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HomeMy WebLinkAboutHIP - Guidelines, Funding & Procedures CITY OF PALM DESERT— REDEVELOPMENT AGENCY HOME IMPRt�VEMENT PROGRAM (HIP) ��:�:. �r,. ti� • ��f'1 ��� a��{'~ ��r�r _ �'��,/ �`� � �� ,� J�I 7 K �VJ � 4 ,� y • � �� '�jr �._- ti,y ��• . ,�r�=:I::.[l:tl'Jji� 73-510 Nrcd Waring Drivc I'alm Descrt, CA 922G0 Phone: (760) 34G-0611 Fax: (7G0) 341-G372 w�vw.cityofpalmdescrt.org Version 1.0 �xhibit A to Resolution Nos. A�proved 7/12/07 Guideline s Fundin Com onents g p Procedures Home Improvement Program--Guidelines,Funding Components and Procedures Effective July 12,2007 `Table of Contents I. Guidelines 1. Program Overview 1 2. Definitions and Interpretations 2-3 3. Eligible Homeowners 4 4. Eligible Properties 5-6 5. Eligible Improvements 7 6. Eligible Contractors 7 7. Participation Priorities 8 8. Terms and Conditions 8-9 9. Loan Management 9-10 10. Administrative Fees 10 11. Consultants 11 II. Funding Components Component No. 1 — Emergency Grant (EG) 12 Component No. 2 — Rehabilitation Grant (RG) 13 Component No. 3 — Matching Fund (MF) 13 Component No. 4A— Rehabilitation (RL) — Low Income 14 Component No. 4B — Rehabilitation (R�) — Moderate Income 14 Component No. 4C — Deferred Loan (DL) 14-15 Component No. 5 — Drought Tolerant Landscape Retrofit (DTLR) 15 Component No. 6 — Make a Difference Volunteer (MADV) 15-16 Component No. 7 —Acquisition/Rehabilitation/Resale (ARR) 16 Component No. 8 — Lead and Asbestos Abatement Grant (LAAG) 17-18 Financial Hardship Exception 18 III. Procedures Step 1 - Application Process 19-20 Step 2 - Loan/Grant Approval or Denial 21 Step 3 - Loan Funding 21-22 Step 4 - Pre-Construction (Bids and Contracts) 22-24 Step 5 - Construction 24 Step 6 - Disbursement of Payments 24-25 Step 7 - Project Completion 25 Step 8 - Final Loan/Cost Verification Statements 25 Step 9 - Appeal and Dispute Resolution Process 25-26 Exhibits Exhibit A — Eligible Improvements 27 Exhibit B — Ineligible Improvements 28 Exhibit C — HUD Chart of Co. of Riverside Median Income Data 29 Exhibit D — HIP At-A-Glance 30-33 Home Improvemenf Program--Guidelines, Funding Components and Procedures Effective July 12,2007 HOME IMPR�VEMENT PROGRAM Section I. Guidelines 1. PROGRAM OVERVIEW The Home Improvement Program ("HIP" or "Program") is a residential rehabilitation loan and grant program. The Program is designed to provide financial assistance to very low, fow and moderate-income homeowners in the City of Palm Desert ("City") to correct existing code violations, health and safety hazards, and substandard conditions of the home. The objective of the Program is to assist the City's lower income residents maintain healthy, safe and attractive housing in the City. The funding sources for HIP are Community Development Block Grant (CDBG) funds; 20% tax increment housing set-aside funds; and housing mitigation funds. The Palm Desert Redevelopment Agency ("Agency") is the administrator ("Administrator") of the HIP and has the authority to administer the Program, regardless of funding source. Financial assistance includes grants, low-interest and deferred loans. Loans are secured by a loan agreement, promissory note and deed of trust, and are subject to certain conditions which are recorded against assisted properties. Grants are secured by a grant agreement, promissory note and deed of trust that proportionately forgives the obligation to repay over the term of the grant, and are subject to certain conditions which are recorded against assisted properties. Program grants/loans are subject to the availability of Program funds and will be processed by priority noted in Section I-7. The Agency may retain one or more consultants ("Program Consultant") to provide technical and professional consulting services in connection with the administration of the Program. In particular, the Program Consultant will assist eligible homeowners in assessing the scope of needed repairs, assisting the homeowner in obtaining bids or estimates, selecting and retaining contractors, coordinating and monitoring construction or repair work, arranging for inspections and overseeing required paperwork. All construction contracts are between the homeowner and contractor. Therefore, by signing the construction contract, the homeowner approves the construction contract and authorizes the work to proceed as stated in the construction contract in accordance with its terms. The City, Agency and Program Consultant are not parties to the construction contracts entered into for HIP improvement work and assume no liability whatsoever for any work performed or not performed by any contractor or other person or entity pursuant to the Program. To qualify for a HIP loan or grant, both the Participant and the property must satisfy eligibility criteria. Home Improvement Program--Guidelines,Funding Components and Procedures Effective July 12,2007 1 Home Improvement Program Section I Guidelines 2. DEFINITIONS AND INTERPRETATION Definitions:. Capitalized terms used herein shall have the following meanings unless the context in which they are used clearly requires otherwise. "Administrator" of the Program shall mean the Palm Desert Redevelopment Agency regardless of funding source. "Adjusted for Family Size" shall mean a household of one person in the case of a studio unit, two persons in the case of a one-bedroom unit, three persons in the case of a two-bedroom unit, four persons in the case of a three-bedroom unit, and five persons in the case of a four-bedroom unit. "Affordable Housing Cost" shall mean a housing cost which is calculated pursuant to California Health and Safety Code Section 50052.5, as amended from time to time, and for the purposes hereof, the term "housing cost" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6920, as such regulations may be amended from time to time, and the term "Gross Income" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6914, as such regulations may be amended from time to time. "Agency" shall mean the Palm Desert Redevelopment Agency. "AMI" shall mean the area median income for Riverside County as published by the United States Department of Housing and Urban Development, or if such agency shall cease to publish such an index, then any comparable index published by any other federal or state agency which is approved by the Agency. The AMI shall be adjusted for family size in accordance with the state regulations adopted pursuant to California Health and Safety Code Section 50052.5. "Applicant" shall mean an owner of real property seeking financial assistance pursuant to the program for the purposes of improving their property. See also "Homeowner" and "Participant". "CDBG" shall mean Community Development Block Grant. "City" shall mean the City of Palm Desert. "City Manager" shall mean the City Manager for the City of Palm Desert. "County" shall mean the County of Riverside, California. "Executive Director" shall mean the Executive Director of the Palm Desert Redevelopment Agency. "Extremely Low Income Households" shall mean persons and families whose income does not exceed the qualifying limits for persons and families of very low income set forth in California Health and Safety Code Section 50106 and Title 25 of the California Code of Regulations, Section 6910, as such statute and regulations may be amended from time to time. "Gross Income" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6914, as such regulations may be amended from time to time. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 2 Home Improvement Program Section I Guidelines "HCD" shall mean the Department of Housing and Community Development for the State of California. "H!P" shall mean the Palm Desert Home Improvement Program. "Homeowner" shall mean the owner of real property. See also "Applicant" and "Participant". "Household Income" shall mean the household income of all Applicants, co-Applicants, persons holding title to the participating property, and all household occupants 18 years of age or older calculated in accordance with Title 25 of the California Code of Regulations Section 6914. "HUD" shall mean the Federal Department of Housing and Urban Development. "Low Income Households" shall mean persons and families whose income does not exceed the qualifying limits for lower income households set forth in California Health and Safety Code Section 50079.5 and Title 25 of the California Code of Regulations, Section 6910, as such statute and regulations may be amended from time to time. "Moderate Income Households" shall mean persons and families whose income does not exceed the qualifying limits for persons and families of moderate income set forth in California Health and Safety Code Section 50093 and Title 25 of the California Code of Regulations, Section 6910, as such statute and regulations may be amended from time to time. "Owner" see "Homeowner". "Participant" shall mean a qualified applicant who agrees to participate in the Home Improvement Program. See also: "Applicant" and "Homeowner". "Program ConsultanY' shall mean the person or entity designated by the City Manager or Executive Director of the Redevelopment Agency to implement the program. "Qualified Person or Household" shall mean a person or persons whose Household Income and eligibility requirements are met as they pertain to the Program. "Redevelopment Law" shall mean California Community Redevelopment Law. "Three-Year Period" shall mean the three-year period commencing on the date of the final disbursement of the most recent HIP assistance. "Total Assistance" shall mean the aggregate dollar amount of financial assistance from the City of Palm Desert, the Palm Desert Redevelopment Agency or its related entities. This includes down payment assistance, silent seconds and previous and projected HIP assistance. "Very Low Income Households" shall mean persons and families whose income does not exceed the qualifying limits for persons and families of very low income set forth in California Health and Safety Code Section 50105 and Title 25 of the California Code of Regulations, Section 6910, as such statute and regulations may be amended from time to time. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 3 Home Improvement Program Section I Guidelines 3. ELIGIBLE HOMEOWNERS Homeowners who seek financial assistance pursuant to the HIP are referred to in these Guidelines as "Homeowner," "Applicant" and/or "Participant". ■ Title - Participants must have title to the property for which the request for funding of improvements is being made. ■ Owner-Occupancy - Participants must occupy the property as their sole and principal residence, except where occupancy would be detrimental due to unhealthy, unsafe or emergency circumstances. • Household Income — Gross household income may not exceed the AMI percentages in the specified funding component that the applicants applies for. ■ Credit Report Check - Participants must consent and submit to a credit report check to verify necessary identification and credit information. ■ Capacitv - Participants must be of legal age and, by applying for the Program, have stated that they have the capacity to enter into binding contracts. ■ Conflicts - No employee of the City, Agency or related entity thereof, elected or appointed official, agent or consultant who exercises any policy, decision-making function or may receive an indirect gain in connection with the Program is eligible for HIP assistance. ■ False, Inadequate or Misleadinq Information —The City/Agency maintains the right to deny Program assistance to any Applicant if false, misleading, inadequate or misrepresentative information is found in the application or other documentation made a part of the application process and used to determine eligibility. ■ Recipient of Previous HIP Assistance — For Applicants having received previous HIP assistance, three (3) years must have elapsed, as measured by the date of the final disbursement, except as otherwise outlined in the funding components. Previous recipient's total assistance, in aggregate, may not exceed the then highest valued funding component. ■ Outside AQencv Funding—Applicants who are eligible to receive funding through another agency (i.e. county, state, federal), lender or insurance adjustment/settlement, etc., must exhaust those resources before being approved for HIP assistance; in most cases, the City/Agency will require priority recording position when Program documents are recorded in the Riverside County Recorder's Office. Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 4 Home Improvement Program Section I Guidelines 4. ELIGIBLE PROPERTIES ■ Location - The property must be located within the City of Palm Desert's ciry boundaries. ■ Focus Areas — The Agency may from time to time establish geographically defined Focus Areas within the City that may be eligible for priority or special assistance under the Program. ■ Type - The property must be a single-family detached home, mobile home or a duplex. Duplexes must be owned either as a separate parcel with a common area or owned in its entirety, and the owner must occupy at least a 50% portion of the habitable dwelling on the property as a primary and sole residence. The improvements funded by the Program shall be only to the property occupied by a qualifying person. Exception: mobilehomes are not eligible for the Deferred Loan (DL) but are eligible for all other funding components. ■ Condition - The condition of the property must be such that it is in need of one or more of the following repairs: a) Correct existing nonconforming local and/or state code requirements b) Correct existing local and/or state code violations c) Correct existing nonconforming development standards d) Protect structural integrity of the property e) Promote neighborhood safety f} Correct an existing condition that creates a life safety issue g) Correct an existing health and safety condition h) Improve energy efficiency i) Refurbish deteriorating exterior conditions j) Aid in the mobility of the physically disabled and/or the elderly k) Improve efficiency of water usage, drainage or sewage transfer ■ Propertv A�e Conditions — Properties built prior to certain dates may contain lead- based paint and/or asbestos that may require inspections: a) Lead-Based Paint and Abatement - Properties that were built prior to January 1, 1978 must be inspected for lead-based paint, except for: ■ Properties that have been found free of lead-based paint by a certified lead-based paint inspector; a copy of the lead hazard evaluation report must be submitted to the Administrator prior to work write-up ■ Properties where all lead-based paint has been removed; a copy of the lead-based paint clearance report must be submitted to the Administrator prior to work write-up; or ■ No painted surface will be disturbed during any HIP funded improvement projects b) Asbestos & Abatement - Properties that were built prior to January 1, 1980 must be inspected for asbestos, except for: Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 5 Home Improvement Program Section I Guidelines ■ Properties that have been found free of asbestos by a certified asbestos professional and licensed asbestos laboratory; a copy of the asbestos evaluation report must be submitted to the Administrator prior to work write-up • Properties where all asbestos has been removed; a copy of the asbestos Clearance report must be submitted to the Administrator prior to work write-up; or • No asbestos containing materials will be disturbed during any improvement Projects Both lead-based paint and asbestos inspections must be conducted for the areas that will be disturbed during the HIP funded rehabilitation. Refer to the Lead and Asbestos Abatement Grant (LAAG) funding component for more information on inspections, inspection results, and the payment of costs associated with lead- based paint and asbestos. ■ Insurance - Properties must be insured with an all-risk property insurance policy of not less than the replacement value of the home and may require that the Agency be listed as a loss payee or additional insured. ■ Equitv - Appraisals - At the time of application for HIP assistance, unless approved in writing by the Executive Director, the property shall not be encumbered in excess of eighty percent (80%) of its current fair market value. Total encumbrances, including the HIP loan, shall not exceed ninety-five percent (95%) of the property's current fair market value. Current fair market value may be determined by comparable sales data for sales within six (6) months prior to the date of the application; alternatively, the City/Agency may elect to determine fair market value by an appraisal conducted by an appraiser approved by the City/Agency. If HIP assistance is approved, the cost of the appraisal shall be paid by the Applicant or may be included in the loan amount; if HIP assistance is not approved or the Homeowner decides to withdraw the application, the Homeowner shall pay for the appraisal. ■ No Tax Delinquencv or Recorded Liens - Property taxes and assessments must be paid current, and must remain current during the term of the HIP loan/grant, unless the property owner is participating in the State's Property Tax Postponement program (or other similar program) and no tax liens or mechanics liens are recorded against the property without prior written approval by the Agency. ■ No Criminal Activity - Properties that have evidence of repeated or ongoing criminal activity will not be eligible for HIP assistance. