HomeMy WebLinkAboutD-1751 Tract 2707 & 2785 - 861 & 953 Orcutt Road Recorded 12/07/2007RECORDING 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 RQDEIWALD MEL
San Luis Obispo,C
Clerk/Recorder 12/07/2007
a :4t,..,.., 8:13 AM
.'� Recorded ahahe request`o .., ,,
Chicago Title. 10.00a
p r I20�y010781658
III NPIR�IWIIII�IIIII
Titles: 1
Pages: 18
Fees
0:00
Taxes
0.00
Others
0.00
PAID
$0.00
Recorded for the benefit of
the City of San Luis Obispo
at no fee under section 27383
of the Government Code
AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACTS
2707/2785
THIS AGREEMENT is made and entered into this _12th day of October, 2007,
by and between the City of San Luis Obispo (the "City ") and CityView Laurel Creek 178,
L.P., a Delaware limited partnership (the "Owner'), collectively referred to as "the
parties."
RECITALS
A. On November 15, 2005, the City Council adopted Resolution No. 9748,
approving .Tract 2707, a residential subdivision project with 178 dwellings,
located at 861 and 953 Orcutt Road, San Luis Obispo ( "the project'); and
B. Section 3, Project Condition #1 of that approval requires the applicant to
provide a minimum of two affordable dwelling units for sale through the City's
Inclusionary Housing Ordinance (under separate affordability agreement) plus 10
units under the approved program guidelines of the State's BEGIN program; and
C. The parties have agreed that the Owner shall construct and sell 10 homes
in conformance with the City's Affordable Housing Standards and the City's State
approved BEGIN Program Guidelines (Attachment 2); and
D. . The City and Owner desire to assure that ten affordable dwelling units
located at 902, 904, 910, 914, 916, 922, 928, 932, 934, 936 Tarragon Way remain
affordable to low or moderate income households for a period of at least 5 years in
accordance with the City's Shared Equity Purchase program and the Affordability
Plan submitted by the developer which designates maximum sale prices for
BEGIN units (Attachment A); and
E. The City and Owner desire to assure that a total of two inclusionary
affordable dwelling units under a separate agreement remain affordable for 45
years. The ten BEGIN Housing Units, lot numbers (1209, 1208, 1205, 1203, 1202,
1308, 1305, 1303, 1302, 1301), shall be governed by the City's Affordable Housing
Standards, the Equity Share program and BEGIN program guidelines.
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Page 2, Affordable Housing Agreement for Tracts'2707/2785
F. The City and Owner understand that third party verification is a perquisite to
eligible buyer certification and must be performed by the Housing Authority or
another entity approved by the City. The Owner agrees to reimburse successful
buyers for their 3d party verification fees through escrow, in an amount not to
exceed $500.00.
NOW, THEREFORE, the parties acknowledge and agree as follows:
ARTICLE 1. DEFINITIONS
1.01. "Moderate income households" means persons and families whose income does
not exceed 120 percent of the County of San Luis Obispo area median income,
adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing
Standards.
1.02. "Low income households" means persons and families whose income does not
exceed 80 percent of the County of San Luis Obispo area median income,
adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing
Standards.
1.02.5 Very low income households" means persons and families whose income does
not exceed 50 percent of the County of San Luis Obispo area median income,
adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing
Standards.
1.03 Persons and families meeting the definition under Sections 1.01 and 1.02 shall be
referred to as "eligible households."
1.04 "The properties" shall mean those specific real properties described in this
agreement (lots 1209, 1208, 1205, 1203, 1202, 1308, 1305, 1303, 1302, 1301),
intended to be sold to and occupied by eligible households.
ARTICLE 2. RESTRICTIONS
2.01. The ten BEGIN units to be constructed on the properties shall be governed by the
City's Equity Share program of the Inclusionary Housing Ordinance and the State's
BEGIN program guidelines. These units shall be used for owner - occupied housing
purposes and shall be sold to eligible households. The sales prices have been
pre- determined for each unit by bedroom size (Attachment 1). For subsequent
sales to eligible households, sales prices shall be based on and consistent with the
City's equity share program and the BEGIN program guidelines.
