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HomeMy WebLinkAboutGuidelines & Procedures for the Neighborhood Stabilization PgrmCITY OF PALM DESERT/PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: ADOPT CITY OF PALM DESERT RESOLUTION NO2010-12AND PALM DESERT REDEVELOPMENT AGENCY RESOLUTION NO. 570 APPROVING THE GUIDELINES AND PROCEDURES FOR THE NEIGHBORHOOD STABILIZATION PROGRAM SUBMITTED BY: Veronica Tapia, Redevelopment Accountant DATE: March 11, 2010 CONTENTS: 1 Neighborhood Stabilization Program Guidelines 2 Standard Agreement 3 Program Documents 4 Loan Documents 5 Approved Lenders List 6 Approved Education Sources List Recommendation That the City Council and Agency Board: 1) Waive further reading and adopt City Resolution No 2010-1 and Agency Resolution No. 570 approving the Guidelines and Procedures for the Neighborhood Stabilization Program (the "NSP Program") substantially as to form; and 2) Receive and file the Standard Agreement from the State of California Housing and Community Development (HCD) for Joint NSP Funding with the County of Riverside. By minute motion, that the City Council and Agency Board: 3) Approve the draft program documents related to the acquisition of foreclosed homes in the designated target areas of Palm Desert as required by the NSP Program; and 4) Approve the draft loan documents related to the City silent second loans for down payment assistance and rehabilitation substantially as to form; and 5) Accept the County of Riverside's identified list of authorized NSP Lenders and Education Sources; and 6) Authorize use of a third party to facilitate the Rehabilitation Component of the NSP Program, as necessary; and 7) Authorize the City Manager and/or the Executive Director to execute any documents necessary to establish and/or implement the NSP Program; and Staff Report Approval of the Neighborhood Stabilization Program Guidelines and Documents March 11, 2010 Page 2 of 3 8) Establish a budget for estimated revenue to State Grant-HCD NSP Revenue Account No. 214-0000-334-7203 in the amount of $326,784 and appropriate $326,784 to the related expense for the Neighborhood Stabilization Program. Executive Summary On May 21, 2009, the City Council/Agency Board approved the draft 2009-2010 NSP Action Plan and MOU between the City of Palm Desert and County of Riverside for NSP Funding. The application has since been approved and funding is now available to the City. Approval of the resolutions and documents will allow staff to proceed with the program in order to provide assistance with the sale of foreclosed homes in the targeted areas to income qualified buyers. Background The Neighborhood Stabilization Program (NSP) is a special allocation of Community Development Block Grant (CDBG) funds provided through the U.S. Department of Housing and Urban Development (HUD) under the Housing and Recovery Act of 2008. On May 21, 2009, the City Council/Agency Board approved the joint agreement, which was necessary to meet the $1 million threshold to apply with the County of Riverside, City of Coachella, and City of Palm Springs to secure funding available to each area. The basic intent of the NSP is to mitigate the impacts of increasing foreclosures and falling home prices by purchasing foreclosed and abandoned homes and other residential properties at a discounted value, rehabilitating or redeveloping these properties if necessary, and reselling or reusing the properties. The Action Plan identified an enhanced First -Time Home Buyers (FTHB) Program as the primary focus of the use of funds. The Program offers a financing mechanism to eligible first- time home buyers to enable them to directly acquire foreclosed or abandoned single-family homes using NSP funds. The Program provides down -payment assistance to low- and moderate -income households that have not owned homes within a three-year period. The program is available for households with an annual income that is no greater than 120% of the area median income as published by HUD. The down -payment assistance requires a 15-year affordability period as a "silent second" loan, plus a rehabilitation component to enhance the physical appearance of the home and remove all health and safety concerns to satisfy the Housing Quality Standards (HQS). The total amount of assistance for each home will not exceed $75,000 (which includes both down payment assistance and rehab). The designated target areas identified as having the greatest need within Palm Desert include Palma Village, Palm Desert Country Club, and the North Sphere. It is the intent to not only target and stabilize these neighborhoods in the short term but to strategically incorporate modern, green -building, and energy -efficiency improvements in NSP activities thereby providing increased sustainability and attractiveness of housing and neighborhoods. NSP funds come with many requirements and due diligence on the part of the City. The program documents are required by HUD in order to ensure the requirements of the program are being met. The loan documents are necessary to place a lien on home to ensure that the affordability period is met. Lenders and their staff must be direct lenders demonstrating experience and a commitment to the Community Reinvestment Act and the NSP Program. G:\rda\Veronica Tapia\Word Files\Staff Reports\NSP Guidelines - Joint Consideration.doc Staff Report Approval of the Neighborhood Stabilization Program Guidelines and Documents March 11, 2010 Page 3 of 3 experience and a commitment to the Community Reinvestment Act and the NSP Program. Finally, all participants in the program are required to complete an eight -hour Home Buyer Education Seminar. Each of these requirements