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 6 Home Improvement Program Section I Guidelines 5. ELIGIBLE IMPROVEMENTS Eligible improvements must be designed to correct one or more of the property conditions described in Section I-4. An illustrative list of general categories of eligible improvements is set forth in Exhibit A. An illustrative list of general categories of ineligible improvements is set forth in Exhibit B. ■ Improvements will be authorized upon the determination by the Administrator, in its discretion, that they are necessary to correct any condition set forth in Section I-4., and will improve the appearance of the dwelling and property from the public right- of-way; are interior repairs needed to provide safe and sanitary living conditions; or are improvements requiring replacement of an item (i.e., roof, water heater, windows) that is defective, unsafe, energy deficient, or aesthetically unattractive ■ Any Improvements that were previously funded through the HIP are ineligible, unless the subsequent work is to correct a defect, deficiency or damage in the original improvement, and only to the e�ctent that is permitted by law according to funding type. ■ Improvements to a mobile home that include affixing the mobile home in a permanent manner to a foundation will require that either the land be owned solely by the registered owner of the mobile home or the registered owner of the mobile home must obtain written approval of the owner(s) of the land and Homeowner's Association, if any, to affix the mobile home to a foundation. This documentation must be provided prior to approval of the application. For any improvements fhat are eligible to receive funding through an energy-efficient program, those resources must be exhausted first prior to Applicant(s) receiving HIP assistance. Rebates will be refunded to the HIP program and the assistance grant or loan will be adjusted accordingly. 6. ELIGIBLE CONTRACTORS Before the homeowner enters into a construction agreement and before work begins, all contractors must meet the following requirements, in accordance with the laws and regulations of the State Contractors License Board (CSLB), by providing proof of: ■ A contractor's license, which the classification thereof covers the type of improvements being done, and bonded by the State of California (verified as "current, active, and in good standing") ■ A City of Palm Desert business license • Workers' Compensation (if they employ or otherwise engage any person to work) ■ Any other insurances or certificates required by law to perform such work Contractors are required to provide the homeowner any and all required notices and will be responsible for knowing and conforming to all federal and state laws and regulations pertaining to the type of work to be performed, and the consequences thereof. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 7 Home Improvement Program Section I Guidelines 7. PARTICIPATION PRIORITIES ■ Funding is based on a first-come-first-served basis, except when health and safety code violations and emergencies exist, they will have first priority. ■ The City/Agency will not pay for improvements that have been completed or started prior to the date of the release of the Notice to Proceed without prior approval from the Executive Director, unless determined by the Executive Director to be unavoidable due to emergency circumstances. ■ The Executive Director shall establish and modify from time to time the type, nature and scope of improvements that will be financed by HIP. 8. TERMS AND CONDITIONS A deed of trust or security agreement, in the case of a non-affixed mobilehome, will be recorded against HIP assisted properties and will include but is not limited to the following terms and conditions: ■ Compliance with Ordinances, Rules and Requlations — Participants will comply with all federal, state and local laws, including ordinances, rules and regulations of the Agency and the City. ■ Maintenance Requirements - Participants must maintain assisted properties and the improvements thereon clean and in good condition and repair; not remove or demolish any building thereon; complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefore; to comply with all laws affecting the Property, or requiring any alterations or improvements to be made thereon; not to commit or permit waste or nuisance thereof; not to commit, suffer, or permit any act upon the Property in violation of the law; and to do all other acts which from the character or use of the Property may be reasonably necessary. ■ Hazard Insurance - Throughout the HIP loan or grant term, participating homeowners must maintain an all-risk property insurance policy, insuring the property in an amount not less than the full replacement cost of the home and any improvements thereto. The policy may be required to name the Ciry/Agency as additional insured/loss payees and a current copy of coverage may be required to be provided on an annual basis or from time to time as requested. ■ Nondiscrimination — In accordance with state and federal laws, there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental disability, medical condition, or sexual orientation in the administration of the Program and provision of HIP assistance, in the homeowner's selection of contractors to complete the rehabilitation work financed with HIP assistance, or in the sale, transfer, use, occupancy, tenure, or enjoyment of assisted properties. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-T2-07 $ Home Improvement Program Section I Guidelines ■ Records —The Administrator will keep records as appropriate within their respective retention schedules; however it is strongly suggested that Participants keep all loan/grant documents, and such records as may be required from time to time for the rehabilitation work financed with HIP assistance, including work orders, contracts, invoices, payments and receipts. 9. LOAN MANAGEMENT A. Payments on Loans Payments on HIP loans are due in accordance with the terms of the Promissory Note. !n the event loan payments are not paid in a timely manner and become delinquent, the Agency reserves the right to exercise all remedies available, up to and including foreclosure. Participants may prepay a HIP loan or grant in whole or in part at any time without a prepayment penalty. In the event that the Participants seek to payoff a loan or grant, a demand for payoff must be requested in writing to the Agency or its loan servicer, whichever applies. HIP Ioans may be serviced through the City/Agency or an outside service. The loan closing notification will indicate the address where payments are to be sent. Any changes in payment locations will be provided to the borrower in writing. B. Loan/Grant Payoff(Reconveyance) The entire loan/grant, including principal and accrued interest, is immediately due and payable in full upon the occurrence of any of the following events: ■ Sale or transfer of the property (unless the property is sold or otherwise transferred to a person or persons qualifying under the criteria of the HIP loan/grant) ■ Property is refinanced with a "cash out" provision ■ Participant no longer resides at the property as his/her sole or principal residence ■ Participants are discovered to have title to additional residential property(ies), other than the subject property ■ Property is determined by the City/Agency to be in violation of the City's Municipal Code and such default has not been cured after reasonable notice and opportunity to cure; or ■ The discovery by City/Agency of the commission of any fraud or deceit in relation to the HIP Program by Participants Notwithstanding the foregoing, to the extent required by applicable law, the following shall not entitle the City/Agency to accelerate the principal under the Note, but will not affect any other remedies to which the City/Agency may be entitled: Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 9 Home Improvement Program Section I Guidelines ■ A transfer resulting from the death of any Participant where the transfer is to the spouse of that Participant who is also a Participant ■ A transfer by a Participant where the transfer is due to the spouse becoming a co- owner of the Property ■ A transfer resulting from a decree of dissolution of the marriage or legal separation or from a property settlement agreement incidental to such a decree which requires the applicable Participant to continue to make the loan payments by which the spouse (or former spouse) of such Participant who is also a Participant becomes the sole owner of the Property ■ A transfer by a Participants entering into an inter vivos trust in which such Participant(s) are beneficiaries; or ■ The Property or any portion thereof is made subject to a junior encumbrance or lien. C. Refinancing of Participating Property (Subordination) If, at any time during the life of the loan/grant, Participants request the City/Agency to subordinate to a new loan (i.e., refinance), the following conditions will apply but are not limited to: ■ The amount of the refinancing may not exceed the outstanding balance of the loan being refinanced plus reasonable closing costs for the refinancing. ■ New loan being refinanced has no provisions for subsequent disbursements of cash, or its equivalent, to the borrower after the closing of the loan. ■ There are no other encumbrances against the property, other than the new, proposed deed of trust that the Agency would be subordinating to, that the Agency has not approved in writing. ■ The terms of the refinanced loan comply with the Loan/Grant Agreement that remains in full force and effect, in addition to all conditions set forth in the Subordination Agreement. Documentation that may be required includes but is not limited to: ■ Copy of the Good Faith Estimate (or other similar document defining the amount of the new loan, terms and the new payment). ■ Copy of the proposed note and deed of trust in connection with the new first loan. ■ Copy of the preliminary title report. ■ The borrower must execute and record a Request for Notice in favor of the Agency on the new first trust deed. ■ The form agreement for Subordination must be approved by the Executive Director, City Manager, or his designee as applicable. 10. ADMINISTRATIVE FEES Participants may be responsible for fees incurred by the application processing should HIP assistance be denied due to false information, failure to disclose or submit information, or should the homeowner withdraw the application after any services have been provided and/or fees incurred. Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 10 Home Improvement Program Section I Guidelines 11. CONSULTANTS The City/Agency may utilize one or more Program Consultants for any or all of the implementation and/or administration of the Program. Applicant will be notified in writing upon initial review of income as to who the designated Administrator will be for the work write-up, documentation and construction portion of the Program. Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 11 Home Improvement Program Section II Funding Components Section II. Funding Components Income eligibility for the various funding components of HIP assistance is determined in accordance with applicable percentages of the AMI for Riverside County. A chart setting forth the current AMI figures, effective as of April 2007, is attached as Exhibit C. Income eligibility for Program applications shall be processed in accordance with Exhibit C or, as AMI figures are revised and updated from time to time by HUD. Component No. 1 — Emerqency Grant (EG) ■ For very low and low-income households whose income does not exceed 80% of AMI. ■ Maximum grant amount of$7,500 for very low income families; $5,000 for low income families. ■ Covers emergency conditions, as determined by staff, including but not limited to the following: - abatement of lead - abatement of asbestos - abatement of existing or incipient code violations - correction of existing or incipient health and safety and/or City municipal code violations - repair or replacement of roof leaks (during rainy conditions) - repair of plumbing leaks - repair or replacement of air conditioner(during summer months) or heating system (during winter months) - fumigation and treatment of pest, rodent and vector control, not otherwise provided for by any other governmental agency - access improvements and special safety features to aid the physically disabled and the elderly ■ Grant agreement that proportionally forgives the obligation to repay over five (5) years (For example, with a grant of $5,000, $1,000 is forgiven annually). ■ Deed of trust recorded as security for the performance of the obligations under the grant agreement. ■ No repayment is required during the term of the grant agreement unless the property is sold or transferred to a household that exceeds 80% of the AMI. ■ Assumable if property is sold or transferred to a household whose income equals or is less than 8Q% of the AMI. The Administrator, in its discretion, may streamline verifications and with justification proceed with only one construction bid proposal or estimate. Under the EG, the three year period for previous recipients of the Program does not apply; however, total EG assistance may not exceed twice the maximum emergency grant amount. Home Improvement Program--Guidelines, Funding Components and Procedures Effective July 12,2007 12 Home Improvement Program Section II Funding Components Component No. 2 — Rehabilitation Grant (RG) ■ For very low income households whose income does not exceed 50% of AMI. • Maximum grant amount of$20,000. ■ Grant agreement proportionally forgives the obligation to repay over fifteen (15) years; (For example, with a grant of$7,500, $500 is forgiven annually); no repayment is required during the term of the grant agreement unless the property is sold or transferred to a household that exceeds 50% of the AMI. ■ Deed of trust recorded as security for the performance of the obligations under the grant agreement. ■ Assumable if property is sold or transferred to a household whose income equals or is less than 50% of the AMI. ■ Available once per household in a three-year period as defined in herein, provided Total Assistance is not exceeded. Component No. 3 — Matching Fund Grant (MFG) ■ For very low, low, and moderate income households whose income does not exceed 100% of the AMI, the City will match funds dollar for dollar with the homeowner (For example, the homeowner has a City-approved HIP project that costs $3,000; the homeowner pays $1,500 and the City will pay $1,500). ■ Matches expenditures of an eligible household up to a maximum grant amount of $5,000. ■ Grant agreement that proportionally forgives the obligation to repay the homeowner's portion over five (5) years. ■ Deed of trust recorded as security for the performance of the obligations under the grant agreement. No repayment is required unless the property is sold or transferred to a household that exceeds 100% of AMI. ■ Assumable if property is sold or transferred to a household whose income equals or is less than 100% of the AMI. ■ Available once every 18 months to a maximum of $10,000 in matching funds during the term of the grant agreement and cannot be combined with another funding component. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 13 Home Improvement Program Section II Funding Components Component No. 4— Rehabilitation Loan (RL) Component No. 4A— Rehabilitation Loan (very low and low income households) ■ For very low and low-income households whose income does not exceed 80% of the AMI. ■ Maximum loan amount of$35,000. ■ Deed of trust and/or security agreement recorded securing note at an interest rate which shall be 1% for very low income households and 3% for low income households, simple interest rate with principal and interest fully amortized over: (a) ten (10) years if less than $15,000, (b) fifteen (15} years if befinreen $15,000 and $20,000, or (c) twenty (20) years if between $20,001 and $35,000. The maturity date is 10, 15 or 20 years depending on the amount. ■ Assumable if property is sold or transferred to a household whose income equals or is less than 80% of the AMI. ■ Available once per household in a three-year period as defined herein, provided Total Assistance is not exceeded. Component No. 4B — Rehabilitation Loan (moderate income households) ■ For moderate income households whose income is between 81-100% of the AMI ■ Maximum loan amount of $35,000 � Deed of trust and/or security agreement recorded securing note at an interest rate of 5% simple interest with principal and interest fully amortized over: (a) ten (10) years if less than $15,000, or (b) fifteen (15) years if between $15,000 and $20,000, or (c) finrenty (20) years if between $20,001 and $35,000. The maturity date is 10, 15 or 20 years depending on the amount. � Assumable if property is sold or transferred to a household whose income equals or is less than 100% of the AMI ■ Available once per household in a three-year period as defined herein, provided Total Assistance is not exceeded. Component No. 4C — Rehabilitation Loan -- Deferred (RL-D) (not available for mobilehomes) ■ For very low, low, and moderate income households whose income does not exceed 100% of the AMI. ■ Maximum loan amount of $45,000. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 14 Home Improvement Program Section II Funding Components ■ 45-year affordability restriction required. ■ Deed of trust recorded securing note at 3% simple interest requiring no payments. Deferred loan forgiven after 30 years if property remains in compliance ("Silent Second"). ■ Assumable if property is sold or transferred to a household that does not exceed 100% of the AMI. ■ Available once per household or property while loan is outstanding. This component is not available for mobilehomes. Component No. 5 - Drouqht Tolerant Landscape Retrofit Loan (DTLR) The DTLR component is designed for improvements that are intended to reduce the consumption of water or other natural resource. ■ For very low, low and moderate income households whose income does not exceed 100% of the AMI. ■ Maximum loan amount of $7,500. ■ Deed of trust recorded securing note at 3% simple interest requiring no payments. ■ Assumable if property is sold or transferred to a household that does not exceed 100% of the AMI. ■ Available once per household or property. ■ Can be combined with any other HIP component provided the Total Assistance is not exceeded. Component No. 6 — Make a Difference Volunteer (MADV) The Make a Difference Volunteer (MADV) component is designed to elicit the involvement of volunteers to assist with special neighborhood clean-up events within a geographic area that from time to time may be identified as a Focus Area. Focus Areas are defined in Section I-4. In addition, City/Agency will solicit donations of material to defray the cost of improvements made pursuant to this component. ■ Properties will be identified within the Focus Area in need of repairs and clean- up. ■ Homeowners will be contacted to inquire as to their willingness to participate in the Program. ■ A clean-up/repair work program will be prepared by the Administrator. Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 15 Home Improvement Program Section II Funding Components ■ An event date will be selected and solicitation of both volunteers and donations will begin. ■ The Administrator will coordinate all aspects of the Make a Difference Volunteer component. ■ Can be combined with any other HIP component. Component No. 7 —Acquisition/Rehabilitation/Resale IARR) ■ For very low, low and moderate income households whose income does not exceed 120% of the AMI. ■ Will be targeted to first-time homebuyers. Any available waitlists will be utilized to identify potential buyers. • Anticipated acquisition cost per home up to a maximum of $350,000. ■ Second trust deeds in amounts not to exceed $75,000 per property will be made available as required from 20% Housing Set-Aside Funds to ensure an affordable housing cost. ■ Can only be combined with another HIP component with written approval of the Executive Director. Total Assistance will apply to recipients under the ARR program in the event additional assistance is requested after acquisition. Property Acquisition and Rehabilitation Procedures ■ The Administrator will identify homes that are for sale within the jurisdiction and negotiate the acquisition of such property. ■ The Administrator will accomplish due diligence and define renovation costs by preparing a Scope of Work analysis to include costs of rehabilitation. ■ The Administrator will identify and work with conventional lending institutions to qualify and finance prospective buyers for fixed rate loans at the then-current market rate for a term up to 30 years. ■ The Administrator will establish a waiting list of qualified very low, low and moderate-income families for ARR assistance. ■ The City/Agency will provide, as necessary, a silent second trust deed mortgage to reduce the mortgage amount and make a grant to cover closing costs to ensure an affordable housing cost. ■ The City/Agency may from time to time identify non-profit organizations which may acquire, rehabilitate and resell identified property to a very low, low or moderate income household. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 16 Home Improvement Program Section II Funding Components Component No. 8 — Lead and Asbestos Abatement Grant (LAAG� ■ For very low and low-income households whose income does not exceed 80% of the AMI. ■ Covers lead and asbestos abatement requirements identified by inspections noted in Section 1-4. (Also see: Inspections, below). ■ Maximum grant amount of$7,500. ■ Grant agreement proportionally forgives the obligation to repay over five (5) years (For example, with a grant of$5,000, $1,000 is forgiven annually). ■ Deed of trust recorded as security for the performance of the obligations under the grant agreement. r No repayment is required unless property is sold or transferred to a household that exceeds 80% of the AMI. • Assumable if property is sold or transferred to a household whose income does not exceed 80% of the AMI. � Can be combined with any HIP component provided the Total Assistance is not exceeded. Inspections will be conducted by certified professionals approved by the Administrator, but such approval shall not render the City/Agency or Administrator liable for the work or the acts or omissions of such professionals. The total inspection fees for: 1) lead-based paint and asbestos inspection; and 2) risk assessment will be paid for by the HIP Participant and reimbursed to the approved Applicant by increasing the amount of the loan or grant by the amount necessary to cover the cost of such inspection, provided the addition of the cost does not cause the loan or grant to exceed the respective maximums. If the inspection reveals no presence of lead or asbestos, and no further inspection, analysis, or abatement is necessary, then the costs may be funded under the Lead and Asbestos Abatement Grant (LAAG), subject to the Participant meeting the criteria under the LAAG. If the Participant exceeds the income levels to be eligible for a LAAG, then the costs can be funded through the Participant's HIP loan, provided the applicable loan limits are not exceeded. If the inspection reveals positive results, risk assessment must be conducted at the same time to determine the level of risk involved. The costs (up to $7,500 per property, including the initial inspection fees) for risk assessment, abatement, abatement monitoring, clearance inspection, laboratory sampling, and other related work may be funded under the LAAG. If abatement services are needed, the Participant must obtain three (3) abatement estimates from state certified and licensed abatement specialists Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 17 Home Improvement Program Section II Funding Components and contract directly for the service. The Administrator will assist Participants in obtaining a list of state certified hazard abatement contractors. If Participant cancels the application for funding after costs are incurred related to the lead and asbestos inspection or abatement, the Participant shall be responsible for those costs. The Administrator, in its discretion, may streamline verifications and with justification proceed with only one construction or repair proposal, bid or estimate. Under the LAAG, there is no three-year waiting period required for previous recipients of the Program; however, total LAAG assistance may not exceed twice the maximum LAAG grant amount. Financial Hardship Exceptions to Component Requirements The Executive Director or his/her designee has the authority to reduce or waive interest, and/or to authorize other discretionary modifications to the Funding Components in order to further assist otherwise eligible homeowners in cases of extreme financial hardship and/or need for eligible improvements. Such exceptions shall be made strictly on a case-by-case basis, in accordance with the terms and conditions set forth in Section I, above and the funding sources used. Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 18 Home Improvement Program Section III Procedures Section III. Procedures The Palm Desert Redevelopment Agency is the administrator of the HIP, regardless of funding source. The Executive Director of the Agency is authorized to establish Guidelines and other procedures to implement the HIP and to amend them from time to time as necessary, or as required by law. Step 1: Application Process A. Submission of an Application Packaqe and Supportinq Documentation An application must be submitted along with supporting documentation including but not limited to: ■ A signed application by both Applicant and co-Applicant(s); an incomplete application will not be processed ■ All required supporting documentation outlined in the application in addition to any other additional information requested during the application process ■ All persons having title to property have submitted a completed application and supporting documentation indicating eligibility by meeting all Program criteria ■ Signed Consent form(s) including authorization to verify application documentation such as credit checks, employment, mortgage, insurance, and assets B. Evaluation and Verification of Application As part of the application process, the following steps will be performed: ■ Review of application and supporting documentation that may include: tax returns, identification, and household status. ■ Verification of prior HIP assistance (for three-year period or other applicable waiting period criteria). ■ Property legal description and vesting verification. ■ Credit report check (paid for by Agency). ■ Ordering of preliminary title report paid for by the City/Agency subject to Section I-10. ■ Verifications of employment(s), deposit(s) and mortgage(s). ■ Determination of eligibility as more particularly described in Sections I-3, I-4 and I-5 of these Guidelines. ■ Review of Preliminary Title Report. Grants and liens will be recorded with the Riverside County recorder's office in the most favorable position for the City/Agency. It is anticipated that the recorded grants and liens may be subordinate to a superior first trust deed, however, the City/Agency reserve the right to approve all other liens that may take a superior position to the grant or lien. If such approval is withheld, the application will be denied. Home Improvement Program--Guidelines,Funding Components and Procedures Effective July 12,2007 19 Home Improvement Program Section III Procedures Upon receipt of the application, supporting documentation, verifications, and if the Applicant(s) and property are determined to meet the Program's criteria as defined by these Guidelines, then the Applicant(s) will be allowed to proceed to the next step of the application process, as outlined in Section III- Step 2, below. At this step, upon receipt of all required documentation, if the Applicant or property is determined not to meet the Program's criteria, then the Applicant will be mailed a letter of ineligibility in accordance with federal consumer credit laws. C. Inspection and Work Write-Up ■ The Administrator will conduct an initial property inspection. At this time, photographs are taken to determine the eligibility of homeowner's desired improvement projects. ■ Inspections will be completed on a first-come-first-served basis as appointments are set-up except that priority will be given to those property inspections that involve code violations, health and safety issues, potential environmental issues or emergency conditions. ■ Any additional requests for home improvements not examined during the inspection and not listed on the "Work Write-Up" must be brought to the attention of the Administrator immediately before loan/grant documents are signed. ■ Any corrective work for lead-based paint and/or asbestos removal will be identified during the initial inspection and made part of the Work Write Up. All remediation and abatement will be completed and certified prior to any other work commencing, except for emergency or health and safety items that will in no way impact the area where the lead-based paint, asbestos or other contaminant that is known to exist unless, in the discretion of the Administrator, the emergency is life- threatening. Following the initial inspection, the Administrator will issue a "Work Write-Up" and outline the eligible improvements and estimated costs. The estimated dollar amount of the Work Write-Up will be used to determine the HIP funding type and amount needed to approve the loan/grant. The homeowner and the Administrator will review the Work Write-Up and finalize the list of improvements which will be made part of the application. The funding type and loan/grant amount will be adjusted, as needed, upon receipt of bids, estimates or proposals. Only those improvements listed in the Work Write-Up that are approved under the Guidelines will be eligible for HIP funding. All the improvements listed in the Work Write-Up may or may not be funded depending on eligibility, funding availability and funding component limits. D. Completed Application An application is complete once the requirements in Step 1 A. through C. above, have been completed. A completed application is neither an approval nor denial for funding assistance. A written statement of approval, denial or ineligibility will be provided to the Applicant in accordance with the procedural steps identified in these Guidelines. Home Improvement Program--Guidelines, Funding Components and Procedures Effedive 07-12-07 2� Home Improvement Program Section III Procedures Step 2: Loan/Grant Approval or Denial Upon review of the Work Write-Up, if the Applicant and property is determined to meet the Program's criteria, the funding type will be identified, subject to the Agency having sufficient funds. Concurrently, the application will be forwarded to the City's CDBG department for CDBG environmental and applicability acceptance, should CDBG funding be available. If the Work Write-Up does not meet the Program's criteria, is not in accordance with CDBG guidelines, or is not approved by the Agency, then the Applicant will be mailed a letter of denial in accordance with the federal consumer credit laws within thirty (30) days of completion of the application. If the program eligibility guidelines are met and all other Agency approvals have been granted, the Administrator will issue final loan approval, and notify the Applicant in writing within thirty (30) days of completion of the application. Step 3: Loan Funding A. Siqninq of Documents Once all above steps have been completed, loan/grant documents will be prepared for ParticipanYs signature. All persons holding title to the property must sign the loan or grant documents and consent to the terms therein. The City/Agency does not provide notary services and any documents requiring notary services and associated fees are the responsibility of the Participant. The following documents are required, as differentiated by the funding type: Loans ■ Deed of Trust ■ Promissory Note ■ Loan Agreement ■ Truth in Lending Disclosure Statement ■ Notice of Right to Cancel ■ Regulatory Agreement (for Component No. 4C — Deferred Loan, o�) Grants ■ Deed of Trust ■ Promissory Note ■ Grant Agreement ■ Notice of Right to Cancel Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 21 Home Improvement Program Section III Procedures Participants will be provided with a copy of the non-executed documents. Note: Upon completion of the improvement work, the actual costs and indebtedness shall be confirmed by the City/Agency in writing (see Step 8, below). B. Notice of Riqht to Cancel (3-Day Cancellation Period) As required by law, there is a three (3) business day cancellation period after the Participant executes the loan/grant documents. Participants have this period to cancel the loan/grant without incurring additional fees. C. Title Insurance For loans or grants that are in an amount determined by the City/Agency to require the City/Agency's position to be insured, title insurance shall be obtained, the cost of which shall be paid for by the City/Agency. This policy will be requested and obtained after Participants have fully executed all loan documents, and prior to beginning construction. D. Recordinq of Documents Following the execution and notarization (when applicable) of all grant or loan documents, the Applicant shall return the documents to the Administrator. The Administrator will forward the documents and authorize recording with the Riverside County Recorder's Office. Step 4: Pre-Construction (Bids and Contracts) A. Bid Process The Participants are strongly encouraged but not required to participate in obtaining bids, proposals or estimates for the home improvement projects approved under the Program, since all construction contracts are by and between the homeowner and the contractor(s) exclusively. The Participant, and not the City/Agency or Program Consultant, makes the final selection of contractor(s). The obtaining of three (3) written estimates from licensed contractors for each improvement (excluding Emergency Grants) must be attempted and submitted to the Administrator within thirty (30) days from the receipt of the letter of approval, un(ess exception is given by the Agency. The Participants must indicate their 1Sc, 2^°and 3�d choice for each improvement project. In the event that three estimates cannot be obtained, the Administrator may process the bid with less than the required three estimates if adequate documentation has been supplied to indicate that there has been sufficient effort expended to obtain three estimates and that the required number of qualified contractors have not responded. The Administrator retains the discretion to reject all bids or estimates if they are deemed to be unreasonable, incomplete or otherwise irregular. Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 22 Home Improvement Program Section III Procedures In the event of an emergency situation, the Administrator may proceed with only one estimate. It is the contractor's responsibility to obtain permits when permits are required for the approved work. Inspections that are required as part of the approved work will be conducted by a person or entity deemed to be qualified for such inspections. Contractor's estimates must include costs for all applicable permits and required inspections except in the case of environmental inspections which will be handled in the customary manner for such inspections. Participants may perform the work themselves, if they are deemed and approved to be qualified in the discretion of the Administrator. In such situations, HIP covers the cost of materials only, and does not cover the cost of labor. B. Contractor Requirements and Contracts For all contracts for work in excess of $500, contractors selected by the Participants must meet all California State Contractor's Board (CSLB) requirements including but not limited to the following: ■ California State Contractor's license and bond verified as "Current, Active, and in Good Standing;" the information can be verified by contacting the CSLB: 1-800- 321-CSLB or www.cslb.ca.qov ■ A current and valid City of Palm Desert business license. If not, one must be obtained prior to the commencement of work; payment will not be disbursed until the license is obtained ■ Workers' Compensation (WC) is required if contractor employs or otherwise engages any person to work; verification of WC insurance will be verifled on CSLB's website ■ A completed Taxpayer ldentification Request form ■ All other licenses and insurances that cover the contractor and its employees for the type of work being performed, as required by the CSLB C. Notice to Proceed A Notice to Proceed is issued to Participants after the 3-business day cancellation period following the signing of loan/grant documents. D. Siqninq of Contracts Upon receiving the Notice to Proceed, Participants shall sign the approved contract(s) and, once fully executed, begin the improvement projects with the approved contractors. Contracts must reflect the estimate received; any changes in the contract or any Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 23 Home Improvement Program Section III Procedures subsequent change orders to the contract must be authorized in writing by the Participant and approved by the Administrator. Prior to the commencement of construction, the contractor will submit the following documents to the Participant: ■ IRS form W-9 (Request for Taxpayer ldentification and Certification) ■ Contract (fully executed) The Participant shall permit the Administrator to make and retain copies of the fully executed IRS forms and contract documents(s). The Participant will retain all original contract documents. Step 5: Construction All improvement work shall be in accordance with the Uniform Building Code, as well as the City's codes and other applicable laws. The Administrator will monitor the progress of work and assist the Participant, as needed, should any problems, disputes or delays occur. Home improvement work should be done in the following order: ■ Health and safety (including lead and/or asbestos hazards) ■ Emergencies (as defined by the Program) ■ Code violation abatement ■ Other work as approved by the Administrator As required by law, hazard abatement activities must be monitored by certified inspectors. Participants need to coordinate with both the hazard abatement professional and a certified inspector (same firms as the initial lead-based and asbestos inspections) to ensure the work is performed properly. After the hazard abatement activities are completed, a certified inspector will perform a second clearance test and generate a "Notice to Lead Hazard Abatement Activity" report and/or "Asbestos Abatement Report", which will be provided to Participant within fifteen (15) days, to declare the areas of the property to be disturbed to be free of lead, asbestos or other hazardous material. Construction work will not proceed until the property has been declared to be free of lead, asbestos or other hazardous material. Prior to or during the improvement work, a HIP sign will be placed on the participating property (subject to sign availability). Step 6: Disbursement of Payments The contractor and Participant must sign and submit a draw request for work completed in accordance with the contract. Prior to approval of each draw request, the Administrator will inspect the work performed, but no inspection or disbursement of Home Improvement Program--Guidelines,Funding Components and Procedures Effedive 07-12-07 24 Home Improvement Program Section III Procedures funds shall render the City/Agency or Any Program Consultant liable for any defects in the work or any damage incident thereto. Payments will not be disbursed until contractors have provided the following: ■ Certificate of Satisfactory Completion of Progression Portion of Work or Certificate of Satisfactory Completion of Work (whichever is applicable) ■ Conditional Waiver and Release Upon Progressive Payment or Conditional Waiver and Release Upon Final Payment (whichever is applicable) ■ Change Order (if applicable) Ten (10%) percent retention of each draw request will be held until the final payment and all work is completed (see Step 7), inspected by the Administrator and approved by the Participant. Checks will be issued payable to the contractor unless otherwise approved by the Executive Director. Step 7: Project Completion Upon the completion of improvement work, projects will be inspected and photographed by the Administrator. If applicable, the work must be finaled by the City's Building and Safety Department. If applicable, a "Notice of Completion" document will be signed by the Participant, submitted to the Administrator who will forward it to the Riverside County Recorder's Office for recordation. Step 8: Final Loan/Cost Verification Statements ■ Once Step 7 is complete and the final disbursement has been issued, final principal adjustments will be made to the loan or grant of record and will reflect actual disbursements made pursuant to the HIP. Participant will receive notification of the principal adjustment upon completion of all cost verifications. ■ Copies of the closing documents will be distributed to appropriate staff for purposes of maintaining information relative to the HIP loan or grant. In cases where the loan is being handled by an outside agency, loan set up and other necessary actions necessary to close the loan, will be performed. Step 9: Appeal and Dispute Resolution Process If an Applicant is denied Program participation or is not satisfied with the assistance provided under the HIP, the following procedures may be taken: ■ Denial of application: Within ten (10) days of receiving written notification of the application for HIP assistance being denied, the Applicant shall submit an Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 25 Home Improvement Program Section III Procedures appeal, in writing, to the attention of the Executive Director. The appeal shall set forth a clear and concise statement of the reason(s) the Applicant believes the application for HIP assistance should have been approved, together with any supporting documentation. The Executive Director or his/her designee shall review the appeal and issue a decision thereon in writing and mail it to the Applicant within thirty (30) days. The decision of the Agency shall be final. ■ Dis�ute Resolution: If the Participant is not satisfied with the assistance provided under the HIP or encounters problems with the Contractor or the workmanship of the Contractor, the Participant should promptly bring this to the attention of the Administrator. The Administrator will endeavor to assist the Participant in resolving such disputes or problems informally. Every effort should be made to address and resolve problems promptly. In the event of a dispute befinreen the Participant and the Contractor that cannot be resolved with the assistance of the Administrator, the Participant 's sole recourse is against the Contractor. The City/Agency and Any Program Consultant assume no liability whatsoever for any work performed or not performed by any contractor or other person or entity pursuant to the Program. Home Improvement Program--Guidelines, Funding Components and Procedures Effedive 07-12-07 26 Home Improvement Program Exhibits Exhibit A Eligible Improvements Eligible improvements include, but are not limited to the following: A E L T Additions to structures: Earthwork Landscaping Thermostats bathrooms/bedroom(to Electrical Lathe&plaster Tiles: roof mitigate crowded or Energy efficiency Lighting:exterior Termite control(with unsatisfactory living improvements':(ceiling replacement of damage) conditions) insulation,weather-stripping, M Trees(diseased or damaged Air conditioning(central) caulking,low-flow shower Masonry and hazard to structure on Attic fans heads,water heater blankets, Meters:electric,water,gas property or to the public right B evaporative or a/c covers, Molding of way Basements(repairs) pipe insulation,faucet Bathroom&bedroom: aerators,fluorescent lights& P U handicap accessibility fixtures) Painting(exterior) improvements or plumbing Evaporative coolers Patios leaks Exhaust fans Paving V Blacktopping Exterior work(as eligible) Pest control Ventilation systems Plastering Vents C F Plumbing Carpentry Fencing:brick,wood,iron Porches W Carports Finishes:exterior Wall heaters Ceilings Fireplaces(indoor only) R Walls: brick,wood, iron Chimney(repairs} Furnaces:coal,floor,gas,oil Railings for handicap Walkways Code violation abatement accessibility Water heaters Concrete G Resurfacing Weather&water proofing Curbing(single family only) Garage doors&system Retaining walls Weather stripping Garages&carports Roofing(repairs&new) Windows:screen,storm, D Gas heating systems thermal Debris cleanup Gas leaks S Wiring:electric Demolition,clearing 8 Greenhouses Sandblasting grubbing Guardrails Sanding Doors&hardware:exterior Gutters,downspouts& Sashes Driveways flashing Screening Drywall, hardboard&plywood Sewerage system(sewer& H septic) Handicap accessibility Siding improvements Sills Hardware(door) Structural:repair,changes 8� Health&safety items facades Heat system 8 ventilation Stucco (repairs&new) Studding I Insulation Irrigation system J K *Includes installation of insulation and other energy conservation measures if staff determines it is cost effective and verifies that Applicant has exhausted all available energy program resources for assistance prior to applying for HIP funds. Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 27 Home Improvement Program Exhibits Exhibit B Ineligible Improvements* Ineligible improvements include, without limitation, improvements that are cosmetic in nature and/or accessory-use improvements, including, but not limited to: A G S Air conditioning placed in windows Gazebos or decks Satellite dishes Alarm systems Green houses Securiry system Appliances Sinks H Sprinkler system:fire B Home furnishings:indooNoutdoor Swimming pools(or any repairs in Barbeque pits Hot tubs,saunas,spas or whirlpool connection with) Basements(new) baths(interior or exterior) Swimming pool enclosures Bath houses Blinds:shutters,Venetian,vertical I T Built-Ins:stove or ovens that are Interior work: handicap accessibility Television antennae functionally obsolete are the exception improvements, health&safety are the Tree surgery/removal(unless diseased exception and hazard to strudure) C Cabana rooms K V Cabinets:handicap accessibiliry is the Kitchen appliances or equipment:built- Valence or cornice boards exception in stoves&ovens are the exception if Carpet:sanitary conditions are the functionally obsolete W exception Water conditioners Chimneys(new) L Waterproofing(pumping or injecting any D Lighting:interior(energy efficient items substance in the earth adjacent to or Deck around swimming pool are the exception) beneath the foundation or basement Dishwasher floor) Door chimes M Moveable structures E O F Fans Fire extinguishers P Fireplaces or hearths Penthouse additions Photomurals Pool(restoration or aesthetic) R Range hoods Remodeling * Some items noted as ineligible may qualify under one or more programs available for the purposes of increasing energy efficiency, thus reducing overall energy consumption. Those items will be identified by the Palm Desert Office of Energy Management. If such designation is made, this program may be utilized for the purchase and installation of energy components. If Applicant is eligible for any other program monies for the same purpose, the Applicant must apply for and expend such monies prior to HIP funds being disbursed. In the case of rebates, such rebates will be refunded to the Agency and applied to the grant/loan accordingly. Home Improvement Program--Guidelines,Funding Components and Procedures Effective 07-12-07 2$ Home Improvement Program Exhibits Exhibit C Department of Housing and Urban Development Chart of County of Riverside Median Income data Effective as of April 2007 INCOME ELIGIBILITY LIMITS FOR AFFORDABLE HOUSING IN RIVERSIDE COUNTY This chart is based on HUD & HCD published income figures NOTE 1: operative as of Apr(t 23,2007 Interim % of AMI have been calculated based on 100%AMI for each NOTE 2: household size Income eligibility limits based on the following number of persons in the family Income % of household Category Median 1 2 3 4 5 6 7 8 Extremely low 20% 8,280 9,480 10,660 11,840 12,780 13,740 14,680 15,620 Extremely low 25% 10,350 11,850 13,325 14,800 15,975 17,175 18,350 19,525 Extremely low HUD/HCD 30% 12,450 14,200 16,000 17,750 19,150 20,600 22,000 23,450 Very low 35% 14,490 16,590 18,655 20,720 22,365 24,045 25,690 27,335 Very low 40% 16,560 18,960 21,320 23,680 25,560 27,480 29,360 31,240 Very low 45% 18,630 21,330 23,985 26,640 28,755 30,915 33,030 35,145 Very low HUD/HCD 50% 20,700 23,700 26,650 29,600 31,950 34,350 36,700 39,050 Lower 55% 22,770 26,070 29,315 32,560 35,145 37,785 40,370 42,955 Lower 60% 24,840 28,440 31,980 35,520 38,340 41,220 44,040 46,860 Lower 65% 26,910 30,810 34,645 38,480 41,535 44,655 47,710 50,765 Lower 70°/a 28,980 33,180 37,310 41,440 44,730 48,090 51,380 54,670 Lower 75% 31,050 35,550 39,975 44,400 47,925 51,525 55,050 58,575 Lower HUD/HCD 80% 33,150 37,900 42,600 47,350 51,150 54,950 58,700 62,500 Median 85% 35,190 40,290 45,305 50,320 54,315 58,395 62,390 66,385 Median 90% 37,260 42,660 47,970 53,280 57,510 61,830 66,060 70,290 Median 95% 39,330 45,030 50,635 56,240 60,705 65,265 69,730 74,195 Median HUD/HCD 100% 41,400 47,400 53,300 59 200 63,900 68,700 73,400 78,100 Moderate 105% 43,470 49,770 55,965 62,160 67,095 72,135 77,070 82,005 Moderate 110% 45,540 52,140 58,630 65,120 70,290 75,570 80,740 85,910 Moderate 115% 47,610 54,510 61,295 68,080 73,485 79,005 84,410 89,815 Moderate HUD/HCD 120% 49,700 56,800 63,900 71,000 76,700 82,400 88,000 93,700 Home Improvement Program--Guidelines, Funding Components and Procedures Effective 07-12-07 29 Home Improvement Program Exhibits HOME IMPROVEMENT PROGRAM AT-A-G LANC E Exhibit D COMPONENT PROGRAM REQUIREMENTS AND ASSISTANCE AMOUNTS Mobile Homes • Added mobile homes to property criteria-- (7- �2-0�� Lead-Based Paint & Asbestos • Added lead-based paint&asbestos abatement Abatement ��-�2-��� Emergency Grant (EG) • Maximum grant amount of 57,500 for very low income; $5,000 for low income households Emergency improvements • Very Low and Low Income does not exceed 80% of AMI • Interest rate is 0% � Obligation forgiven equally porportionate over 5 years • No payments required unless default Rehabilitation Grant (RG) • Maximum grant amount of$20,000 Rehabifitation Improvements . Very low income households whose income does not exceed 50%of AMI • interest rate is 0% � Obligation forgiven equally porportionate over 15 years • No payments required unless default . Available once per household in a 3-year period Matching Funds (MF) ' Maximum grant of$5,000 The City will match funds dollar for • Very Iow,Low and Median income households dollar with a homeowner(for example, whose income does not exceed 100%AMI the homeowner has a City approved . Interest rate is 0% project done that costs$3,000. The • Obligation forgiven equally porportionate over 5 homeowner pays $1,500 and the City will years pay$1,500) • No payments required unless default • Available once every 18 months to a maximum of $10,000 Home Improvement Program--Guidelines, Funding Components and Procedures Effective 7-12-07 Home Improvement Program Exhibits HOME IMPROVEMENT PROGRAM AT-A-GLANCE Exhibit D COMPONENT PROGRAM REQUIREMENTS AND ASSISTANCE AMOUNTS Rehabilitation Loan (RL) • Maximum loan amount of$35,000 (RL) — Low Income • Very low and Low income households whose income does not exceed 80%AMI Rehabilitation Improvements . Interest from 1-3%Simple depending on income • Amortized over 10-20 years depending on Loan amount • Payments due monthly . Available once per household in a three year period Rehabilitation Loan (RL) � Maximum loan amount of$35,000 (RL) — Median Income • Median income households whose income does not exceed 100%of AMI Rehabilitation Improvements • Interest 5% Simple • Amortized over 10-20 years depending on amount • Payments due monthly • Available once per household in a three year period Rehabilitation Loan - Deferred (RL- • Maximum loan amount of$45,000 �) • Very Iow,Low and Median income households whose income does not exceed 100%AMI Rehabilitation Improvements • Interest 3% Simple • No payments required unless default • Requires a 30 year affordability Covenant • Available once per household or residence while loan is outstanding Draught Tolerant Landscape Retrofit • Maximum loan amount of S7,soo (DTLR) The DTLR component is designed for • Very Iow,Low and Median income households improvements having a nature that will serve whose income does not exceed 100°/a AMI fo reduce the consumption of water or other • Interest 3%Simple natural resource. • Available once per household or residence Make a Difference Volunteer � Volunteers will assist with special neighborhood Program (MADD) cleanups • Program Administrator will solicit donations of material to defray the cost of improvements Home Improvement Program--Guidelines, Funding Components and Procedures Effective 7-12-07 Home Improvement Program Exhibits HOME IMPROVEMENT PROGRAM AT-A-GLANCE Exhibit D COMPONENT PROGRAM REQUIREMENTS AND ASSISTANCE AMOUNTS Acquisition/Rehab/Resale (ARR) • Anticipated cost per home up to 3350,000 • First-Time Home Buyer Program • Very Low, Low and Moderate income households • Income does not exceed 120%of AMI • Anticipated rehabilitation cost will vary on the homes condition • Silent Second Trust Deed to ensure affordability Lead 8 Asbestos Abatement Grant • Maximum grant amount of$7,500.00 (LAAG) • Very Low, Low income households • Income does not exceed 80°/a of AMI • Interest rate 0°/a • Principal forgiven over 5 years • No payments required unless default Energy Efficiency Upgrade Program • Added energy efficiency eligible improvements in Coordination connection with any plan designed by the office of Energy Management; Home Improvement Program--Guidelines, Funding Components and Procedures Effective 7-12-07 Existing Home Improvement Program Guidelines August 2000 , , . Page 1 of 12 � PALM DESEIZT REIDEVEL,OPIVIENT `�MAKE A IDIFFERENCE"�IOME IMPROVICMENT PROGRAM (gIIP) The intent of this document is to describe all components of the Home Improvement Program{HIP) X. PURPOSE-WHY DO WE.HAVE T�IIS PROGRAM? A. To specifically identify and address the housing needs of our community pursuant to Califomia Redevelopment Law(Heatth and Safety Code Section 33000,et sea.) and policy 5.2 of the Redevelopment City's Housing Compliance Program for very low and low income families within our community. B. To iunprove and stabilize the quality of life for neighborho+ods and residents. C. To instill a sense of cammunity among the residents. • II. FUN�IIVG SUURCES-WHERE DOES THE MONEY C4ME FROM? A. County of Riverside County-wide Community Development Block Grant(CDBG); B. 20°lo Tax Increment Housing Set-aside Funds; C. Housing Mitigation Funds. III. ELEMENTS-WHAT IS THE PROGRAM? A. The MAKE A DIFFERENCE program is a home improvement program designed for Palm Desert residents based on the needs of individual homes and neighborhoods. B. The MAKE A DIFFERENCE program consists of the following camponents 1. COMPONENT NO.1-EMERGENCY GRANT COMP�NENT(EGC) a. Covers emergency occurrences, as determined by staff, up to maximum grant amount of$3,000.00. � b. For very low and low income households whose income does not exceed 80°l0 of the County of Rivcrside Median Income as established by the Department of Housing and Urban Development (HUD).