HomeMy WebLinkAbout2007078656-1RECORDING REQUESTED BY:
City of San Luis Obispo
WHEN RECORDED MAIL TO:
Community Development Department
City of San Luis Obispo
919 Palm Street
San Luis Obispo, CA 93401
JULIE RODEWALD
MEL
San Luis Obispo County—Clerk/Recorder
12/07/2007
Recorded at the request of
8:13 AM
Chicago Title Company
D o C # : 2007078656
Titles: 1
Pages: 18
Fees
0.00
Taxes
0.00
Others
0.00
$0.00
Recorded for the be o
the City of San L14sobis,6
at no fee under s ct'on 27
of the Government d
AFFORDABILITY AGREEMENT/DEED OF TRUST
2707/2785 �
THIS AGREEMENT is made and entered into this
y of October, 2007,
by and between the City of San Luis Obispo (the "City"Laurel Creek 178,
L.P., a Delaware limited partnership (the "Ownerreferred to as "the
parties."
RECITA
A. On November 15, 2005, the o cl pted Resolution No. 9748,
approving Tract 2707, a residential bd' roject with 178 dwellings,
located at 861 and 953 Orcu t Roa Lui bispo ("the project"); and
B. Section 3, Project Co rl- i ,chat approval requires the applicant to
provide a minimum of two r a d Iling units for sale through the City's
Inclusionary Housin Ordi ce (u d r separate affordability agreement) plus 10
units under the a v p m delines of the State's BEGIN program; and
C. Thep a ea that the Owner shall construct and sell 10 homes
in conforman a w' ity's ordable Housing Standards and the City's State
approved BEG _ ogra idelines (Attachment 2); and
D. The d Div er desire to assure that ten affordable dwelling units
located at 2, 9 10, 914, 916, 922, 928, 932, 934, 936 Tarragon Way remain
affordabl t low or oderate income households for a period of at least 5 years in
accor c City's Shared Equity Purchase program and the Affordability
W
,e y the developer which designates maximum sale prices for
WI uni Z;achment A); and
'The� City and Owner desire to assure that a total of two inclusionary
tble dwelling units under a separate agreement remain affordable for 45
The ten BEGIN Housing Units, lot numbers (1209, 1208, 1205, 1203, 1202,
1305, 1303, 1302, 1301), shall be governed by the City's Affordable Housing
ards, the Equity Share program and BEGIN program guidelines.
- 1 -
Page 2, Affordable Housing Agreement for Tracts 2707/2785
F. The City and Owner understand that third party verification is a perquisi
eligible buyer certification and must be performed by the Housing Authori
another entity approved by the City. The Owner agrees to reimburse
buyers for their 3rd party verification fees through escrow, in an amou t
exceed $500.00.
NOW, THEREFORE, the parties acknowledge and agree as follows: J
ARTICLE 1. DEFINITIONS
1.01. "Moderate income households" means persons
not exceed 120 percent of the County of San
adjusted for family size pursuant to the City of
Standards.
to
d- nili os come does
s Obispo edian income,
Luis Obi=ffordable Housing
1.02. "Low income households" means persons and farm -dies whose income does not
exceed 80 percent of the County n Luis Obispo area median income,
adjusted for family size pursuant to the Ci o San Luis Obispo Affordable Housing
Standards.
02.5 "Very low income househol
not exceed 50 percent of t
adjusted for family size purs
Standards.
1.03 Persons and fami
referred to as "elis
1.04 "The propert'
agreement (I0
intended to be
ARTICLE 2.
id families whose income does
Obispo area median income,
Luis Obispo Affordable Housing
the dbfibition under Sections 1.01 and 1.02 shall be
hose specific real properties described in this
05, 1203, 1202, 1308, 1305, 1303, 1302, 1301),
upied by eligible households.