2.02. The grant deed.from Owner, or Owner's successors in interest and all future grant
deeds for transfers of interest in the properties shall contain a restriction consistent.
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Page 3, Affordabiekusing Agreement for Tracts 2707/2785
with the BEGIN guidelines and the City's equity share program. Any sale, lease,
rental, or other transfer of the property in violation of this covenant shall be void.
2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo,
or other qualified entity acceptable to the City, at his or her expense, for screening
of potential buyers to determine if they qualify as eligible households.
2.04. These affordability requirements shall be covenants running with the land as
defined in California Civil Code Section 1460, and shall apply to the properties as
shown on Exhibit A. Pursuant to Civil Code Section 1468, which governs such
covenants, the provisions of this Agreement as well as the BEGIN program
guidelines shall be binding upon all parties having any right, title, or interest in any
of the properties described herein, or any portion thereof and on their heirs,
successors in interest and assigns for a period of 5 years for the ten BEGIN
Housing Units from the date of occupancy of the property. The parties agree that.
all future deeds or transfers of interest regarding the properties shall show the
restrictions of this Agreement and follow the BEGIN guidelines for as long as the
Agreement is in effect.
2.05. When a designated affordable housing unit is first sold to an eligible buyer, the
buyer and City shall enter into an Affordable Housing Agreement which shall be
recorded as an encumbrance on the property, and secured by a recorded deed of
trust. The Deed of Trust and Promissory Note have been approved by the State
for the BEGIN units. Said agreement and deed of trust shall establish the
monetary difference between the initial purchase price and the initial appraised
value as a loan payable to the City. Said loan shall accrue interest, compounded
annually, at an annual rate equal to 4.5 points added to the 11 th District Cost of
Funds as currently published by the Federal Home Loan Bank Board, amortized
over 30 years, and the monthly payments of principal and interest shall be waived
by the City as long as the owner previously approved by the City Housing Authority
or other entity approved by the City, as an eligible household, or subsequent
buyers approved by the Housing Authority as eligible households, continue to own
and reside in the property subject to the City loan as his or her principal residence.
All provisions of the BEGIN Deed and Note apply.
2.06. If a designated affordable housing unit is sold, leased, or otherwise transferred to
an entity other than to an eligible household, in violation of this agreement or the
BEGIN guidelines, the City's and the BEGIN loan shall immediately become due
and payable from the proceeds of sale of the property. "Proceeds of sale" shall
mean the value of any and all consideration, however denominated, received or to
be received by the Seller from the sale of the property after the payment of the first
deed of trust.
2.07. Upon resale, the City or the Housing Authority of the City of San Luis Obispo shall
have the first right of refusal to purchase the property or properties at current
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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 the City loan
remaining after deducting this 1 percent of the loan balance shall be credited
toward the purchase price if the City chooses to exercise the purchase option. The
provisions of this section shall not impair the rights of a first mortgage lender
secured by a recorded deed of trust. The purchase money lender shall have a
higher priority than the City's loan. The City's security shall be prioritized as a
second mortgage. This first priority applies to the purchase money lender's
assignee or successor in interest, to:
(i) Foreclose on the subject property pursuant to the remedies permitted by
law and written in a recorded contract or deed. of trust; or
(ii) Accept a deed of trust or assignment to the extent of the value of the unpaid
first mortgage to the current market value in lieu of foreclosure in the event
of default by a trustor; or
(iii) Sell the property to any person at a fair market value price subsequent to
exercising its rights under the deed of trust. Any value in excess of the
unpaid mortgage and costs of sale administration shall be used to satisfy
the City loan. In no case may a first mortgage lender, exercising foreclosure
assignment in -lieu of foreclosure or sale, obtain value or rights to value
greater than the value of the outstanding indebtedness on the first
mortgage at the time of the debt clearing action.
In addition, the following types of transfers shall remain subject to the requirements
of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to
the owner's spouse; transfer to a surviving joint tenant; transfer to a spouse as part
of divorce or dissolution proceedings; or acquisition in conjunction with a marriage.