(See Chart) c. Application and supporting documentation must be submitted. Staff at their discretion,may streamline verifications andproceed with only one construction proposal. d. Avaiiable cityvvide. 2. COMP'ONENT NO.2 -REHABILITATION GRANT COMPONENT (RCG) a. Maximum grant amount of$12,500. b. For very low income households whose income does not exceed 50% of the County of Riverside Median Income as established by the Deparhnent of Housing and Urban Development(HUD).{See Chart) � c. Covenant and Lien recorded that proportionally forgives lien over ten � years. (For example,with a grant of$5,00��ixen$500 is forgiven annually) No repayment is zequired uniess property is sold or transfened to a household that exceeds 80%of the median income. Existing Home Improvement Program Guidelines August 2000 Page 2 of 12 . ' d. Available citywide. e. Ail health and safety and code violations(if any)must be addressed first. f. Available once per household in a three-year period. 3. COMPONENT NO.NO.3-MATCHING FUND COMPONENT{MFC} a. Matches expenditures of an eligible household up to a maximum grant of$2,500. b. For very low, low, and median income households whose income does not exceed 100%of the Coun.ty of Riverside Median Income as established by the Departnnent of Housing and Urban Development (HiJD).(See Chart) The City will match funds dollar for dollar with the homeowner(Foz example, the homeowner has a City approved project.done that costs $3,000.00. The homeowner pays $1,500.00 and the City will pay$1,500.00). c. Covenant and Lien recorded that proportionally forgives lien over � three years. No repayment is required unless property is sold or transferred to a household that exceeds 100%of inedian income. d. Available citywide. - e. All health and safety and code violations (if any)must be addressed first. f. Available once per household in a three-year period. 4. COMPONENT NO.4-REHABILITATION L�AN COMP�NENT (RLC) COMPQNENT NO 4A - REHABILITATION LOAN FOR LOW INCOME HOUSEHOLDS a. Maximum loan amount of$20,000. b. For very low and low income households whose income does not exceed 80% of the County, of Riverside Median Income as established by the Department of Housing and Urban Development (HUD). (See Chart) c. Deed of Trust with ten (10} year occupancy restriction recorded securing nate at 3%*simple interest rate fully amortized over(a)ten (10)years if tess than$10,040;or(b)fifteen(15)years if$10,000 or more. Note and Deed of Trust may be assumed if property is sold or cransferred to a household that does not exceed 80%of the median income. d. Available ciiywide. e. Ail health and safety and Code violations(if any)must be addressed first. 2 Existing Home Improvement Program Guidelines August 2000 Page 3 of 12 f. Available on.ce per household in a three-year period * For very low income households(0-50%of inedian)interest will be set at 0%or,if staffdetermines that a disproportionate financial hardship will occur for low income households{51- '80°l0 of inedian),interest can be set at 0%. COMPONENT NO. 4B - REHABILITATION LOAI�i FOR MEDIAN INCOME HOUSEHOLDS a. Maximum loan amount of$20,000. b. For median income households whose income is between 81-100% � of the County of Riverside Median income as established by the Department of Housing and Urban Development{HLTD).(See Chart) c. Deed of Trust with ten (10} year occupancy restriction recorded securing note at S%*simple interest fully amortized over(a)ten(10 years if less than 510,000;or(b)fifteen(15)years if$10,000 or more. Note and Deed of Trust may be assamed if property is sold or transferred to a household that does not exceed 100%of the median income. - � . d. Available citywide. e. All health and safety and code violations(if any)must be addressed Srst. f. Available once per household in a three yeaz period. * If staff determines that a disproportionate financial hardship will occur, interest can be set at 3%. CO1t�IPONENT NO. 4C - DEFERRED LOAN WITH 30 YEA.R AFFORDABILITY COVENANT a. Maximum Ioan amount of$25,000. b. For very low, low, and median income households whose income does nat exceed 100%of the County of Riverside Median incame as established by the Department of Housing and Urban Development (HUD).(5ee Chart} c. Deed of Trust recorded securing note at 3%simple interest requiring no payments. Note and Deed of Trust may be assumed if property is sold or transferred to a household that does not exceed 100%of the median income. Defened loan forgiven after 30 yeazs if property remains in compliance("Silent Second'�. d. Recordation of 30 Xear Affordability Covenant as part of Deed of Trust in conformity with mitigation measures established by the pertinent stipulation(s)with the Western Center on Law and Poverty. e. Available citywide. _ f. AlI health and safety and code violations{if any)must be addressed � first. 3 Existing Home Improvement Program Guidelines August 2000 ., , , , Page 4 of 12 g. Available once per household or residence while loan is outstanding. 5. COMPONENT NO. 5 - COUPiTY OF RIVERSTDE ECONOMIC DEVELOPMENT AGENCY LOAN PROGRAM - HOME IMPROVEMENT PROGRAM(COUNTY FUNDS) a. The County of Riverside EDA administers a county-wide Home Improvement Loan Progratn available to Palm Desert residents. Funding is provided from Community Development Block Grant Funds. b. Loan amount up to$30,000.00. c. 2%simple interest rate. d. For owner-occupied single family households whose income does not exceed 80°!0 of the County of R.iverside Median Income as established by the Department of Housing and Urban Development (HUD). (See Chart). e. 3Q year term. 6. COMPONENT NO. 6 - MAKE A DIFFERENCE VOLUNTEER - COMPONENT The Make a Difference Volunteer Component is very important. This component is designed to elicit the involvement of volunteers to assist with special neighborhood clean-up events within Focus Areas. In additian,staff will solicit donations of material to defray the cost of unprovements. HOW WILL IT WORK: Housing Staff and Code Enforcement will identify properties in the Focus Area in need of repairs and clean-up and whose owner is willing to participate in a special event clean-up program. Staff will prepare a clean- up/repair work program. An event date will be selected and solicitation of both volunteers and donations will begin. With the help of community organizations and Code Enforcement, the Volunteer Program will be echoing the purpose, goals and objectives of the Make a Difference Home Improvement Program. 7. COMPONENT NO.7-ACQUISITION/REHABILITATION/RESALE COMPONENT (AR.RC) ($500,000 PROGRAM BUDGET) � a. For very low and law incame households whose income does not exceed 80% of the County of Riverside Median Income as established by the Department of Housing•and Urban Development (HUD). (See Chart) b. First-tizne Home Buyer Program. c. Anticipated cost per home$75,000-$85,000. � Existing Home improvement Program Guidelines August 2000 � Page 5 of 12 d. Anticipated rehabilitatian cost$10,000/h�me. e. Second TD will be made available as required from 20% Housing Set-aside Funds. PROPERTY ACQUISITi4N PRUCEDURES 1. Staff,working through local realtors,will identify homes that are for sale both inside and outside the Focus Areas. (It is Staffls intent to purchase selected properties at the lowest possible purchase price to provide affordable housing to lower income families.) 2. Make offers through local broker. _ 3_ Enter purchase escrow. 4. Staff will accomplish due diligence and define renovation costs via the preparation of a Scope of Work analysis to include costs of rehabilitation. 5. Staffwill prepare�uvork write-up. 6. Identify and contract with local general contractor£or rehabilitation and commence work. 7. Staff wili monitor and inspect project throughout rehab phase. 8. Staff will identify and work with conventional lending institutions to qualify and finance prospective buyers and establish a wairing list of qualified very low and low - income families. 9. Enter sales escrow and work with a local broker for the sale of properties. l 0. The Agency will provide, as necessary, a silent second TD mortgage to reduce the mortgage amount and make a grant to cover closing costs. IV. PRIORITIES-WHAT ARE THE GUIDELINES? A. The MAKE A DIFFERENCE program shall be for owner-occupied single-family residential properties including planned unit developments. B. Home Improvement assistance shall be made available to eligibie properties within the territorial jurisdiction. The City may, from time to time, designate certain neighborhoods as priority focus areas. C. The MAKE A DIFFERENCE program guidelines shall providc a basis forreviewing, analyzing and prioritizing certain rehabilitation projects. Emphasis will be placed �n achieving improvements that will address health and safety issues,eliminate blight conditions and make a positive dramatic impact upon the appearance and economic viability of the neighborhood. D. The City of Palm Desert will not pay for improvements that have been completed or started prior to the date of the release of the"Authorization to Proceed". The City � reserves the right to establish the type,nature and scope of improvements that it will finance. �. ELIGIBILITY-WHO AND WHAT QUALI�IES? A. The program is available for owner-occupants of single family residential units that demonstrate that the household income does not exceed ttiE very low,low,or median income percentage standards ofthe cuirent County ofRiverside Median Income(See Chart)as appropriate for whichever program component is used. � Existing Home Improvement Program Guidelines August 2000 � Page 6 of 12 B. Home in need of repair must be owner occupied and applicants sole and primary residence. C. Authorized improveznents that improve the appearance of the dwelling and property from the public right-of-way and interior repairs needed to provide safe and sanitary living conditions which include but are not limited to the following: a. Any items to correct Health and Safety and Code violations have first priority. b. Landscaping (1) Removal ofrock,vegetation,walls, etc. , (2) Trimming of vegetation (3) Repair and installation of sprinkler systems (4) Installation of landscaping including grass, shiubs,trees,rocks, etc. c. Walls and Fences (1) Repair of existing watls and fences (2) Installation of new concrete block walls, wooden fences, and "ornamental iron"fences(No chainlink fencing) d. Walks and Driveways (I) Repair of existing asphalt and concrete walks and driveways (2) Installation of public right-of-way concrete sidewalks (3) Installation of on-site concrete walks, driveways etc. including removal of existing asphalt driveways e. Sewer and Septic (1} Repair of existing septic and sewer Iines (2) Installation of new on-site sewer lines and sewer lateral lines including "sanitation capacity charge" and other fees required by Coachella Valley Water District(CVWD) f. Roofs (1) Repair of leaks if balance of roof acceptable � (2) Elastomeric coating of applicable roofs (3) Rigid insulation to roofs without attics (4) Replacement of defective sheathing (5) Build up flat roofs to provide drainage (6) Replacement of roofs complete g. Heating, Cooling, and Fixtures (1} Repair or replacement of wall furnaces (2) Repair or replacement of furnaces, air conditioners, and forced air units (3) Repair,replacement,or addition of evaporative coolers (4} Repair or replacement of water heaters • (5} Repair or replacement (if functionally obsolete) built-in stoves and ovens (6) Electrical, gas,plumbing, etc. required for above Existing Home Improvement Program Guidelines August 2000 , . Page 7 of 12 h. Exterior Painting and Patching Complete i. Defective Struotural Elements Repaired or Replaced j. Door,Window, and Insulation (1) Repair broken windows (2) Repair or replace screens (3) Replace deteriorated exterior doors and required hardware (4) Replace broken interior doors and required hardware (5) Installation of insulation and other energy conservation measures if staff determines it is cost effective k. Garages and Carports (1) Replace garage doors and install automatic openers (2) Convert carports to garages (3) Build carports and garages 1. Stucco and Exterior Siding (1) Repair of existing stucco and siding (2) Lathe,plaster and stucco complete - m. Interior Repairs Needed to Provide Safe and Sanitary Living Conditions n. Bedroam and/or Bathroom Additions (1) Bedroom addition to mitigate crowded or unsatisfactory living arrangements (2) Bathroom addition to mitigate functional obsolescence or unsatisfactory living anangements D. Staff shall establish the work and expenditure priority of all improvements. VI. GUALS -WHAT DO WE WANT TO ACHIEVE? The results we want are primarily related to the residents having a positive experience from their neighborhoods and community. We want the residents of Palm Desert to take pride in their neighborhoads and express that pride by improving and maintaining their own properties and by helping others so that everyone can live safely and securely in clean,well- kept neighborhoods. VII. OBJECTIVES -WHAT'S IN IT FOR YOU? By providing both financial and volunteer assistance to homeowners to improve their properties, the MAKE A DIFFERENCE program hopes to pravide Palm Desert residents with: , � � A. An iacreased quulity of Life-a robust and enriching quality of life is almost aiways tied to a richly fulftiling network of neighborhood relationships. � Existing Home Improvement Program Guidelines August 2000 Page 8 of 12 B. A stronger sense of commuuity-when present,it is so interwoven into one's daily patterns of living that it is normally thought of as a general contentment with where one lives. The four characteristics of a sense of community are: 1. A sense of belonging to the neighborhood 2. A sense of mattering to other neighbors 3. A shared faith that all neighbors' needs will be met 4. A commitment to be together C. A measure of success for residents through their participation in neighborhood home . improvement programs D. A program to address health and safety issues E. Assistance through volunteer programs VIII. PROGRAM APPROACH The City of Palm Desert may provide financial assistance for the rehabilitation of specified property improvements in the manner provided below. The City wil] make payments directly to the designated contractor. In certain cases, the City znay provide a two-party - check,made payable to the applicant and the designated contractor. All payments will be made upon completion and verification of the approved home improverrcents. A. General Requirements 1. All eligible vwners of property located in the territorial jurisdiction of Palm Desert may file an applicatxon for assistance. The City wiLl assign a priority number to each application based on the date and time that it is received. The application for assistance will bc reviewed on "First Come First Served" basis or as otherwise described herein. Approval of applications shall be based on the final action by staff. The priority of the work to be completed shall be determined by the City Housing, Building and Safety, and Code Compliance staffs. 2. Applicants may combine County and City programs. Ifthe subject property is eligible for more than one type af assistance,separate application must be filed with both City and County. 3. In the public interest,em.ployees,officials,or consultants of the City of Palm Desert who exercise decision-making functions or responsibilities in connection with the administration of the Home Improvement Program shall not be eligible for assistance. Eligible City officials or employees not directly iz�volved in the operational responsibility of the Home Improvement Program may be granted assistance in accordance with the procedures and regutations of this program. 4. Home improvement assistance will only be provided once, within a three- year period, to each authorized household or owner occupied residence. Requests for additional assistance may be submitted to the City only after three(3)years have elapsed as measured from the date of final"Certification of Satisfactory Completion of Work" for the previous Home Improvement �� assisted project, except for Emer�enc�Grants. � Existing Home Improvement Program Guidelines August 2000 . , , Page 9 of 12 B. Participant Ap�licatioti Process: (City Programs) 1. Eiigible individuals seeking assistance from the City of Palm Desert must submit an application(Staffwill assist with completion and submittal). The application will be processed in the order received. Eligible individuals seeking assistance from the County of Riverside EDA must file saparate County application to be processed by the County. � 2. Applicant will be required to submit income verification and any additional pertinent documentation as required by staff. In the event of an emergencX situa 'on staffmay streamline verificatians and documents. 3. Staff will meet with the prospective participant(s) to explain the program and determine eligibility. _ 4. Staff will visit the subject property and will prepare a "Work Write-Up" which enumerates the home improveznent work inclusive of health and safety corrections to be completed through the City's Home Improvement Program. Photographs shall be taken of the existing conditions. 5. The "Work Write-up", including Code issues, will be reviewed with the applicant. 