2.01. The ten B=INunito be constructed on the properties shall be governed by the
City' iogram of the Inclusionary Housing Ordinance and the State's
BE o m guidelines. These units shall be used for owner -occupied housing
p ses a hall be sold to eligible households. The sales prices have been
re- a rmined for each unit by bedroom size (Attachment 1). For subsequent
s t ' ible households, sales prices shall be based on and consistent with the
Ci ' equity share program and the BEGIN program guidelines.
ant deed from Owner, or Owner's successors in interest and all future grant
for transfers of interest in the properties shall contain a restriction consistent
- 2 -
Page 3, Affordable Housing Agreement for Tracts 2707/2785
with the BEGIN guidelines and the City's equity share program. Any sale,
rental, or other transfer of the property in violation of this covenant shall be v
2.03. The Owner agrees to retain the Housing Authority of the City of San
or other qualified entity acceptable to the City, at his or her expense,
of potential buyers to determine if they qualify as eligible households.',
2.04. These affordability requirements shall be covenants running h the I Tdas
defined in California Civil Code Section 1460, and shall appl a op ies as
shown on Exhibit A. Pursuant to Civil Code Section 146 hi ov n such
covenants, the provisions of this Agreement as well as the B GIN pr gram
guidelines shall be binding upon all parties havin n 'ght, ti o erest in any
of the properties described herein, or any p n thereo n their heirs,
successors in interest and assigns for a pen 0 of 5 yea s for the ten BEGIN
Housing Units from the date of occupancy of t roperty. h parties agree that
all future deeds or transfers of interest regardi a pr ies shall show the
restrictions of this Agreement and follow the BEGI i es for as long as the
Agreement is in effect.
2.05. When a designated affordable housin nit ' st sold to an eligible buyer, the
buyer and City shall enter into an ble, ing Agreement which shall be
recorded as an encumbrance on th ro d secured by a recorded deed of
trust. The Deed of Trust an0rom N have been approved by the State
for the BEGIN units. Said a e deed of trust shall establish the
monetary difference betwee 'ti purchase price and the initial appraised
value as a loan payable to ity. loan shall accrue interest, compounded
annually, at an ann I rat qual t .5 points added to the 11 th District Cost of
Funds as current h t ederal Home Loan Bank Board, amortized
over 30 years, a t o I ments of principal and interest shall be waived
by the City as s e o previously approved by the City Housing Authority
or other enti ro by e City, as an eligible household, or subsequent
buyers approv b the ing Authority as eligible households, continue to own
and reside in the p subject to the City loan as his or her principal residence.
All provision a#e B Deed and Note apply.
2.06. If a desig a d aff r able housing unit is sold, leased, or otherwise transferred to
an a of r to an eligible household, in violation of this agreement or the
BE i lines, the City's and the BEGIN loan shall immediately become due
a ayabl r m the proceeds of sale of the property. "Proceeds of sale" shall
e e value of any and all consideration, however denominated, received or to
ec a by the Seller from the sale of the property after the payment of the first
d f trust.
Up resale, the City or the Housing Authority of the City of San Luis Obispo shall
the first right of refusal to purchase the property or properties at current
- 3 -
Page 4, Affordable Housing Agreement for Tracts 2707/2785
appraised value. The consideration for the City's right of first refusal shall consist
of 1 percent of the remaining City loan balance. The balance of th4)ee
remaining after deducting this 1 percent of the loan balance shall b
toward the purchase price if the City chooses to exercise the purchase o
provisions of this section shall not impair the rights of a first mort secured by a recorded deed of trust. The purchase money lend r higher priority than the City's loan. The City's security shall b ioris a
second mortgage. This first priority applies to the purchase eer's
assignee or successor in interest, to:
(i) Foreclose on the subject property pursuant to the edies ermitted by
law and written in a recorded contract or de o us, o
(ii) Accept a deed of trust or assignment to t xtent of t of the unpaid
first mortgage to the current market valu n lieu of f e losure in the event
of default by a trustor; or
(iii) Sell the property to any person at a fair a t val rice subsequent to
exercising its rights under the deed of trust. n alue in excess of the
unpaid mortgage and costs of administration shall be used to satisfy
the City loan. In no case may a firs gage lender, exercising foreclosure
assignment in -lieu of foreclosur r I obtain value or rights to value
greater than the value of u tan indebtedness on the first
mortgage at the time of ftthe d cl r g tion.
In addition, the following types o r sfe s I remain subject to the requirements
of the City's loan and right of re s : ransfer by gift, devise, or inheritance to
the owner's spouse; transfe a su vjoint tenant; transfer to a spouse as part
of divorce or dissolution pr c edings r acquisition in conjunction with a marriage.
ARTICLE 3. GENE
3.01. Required notic all b s nt by certified mail, return receipt requested, to the
following addresse :
If to the City: City an Luis Obispo
Com nity Development Director
Im Street
San Luis Obispo, CA 93401-3249
If t O e : CityView Laurel Creek 178, L.P.,
c% Waft Developers LLC
201 S. Miller Street, #108
Santa Maria, Ca 93454
- 4 -
Page 5, Affordable Housing Agreement for Tracts 2707/2785
3.02. The Owner hereby specifically acknowledges and agrees to be bound by
covenants respecting affordability on the Property contained herein.