are detailed further in the attached program guidelines. The City Council and Agency contracts with a third party, Rancho Housing Alliance, to administer the field work for the Home Improvement Program. Given their familiarity with the requirements of our programs as well as CDBG, staff recommends that Rancho Housing Alliance also facilitate the rehabilitation component of the NSP Program if needed, on a case by case basis. Staff recommends the approval of Resolution Nos. and approving the Program Guidelines and Procedures in order to facilitate the NSP Program in designated target areas that are experiencing increased foreclosure levels. Fiscal Analysis This program is funded through the U.S. Department of Housing and Urban Development (HUD) under the Housing and Recovery Act of 2008; therefore, would have no impact on the General Fund. The re -sale of foreclosed homes and potential subsequent improvements could however result in an increase to property values and their resulting property tax. Submijted By: 1.1 eronica Tapia, Redevelojment Accountant Approval: Department Head: Janet Mo, re, Director of Housing Paul S. Gibson, Director of Finance Joh' :hlmuth, City Manager/Executive Director CITY • 1 CILXCTION APPR • D DENTED _ O RECEIVED LCI BY RDA OTHER MEET G DA AYES:4l 61' NOES: (W.- ABSENT: k ill a ABSTAIN: N(�11t� VERIFIED BY: I?i)&-1l }1 y�71 -j( curl G Efi Original on File with City CSkrk's Office VERIFIED BY 2D/c/» Z� . Original on file with City Clerk's Office G:\rdatVeronica Tapia\Word Files\Staff Reports \NSP Guidelines - Joint Consideration.doc RESOLUTION NO. 2010-12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT APPROVING THE NEIGHBORHOOD STABILIZATION PROGRAM FOR VERY LOW, LOW AND MODERATE INCOME HOUSEHOLDS NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. The City of Palm Desert (the "City"), in cooperation with the Palm Desert Redevelopment Agency, has established a the Neighborhood Stabilization Program (the "NSP Program") for very low, low and moderate income households in the City. Section 2. The NSP Program will provide financial assistance to qualified buyers in connection with the acquisition and rehabilitation of foreclosed homes within the designated target areas. Section 3. The City has a limited budget for the NSP Program. As a result, the NSP Program is based on a first -come -first -served basis. Section 4. The City Council wishes to approve the NSP Program Guidelines and Procedures for the Program outlined in Exhibit A attached hereto and incorporated herein by this reference. Section 5. The City Manager may take any action which he believes is necessary or desirable to implement this Resolution so long as such action is not inconsistent with the intent hereof. PASSED, APPROVED AND ADOPTED by the City Council of the City of Palm Desert, this day of , 2010 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Cindy Finerty, Mayor ATTEST: Rachelle D. Klassen, City Clerk RESOLUTION NO. 570 A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE NEIGHBORHOOD STABILIZATION PROGRAM FOR VERY LOW, LOW AND MODERATE INCOME HOUSEHOLDS NOW, THEREFORE, THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. The City of Palm Desert (the "City"), in cooperation with the Palm Desert Redevelopment Agency, has established the Neighborhood Stabilization Program (the "NSP Program") for very low, low and moderate income households in the City. Section 2. The NSP Program will provide financial assistance to qualified buyers in connection with the acquisition and rehabilitation of foreclosed homes within the designated target areas. Section 3. The City has a limited budget for the NSP Program. As a result, the NSP Program is based on a first -come -first -served basis. Section 4. The Agency Board wishes to approve the NSP Program Guidelines and Procedures for the Program outlined in Exhibit A attached hereto and incorporated herein by this reference. Section 5. The Executive Director may take any action which he believes is necessary or desirable to implement this Resolution so long as such action is not inconsistent with the intent hereof. PASSED, APPROVED AND ADOPTED by the Palm Desert Redevelopment Agency, this day of , 2010 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Cindy Finerty, Chairman ATTEST: Rachelle D. Klassen, Secretary Exhibit A CITY OF PALM DESERT NEIGHBORHOOD STABILIZATION PROGRAM February 5, 2010 Program Guidelines City of Palm Desert 760-346-0611 Mailing Address: 73-510 Fred Waring Drive Palm Desert, CA 92260 TABLE OF CONTENTS I) INTRODUCTION 4 a) Purpose 4 II) GENERAL ELIGIBILITY REQUIREMENTS 5 a) Eligible Properties 5 b) Characteristics of the Home Buyer 7 c) Determination of Adjusted Gross Income 8 d) Assets 8 e) Other Requirements 8 III) GENERAL LOAN REQUIREMENTS 8 a) First Loan Requirements 8 b) NSP Loan Requirements 9 i) Affordability Period 9 ii) Home Buyer Education 9 iii) Types of Assistance 9 iv) Minimum and Maximum Assistance 10 v) Notifications 10 vi) Confidentiality 11 vii) Resales 11 viii) Subordination 11 ix) Refinancing 11 x) Title Insurance 11 xi) Property Maintenance Requirement 11 xii) Loss Payee 12 xiii) Auditing/Monitoring 12 xiv) Conflict of Interest 12 IV) PARTICIPATING LENDERS 12 a) Requirements 12 b) Selection Process 12 c) Brokers 13 d) Removal 13 e) Authorized Lender Staff 13 V) PROCESSING PROCEDURES 14 2 a) Pre -Qualification Phase 14 b) Application Phase 15 c) Reservation Phase 16 d) Request for Funding Phase 16 e) Closing Phase 17 f) Resubmission of Denied Applications 17 g) Changes in Information 18 VI) HOME REPAIR COMPONENT 18 a) Requirements 18 b) Application Submission 19 c) Property Repair Assessment 19 d) Bid Process 20 VII) CONSTRUCTION AND CHANGE ORDERS . 