6. Staff will assist applicant with seeking competitive bids fronn licensed contractors for the designated construction activity. In the event that the applicant cannot obtain construction proposals from at least three - independent contractors, staff may authoxize the applicant to proceed if adequate documentation has been supplied to indicate that there has been sufficient effort expended to obtain construction bids and that the required num.ber of qualified contractors have not responded. In any event,staff must determine that the anticipated construction costs are reasonable. In the event ' of an emer�ency situation,staff may authorize the applicant to proceed with one proposal if it is reasonable. a. Contractor eligibility criteria: {1) Contractor must have a state license (2) Contract must have a City business license (3} Contractor must have general liability insurance; personal injury insurance; and property damage inse�rance (4) Gontractor nnust have Workers' Compensation insurance as required by the State of California b. Applicant may begin the home improvement work after: (1) Eligibility has been determined by staff and required documents executed by appticant. (2) A valid consEruction contract has been executed by the applicant(s)and the selected contractor and approved by staff (3) The required building and development permits have been obtained from the City if any required. n Existing Home Improvement Program Guidelines August 2000 . , . Page 10 of 12 NOTE: THE CITY OF PALM DESERT IS NOT A PARTY T�THE CONSTRUCTION CONTRACT. C. Pavment Process . 1. When all the work is completed.,the applicant must submit the contractor's itemized invoice to the City for payment along with any additional documentation required by staff. Applicant must sign the "Certification of Satisfactory Completion of Work"stating that the work has been compieted to his/her satisfaction. If the work is governed by a building permit,then the work must be finaled by the City's Building and Safety Department. 2. Upon completion of the construction work, City staff will verify: _ a. That all permits have been property processed; b. All program documents have been submitted and properly filed; c. Atl labor and/or material Iien releases have been obtained; . d. Post-work photoaaphs have been taken. 3. Upon the completion of the specified work items, City staff, at its discretion, may make disbursements directly to the applicant, the contractor, or the applicant and the contractor. 4. Payment will be made after the City staff verifies that the designated work has been completed in accordance with the approved plans, notice of - completion has been filed(if necessary), all conditional waivers of inechanic liens released, and homeowner certifica#ion of satisfactory completion of work has been signed. Payment will be made in a timely manner following submission of a completed request for payment. IX. PROMOTIUN A. Staff is currently working with the Director of Communiiy Affairs to publicize the Home Improvement Program with the intent of continued growth in the number of participants. B. Some additional promotional ideas will include: ► Television spots to run public service informational items on HIP ► Radio spots to run public service info�rnational items on HIP ► Human interest stories in the local newspaper as well as other papers such as Palm Deseit Post and Que Nuevas ► Door-to-door approaches by staff ► Fliers included in utility bills ► Community meetings in Focus Areas ► Neighborhood Watch and other organizations solicited for volunteers ► Code Enforcement given flyers and applications for HIP ► Kicic-off clean-up events -each Focus Area ► Will have an evez�t to start and celebrate their status as a"Make A Difference Neighborhood" ► Contact Visitors Center, Chamber of Commerce�, Library, YMCA to leave � flyers for public distribution Existing Home Improvement Program Guidelines August 2000 , , Page 11 of 12 o Contact Joslyn Cove Comnnunities Senior Center and Board of Realtors to: ► Leave flyers for puhlic distribution ► Seek to matce presentation at meetings ► Contact chu�ches and other charitable organization to disseminate information ► At�ach boxes for HIP flyers to "Make a Difference" signs posted on participant's property ► Discuss with City's marketing firm suggestions for Marketing Plan ► Seek approval from Desert Sands Unified School District to distribute"talce home"flyers to students at Palm Desert schools � ► Seek approval from nursery schools to distribute flyers to client households - ► Consideration of paid advertisement if insufficient response to above efforts X. ROLES AND RESPONSIBILITIES A. Ci Staff The Palm Desert Redevelopment Agency and appropriate city staff are responsible for ensuring that the home improvement activity meets state guidelines and the City's adopted - guidelines. The City Council or its designee shall: 1. Establish regulations and policies necessary to implement the rehabilitation of eligible properties. 2. Approve fundi�ng liznits and payment ofwarran,ts necessary to fund the rehabilitation of eligible properties. 3. Approve a process whereby an applicant znay appeal a deciszon that he/she feels is contrary to the intent of the program. The HIP will be implemented by PALM DESERT REDEVELOPMENT AGENCY Staff as follows: ► Housing Manager shail oversee and monitor all administrative and promotional activities of all program components. ► Housing Rehabilitation Construction Specialist shall implement all program components including processing application;prepare work write-up;assist applicant with bid process and selection of contractor;monitor all phases of construction and assist Code Enforcement with inspections; authorize partial payments through the course of construction. Housing Rehabil'ztation Canstruction Specialist sk�all also distribute program information; contact prospective homeowners and explain Program and eligibility critenia; assist applicant with preparation of application; . verify applicant's infoi�rnation; and maintain program files. . B. Housing Commission 1. The Falm Desert Housing Commission shall be comprised of the following members: • � a. A seven-member committee appointed by the City Council to serve as an advisory committee on housing. Existing Home Improvement Program Guidelines August 2000 Page 12 of 12 . 2. The responsibilities of the Housing Commission with ragard to the Horr►e Improvement Program include the following: a. Act on matters relating to the Home Improvement Program that do not require City Council action. b. Review and make recommendations to the City Council relative to the Home Improvement Program. e. Review programmatic and financial status of the program and provide periodic reports to the City Council and Executive Director. f Monitor and evaluate Home Improvement Program on a continuing basis. XI. APPEAL PROCEDURES If an applicant is denied program participation or is not satisfied with the assistance provided to accomplish the home improvement project, an appeal may be filed with the Housing Commission in accordance with the following procedures: A. The applicant may file a written notification within ten days of receiving written notification of application denial or within ten days of notifying staff of the problem. The applicants' notification shall identify the problem and/or request an appeal. - B. The applicant shall be allowed to present all pertinent facts to the Commission that may have a bearing on the particular issue to be resolved. C. The decision of the Housing Commission shall be final unless appealed to the City Council within ten (10) days after a decision has been rendered by the Housing � Commission. DRAFT FOR DISCUSSION PURPOSES LOAN AND GRANT AGREEMENT PALM DESERT REDEVELOPMENT AGENCY HOME IMPROVEMENT PROGRAM This Loan and Grant Agreement ("AgreemenY') is made and entered into as of the day of , by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and (collectively, "Owner"). RECITALS A. Agency has established the Home Improvement Program (the "Program") pursuant to which Agency makes grants and loans for rehabilitation purposes to a qualified person or persons in accordance with the income and household size requirements of the Program for the type of loan being provided (each, a "Qualified Person.") B. The Program is funded with Community Development Block Grant program ("CDBG") funds under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301, et seq.) and the 20% tax increment set-aside under the California Community Redevelopment Law (the "CRL") for the purposes of promoting, preserving and improving affordable housing. As a result, the Program and this Agreement are subject to (i) regulations promulgated by the U.S. Department of Housing and Urban Development ("HUD ") set forth at 24 Code of Federal Regulation Part 570 (the "Regulations") and (ii) the CRL. C. Owner is a Qualified Person and wishes to receive funding of up to $ (the "Funds") under the Program for use in connection with the rehabilitation of the single-family home owned and occupied by Owner located on certain real property known as , Palm Desert, California and described more particularly on Exhibit A, attached hereto and incorporated by reference (the "Property"). Agency is willing to provide the funds, initially in the form of a loan, repayment of which will be forgiven in accordance with this Agreement if Owner does not default on its obligations hereunder. D. Agency or its agent has approved certain work on the Prope�ty to be financed by the Funds as described more particularly in the summary of contracts attached hereto and incorporated by reference as Exhibit "B" (the "Work"). E. Owner is willing to comply with the requirements of HUD, the CRL and the Program with respect to the Funds, and Agency is willing to make a forgivable loan to Owner on the terms and conditions below. NOW, THEREFORE, the parties in consideration of the mutual covenants below agree as follows: P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) AGREEMENT 1. Loan Aqreement; Forqiveness (a) Agency agrees to lend to Owner, and Owner agrees to borrow from Agency, on the terms and conditions set forth herein, up to and No/100ths Dollars ($ )(the "Loan"). Concurrently with, and as a condition to, the making of the Loan, Owner shall execute and deliver to the Agency (i) the Note in favor of the Agency, in the form of Exhibit "C" attached hereto and incorporated herein by this reference; (ii) the Deed of Trust which shall secure the Note and Owner's performance hereunder, in the form of Exhibit "D" attached hereto and incorporated herein by this reference; and (iii) the Disclosure Statement, in the form of Exhibit "E" attached hereto and incorporated herein by this reference. This Agreement, together with the Note, Deed of Trust, and Disclosure Statement are collectively referred to herein as the "Loan Documents." (b) The terms of repayment of the Loan are set forth in the Note. (c) On each anniversary of the first day of the first full calendar month following final disbursement of the Loan by Agency (the "Final Loan Disbursement Date"), if Owner has not defaulted in performing the terms and conditions of this Agreement (as "default" is defined in Section 15 below) at any time during the preceding year, then the outstanding amount of principal due under the Note shall be reduced by 6.67% of the total Loan proceeds disbursed prior to such anniversary date. If, on the 15th anniversary of the Final Loan Disbursement Date, Owner has not defaulted in performing its obligations under this Agreement, the entire amount of principal shall be forgiven, the Loan shall be deemed to have been a grant, all interest due under the Note shall be forgiven by the Agency, this Agreement shall terminate and the Agency shall reconvey the lien of the Deed of Trust. 2. Use of Proceeds All Loan proceeds shall be used by Owner for the sole purpose of paying for reasonable costs and expenses of the Work on the Property pursuant to the contracts summarized in Exhibit "B" attached hereto. If the actual cost of completing the Work is greater than the Loan amount, Owner will deliver to Agency evidence of the source of other loans or a sum equal to such difference, which shall be disbursed in the manner specified in Section 3 hereof before Agency's disbursement of any of the Loan proceeds. Owner shall comply with (i) all requirements of the CDBG Program in accordance with the Regulations and (ii) applicable provisions of the CRL. 3. Disbursement Procedures (a) Subject to the conditions set forth below, Agency shall make one or payments to contractor(s) upon receipt of: P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 2 (i) A certification from Owner and the contractor(s) that the Work for which payment is requested is complete. (ii) A general contractor's and subcontractor's sworn statements and releases or waivers of lien, in actual dollar amounts to cover both labor and material, all in compliance with the California Mechanic's Lien Laws and with the requirements of the Agency together with such invoices showing sums due, subcontracts and other supporting data as Agency may require. (b) If this Loan is being made in conjunction with a loan from another lender, Agency shall advance the proceeds of the Loan after all advances have been made by any lenders whose loans are secured by trust deeds encumbering the Property that are senior to the lien of the Deed of Trust. (c) Notwithstanding any provision herein to the contrary, the Agency shall have no obligation to disburse any funds hereunder unless and until each of the following conditions is satisfied, or such satisfaction is expressly waived by the Agency: (i) Owner has executed and delivered to Agency the Note, Deed of Trust, and Disclosure Statement; (ii) The labor, services and/or materials representing the portion of the Work for which payment is sought are complete; and (iii) No preliminary notice describing such labor, services and/or materials has been served upon the Agency except by the person named in the disbursement request. (d) The Agency reserves the right to withhold payment (and to receive a refund if the disbursement has already been made) to the extent the Agency determines the cost of the labor, service and/or materials involved is commercially unreasonable or excessive. (e) Owner will, within five (5) days of presentation by Agency, execute any and all documents required by Agency in connection with the release of payments to contractor. 4. Title Insurance. As an additional condition to disbursement of the Loan, Agency, at no cost to Owner, may obtain, as a condition to the Loan, a standard form ALTA Lender's policy of Title Insurance, issued by a title company chosen by Agency, which, if obtained, must be (unless otherwise elected by Agency) in an amount not less than the Loan and must insure the priority of the Deed of Trust against all monetary liens and encumbrances against the Property, including but not limited to, mechanic's liens claims, and excepting only (a) the lien of any nondelinquent property taxes; (b) the deed of trust securing any First Mortgage Loan (as defined in Section 10 below); and (c) P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 3 other encumbrances and exceptions to title as may be approved in writing by the Agency in the Agency's sole and absolute discretion. 5. Reports Owner agrees upon the request of Agency to deliver or cause its contractor(s) to deliver to Agency a status report regarding construction of the improvements detailed in Exhibit "B." 6. Owner's Covenants (a) Qualification. Owner covenants and agrees that all information submitted to Agency regarding Owner's income qualification is true and correct, and that Owner is a Qualified Person. (b) Maintenance. Owner covenants and agrees, for the period commencing with the date hereof and ending on the date the Loan has been repaid or forgiven in full, to maintain the Property and the improvements thereon in accordance with requirements of the Deed of Trust. (c) Owner occupancv. Owner covenants and agrees, for the period commencing with the date hereof and ending on the date the Loan has been repaid or forgiven in full, that the Property shall continue to be used and occupied as Owner's primary residence. (d) Siqn. Owner covenants and agrees, for the period commencing with the date hereof, and for no less than ninety (90) days after the date of final disbursement of funds hereinbefore set forth in Section 3, that Owner will allow Agency to post a sign(s) advertising the Program in a conspicuous location on the Property and Owner will maintain said posted sign. (e) No Refinancinq without Agency Consent. Owner shall not refinance the Property or record any additional encumbrances on the Property without the prior written consent of the Agency. 7. Schedule of the Work Subject to Section 15(h), Owner agrees to commence the Work on or prior to , and to complete the Work on or prior to . Notwithstanding the foregoing, the Work shall not commence until notification is given by Agency or its authorized agent to Owner to proceed. 8. Mechanic's Lien and Stop Notices In the event of the filing of a stop notice or the recording of a mechanic's lien pursuant to applicable law of the State of California relating to works of improvement upon the Property, Agency may summarily refuse to pay any request for P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 4 payment pursuant to this Agreement, and in the event Owner fails to furnish Agency a bond causing such notice or lien to be released, within ten (10) days of notice from Agency to do so, such failure shall at the option of Agency constitute a default under the terms of this Agreement. Owner shall promptly deliver to Agency copies of all preliminary twenty-day notices. 9. Restrictions on Transfer; Transfer to Qualified Person (a) OWNER COVENANTS AND AGREES THAT THE PROPERTY SHALL BE USED AND OCCUPIED UNTIL AS THE PRIMARY RESIDENCE OF A PERSON OR PERSONS WHOSE INCOME DOES NOT EXCEED FIFTY PERCENT (50%) OF THE COUNTY OF RIVERSIDE MEDIAN INCOME ACCORDING TO THE STANDARDS ESTABLISHED BY HUD, HEREIN CALLED "VERY LOW INCOME". (b) THE PURPOSE OF THIS AGREEMENT, THE NOTE, AND THE DEED OF TRUST IS TO ENCOURAGE THE CONTINUED OCCUPANCY OF THE PROPERTY AS THE PRIMARY RESIDENCE OF A PERSON OR PERSONS OF VERY LOW INCOME AS DETERMINED BY THE STANDARDS ESTABLISHED BY HUD, AND TO ENCOURAGE SALE OR TRANSFER TO SUCH A PERSON OR PERSONS AT A LOWER COST THAN MIGHT BE CHARGED BY THE OWNERS TO SELL THE PROPERTY TO A NON-QUALIFYING BUYER. Notwithstanding subsection (a) of this section, if Owner gives written notice to Agency in advance of any such sale or transfer of the intent to execute such a sale or transfer, Agency shall make a determination as to the amount due, if any, under this Loan and shall provide a statement of the total amount secured. If the prospective transferee and/or buyer submit an application and such income statements and other relevant documentation required by Agency, and intend to occupy the Property as his, her, or their primary residence, Agency shall determine whether or not said individuals are a person or persons of Very Low Income under HUD standards and meet the other qualification standards of the Program. (c) !N THE EVENT THE PROPERTY IS SOLD OR OTHERWISE TRANSFERRED TO A PERSON OR PERSONS WHO (i) WILL OCCUPY THE PROPERTY AS HIS, HER, OR THEIR PRIMARY RESIDENCE; (ii) QUALIFY AS VERY LOW INCOME; AND (iii) ARE APPROVED BY THE AGENCY, THEN THE LOAN MAY BE TRANSFERRED TO THE NEW QUALIFIED BUYER PURSUANT TO AN ASSIGNMENT AND ASSUMPTION AGREEMENT ACCEPTABLE TO AGENCY. 