. HVAC units should be protected from vandalism, pursuant to discretion of SHRA.

C. Toilets, showerheads, faucets, and mixing valves shall be new and meet current water conservation codes.

D. Tub surrounds must be one unbroken piece per wall and must be of solid surfaces (such as “Swanstone” or other solid acrylic materials, quartz composites), or other similar materials. Fiberglass/acrylic surrounds are acceptable.

Mechanical/Plumbing – Rehabilitation only

A. All toilets, sinks, and tubs shall be chip and stain free.

Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org

Electrical

A. All units must have smoke/carbon monoxide detectors installed per current code.

B. Wiring from telephone/data/cable suppliers shall be installed within walls, attic spaces, and/or crawl spaces. No conduits are allowed to be mounted on the exterior of the buildings in new construction.

C. Broadband infrastructure meeting the requirements of 24 CFR 5.100* is required in all new construction projects of 4 or more units.

*Broadband infrastructure means cables, fiber optics, wiring, or other permanent (integral to the structure) infrastructure, including wireless infrastructure, that is capable of providing access to Internet connections in individual housing units, and that meets the definition of “advanced telecommunications capability” determined by the Federal Communications Commission under section 706 of the Telecommunications Act of 19 96 (47 U.S.C. 1302).

Electrical – Rehabilitation only

A. All electrical panels shall meet current code.

B. Any rehabilitation projects with un-grounded electrical systems shall be re-wired with grounded systems to meet current code.

C. For rehabilitation projects, switches, outlets and light fixtures shall be replaced with devices that meet current applicable codes.

D. Wiring mounted on the exterior of the surface may be allowed if it is concealed in conduit and conduit is painted to match exterior siding. For projects where exterior siding will be removed, this wiring shall be installed within walls, attic spaces, and/or crawl spaces.

Resident Services Community Space

All properties, regardless of project type (i.e. senior, family, or large family), must devote a minimum of 1,200 s.f. to actual resident services/community space. Resident services space includes common kitchens, computer rooms, meeting rooms and general gathering space. It does not include public restrooms, leasing offices, laundry facilities and lobbies. Common kitchens are required, including refrigerator, stove, garbage disposal, and dishwasher.

For existing buildings, these requirements shall apply unless SHRA deems there to be significant physical constraints.

End of Scope of Development.

RESOLUTION NO. 2023 -

Adopted by the Housing Authority of the City of Sacramento

on date of

SAN JUAN APARTMENTS BY MUTUAL HOUSING: A RESOLUTION OF THE

HOUSING AUTHORITY OF THE CITY OF SACRAMENTO AUTHORIZING

COOPERATION WITH THE HOUSING AUTHORITY OF THE COUNTY OF

SACRAMENTO WITH RESPECT TO THE ISSUANCE OF REVENUE BONDS

TO FINANCE A MULTIFAMILY RENTAL HOUSING PROJECT LOCATED IN

THE COUNTY OF SACRAMENTO AND THE CITY OF SACRAMENTO

BACKGROUND
A. The Housing Authority of the County of Sacramento (the “County Housing Authority”) has determined to engage in a multifamily rental housing finance program pursuant to Section 34312.3 of the California Health and Safety Code and related provisions (the “Act”), and to issue revenue bonds to finance the acquisition and construction or rehabilitation of multifamily rental housing in the County of Sacramento, all as provided for in the Act (the “Program”); B. Housing Authority of the City of Sacramento (the “ Authority”) has determined to cooperate with the County Housing A uthority pursuant to the Act , including Section 34324 thereof , in the exercise of its powers under the Act and the Program for the purpose of financing or refinancing the acquisition, construction and development of a 113 -unit multifamily rental housing de velopment to be located at 5700 Stockton Boulevard and 5258 Young Street in the County of Sacramento, and 5266, 52 80, 5300, 5320, 5340 Young Street, in the City of Sacramento, which will be owned and operated by a limited partnership or related entities and occupied by low-income persons and families (the “Project”); and
C. In connection with such cooperation, the Authority has determined to authorize the County Housing Authority to act on its behalf with respect to any or all of its powers, as its agent or otherwise, in connection with the financing or refinancing the Project pursuant to the Act and the Program;

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO RESOLVES AS FOLLOWS:

Section 1. All evidence presen ted having been duly considered, the findings, as stated above, are found to be true and accurate and are hereby approved adopted.