IN WITNESS WHEREOF, this Agreement has been duly exe¢� "Y the
undersigned as of the date set forth below.
CityView Laurel Creek 178, L.P., Owner
By: Watt Communities at Laurel Creek LLC,
a California limited liability company,
its authorized agent
By: Watt Developers LLC,
a California limited liability company,
-s-
Date
Page 6, Affordable Housing Agreement for Tracts 2707/2785
COUNTY OF SAN LUIS OBISPO )
On 0, 2 ,06 "1 before me,
personally appeared 2—a"
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same
in his/her/ their authorized capacity(ies) and that by
his/her/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) actld
executed the instrument. ��
WITNESS my hand and official seal.
Signature &4k4j 0y•
0
- 6 -
li
w
ary Public - California
nta Barbara Counly
9 2011
State of California }
County of San Luis Obispo }
On October 24, 2007, before me, Diane R. Stuart, Notary Public,
John Mandeville, personally known to me to be the person whose r
the within instrument and acknowledged to me that he executed the
and that by his signature on the instrument the person or the entity
the person acted, executed the instrument. /
Witness my hand and official seal.
Diane R. Stuart, Kotary Public
Capacity claimed by signer(s): Political
Affordability Housing Agreement/Deed of
0
C
subscribed to
s
DIANE R. STUART
COMM. #1581455
IOTARY PUBLIC - CALIFOIM
SAN LUIS OBISPO COUNTY
Comm. ExDMes June 20. 2009
for Tracts 2707 and 2785
Tide No. 06-34SW708-F•DL
Locate No. CACTI7740-7740-1348-0034900799,
LEGAL DESCRIPTION
EXHIBIT "A"
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN WIS OBISPO,'Ou OF
LUIS OBISPO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS; \ \
Lots 1 and 2, and Remainder Parcel of Tract No. 2134-1, in the City of San Luis Ob' , 1
Obispo, State of California, according to map recorded March 28, 2000 in Book 19 P�
office of the County Recorder of said County,
aTA Pminirrn P*W form (11/17ps)
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City of San Luis Obispo
BEGIN Program Guidelines �t�dC�me
A. Overview
The State of California Building Equity and Growth in Neighborho d
Program is providing assistance to eligible Borrowers under this gram.
following applies to BEGIN loans made under this Program and is to b o erat
conformance with the State of California BEGIN Program Gui vise
March 4, 2005.
B. Eligible Uses of Funds
1. BEGIN funds are project specific and maybe d only forte
a. The provision of permanent secondary age assis a ce to first time
homebuyers in connection with a new pri ort g loan for the
purchase of a principal place of esidence loc in the specific
homeownership development o� ct for which the City has received
BEGIN funds;
b. Self-help housing mortgage a sa e.
C. Non -recurring loan cos.
C. Ineligible Uses of Funds
1. BEGIN funds may not be sed for.,,
a. Any use//gWexres`sly ' to above as an eligible use of BEGIN funds.
D. Eligible Hou
1. To be eligible to rec*e'-PEGIN funds, an individual household shall:
a. jB we n me or moderate income household (income equal to or
n 20 of area median income as adjusted for household size)
en co i ering the gross income of all household residents 18 years
os ome is as defined in the California Code of Regulations (CCR),
it 25, Section 6914 and is: `The anticipated income of a person or
family for the 12 month period following the date of determination of
income.,,
2) Lender shall determine annual gross income in accordance with the
Code of Federal Regulations (CFR), Title 24, Part 5, Section 5.609(b)
attached hereto as Exhibit "A".
3) Income from assets is recognized as part of annual income under 24
Page 1 of 8
E.
Attachment 2
CFR Part 5. Lender shall determine income from assets 'in accordance
with 24 CFR 5 attached hereto as Exhibit "B".
b. Include as Borrowers all persons who will be or are on title to the
property.
C. Be a first time homebuyer (FTHB) and occupy the property
place of residence (A FTHB is a borrower who has not owr
during the three year period before the purchase of the hor
assistance).