20 a) Construction Phase 20 b) Change Orders 20 VIII) PROJECT COMPLETION AND CONTRACTOR PAYMENT 21 APPENDICES 22 APPENDIX A 23 APPENDIX B 24 APPENDIX C 25 APPENDIX D 30 APPENDIX E 36 APPENDIX F 46 APPENDIX G 48 APPENDIX H 49 APPENDIX I 50 3 I) INTRODUCTION a) Purpose i. The City of Palm Desert is offering a Neighborhood Stabilization Program (NSP hereinafter called "Program"). The primary objective of the Neighborhood Stabilization Program is to stabilize neighborhoods affected by large number of foreclosed homes. The Program addresses the problem of abandoned and foreclosed homes in Targeted areas within City of Palm Desert, which will be available for purchase by first-time homebuyers of low and moderate income. The Program will be available to anyone who has not owned a home in the last three years, has an annual income that is not greater than 120% of the area median income as published by the U.S. Department of Housing and Urban Development (HUD), and is purchasing a vacant foreclosed home in the designated Target areas in the City of Palm Desert. The maximum household income limit is shown in the attached Appendix A. ii. This Program will provide purchase price assistance as a silent -second loan to low and moderate income first-time homebuyers in the amount of twenty percent (20%) of the purchase price of the home. The maximum amount of assistance is the gap financing limit such that the housing payment to income ratio is between the range of twenty-five percent (25%) and thirty-five percent (35%). The program will also provide Home Repair Assistance to all foreclosed homes within the program to stabilize the neighborhoods by incorporating energy -efficient improvements for long-term affordability and increased sustainability to housing and neighborhoods. Activities in the City of Palm Desert home repair component will include items such as curb appeal and landscaping after the close of escrow. However, all home repair items will be identified prior to closing. If repair assistance is utilized, the minimum amount of repair assistance shall be $1,500. The total combined amount of purchase price assistance and home repair assistance cannot exceed $75,000. The first loan must be a fully amortized, fixed rate, thirty-year mortgage and the City of Palm Desert Assistance will be secured by deed of trust recorded in subordinate position to the first mortgage. Closing cost assistance is not eligible under this Program. iii. All buyers participating in this Program shall agree to the terms and conditions of an Affordability Period. The Affordability Period provides that if the property is re -sold within fifteen (15) years, it will be offered or otherwise be made available for purchase by qualified low and moderate income families. If the property is no longer maintained as the principal residence of the buyer or is sold prior to the end of the Affordability Period, and the homebuyer is not eligible for this Program, all NSP funds invested in the property must be repaid. Properties that remain affordable to program participants throughout the Affordability Period will have the City of Palm Desert's investment converted to a grant. This program is available to homes being purchased within the Target Areas Map listed in Appendix B. iv. All foreclosed homes participating in this program must meet Current Market Appraised Value. The Current Market Appraised Value means the value of a foreclosed upon home that is established through an appraisal made in conformity with appraisal requirements of the Uniform Relocation Assistance Real Property Acquisition Policies Act of 1970 (URA) at 49 CFR 24.103 and completed within sixty (60) days prior to a final offer made for the property by individual homebuyer. Any purchase of a foreclosed home under this Program shall be at a discount from the current market appraised value, taking into account its current condition, and such discount shall ensure that homebuyers are paying below -market value for the home. Properties must be purchased at a minimum discount rate of one percent (1 %) below the current market appraised value. 4 II) GENERAL ELIGIBILITY REQUIREMENTS a) Eligible Properties i) Location. The Program will be offered in Targeted areas which are listed below: • Palma Village • North Sphere • Palm Desert Country Club Please check the Target Areas Map listed in Appendix B and the City of Palm Desert website. ii) Program Price Limits. To be eligible for the Program, the maximum property value shall not exceed the actual 95 percent of the area median sales price published and updated regularly by U.S. Department of Housing and Urban Development. The maximum purchase price limit is shown in the attached Appendix A. iii) Price Limits. The purchase price of the home must be at least one percent (1 %) below the Current Market Appraised Value of the home. Appraisal must be completed within sixty (60) days of the final purchase offer. The Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) and its implementing regulations at 49 CFR Part 24 set forth the minimum requirements for real property acquisitions appraisals for federally -assisted programs. The appraisal will be done through an independent fee contract appraiser hired by City of Palm Desert. The appraisal must meet the requirements of the URA at 49 CFR 24.103 for each property that submits an application for NSP funds. The contract fee appraiser contracted by City of Palm Desert must be State licensed or certified in accordance with title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) (12 U.S.C. 3331 et seq.). The cost of the appraisal will be part of the purchase price assistance if the application is successful. All