Section 2. The Authority hereby agrees to cooperate with the County Housing Authority in connection with the financing or refinancing of the Project, and -2-
4154-7906-7971.5

hereby authorizes the County Housing Authority to act on its behalf with respect to any or all of its powers, as its agent or otherwise, in connection with the financing or refinancing of the Project pursuant to the Act and the Program, including the issuance of revenue bonds and the making or acquiring of mortgage loans with respect to the Project.

Section 3. The Authority will have no responsibilities relating to the Program and this resolution shall not bind the Authority to any financial obligation or credit risk or allow any repayment recourse to the Authority and nothing herein shall be deemed to bind the Authority to make any expenditure or to incur indebtedness in relation to the Program or the revenue bonds referred to above. This resolution shall not alter any term or condition of any agreement entered into by any party with the developer of the Project.

Section 4. This resolution shall take effect immediately upon its passage and adoption.

-3-
4154-7906-7971.5

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SHRAGIS
December 19, 2022

Site Plan Attachment 9

Project Rendering Attachment 10
Attachment 11
Address
Number of Units
Construction Type
Acreage
Unit Mix¹
ELI 30% AMI ELI 40% AMI VLI 50% AMI VLI 60% AMI
Exempt
Management Unit Total
1 Bedroom/1 Bath 7 7 11 14 0 39
2 Bedroom/1 Bath 5 5 14 16 1 41
3 Bedroom/2 Bath 3 3 12 15 0 33
TOTAL 15 15 37 45 1 113
Square Footage Per Unit Total
1 Bedroom/1 Bath 570 22,230 sq.ft.
2 Bedroom/1 Bath 870 35,670 sq.ft.
3 Bedroom/2 Bath 1,060 34,980 sq.ft.

Common Areas/Tuck Under Parking 52,621 52,621 sq.ft.

TOTAL 145,501 sq.ft.

Resident Facilities
Permanent Sources
Current Total Per Unit Per Sq Ft
Federal Tax Credit Equity 37,446,287$ 331,383$ 257.36$ Permanent Loan 4,685,422$ 41,464$ 32.20$ Predevelopment Loan 500,000$ 4,425$ 3.44$ SHRA County Construction & Permanent Loan 19,500,000$ 172,566$ 134.02$ SHRA City and County Construction & Permanent Loan 2,000,000$ 17,699$ 13.75$ SMUD Rebates 141,890$ 1,256$ 0.98$ HACOS Seller Carryback Loan 123,000$ 1,088$ 0.85$ HACS Seller Carryback Loan 545,000$ 4,823$ 3.75$ Accrued Interest 818,720$ 7,245$ 5.63$ GP Contribution 4,164,638$ 36,855$ 28.62$ SHRA funds for soil clean up $1,000,000 8,850$ 6.87$ Deferred Developer Fee 2,315,810$ 20,494$ 15.92$ Go Green Grant 2,000,000$ 17,699$ 13.75$ TOTAL SOURCES 75,240,767$ 665,847$ 517.12$ Permanent Uses
Acquisition 668,000$ 5,912$ 4.59$ Construction 50,387,000$ 445,903$ 346.30$ Permits and Fees 1,721,000$ 15,230$ 11.83$ Architecture and Engineering 2,743,000$ 24,274$ 18.85$ Hard Cost Contingency 2,519,400$ 22,296$ 17.32$ Soft Cost Contingency 250,000$ 2,212$ 1.72$ Financing Costs 3,906,384$ 34,570$ 26.85$ Operating Reserves 647,115$ 5,727$ 4.45$ Accrued Interest 818,720$ 7,245$ 5.63$ SHRA funds for soil clean up $1,000,000 8,850$ 6.87$ Legal Fees 80,000$ 708$ 0.55$ Developer Fee 9,220,448$ 81,597$ 63.37$ Insurance, Third Party, Marketing, Other 1,279,700$ 11,325$ 8.80$ TOTAL USES 75,240,767$ 665,847$ 517.12$ Leverage SHRA $ per Unit Per Unit Cost
200,602$ 665,847$ $1.00 : $3.32
Management/Operations (113 Units)
Proposed Developer
Property Management Company
Operations Budget 593,570$ 5,253$
Property Management 77,268$ 684$
Resident Services 44,516$ 394$
Replacement Reserves 56,500$ 500$
Taxes and Insurance 165,379$ 1,464$
New Construction
San Juan Apartments by Mutual Housing
Residential Project Summary
Corner of Stockton Blvd. and Young Street
113
5700 Stockton Blvd. 5258, 5266, 5280, 5300, 5320, 5340 Young St.