2. The following individual or individuals may not
consideration as a first time homebuyer under this SE
a. A displaced homemaker, who, while a o emaker, ned'a home with
his or her spouse or resided in a home ned by the use. A displaced
homemaker is an adult who has not, i in the pr c ding two years,
worked on a full-time basis as a me b of t abor force for a
consecutive twelve-month period and wh as en unemployed or
underemployed, experience 'fficulty in obtaining or upgrading
employment and worked priman out remuneration to care for his or
her home and family;
b. A single parent who, while ne ed home with his or her spouse
or resided in a ho a ow d t pouse. A single parent is an
individual who is unr 'ed r e all eparated from a spouse and has
one or more minor chil or h the individual has custody or joint
custody or is pre ,
C. An individ i or i d viduals w o owns or owned, as a principal place of
residencri t e ree ar period before the purchase of a home
with B GC
N 4 is n a elling unit whose structure is:
1) N�bt(pe n%tlyaid to a permanent foundation in accordance with
st a localations; or
2) N in c nce with state, local or model building codes and cannot
consto ht ' compliance with such codes for less than the cost of
onstr ti g a permanent structure.
with BEGIN funds must be:
ated within the jurisdictional boundaries of the City of San Luis
spo; and
Newly constructed within a specific homeownership development project
(Laurel Creeks) for which the City of San Luis Obispo has been awarded
BEGIN funds. The 2005 BEGIN Project in San Luis Obispo is the Laurel
Creeks Development — formerly know as Tumbling Waters.
Page 2 of 8
Attachment 2
F. Maximum Sales/Price Value Limit
1. BEGIN -assisted units shall be available for sale to Eligible Households at
affordable price as defined either by:
a. The current CalHome Sales PriceNalue limits for San Luis
County; or
b. The maximum price established by the City of San LZg
Inclusionary Ordinance — Affordable Housing Standas udesignated as affordable under said ordinance; or
c. A price determined to be affordable to an i Home less
than or equal to 120% as adjusted for ho hold size% of
gross annual income for principal, interest taxes and insurance (PITI).
G. Maximum Loan Amount
1. BEGIN loans shall not exceed $30 or 20% of the purchase price of the
BEGIN -assisted unit, whichever is le he amount of the BEGIN Program
loan shall be determined on a case-by-c a asis by City in accordance with
this section of the Manual and, wh c si a with other available financing
and assistance, the minimum am �n ce ary
a. Ensure affordable mirit hbG n�:css as defined by the first mortgage
lender (The first lender a ma aargest first loan possible given the
ability of the Borrow r a m order to keep the BEGIN loan amount
at the minimum a o n eces ).
b. The Ciecu a $400 0 in City funds and $100,000 in developer
contribt st a i i low and moderate income households. The
ad=Jq
es f ds will enable total loan amounts to reach up to
$7w er, N funds shall be capped at $30,000 per loan.
H. Loan
1. All BEGIN loos shaft bo evidenced by the following documents and provisions.
a. ' Note (attached hereto as Exhibit «F„) payable to City in the
inc amount of the loan and stating the terms and rate of interest.
Dee of Trust (attached hereto as Exhibit "G") securing the Note; this
Aeed shall be recorded and shall secure City's financial interest in the
roperty.
Request for Copy of Notice of Default.
I. Loan Terms
Page 3 of 8
1. Security:
Attachment 2
a. BEGIN loans shall be secured by the property or leasehold interest, as
applicable.
b. The lien securing repayment of the BEGIN loan shall be subject only t--
liens, encumbrances and other matters of record reviewed an o d
by the City.
2. Deferment:
a. Principal and interest payments for the BEGIN funds s all be a rre o
the term of the BEGIN loan (30 years).
3. Repayment: / %
a. The BEGIN loan principal and interest s a be repaya I upon: 1) Sale,
transfer or lease of the property. 2) Borro r failur occupy the
property as Borrower's principal place of rest ce rrower must certify
occupancy annually) within th i t five years after the date of recordation
of the deed of trust securing the mloan. 3) The BEGIN loan maturity
date. 4) The maturity date, or full rep nt, of any debt secured by a
lien on the Property that is se 'or he N deed of trust. 5) Upon
default of the BEGIN promis e, ee of trust or other recorded
documents of recordpertai in t e erty.
b. If it is determined by thl th t ent of the loan at maturity will
cause a hardship to the r e , City may, at its option, elect to:
1) Approve a one-time' additi I deferral period of up to 30 years in length
at 0% a,IdiIional'nterest, or;
2) Convert ttl "&I WinCipatand accrued interest) to a 15 year amortized
4. Assu
a. JB an a assumable by another low- or moderate income buyer
er fi y ars romthe date of recordation of the deed of trust securing
BEGI an.