purchase price at the time of application of NSP funds is received will be considered as initial offer. City of Palm Desert will determine the appraisal value of the house. The final purchase offer must be at least 1 % below the appraised value. City of Palm Desert will strive to obtain the appraisal value within five (5) days of the application received. If the initial sales price meets the 1% discount, seller and buyer is required to submit final NSP-6 form. However, if the purchase price falls short of the 1 % discount, the homebuyer will be required to negotiate a minimum of 1 % discount. If the seller and homebuyer could not reach an amicable agreement for the purchase price of the property meeting the 1 % discount, the application will be denied and the cost of the appraisal will be borne by City of Palm Desert. The final offer meeting the 1 % discount must be received by City of Palm Desert within thirty days of the completed City of Palm Desert appraisal or the application will be denied. iv) Type of Home. The Program may be used to purchase any foreclosed single family home, condominium /town home that meets all of the following minimum criteria: a. The home is permanently fixed to a permanent foundation; and b. The home is currently vacant and no tenant lived in the property at the time of foreclosure; or the home is currently vacant and any tenant was given 90 day's notice prior to being asked to vacate. For properties that were tenant occupied at time of foreclosure, the selling bank must supply documentation that the tenant was given 90 days written notice to vacate as well as a copy of the tenant's lease. Under no circumstances may a lease be terminated for a Section 8 tenant on transactions utilizing the NSP program. c. The home must be built after 1978 and not be listed on, or eligible for listing on the National Register of Historic Places. 5 d. In -ground Pools and Spas. Single -Family home with in -ground pools or spas are eligible for the Program. v) Home Condition. A home shall not be eligible for purchase under this program unless it is in standard condition and suitable for occupancy upon purchase. Under no circumstances shall a home be modified or altered to qualify a home that is otherwise an ineligible property after submittal of an application to City of Paim Desert. The following procedures will be used to determine if the home meets these requirements: 1) Foreclosed Homes A) All homebuyers of existing homes must obtain a home inspection report prepared according to industry standards. Any deficient items affecting habitability of the home noted in the home inspection and the purchase agreement shall be corrected at the close of escrow by seller's contractor. If the home inspection report indicates that the home has serious deficiencies, the City of Palm Desert may inspect the home to determine if it meets the Housing Quality Standard (HQS). The Housing Quality Standard (HQS) is a basic standard of livability based on health and safety standards. The HQS Checklist is attached in Appendix E. B) Inspection Process. Home Inspections are to be performed by qualified Home Inspection Professionals in accordance with industry standards. Home Inspectors who are members of the California Real Estate Inspectors Association, the American Society of Home Inspectors or the International Conference of Building Officials will be presumed to be qualified. Typically, Home Inspections are 7 to 15 pages in length, and utilize a checklist with explanations of any items that need work or are not in standard condition. It is strongly advised that the home buyer accompany the Home Inspector during the inspection. The Home Inspector will provide guidance on maintenance requirements, and will explain any items that need work. No Termite inspection will be required unless there are signs of active infestation or the appraiser notes the requirement for one on the appraisal report. All termite clearance must be done by the Seller prior to close of escrow. C) Repair Requirements. City of Palm Desert will review the Home Inspection Report and will prepare a list of required repairs to be completed by seller. A copy of the Home Inspection Report and list of required repairs is sent to the buyers. The buyer also needs to ensure that the home meets their requirements and that the repairs have been completed to their satisfaction. City of Palm Desert will review the Inspection Report for safety, habitability concerns, and cosmetic items. Certain repairs that will not affect the homebuyer from moving in after the close of escrow and deem beyond the scope of the lender habitability standard can be included as part of the additional repair assistance that can be provided by City of Paim Desert. All repair that affects the move -in and habitability standard must be corrected and completed prior to close of escrow as a condition of NSP purchase price assistance requirements. D) Lender Certification. Lender will certify that the required repairs have been completed prior to the close of escrow. Lender will provide a letter from a licensed contractor or inspector to ascertain that the work has been done. E) In addition to the purchase price assistance, City of Palm Desert also provides repair assistance to homebuyers to include home improvements to increase the energy efficiency or conservation of the home for Tong -term affordability and increased sustainability and attractiveness of housing and neighborhoods. This repair will be limited to the items identified by City of Paim Desert staff prior to close of escrow and completed through City of Palm Desert approved contractors after the close of escrow. The total combined assistance including