ARTICLE 3. GENERAL
3.01. Required notices shall be sent by certified mail, return receipt requested, to the
following addresses:
If to the City: City of San Luis Obispo
Community Development Director
919 Palm Street.
San Luis Obispo, CA 93401 -3249
If to the Owner: CityView Laurel Creek 178, L.P.,
c% Watt Developers LLC
201 S. Miller Street, #108
Santa Maria, Ca 93454
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Page 5, Affordable Housing Agreement for Tracts 2707/2785
3.02. The Owner hereby specifically acknowledges and agrees to be bound by the
covenants respecting affordability on the Property contained herein.
IN WITNESS WHEREOF, this Agreement has been duly, executed by 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,
its sol ember
By:_
It-
Gary L. Pol' te, Vice President
CITY:
I
ad-r
le, Community Development Director
ROYgD AS TO FOW AND LEGAL EFFECT:
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C)cTOBe-r2 1ZrH . Zoo-'
Date
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Page 6, A- ffordable Housing Agreement for Tracts 2707/2785
STATE OF CALIFORNIA
)SS
COUNTY OF SAN LUIS OBISPO
On . � ll;, ZDd 7 . before me,
_ 0 `
personally appeared
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 /heel their authorized capacity(ies) and that by
his /her /their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Signature of
- 6 -
CINDY LOU SIMPSON
Commission # 177978
-® Notary Public - California
Santa Barbara County
Cortxn.FS flea r9 2011
(The above area for official notarial seal)
State of California }
County of San Luis Obispo }
On October 24, 2007, before me, Diane R. Stuart, Notary Public, personally appeared
John Mandeville, personally known to me to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his capacity,
and that by his signature on the instrument the person or the entity upon behalf of which
the person acted, executed the instrument.
Witness my hand and official seal.
FD R. Stuart, �otary Public
DIANE R. STUART
COMM. #158145$
NOTARY PUBLIC . CALIFOIBW
SAN LUIS OBISPO COUNTY
o Ny Camm.. Evhs .Aare 20,2W9
Capacity claimed by signer(s):, Political Agency
Affordability Housing Agreement/Deed of Trust Covenants for Tracts 2707 and 2785
Title No, 06.34800798 -F•DL
Coate Na CACn7740- 7740-1348 - 0034900798
L9GAL DESCRIPTION
EXHIBIT `A°
THE LAND REFERRED TO HEREIN BELOW IS SMATED IN THE CDY_OF'SAN WIS OBISPO, COUNTY OF SAN
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 Obispo, County of San Luis
Obispo, State of California, according to map recorded March 28, 2000 in Book 19, Page 7 of Maps, in the
office of the County Recorder of said County..
APN;053- 061 - 046,053-061 - 047,053.061 -046
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City of San Luis Obispo
BEGIN Program Guidelines
A. Overview
0
r
Attachment 2
The State of California Building Equity and Growth in Neighborhoods (BEGIN)
Program is providing assistance to eligible Borrowers under this Program.. The
following applies to BEGIN loans made under this Program and is to be operated in
conformance with the State of California BEGIN Program Guidelines revised on
March 4, 2005.
B. Eligible Uses of Funds
1. BEGIN funds are project specific and maybe used only for:
a. The provision of permanent secondary mortgage assistance to first time
homebuyers in connection with a new primary mortgage loan for the
purchase of a principal place of residence located within the specific
homeownership development project for which the City has received_
BEGIN funds;
b. Self -help housing mortgage assistance.
c. Non- recurring loan costs.
C. Ineligible Uses of Funds
1. BEGIN funds may not be used for:
a. Any use not expressly listed above as an eligible use of BEGIN funds.
D. Eligible Household
1. To be eligible to receive BEGIN funds, an individual household shall:
a. Be a lower income or moderate income household (income equal to or
less than 120% .of area median income as adjusted for household size)
when considering the gross income of all household residents 18 years
old or older.
1) Gross income is as defined in the California Code of Regulations (CCR),
Title 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
Attachment ?
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 as a principal
place of residence (A FTHB is a borrower who has not owned a home
during the three year period before the purchase of the home with BEGIN
assistance)..