10. Covenants Do Not Impair Lien (a) The provisions of this Agreement and Deed of Trust shall be subordinate to any purchase money mortgage recorded on the Property prior to the recordation of the Deed of Trust (herein "First Mortgage Loan") and shall not impair the rights of the lender thereunder (herein, "First Mortgage Lender"), or First Mortgage Lender's assignee or successor in interest, to exercise its remedies under the First P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 5 Mortgage Loan in the event of default. Such remedies under the First Mortgage Loan include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this Agreement and the Deed of Trust shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of the First Mortgage acquires title to the Property pursuant to a deed or assignment in lieu of foreclosure, this Agreement and the Deed of Trust shall automatically terminate upon such acquisition of title. (b) Agency shall cause a Request for Notice to be recorded on the Property subsequent to the recordation of the First Mortgage Loan requesting a statutory notice of default as set forth in the California Civil Code Section 2924b. Such notice shall be sent to the Agency at the address set forth in Section 18 hereof. 11. Indemnification Owner shall defend, indemnify and hold harmless Agency and the City of Palm Desert (the "City") and their respective officers, officials, agents, employees, representatives, and volunteers from and against any damages, costs, expenses, losses, liabilities, claims, and judgments relating in any manner to the Property, this Agreement, the Work or the Loan. The Owner shall remain fully obligated for the payment of taxes, liens and assessments related to the Property. There shall be no reduction in taxes for Owner, nor any transfer of responsibility to Agency to make such payments, by virtue of the Loan. 12. Insurance Owner shall maintain, during the term of the Loan, an all-risk property insurance policy insuring the Property in an amount equal to the full replacement value of the structures on the Property, with appropriate waiver of subrogation rights. The policy shall name Agency and the City as loss payees and shall contain a statement of obligation on behalf of the carrier to notify Agency of any material change, cancellation or termination of coverage at least thirty (30) days in advance of the effective date of such material change, cancellation or termination. Owner shall transmit a copy of the certificate of insurance and loss payee endorsement to Agency within thirty (30) days of the effective date of this Agreement, and Owner shall annually transmit to Agency a copy of the certificate of insurance and a loss payee endorsement, signed by an authorized agent of the insurance carrier setting forth the general provisions of coverage. Any certificate of insurance must be in a form, content and with companies approved by Agency. The copy of the certificate of insurance and loss payee endorsement shall be transmitted to Agency at the address set forth in Section 18 hereof. 13. Loan Servicing. P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 6 Agency may contract with a private lender or other person or entity (the "Administrator") to originate and service the Loan, and to carry out Agency's obligations under this Agreement. 14. Further Assurances. The Owner shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as Agency shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Agreement and making the Loan. 15. Events of Default (a) Subject to the further provisions of this Section 15, failure or delay by Owner to pertorm any term or provision of this Agreement, the Note, or the Deed of Trust constitutes a default. The Owner must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence, but in any event, within the time set forth in Sections 15(c) and (d) below, as applicable. (b) The Agency shall give written notice of default to the Owner, specifying the default complained of by the Agency. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) If a monetary event of default occurs, prior to exercising any remedies under any of the Loan Documents, Agency shall give Owner written notice of such default. Owner shall have a period of thirty (30) days after such notice is given within which to cure the default prior to exercise of remedies by Agency. (d) If a non-monetary event of default occurs, prior to exercising any remedies under any of the Loan Documents, Agency shall give Owner notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Owner shall have such period to effect a cure prior to exercise of remedies by the Agency under the Note and the Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Owner (i) initiates corrective action within that period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Owner shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Agency. However, in no event shall Agency be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or if the default is not cured within one hundred and twenty (120) days after the first notice of default is given. (e) If any event of default occurs, then, upon the election of Agency, the entire Loan shall immediately become due and payable without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived. P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 7 (fl Upon an event of default, Agency may accelerate the Loan and declare all principal and interest immediately due and payable, and may exercise any or all of the rights and remedies available to it under the law, at equity or as provided in the Loan Documents. (g) Any and all costs and expenses incurred by the Agency in pursuing its remedies hereunder shall be additional indebtedness of the Owner to the Agency hereunder, and shall be secured by the Loan Documents. (h) Performance of covenants and conditions imposed upon Owner hereunder shall be excused while and to the extent that, Owner is prevented from complying therewith by war, riots, strikes, lockouts, action of the elements, accidents, or acts of God beyond the reasonable control of the Owner, provided, however, that such event is not caused by the fault, negligence or misconduct of Owner; provided, further, as soon as the cause or matter so preventing compliance with such obligations is removed or ceases to exist the obligations shall be restored to full force and effect and Owner shall immediately resume compliance therewith and performance thereof. 16. Compliance with Ordinances, Rules, and Requlations The Owner agrees to comply with all federal and state laws, as well as all ordinances, rules and regulations of Agency and the City. Nothing in this Agreement is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule or regulation. 17. Severability Any failure by Agency to enforce any of its remedies hereunder in any particular instance shall not constitute a waiver by Agency of its right to subsequently enforce its rights under the same or any other provision in the event of a subsequent default. 18. Notices Any written notice or payment of one party to the other shall be service by registered or certified mail, postage prepaid, return receipt requested, addressed to the parties as follows: To Agency: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260-2578 Attention: Housing Division To Owner: At the Property. All notices shall be deemed received on the date two (2) business days after the date of deposit into the U.S. mail in the fashion provided herein. P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 8 19. Attornevs' Fees and Costs. In the event that any action is instituted to enforce payment or performance under this Agreement, the parties agree that the non-prevailing party shall be responsible for and shall pay all costs and all attorneys' fees incurred by the prevailing party in enforcing this Agreement. If Agency shall be or shall become a party to any legal proceedings instituted in connection or arising out of the Work on the Property, or in the event of any dispute befinreen the parties hereto arising out of this Agreement in which the Agency is the prevailing party, Owner agrees to pay to Agency on demand all sums paid or incurred by Agency as costs and expenses in the legal proceedings, including but not limited to actual attorney's fees and costs incurred by Agency. 20. No Waiver; Remedies Cumulative. No disbursement of proceeds of the Loan shall constitute a waiver of any conditions to the Agency's obligation to make further disbursements nor, in the event Owner is unable to satisfy any such conditions, shall any such waiver have the effect of precluding the Agency from thereafter declaring such inability to constitute a default under this Agreement. No disbursement of proceeds based upon inadequate or incorrect information shall constitute a waiver of a right to receive a refund thereof. All rights and remedies existing under this Agreement or the other Loan Documents are cumulative to and not exclusive of any rights or remedies otherwise available. The Agency's acceptance of less than the entire amount due for any payment on the Note shall not constitute a waiver by the Agency to thereafter demand the entire amount due. The waiver by Agency of any breach or default herein shall not be deemed, nor shall constitute, a waiver of any subsequent breach or breaches. 21. Governinq Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Riverside, State of California, or in an appropriate municipal court in that County or in the United States District Court for the Central District of California. 22. Amendment of Aqreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by the Owner and Agency. 23. Aqencv May Assiqn. Agency may, at its option, assign the Loan, the Loan Documents and its right to receive repayment of the Loan proceeds without obtaining the consent of the Owner. 24. Owner Assiqnment Prohibited. P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 9 In no event shall Owner assign or transfer any portion of this Agreement or Owner's rights or obligations under the Agreement without the prior express written consent of Agency, which consent shall be given by Agency only in the event that Agency determines that (i) Owner is not in default hereunder and (ii) the assignee or transferee has expressly assumed this Agreement by execution of a written assignment document to be provided by Agency. 25. Relationship of Owner and Aqency. The relationship of Owner and Agency pursuant to this Agreement is that of debtor and creditor and shall not be or be construed to be a joint venture, equity venture, partnership, or other relationship. 26. Generat Time is of the essence of this Agreement and of each and every provision hereof. This Agreement, together with the other Loan Documents, constitutes the entire agreement between the parties hereto, and there shall be no other agreement regarding the subject matter thereof unless signed in writing by the part to be charged. If there is more than one "Owner," the obligations of all Owners shall be joint and several. IN WITNESS WHEREOF, Owner has entered into this Agreement as of the date and year first above written and has hereunto duly executed this document the day of , 20,_ Owner: Agency: Approved as to form: Redevelopment Agency Counsel P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) 10 DRAFT FOR DISCUSSION PURPOSES EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit A DRAFT FOR DISCUSSION PURPOSES EXHIBIT "B" [AT SUCH TIME AS THE "BIDS" HAVE BEEN ACCEPTED AND HAVE BEEN APPROVED BY OWNER, THIS PAGE WILL BE REPLACED WITH A SUMMARY OF CONTRACTS APPROVED BY OWNER AND WILL BECOME A PART OF THE AGREEMENT HEREIN NOTED BY REFERENCE.j P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit B DRAFT FOR DISCUSSION PURPOSES EXHIBIT "C" PROMISSORY NOTE SECURED BY DEED OF TRUST PALM DESERT REDEVELOPMENT AGENCY HOME IMPROVEMENT PROGRAM VERY LOW INCOME HOUSEHOLD US$ Palm Desert, California BASIC PROVISIONS Date: Annual Principal Forgiveness Amount: 6.67% Maturity/Full Forgiveness Date: Fifteenth (15'h) anniversary of the Interest Accrual Date Borrower(s) ("Borrower"): Principal Amount: and 00/100 Dollars ($ ) Default Interest Rate: Five percent (5%) per year Interest Accrual Date: First day of the first full calendar month after the final Loan disbursement or the first day of the first full calendar month following ninety (90) days after the first Loan disbursement, whichever occurs first. FOR VALUE RECEIVED, Owner, as set forth in the Basic Provisions above, hereby promises to pay to the Palm Desert Redevelopment Agency, a public body, corporate, and politic, as lender ("Agency"), at 73-510 Fred Waring Drive, Palm Desert, California 92260, Attention: Housing Division, or order, without deduction or offset, the Principal Amount set forth in the Basic Provisions above, together with any interest required pursuant to the provisions below. If more than one person is signing this as Owner, then the obligations of Owner shall be joint and several. This Promissory Note (this "Note") is issued pursuant to and arises out of the terms and conditions of a Loan and Grant Agreement (the "Loan Agreement") dated P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit C (Page 1) the same date as this Note, between Owner and Agency, and is secured by that certain Deed of Trust of even date herewith executed by Owner for the benefit of Agency (the "Deed of Trust"). The Owner acknowledges that, but for the execution of this Note, the Agency would not enter into the Loan Agreement or make the loan contemplated therein (the "Loan"). Unless otherwise defined in this Note, each capitalized term shall have the meaning ascribed to such term in the Loan Agreement. As required by the Loan Agreement, concurrently with the execution of this Note, Owner is executing the Deed of Trust, which is incorporated herein by this reference. This Note and the Deed of Trust are junior and subordinate to the lien of the First Mortgage. No interest shall accrue on the Loan, except in the case of a default (as defined below), in which case, interest shall accrue at the Default Interest Rate as set forth in the Basic Provisions. Agency agrees to defer payment of principal and interest until the Maturity Date as set forth in the Basic Provisions above, provided that Owner has not breached the terms and conditions of this Note and the other Loan Documents. In addition, On each anniversary of the first day of the first full calendar month following final disbursement of the Loan by Agency (the "Final Loan Disbursement Date"), if Owner has not defaulted in performing the terms and conditions of this Agreement (as "default" is defined in Section 15 below) at any time during the preceding year, then the outstanding amount of principal due under the Note shall be reduced by 6.67% of the total Loan proceeds disbursed prior to such anniversary date. If, on the fifteenth (15'n) anniversary of the Final Loan Disbursement Date, Owner has not defaulted in performing under this Agreement, the entire amount of principal shall be deemed to have been a grant, all interest due under the Note shall be forgiven by the Agency, this Agreement shall terminate and the Agency shall reconvey the lien of the Deed of Trust. The outstanding principal balance of the Loan, and any accrued but unpaid Interest, shall become due and immediately payable upon the occurrence of any one of the following events prior to the Maturity Date: (1) any sale of the Property except as permitted under the Loan Agreement; provided, however, that the transfer of the Property solely as a result of the marriage, divorce, incompetency or death of the Owner or any person constituting the Owner shall not accelerate the Loan so long as the transferee gives notice to Agency of such event within thirty (30) days of its occurrence and the transferee assumes Owner's obligations under the Loan Agreement, by execution of an assignment and assumption agreement approved by Agency; (2) if Owner fails to properly maintain the Property in accordance with the requirements of the Deed of Trust; (3) if Owner does not obtain all the necessary permits from the City of Palm Desert and fails to adhere to all pertinent City regulations in connection with the proposed improvements; P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit C (Page 2) (4) if Owner ceases to occupy the Property as Owner's primary residence or othenivise fails to comply with Section 9 of the Loan Agreement; (5) an uncured event of default by Owner underthe Loan Agreement,this Note, the Agency Deed of Trust or the First Mo�tgage; or (6) if Owner refinances the First Mortgage, if any, unless the Agency consents in writing prior to the refinancing. Thereafter, interest shall accrue at the maximum legal rate permitted to be charged by non-exempt lenders under the usury laws of the State of California. At the request of Owner, the Agency may, in its sole and absolute discretion, waive the acceleration requirements of this Note and defer repayment and/or extend the term of the Loan. Any waiver must be in writing. If any payment due under this Note or the Deed of Trust is not received by Agency within fifteen (15) calendar days of the date such payment is due, Owner shall pay to Agency a late charge of five dollars ($5.00), which late charge shall be immediately due and payable without demand or notice by Agency. Owner acknowledges that late payment under this Note will cause Agency to incur costs that