purchase price assistance cannot exceed $75,000. The repair portion of the loan will be recorded as a separate deed of trust and will have the same 6 affordability and term as the purchase price assistance. Any repair works that are identified that would prevent the homebuyer from moving in after the close of escrow will not be eligible. vi) Occupancy Standard. One of the purposes of the Program is to address persistent conditions of housing overcrowding in the City. Therefore, City of Palm Desert is requiring that all homebuyers must meet the occupancy standard as defined in the Housing Quality Act under 982.401 that states "The dwelling unit must have at least one bedroom or living / sleeping room for each two persons." Children of opposite sex, other than very young children, may not be required to occupy the same bedroom or living / sleeping room. b) Characteristics of the Home Buyer i. Income Limits. In order to be eligible for this program, the homebuyers' annual income shall not exceed 120% of the area median income, as determined by HUD, adjusted for family size. In addition, family assets, excluding personal property, funds in restricted retirement accounts, and funds to be used for the home purchase, shall not exceed a 12 month reserve based on the maximum income for the family size. The income and assets of all persons age 18 and older who will reside in the home must be included in the calculation to determine income eligibility. The current income limits are shown in Appendix A. See item c below for instructions on calculating annual income. ii. Co -owners. Co -owners are only permitted if they will occupy the home as their principal residence and qualify as first time buyers. The income of all co -owners will be included in determining if the household qualifies as moderate income, as noted in 1 above, as well as appendices A and C. Cosigners are not permitted. iii. Minimum Buyer Investment. The buyer shall provide from their own funds a minimum investment of the amount required by the first mortgage. The buyers' contribution may be used toward the down payment or closing costs, at their discretion and in accordance with the requirements of the first mortgage. iv. Prior Home Ownership Criteria. In order to qualify as a first-time homebuyer, the homebuyer cannot have owned a home for the previous three years from the date of application to the Program. The homebuyer must sign a sworn application attesting that they have not owned a home, in addition the last three years tax returns will be reviewed to ascertain that no mortgage interest or real estate tax deductions have been claimed. First —Time Homebuver means an individual or individuals or an individual and his or her spouse who have not owned a home during the three-year period before the purchase of a home with subsidy assistance, except that the following individual or individuals may not be excluded from consideration as a First -Time Homebuyer under this definition: 1) a displaced homemaker who, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse. A displaced homemaker is an adult who has not, within the preceding two (2) years, worked on a full-time basis as a member of the labor force for a consecutive twelve-month period and who has been unemployed or underemployed, experienced difficulty in obtaining or upgrading employment and worked primarily without remuneration to care for his or her home and family; 2) a single parent who, while married, owned a home with his or her spouse or resided in a home owned by the spouse. A single parent is an individual who is unmarried or legally separated from a spouse and has one or more minor children for whom the individual has custody or joint custody or is pregnant; and 3) an individual or individuals who owns or owned, as a principal residence during the three- year period before the purchase of a home with assistance, a dwelling unit whose structure is: 7 iii) not permanently affixed to a permanent foundation in accordance with local or state regulations; or iv) not in compliance with state, local, or model building codes and cannot be brought into compliance with such codes for less than the cost of constructing a permanent structure. v. For the purposes of determining home ownership, a dwelling unit that was not permanently affixed to a permanent foundation (i.e. a mobile home), or a dwelling unit that is substandard and cannot be brought into standard condition for less than the cost of constructing a permanent structure, shall be not included in the three year requirement. vi. Buyer's Citizenship. All applicants must be either a US Citizen or a qualified alien as per Section 431 of Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). c) Determination of Adjusted Gross Income i. The Program is limited to buyers with an annual income that is one -hundred twenty percent (120%) or less of the area median income, as determined by HUD. Annual income is the gross amount of income anticipated to be received by all adults in a family during the twelve months following the effective date of the determination. Anticipated income is generally determined by annualizing current income for the next twelve months. The annual income for purposes of qualifying for the Program includes all income and may be higher or lower than the income amount utilized by the lender to underwrite the first mortgage. ii. Annual income includes anticipated income from assets. Please see below for an explanation of how to determine income from assets. The current passbook rate established by HUD is 3.50%. iii. For a detailed explanation of how to calculate various types of income, please see Appendix C. d) Assets In addition to income, family