Leverage
Mutual Housing California
Mutual Housing Management

4.2 (182,952 sq. ft.)
Management offices, resident community space with kitchen, laundry facilities, landscape courtyards, toddler and school-aged play ground, barbecue areas, picnic tables, 144 vehicle parking spaces.

San Juan Apartments by Mutual Housing Square Total Max Gross Utility Max Net Rent per Total Mo. Current Unit Type Number Feet Sq Feet Rent Allowance Rent Sq Foot Rent Annual Rent 1 Bedroom/1 Bath (30% AMI) 7 700 4,900 570$ 69$ 501$ 0.72$ 3,507$ 42,084$ 1 Bedroom/1 Bath (40% AMI) 7 700 4,900 760$ 69$ 691$ 0.99$ 4,837$ 58,044$ 1 Bedroom/1 Bath (50% AMI) 11 700 7,700 950$ 69$ 881$ 1.26$ 9,691$ 116,292$ 1 Bedroom/1 Bath (60% AMI) 14 700 9,800 1,140$ 69$ 1,071$ 1.53$ 14,994$ 179,928$ 2 Bedroom/1 Bath (30% AMI) 5 950 4,750 684$ 87$ 597$ 0.63$ 2,985$ 35,820$ 2 Bedroom/1 Bath (40% AMI) 5 950 4,750 912$ 87$ 825$ 0.87$ 4,125$ 49,500$ 2 Bedroom/1 Bath (50% AMI) 14 950 13,300 1,140$ 87$ 1,053$ 1.11$ 14,742$ 176,904$ 2 Bedroom/1 Bath (60% AMI) 16 950 15,200 1,368$ 87$ 1,281$ 1.35$ 20,496$ 245,952$ 3 Bedroom/1.5 Bath (30% AMI) 3 1,300 3,900 790$ 103$ 687$ 0.53$ 2,061$ 24,732$ 3 Bedroom/1.5 Bath (40% AMI) 3 1,300 3,900 1,122$ 103$ 1,019$ 0.78$ 3,057$ 36,684$ 3 Bedroom/1.5 Bath (50% AMI) 12 1,300 15,600 1,317$ 103$ 1,214$ 0.93$ 14,568$ 174,816$ 3 Bedroom/1.5 Bath (60% AMI) 6 1,300 7,800 1,581$ 103$ 1,478$ 1.14$ 8,868$ 106,416$ 3 Bedroom/1.5 Bath (60% AMI) 9 1,300 11,700 1,520$ 103$ 1,417$ 1.09$ 12,753$ 153,036$ 2 Bedroom/1 Bath (Exempt Management) 1 950 950
Totals 113 109,150 116,684$ 1,400,208$
Annual 2025 2026 2027 2028 2029 2034 2039 2044 2049 2054 Income increase per unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Year 15 Year 20 Year 25 Year 30 Potential Gross Income 2.50% 1,471,094 1,507,871 1,545,568 1,584,207 1,623,812 1,837,194 2,078,617 2,351,764 2,660,805 3,010,457 Other Income 2.50% 10,086 10,338 10,597 10,862 11,133 12,596 14,251 16,124 18,243 20,640 Less Vacancy 5.00% 74,059 75,910 77,808 79,753 81,747 92,490 104,643 118,394 133,952 151,555 Effective Gross Income $1,407,121 $1,442,299 $1,478,356 $1,515,315 $1,553,198 $1,757,301 $1,988,225 $2,249,494 $2,545,095 $2,879,542 Operating Expenses 3.50% $5,627 635,847 658,102 681,135 704,975 729,649 866,594 1,029,242 1,222,417 1,451,848 1,724,340 Property Management 3.50% $732 82,771 85,668 88,667 91,770 94,982 112,809 133,982 159,128 188,994 224,466 Residential Services 3.50% $422 47,687 49,356 51,083 52,871 54,722 64,992 77,190 91,678 108,884 129,320 Replacement Reserves 0.00% $500 56,500 56,500 56,500 56,500 56,500 56,500 56,500 56,500 56,500 56,500 Taxes and Insurance 2.00% $1,464 172,060 175,502 179,012 182,592 186,244 205,628 227,030 250,659 276,748 305,552 Total Expenses $8,745 $994,865 $1,025,127 $1,056,397 $1,088,708 $1,122,096 $1,306,523 $1,523,944 $1,780,382 $2,082,974 $2,440,178 Net Operating Income $412,255 $417,171 $421,959 $426,607 $431,101 $450,778 $464,281 $469,112 $462,121 $439,364 Debt Service amount rate amort