2. The following individual or individuals may not be excluded from
consideration as a first time homebuyer under this section:
a. A displaced homemaker, who, while a homemaker, owned a home with
his or her spouse or resided in a home owned by the spouse. A displaced
homemaker is an adult who has not, within the preceding two years,
worked on a full -time basis as a member of the labor force for a
consecutive twelve -month period and who has been unemployed or
underemployed, experienced difficulty in obtaining or upgrading
employment and worked primarily without remuneration to care for his or
her home and family;
b. A single parent who, while married, owned a home with his or her spouse
or resided in a home owned by the spouse. A single parent is an
individual who is unmarried or legally separated from a spouse and has
one or more minor children for whom the individual has custody or joint
custody or is pregnant; or
C. An individual or individuals who owns or owned, as a principal place of
residence during the three -year period before the purchase of a. home
with BEGIN assistance, a dwelling unit whose structure is:
1) Not permanently affixed to a permanent foundation in accordance with
state or local regulations; or
2) Not in compliance with state, local or model building codes and cannot
be brought into compliance with such codes for less than the cost of
constructing a permanent structure.
E. Eligible Property
1. Property purchased with BEGIN funds must be:
a. Located within the jurisdictional boundaries of the City of San Luis
Obispo; and
b. 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 i
l h
F. Maximum Sales/Price Value Limit
1. BEGIN- assisted units shall be available for sale to Eligible Households at an
affordable price as defined either by:
a. The current CalHome Sales PriceNalue limits for San Luis Obispo
County; or
b. The maximum price established by the City of San Luis Obispo
Inclusionary Ordinance — Affordable Housing Standards _ for those units
designated as affordable under said ordinance; or
C. A price determined to be affordable to an Eligible Household (income less
than or equal to 120% as adjusted for household size) utilizing 40% of
gross annual income for principal, interest taxes and insurance (PITI).
G. Maximum Loan Amount
1. BEGIN loans shall not exceed $30,000 or 20% of the purchase price of the
BEGIN- assisted unit, whichever is less. The amount of the BEGIN Program
loan shall be determined on a case -by -case basis by City in accordance with
this section of the Manual and, when considered with other available financing
and assistance, the minimum amount necessary to:
a. Ensure affordable monthly housing costs as defined by the first mortgage
lender (The first lender shall make the largest first loan possible given the
ability of the Borrower to repay in order to keep the BEGIN loan amount
at the minimum amount necessary).
b. The City has secured $400,000 in City funds and $100,000 in developer
contribution to assist qualified low and moderate income households. The
addition of these funds will enable total loan amounts to reach up to
$70,000, however, BEGIN funds shall be capped at $30,000 per loan.
H. Loan Documentation
1. All BEGIN loans shall be evidenced by the following documents and provisions.
a. Promissory Note (attached hereto as Exhibit "F") payable to City in the
principal amount of the loan and stating the terms and rate of interest.
b. Deed of Trust (attached hereto as Exhibit "G ") securing the Note; this
deed shall be recorded and shall secure City's financial interest in the
property.
C. Request for Copy of Notice of Default.
I. Loan Terms
Page 3 of 8
1
Pttachment �
. Security:
a. BEGIN loans shall be secured by the property or leasehold interest, as /dY.
applicable.
b. The lien securing repayment of the BEGIN loan shall be subject only to
liens, encumbrances and other matters of record "reviewed and approved
by the City.
2. Deferment:
a. Principal and interest payments for the BEGIN funds shall be deferred for
the term of the BEGIN loan (30 years).
3. Repayment:
a. The BEGIN loan principal and interest shall be repayable upon: 1) Sale,
transfer or lease of the property. 2) Borrower's failure to occupy the
property as Borrower's principal place of residence (Borrower must.certify
occupancy annually) within the first five years after the date of recordation
of the deed of trust securing the BEGIN loan. 3) The BEGIN loan maturity
date. 4) The maturity date, or full repayment, of any debt secured by a
lien on the Property that is senior to the BEGIN deed of trust. 5) Upon
default of the BEGIN promissory note, deed of trust or other recorded
documents of record pertaining to the property.
b. If it is determined by the City that repayment of the loan at maturity will
cause a hardship to the Borrower, the City may, at its option, elect to:
1) Approve a one -time additional deferral period of up to 30 years in length
at 0% additional interest, or;
2) Convert the debt (principal and accrued interest) to a 15 year amortized
loan at 0% additional interest.