assets (excluding personal property, funds in restricted retirement accounts, and funds to be used for the home purchase) shall not exceed a 12 month reserve based on the maximum income for the family size. See Appendix A for maximum income limit. See Appendix C for a detailed explanation of the items to be included and excluded from assets. e) Other Requirements Program cannot be combined with City of Palm Desert's Home Improvement Program, Energy Independence Program, or FTHB Program. However, this Program can be combined with Mortgage Credit Certificate Program. III) GENERAL LOAN REQUIREMENTS The following minimum requirements shall apply to all purchases receiving assistance through the Program. a) First Loan Requirements i) The homebuyer shall apply for a first mortgage from a participating lender and provide a minimum investment of the amount required by the applicable federal state. The first mortgage must be a fully amortized, fixed rate, thirty-year term mortgage. The homebuyer must accept the highest first mortgage amount (principal amount at going interest rate) for which they can qualify. Lenders should provide buyers with the best possible interest rate available at the time their loan rate is locked. In general, the participating lender shall be responsible for determining the 8 buyers' creditworthiness and qualifications for obtaining the first mortgage. However, the following minimum criteria must be satisfied: ii) The buyer shall provide a minimum investment of the amount required by the first mortgage. This minimum investment may be applied to the down payment and/or closing costs, at the discretion of the homebuyer and in accordance with the requirements of the first mortgage. The lender shall verify that the buyer has sufficient funds to meet this requirement. In cases where a homebuyer has saved cash at home, the lender shall document these savings in accordance with standard underwriting practices. iii) The first loan amount shall be the maximum amount for which the homebuyer can qualify, based on their income, debts, and current interest rates. The total monthly housing payment (principal, interest, taxes, insurance, private mortgage insurance, flood insurance and home owner association, if applicable) shall not be less than 25% or more than 35% of the homebuyer's gross monthly income for a 30-year fully amortized fixed rate loan. iv) The participating lender may only assess those usual and customary fees and charges that would be assessed for a buyer with the same type of first mortgage who is not participating in the Program. No additional lender fees may be charged for processing of a loan in conjunction with this Program. b) NSP Loan Requirements i) Affordability Period In exchange for receiving funds to assist in the purchase of a home, the homebuyer must sign NSP loan documents, including a Promissory Note, Disclosure Notice, Request for Notice, and Subordinate Deed of Trust, which will provide that, upon sale, transfer, lease or any other disposition, including refinancing or incurring of additional debt secured by the home, within 15 years of purchase, the principal amount of the NSP Assistance is repaid to the City of Palm Desert. After the Affordability Period, the NSP Assistance is converted to a grant and these obligations are forgiven. If the homebuyer is also getting a repair assistance identified prior to close of escrow, then that assistance will be in a form of loan with the same terms and conditions as the purchase price assistance loan. ii) Home Buyer Education In order to be eligible for participation in the Program, prospective homebuyers must complete the minimum requirements of 8 hour education in a Community Home Buyer's Seminar, as approved by the City of Palm Desert. Buyers should complete this requirement as soon as possible in the purchase process. Participating lenders may contact City of Palm Desert for the names of agencies offering approved Community Home Buyer's Seminars. Types of Assistance The NSP financial assistance can be provided as purchase price assistance and repair assistance associated with home purchase. The NSP Assistance cannot be used to pay the homebuyer's prepaid costs (also known as recurring costs). Buyer must make a minimum contribution necessary to comply with any applicable federal or state requirements. In addition, the buyer needs to satisfy the requirements of the first mortgage, which may require the homebuyer to pay a minimum down payment and certain other costs. 1) Home Repair Assistance. In general, NSP funds shall be used primarily for purchase price assistance. Home Repair Assistance is available to all eligible properties who qualify for NSP. The maximum amount of assistance for home repair is the remaining balance of $75,000 once the 9 purchase price assistance has been identified for the property. For example: NSP purchase price assistance is $40,000; the remaining balance is $35,000 of which the Home Repair Assistance cannot exceed. The maximum amount of assistance for each property is $75,000. 2) The Home Repair Assistance is contributed in the form of a silent subordinate loan that will sit behind the NSP purchase price assistance. The loan will stay as a lien on the home for fifteen (15) years which is identified as the Affordability Period. If the property is no longer maintained as the principal residence of the buyer or is sold prior to the end of the fifteen (15) year period (Affordability Period), and the homebuyer is not eligible for this Program, all NSP funds invested in the property must be repaid. Properties that remain the principal residence of the buyer throughout the Affordability Period will have the City of Palm Desert 's investment converted to a grant. 