Tax Exempt Permanent Loan $4,685,422 6.30% 35 331,996 331,996 331,996 331,996 331,996 331,996 331,996 331,996 331,996 331,996 SHRA Monitoring Fee $35,000,000 0.125% 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 Debt Service Subtotal $356,996 $356,996 $356,996 $356,996 $356,996 $356,996 $356,996 $356,996 $356,996 $356,996 Priority Distributions
Limited Partner Management Fee (LP) $5,000 3.00% 5,000 5,150 5,305 5,464 5,628 6,524 7,563 8,768 10,164 0 General Partner Asset Management Fee (GP) $0 1.00% 0 0 0 0 0 0 0 0 0 3,012 Priority Distributions Subtotal $5,000 $5,150 $5,305 $5,464 $5,628 $6,524 $7,563 $8,768 $10,164 $3,012 Net Cash after Priority Distributions $50,259 $55,025 $59,659 $64,147 $68,478 $87,258 $99,722 $103,348 $94,961 $79,356 Deferred Developer Fee
Principal Balance $2,315,810 0.00% 2,315,810 2,265,551 2,210,526 2,150,867 2,086,720 1,704,678 1,240,474 730,495 224,994 0 Accumulated Interest 0 0 0 0 0 0 0 0 0 0
Payment 50,259 55,025 59,659 64,147 68,478 87,258 99,722 103,348 94,961 0 Balance $2,265,551 $2,210,526 $2,150,867 $2,086,720 $2,018,242 $1,617,420 $1,140,752 $627,147 $130,033 $0 Net Cash after Deferred Developer Fee $0 $0 $0 $0 $0 $0 $0 $0 $0 $79,356 SHRA Loan
Principal Balance $22,668,000 3.00% 22,668,000 22,668,000 22,668,000 22,668,000 22,668,000 22,668,000 22,668,000 22,668,000 22,668,000 22,668,000 Accumulated Interest 680,040 1,360,080 2,040,120 2,720,160 3,400,200 6,800,400 10,200,600 13,600,800 17,001,000 20,346,182 Payment 0 0 0 0 0 0 0 0 0 9,140
Balance $23,348,040 $24,028,080 $24,708,120 $25,388,160 $26,068,200 $29,468,400 $32,868,600 $36,268,800 $39,669,000 $43,005,041 Attachment 13
Family Size 30% AMI 40% AMI 50% AMI 60% AMI
1 person 21,300$ 28,400$ 35,500$ 42,600$ 2 person 24,330$ 32,440$ 40,550$ 48,660$ 3 person 27,360$ 36,480$ 45,600$ 54,720$ 4 person 30,390$ 40,520$ 50,650$ 60,780$ 5 person 32,850$ 43,800$ 54,750$ 65,700$ Unit Size 30% AMI 40% AMI 50% AMI 60% AMI
1 Bedroom 570$ 760$ 950$ 1,140$ 2 Bedroom 684$ 912$ 1,140$ 1,368$ 3 Bedroom² 790$ 1,122$ 1,317$ $1,520-$1,581 Maximum Gross Income Limits
The development includes Seventen 3 bedroom units @ resricted at 60% AMI, of which nine are HTF, SHTF or AHF units with more restrictive rents than TCAC.

San Juan Apartments by Mutual
Rents at 30%, 40%, 50%, and 60% of Area Median Income (AMI) Maximum Income and Rent Limits 2022
Maximum Gross Rent Limits¹
Low Income Housing Tax Credits, Mortgage Revenue Bonds, Home Investement Partnership (HOME) Loan, City Housing Trust Fund Loan, County Housing Trust Fund Loan, State Housing Trust Fund Loan, City and County Housing Authority Seller Carryback fund (Loans) and Affordable Housing Fund Loan