5. /Tracer sfer-offnteFest Exceptions:
T"llowing transfers of interest shall not require repayment of the
BEGIN loan:
1) Transfer to a surviving joint tenant by devise, descent or operation of
the law on the death of a joint tenant.
2) A transfer, in which the transferee is a person who occupies or will
occupy the property, which is:
Page 4 of 8
Attachment 2
J.
i. A transfer in which the spouse becomes an owner of the property.
ii. A transfer resulting from a decree of dissolution of marriage, le
separation agreement, or from an incidental property settlem
agreement by which the spouse becomes an owner of the proTw
3) A transfer into an inter vivos trust in which the Borrower 7in,,
the beneficiary and occupant of the property.
6. Loan Term:
a. The BEGIN loan term shall be 30 years, except upon t e o
any condition requiring repayment as noted above.
b. When United States Department of Agric I re, Rural o)i siog'Service
(USDARHS) 502 mortgage loans are in tir�t lien posits n the BEGIN loan
term shall be the term of the 502 mortga(30 to 38 y a s).
7. Prepayment:
a. A Borrower may prepay the Bt loan, in part or whole, at any time
without penalty.
8. Interest:
a. 3% simple interest p�annu
9. Restrictions on Sale:
a. In any loan trLet
t on in w i t e BEGIN loan is the only secondary
financin/g� r can o be restricted from selling the home at its
fair mar vav '
b. m0junc*
ers, n ss assisted with a BEGIN loan under this
t ed o meet the Eligible Household requirements set
C. o s required by other secondary financing sources used in
with a BEGIN loan shall prevail.
e
value (LTV) ratio for a BEGIN loan, when combined with all other
ss to be secured by the property, shall not exceed 100% of the
,e plus a maximum of up to 5% of the sales price to cover closing
1. No downpayment shall be required of an eligible Borrower in order to receive
Page 5 of 8
BEGIN funds under this Program. %titLrs111@>7
L. First Mortgage Underwriting Requirements
1. In addition to the first mortgage requirements of the primary len �
following FTH Program requirements shall also apply to first mortgages is:
in conjunction with a FTH second mortgage:
a. Borrower shall obtain the maximum first mortgage loan wit" t rm an
interest rate from a mortgage lender consistent with affordable o
costs as defined in herein. '7
b. First mortgage loans shall not include provisions for r
a ative
amortization, principal increases, balloon pay s, d e rest or
temporary buydowns. "/\
C. Front End Ratio:
1) For purposes of qualifying Borrower fora t mof_rtgage, and as defined
herein means the ratio betty the total month y living costs (debt) and
gross monthly income.
2) This ratio shall not exceed th y imary mortgage lender.
d. Back End Ratio: O
1) For purposes of quali n Bo�Ilent
r or a first mortgage, and as defined
herein means the a the monthly housing costs plus all
payments on to e i s debt and the monthly household
income.O
2) This r Sh41 i�t e ee at set by the primary mortgage lender.
e.
1) For u oses�f qualifying Borrower for a first mortgage, credit
worthine riteria shall be as established by the primary mortgage
M. Appraisal
r \'A�of escrow an appraisal must be obtained which meets the
oliow quirements:
�e appraisal shall be prepared by a state -licensed residential property
praiser.
The appraisal shall use the sales of comparable properties approach to
determine value.
Page 6 of 8
Attachment 2
N. Cash -Out of Escrow
1. Borrowers may not receive cash out of escrow from any loan
containing secondary BEGIN financing.
O. Title Insurance
1. The Borrower shall provide City with an ALTA title insurance
amount of the BEGIN loan at Borrower's expense. <
P. Hazard Insurance
1. Borrower must provide and maintain fire and flood (if the p o erty )1ated in
a 100 year floodplain) insurance in an amount a east qua to aacement
value of the improvements.
2. City must be named as an additional loss pay eon the policy
Q. Financing Subordinate to BEGIN Loan
1. Fees and/or charges for subordinate 'nancing shall be consistent with
reasonable loan origination fees for first ge financing as determined by
the City based on industry standard .
2. Balloon payments due before the atu it to f the BEGIN loan are not
permitted.
3. All subordinate financings' �'de�r rinci�aI and interest payments for the
term of the BEGIN loan.
no,
Page 7 of 8
'P4,- 6 9 OF 9 END OF DOCUMENT