3) Preliminary Repair Assessment — City of Palm Desert staff or designee will make an on -site visit to the home to do a preliminary assessment of the house within three (3) working days of the receipt of NSP funding application. After confirmation of the purchase price discount and tentative approval of the purchase price assistance and receipt of the inspection report, City of Palm Desert staff or designee will prepare a scope of work in consultation and approval with the homebuyer. Based on the approved scope, City of Palm Desert will solicit bids on behalf of homebuyer. A pre -bid walk through date where contractors will be invited to review the scope of work will be set up in coordination with the seller. After closing of the bid and review of bids received, City of Palm Desert staff or designee will select the contractor. City of Palm Desert will determine maximum repair assistance to be provided to the homebuyer. At no point in time the $75,000 threshold including the purchase price assistance can be exceeded. City of Palm Desert staff has the discretion to lower the threshold to allow for any contingency and complexity of the repair. All the repair work will be started after the close of escrow and completed within 30 days from the close of escrow. iv) Minimum and Maximum Assistance The minimum amount of assistance that may be provided is $1,500 per home purchase. The maximum amount of assistance is the gap financing limit such that the housing payment to income ratio is between the range of twenty-five percent (25%) and thirty-five percent (35%) with an absolute maximum amount of $75,000 for purchase price assistance (20% of the purchase price) and home repair assistance. v) Notifications The following notifications are required for participation in this program: 1) Notice to Sellers (NSP-3). This notice shall be provided to the Sellers at the time a purchase offer is initiated or at the earliest possible date following acceptance of the purchase offer. The Seller shall complete and sign this notice. Compliance with this requirement shall be demonstrated by submission of a fully executed Form NSP-3 at the time the Lender submits an application. This Notice will be used to determine if the home is eligible for purchase under the NSP Program (Home must be vacant for at least 90-days). 2) Disclosure Statement. This notice discloses to the homebuyers the terms of the NSP Assistance. This form is to be signed and notarized at the settlement appointment and submitted to City of Palm Desert with the closing package. 3) Voluntary Acquisition of Foreclosed Property (NSP-6). This notice shall be provided to the Sellers at the time the purchase and sale agreement is initiated. The initial form will be used at the time the application is submitted indicating the initial offer. Once the Appraisal has been determined by City of Palm Desert, a final form will have to be signed by both seller and homebuyer indicating the final agreed purchase price. This notice will identify the 10 purchase price City of Palm Desert is willing to accept on behalf of the homebuyer for the Program. The final form must be returned to City of Palm Desert with accompanying purchase and sale agreement with the final sales price within sixty days of the appraisal date. vi) Confidentiality NSP Applications are subject to confidentiality requirements and will only be discussed with representatives of the buyer including their lender, real estate agent, escrow agent, and home inspector. NSP applications will not be discussed with seller representatives or other outside interests. Items containing confidential information (i.e. tax returns, pay stubs, employment verification) should not be faxed. vii) Resales Sale, transfer and/or conveyance of the property during the Affordability Period shall trigger repayment of the NSP Assistance, as detailed in the loan documents. viii) Subordination The NSP Assistance shall be recorded in second position to the first mortgage on the property. The NSP Assistance shall remain in second position and will not be subordinated to any additional debt. Notwithstanding the above, the NSP assistance will subordinate to CalHFA financing or any other loans provided by the City of Palm Desert. In those instances, the NSP shall be recorded in the third position. The Home Repair Assistance is contributed in the form of a silent subordinate loan behind the NSP purchase price assistance. The loan will stay as a lien on the home for fifteen (15) years which is identified as the Affordability Period. City of Palm Desert will not agree to subordinate the NSP Assistance to any other indebtedness with the following exceptions: (1) the first mortgage obtained concurrently with the NSP Assistance to purchase the home; and (2) limited refinancing as detailed in the following section. ix) Refinancing Subordination for refinancing is only permitted with the prior authorization of the City of Palm Desert and for purposes of reducing the carrying costs of the homebuyer. The City of Palm Desert shall not authorize refinancing for any of the following purposes: (1) to remove equity from the property; (2) to consolidate debts; (3) to consolidate the first mortgage with any junior liens or obligations; and/or (4) to increase the principal indebtedness amount of the first mortgage (except for the amount of the reasonable and usual costs associated with the refinancing). x) Title Insurance The lender will order the title insurance for the property, listing the City of Palm Desert as "additional insured". xi) Property Maintenance Requirement (1) Maintenance. The homebuyer shall agree to maintain the home in standard condition for the term of the NSP assistance. To this end, the homebuyer shall be required to obtain a one-year home warranty as part of the home purchase. The costs of the home warranty are eligible for financial assistance under the NSP program. For newly constructed homes, the builder shall warranty the home for a minimum of one year from date of purchase. In the absence of a written warranty from the builder, the buyer shall obtain a one year home warranty from an independent company. 