4. Assumability:
a. BEGIN loans are assumable by another low- or moderate income buyer
after five years from the date of recordation of the deed of trust securing
the BEGIN loan.
5. Transfer of Interest Exceptions:
a. The following 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
i. A transfer in which the spouse becomes an owner of the property.
ii. A transfer resulting from a decree of dissolution of marriage, legal
separation agreement, or from an incidental property settlement
agreement by which the spouse becomes an owner of the property.
3) A transfer into an inter vivos trust in which the Borrower is and remains
the beneficiary and occupant of the property.
6. Loan Term:
a. The BEGIN loan term shall be 30 years, except upon the occurrence of
any condition requiring repayment as noted above.
b. When United States Department of Agriculture, Rural Housing Service
(USDARHS) 502 mortgage loans are in first lien position, the BEGIN loan
term shall be the term of the 502 mortgage (30 to 38 years).
7. Prepayment:
a. A Borrower may prepay. the BEGIN loan, in part or whole, at any time
without penalty.
8. Interest:
a. 3% simple interest per annum
9. Restrictions on Sale:
a. In any loan transaction in which the BEGIN loan is the only secondary
financing, the Borrower cannot be restricted from selling the home at its
fair market value at any time.
b. Subsequent buyers, unless assisted with a BEGIN loan under this
Program, do not need to meet the Eligible Household requirements set
forth above.
C. Resale restrictions required by other secondary financing sources used in
conjunction with a BEGIN loan shall prevail.
J. Loan -to -Value Limits
1. The loan-to-value (LTV) ratio for, a BEGIN loan, when combined with all other
indebtedness to be secured by the. property, shall not exceed 100% of the
sales price plus a maximum of up to 5% of the sales price to cover closing
costs.
K. Downpayment
1. No downpayment shall be required of an eligible Borrower in order to receive
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BEGIN funds under this Program.
L. First Mortgage Underwriting Requirements
•
AktdLhment 2 R .
1. In addition to the first mortgage requirements of the primary lender, the
following FTH Program requirements shall also apply to first mortgages issued
in conjunction with a FTH second mortgage:
a. Borrower shall obtain the maximum first mortgage loan with a term and
interest rate from a mortgage lender consistent with affordable housing
costs as defined in herein.
b. First mortgage loans shall not include provisions for negative
amortization, principal increases, balloon payments, deferred interest or
temporary buydowns.
C. Front End Ratio:
1) For purposes of qualifying Borrower for a first mortgage, and as defined
herein means the ratio between the total monthly living costs (debt) and
gross monthly income.
2) This ratio shall not exceed that set by the primary mortgage lender.
d. Back End Ratio:
1) For purposes of qualifying Borrower for a first mortgage, and as defined
herein means the ratio between the monthly housing costs plus all
payments on long -term installment debt and the monthly household
income.
2) This ratio shall not exceed that set by the primary mortgage lender.
e. Credit Worthiness Criteria
1) For purposes of qualifying Borrower for a first mortgage, credit
worthiness criteria shall be as established by the primary mortgage
lender.
M. Appraisal
1. - Prior to close of escrow an appraisal must be obtained which meets the
following requirements:
a. The appraisal shall be prepared by a state- licensed residential property
appraiser.
b. The appraisal shall use the sales of comparable properties approach to
determine value.
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Attachment Z
s
N. Cash -Out of Escrow _
1. Borrowers may not receive cash out of escrow from any loan package
containing secondary . BEGIN financing.
O. Title Insurance
1. The Borrower shall provide City with an ALTA title insurance policy in the
amount of the BEGIN loan at Borrower's expense.
P. Hazard Insurance
1. Borrower must provide and maintain fire and flood (if the property is located in
a 100 year floodplain) insurance in an amount at least equal to the replacement
value of the improvements.
2. City must be named as an additional loss payee on the policy.
Q. Financing Subordinate to BEGIN Loan
1. Fees and /or charges for, subordinate loan, financing shall be consistent with
reasonable loan origination fees for first mortgage financing as determined by
the City based on industry standards.
2. Balloon payments due before the maturity date of the BEGIN loan are not
permitted.
3. All subordinate financing shall defer principal and interest payments for the
term of the BEGIN loan.
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