would be costly or inconvenient to establish. Owner agrees that this late charge represents a reasonable sum considering all of the circumstances and represents a fair and reasonable estimate of the costs that Agency will incur by reason of late payment. Agency may, at its option, assign this Note and its right to receive payment under this Note without necessity of obtaining the consent of the Owner or the First Mortgage Lender. In no event shall Owner assign or transfer any portion of this Note, the Loan or the Loan Agreement without the prior express written consent of the Agency, which consent may be given or withheld in the Agency's sole and absolute discretion. This Note may be subject to Section 2966 of the California Civil Code, which provides that Agency shall give written notice to Owner, or Owner's successor in interest, of prescribed information at least sixty (60) and not more than 150 days before any balloon payment is due. Failure or delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. This Note and the Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. All parties who are obligated to pay any portion of the indebtedness represented by this Note, whether as principal, surety, guarantor or endorser, hereby waive presentment for payment, demand, protest, notice of protest and notice of P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit C (Page 3) dishonor, and all other notices to which they might otherwise be entitled, and further waive all defenses based on release of security, extension of time or other indulgence given in respect to payment of this Note, to whomsoever given, and further waive all defenses, generally, except the defense of actual payment of this Note in accordance with its provisions. Owner agrees to pay the following costs, expenses, and attorneys' fees paid or incurred by Agency, or adjudged by a court: (1) reasonable costs of collection, costs and expenses, and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suite is filed; and (2) costs of suit and such sum as the court may adjudge as attorneys' fees in any action to enforce payment of this Note or any part of it. In addition to the foregoing award of attorneys' fees, Agency shall be entitled to its attorneys' fees incurred in any post judgment proceedings to enforce any judgment in connection with this Note. This provision is separate and several and shall survive the merger of this provision into any judgment. Owner waives any right to require the Agency to (a) demand payment of amounts due (known as "presentment"); (b) give notice that amounts due have not been paid (known as "notice of dishonor") and (c) obtain an official certification of nonpayment (known as "protest"). Subject to the foregoing, the terms of this Note shall be binding upon and inure to the benefit, as the case or context may require, of the respective heirs, successors in interest and assigns of Owner and Agency. IN WITNESS WHEREOF, the Owner has hereunto duly executed this document the day of , 20_. "Owner" P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit C (Page 4) EXHIBIT "D" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, CA. 92260 Attn: Housing Division Agency No. Title Order No. A.P.N.: No Recording Fee Required -- Government Code Section 6103 SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENT OF RENTS PALM DESERT REDEVELOPMENT AGENCY HOME IMPROVEMENT PROGRAM VERY LOW INCOME HOUSEHOLD This Deed of Trust With Assignment of Rents, made as of the day of , , by and among herein called Trustor, whose address is , in favor of , a California corporation, as Trustee, for the benefit of the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called Beneficiary, Trustor in consideration of the promises recited herein and the trust herein created, IRREVOCABLY GRANTS, TRANSFERS, AND ASSIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, that certain land (the "Land") situated in the City of Palm Desert, County of Riverside, State of California, described more particularly on Exhibit "A" hereto which is hereby incorporated into this Deed of Trust as if fully set forth below: TOGETHER with all the improvements now or hereafter erected on the Land, and all easements, rights, appurtenances and all fixtures now or hereafter attached to the Land, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Land covered by this Deed of Trust; and P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 1) TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected, or hereafter to be erected, on the Land which are necessary to the complete and comfortable use and occupancy of such building or bui(dings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Land, is herein referred to as the "Property"; To have and to hold the Property together with acquittances to the Trustee, its successors and assigns forever; For the Purpose of Securing: A. Performance of each agreement of Trustor herein contained. B. The performance of each agreement of Trustor set forth in, and rights of the Beneficiary under, that certain Loan and Grant Agreement (the "Loan Agreement") dated concurrently herewith, made for the purpose of assisting Trustor in rehabilitating the Property. C. Payment of the indebtedness evidenced by that certain promissory note (the "Note") dated concurrently herewith, and any extension or renewal thereof, in the principal sum of $ executed by Trustor in favor of Beneficiary or order pursuant to the Loan Agreement. D. Performance of Trustor's obligations and the rights of Beneficiary under any modifications of the foregoing. To Protect the Security of This Deed of Trust, Trustor Agrees: (1) To keep the Property and the improvements thereon clean and in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefore; to comply with all laws affecting the Property, or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon the Property in violation of law; and to do all other acts which from the character or use of the Property may be reasonably necessary, the specific enumerations herein not excluding the general. (2) To provide or cause to provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary and any senior trust deed holder, as their interests may appear. The amount collected under any fire or other P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 2) insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. (4) To pay: Before delinquency all taxes and assessments affecting the Property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on the Property or any part thereof, which appear to be prior or senior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay its reasonable fees. (5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when the statement is demanded. (6) That any award of damages in connection with any condemnation for public use of or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary (and to any senior trust deed holder, as their interests may appear) who may apply or release such moneys received by it in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. (7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 3) (8) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of the Property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement surrounding the lien or charge hereof. (9) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the Note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or person legally entitled thereto." Five years after issuance of such full reconveyance, Trustee may destroy the Note and this Deed of Trust (unless directed in such request to retain them). (10) That upon default by Trustor in payment of any indebtedness secured hereby, or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and election to cause the Property to be sold, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of the notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees, and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 4) (11) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. The instrument must contain the name of the original Trustor, Trustee, and Beneficiary hereunder, the date and instrument number where this Deed of Trust is recorded, and the name of the new Trustee. (12) That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term Beneficiary shall mean the owner and holder, including pledges, of the Note, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. (13) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. (14) Not to refinance the Property or encumber the Property with any additional debt without the prior, written consent of Beneficiary. (15) Upon the Trustor's breach of any covenant or agreement of the Trustor in this Deed of Trust or in the Note or Loan Agreement, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, which remains uncured after the applicable period of time after notice of default specified in the Loan Agreement, the Agency, at the Agency's option, may: (a) Declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; (b) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its Property, enter upon the Property and take possession thereof (or any part thereofl and of any of the Property, in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the Property thereof. The entering upon and taking possession of the Property shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Property, the Agency shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this Deed of Trust as a P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 5) mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to the Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et se�c ., as amended from time to time; or (e) exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Property, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. The Agency shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. (16) Notwithstanding the Agency's acceleration of the sums secured by this Deed of Trust, the Trustor will have the right to have any proceedings begun by the Agency to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) The Trustor pays the Agency all sums which would be then due under this Deed of Trust and no acceleration under the Note has occurred; (b) the Trustor cures all breaches of any other covenants or agreements of the Trustor contained in this Deed of Trust; (c) the Trustor pays all reasonable expenses incurred by the Agency and the Trustee in enforcing the covenants and agreements of the Trustor contained in this Deed of Trust, and in enforcing the Agency's and the Trustee's remedies, including, but not limited to, reasonable attorneys' fees; and (d) the Trustor takes such action as the Agency may reasonably require to assure that the lien of this Deed of Trust, the Agency's interest in the Property and the Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by the Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. (17) Upon a sale of the Property not permitted by the Loan Agreement, the Agency may, at its option, require immediate payment in full of all sums secured by this Deed of Trust. However, this option shall not be exercised by the Agency if such exercise is prohibited by federal law as of the date of this Deed of Trust, or if the Agency has executed a separate written waiver of this option. (18) Upon payment or forgiveness of all sums secured by this Deed of Trust, the Agency will request the Trustee to reconvey the Property and will surrender this Deed of Trust and the Note to the Trustee. The Trustee will reconvey the Property without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. (19) The Agency, at the Agency's option, may from time to time remove the Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable faw. P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 6) (20) Notwithstanding any provision herein, this Deed of Trust shall not diminish or affect the rights of the First Mortgage Lender under any First Mortgage (as such terms are defined in Section 10 of the Loan Agreement), executed by the Trustor in favor of the First Mortgage Lender and recorded in the County of Riverside concurrently herewith or any subsequent First Mortgage Lender deeds of trust hereafter recorded against the Property provided the Agency has approved the form of subordination agreement to be executed by the Agency as well as the terms of the First Mortgage and the loan secured thereby. (21) Trustor waives any right to require the Agency to (a) demand payment of amounts due (known as "presentment"); (b) give notice that amounts due have not been paid (known as "notice of dishonor") and (c) obtain an official certification of nonpayment (known as "protest"). The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to it at its address hereinbefore set forth. Signature(s) of Trustor: P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 7) State of California ) ) County of ) On _, 20_, before me, , a Notary Public, 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/her/their authorized capacity(ies), and that by his/her/their signature(s} on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) State of California ) ) County of ) On _, 20_, before me, , a Notary Public, 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/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 8) Exhibit "A" Legal Description of Land P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit D (Page 9) EXHIBIT "E" DISCLOSURE STATEMENT TRUTH IN LENDING DISCLOSURE STATEMENT Creditor Applicant(s) City of Palm Desert Redevelopment Agency Mailing Address Property Address 73-510 Fred Waring Drive Palm Desert, CA 92260 Loan Number Preparation Date ANNUAL PERCENTAGE RATE FINANCE CHARGE Amount Financed Total of Payments The cost of your credit as a The dollar amount the credit The amount of credit provided The amount you will have paid yearly rate. will cost you. to you on your behalf. after you have made all payments as scheduled. E" % E $ E $ E $ PAYMENT SCHEDULE: NUMBER OF 'AMOUNT OF MONTHLY NUMBER OF 'AMOUNT OF MONTHLY PAYMENTS PAYMENTS PAYMENTS ARE pAYMENTS PAYMENTS PAYMENTS ARE DUE DUE BEGINNING BEGINNING ' "E"means"estimated." " All amounts and payments are estimated. After final rehabilitationlimprovement disbursement,a statement will be provided showing principal and payment amounts. ' Excludes taxes or insurance. DEMAND FEATURE: Q This loan does not have a Demand Feature. 0 This loan has a Demand Feature. ITEMIZATION: You have a right at this time to an ITEMIZATION OF AMOUNT FINANCED. I/We 0 do 0 do not want an itemization. REQUIRED DEPOSIT: 0 The annual percentage rate does not take into account your required deposit. VARIABLE RATE FEATURE: 0 This loan has a Variable Rate Feature. Variable Rate Disclosures have been provided to you earlier. SECURITY: You are giving a security interest in: P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit E (Page 1) ASSUMPTION: Someone buying this property 0 cannot assume the remaining balance due under original mortgage terms 0 may assume,subject to lender's conditions,the remaining balance due under original mortgage terms. FILING/RECORDING FEES: PROPERTYINSURANCE: 0 Property/hazard insurance is a required condition of the loan. Owner may purchase this insurance from any insurance company acceptable to the lender. Hazard insurance � is 0 is not available through the lender at an estimated cost of for a^month term. LATE CHARGES: If your payment is more than 15 days late,you will be charged a late charge of $ 5.00. PREPAYMENT: If�ou prepay this loan in full or in part,you L_.J may � will not have to pay a penalty. 0 may � will not be entitled to a refund of part of the finance charge. See your contract documents for any additional information regarding non-payment,default,required repayment(n full before scheduled date,and payment refunds and penalties. I/We hereby acknowledge reading and receiving a complete copy of this disclosure. I/We understand there is no commitment for the creditor to make this loan and there is no obligation for me/us to accept this loan upon delivery or signing of this disclosure. Owner's Signature Date Owner's Signature Date Owner's Signature Date Owner's Signature Date Exhibit E (Page 2) NOTICE OF RIGHT TO CANCEL Loan Number: Date: Owners: Property Address: Palm Desert, CA 922_ YOUR RIGHT TO CANCEL: You are entering into a transaction that will result in a mortgage, lien or security interest on/in your home. You have a legal right under federal law to cancel this transaction, without cost, within THREE (3) BUSINESS DAYS from whichever of the following events occurs last: 1. The date of the transaction, which is ; or 2. The date you received your Truth-in-Lending disclosures; or 3. The date you received this notice of your right to cancel. If you cancel the transaction, the mortgage, lien or security interest is also cancelled. Within 20 CALENDAR DAYS after we receive your notice, we must take the steps necessary to reflect that the mortgage, lien or security interest on/in your home has been cancelled, and we must return to you any money or property you have given to us or to anyone else in connection with this transaction. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impracticai or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or properry within 20 CALENDAR DAYS of your offer, you may keep it without further obligation. HOW TO CANCEL: If you decide to cancel this transaction, you may do so by notifying us in writing at: City of Palm Desert Redevelopment Agency -Housing Division 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight (or midnight of the THIRD BUSINESS DAY following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. 1 WISH TO CANCEL Date Signature INVE ACKNOWLEDGE RECEIPT OF TWO(2)COPIES OF NOTICE OF RIGHT TO CANCEL AND ONE(1) COPY OF THE FEDERAL TRUTH-IN-LENDING DISCLOSURE STATEMENT,ALL GIVEN BY LENDER IN P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit E (Page 3) COMPLIANCE WITH TRUTH-IN-LENDING SIMPLIFICATION AND REFORM ACT OF 1980(PUBLIC LAW 96-221). Each Owner in this transaction has the right to cancel. The exercise of this right by one Owner shall be effective as to all Owners. Owner's Signature Date Owner's Signature Date P6402-0001\945267v1.doc HIP Component No. 2 Rehabilitation Grant(RG) Exhibit E (Page 4)