11 (2) Hazard Insurance. The homebuyer shall obtain and maintain, for the term of the City's assistance, a hazard insurance policy for the property, listing the City of Palm Desert as "additional insured." The hazard insurance policy shall be of a sufficient amount to cover the City's interest in the home. Full insurance for the amount of the first and second loans, or a Guaranteed Replacement Cost policy, is acceptable. (3) Flood Insurance. Properties located in a flood hazard zone shall obtain flood insurance listing the City of Palm Desert as "additional insured". xii) Loss Payee 1) The City shall be listed on the hazard insurance, flood insurance, and title insurance as the loss payee in the following manner: A. City of Palm Desert, its successors and assignees B. 73-510 Fred Waring Drive, Palm Desert, CA 92260, Attn: Housing xiii) Auditing/Monitoring 1. All participating lenders shall maintain complete files for each Program participant for at least seven (7) years. The City will maintain records for each Program participant for the term of Affordability, plus three (3) years. 2. The City may conduct random audits of lender files to ascertain compliance with the Program. This may include review of participant files, and review of lender information to document compliance with all lender requirements. In addition to participant files, participating lenders shall maintain records of affirmative marketing efforts, Community Reinvestment Act (CRA) compliance, bi-lingual (Spanish speaking) staffing, and efforts to provide assistance with minimal inconvenience to the homebuyer. 3. The City may also conduct surveys of program participants to obtain their input on the program, the processing of their application, and their level of satisfaction with the results. The results of any such surveys will be shared with the Participating Lenders. Complaints about particular individuals or lenders will be investigated and, if necessary, corrective action may be taken. xiv) Conflict of Interest 1. NSP assistance shall not be provided to any person or the immediate family of any person who is in a decision -making position relative to any aspect of the NSP Program or the associated first mortgage. This includes, but is not limited to, employees and immediate family members of employees of the City of Palm Desert and participating lenders. IV) PARTICIPATING LENDERS a) Requirements i) The City will only accept NSP Applications from Participating Lenders who have been pre -approved through the Riverside County Economic Development Agency. b) Selection Process 1) The City shall establish minimum criteria for the selection of participating lenders for the NSP Program. All selected lenders shall enter into a lender participation agreement with the City and shall agree to abide by the City's procedures for all homebuyers participating in the NSP Program. The minimum lender criteria for the Neighborhood Stabilization Program are as follows: 12 1) Participating lenders be direct lenders with the ability to originate and service loans. Loan brokers are not eligible for approval as a participating lender. 2) Participating lenders are encouraged to provide staff personnel with the ability to communicate in Spanish. 3) Participating lenders shall provide application assistance with minimal inconvenience to the homebuyer. Application assistance shall be provided at a time and place convenient to the homebuyer. This may include evenings and weekends and travel throughout the City. 4) Participating lenders shall demonstrate a commitment to Community Reinvestment Act (CRA) and affirmative marketing requirements, and outreach to minority and low income communities. Lenders shall agree to proactively market the Program to low income and minority people. All advertising to the general public shall be complimented with advertising targeted to these groups, including, but not limited to, minority newspaper, television, and radio advertisements. The City will monitor all marketing efforts and will require periodic updates on the marketing efforts of participating lenders. 5) Participating lenders shall have demonstrable experience in first time homebuyer program. 6) The selection of participating lenders shall be at the sole discretion of the City Palm Desert. The City reserves the right to limit the number of approved participating lenders. c) Brokers i) Mortgage Brokers are not eligible for designation as participating lenders in the Program. Participating Lenders may enter into arrangements with brokers to process NSP Applications. However, the Participating Lender shall remain responsible for all submittals to the City and for verifying that all aspects of the purchase meet the Program requirements. d) Removal i) City of Palm Desert may suspend or remove participating lenders from the Neighborhood Stabilization Program in accordance with the provisions of the NSP Program Guidelines. Lenders may be suspended or removed from the Program based on, but not limited to, the following violations: 1) Failure to follow the Program Guidelines, as described in this Manual and periodic Lender Bulletins. 2) Failure to submit all outstanding documentation within thirty (30) days of loan dosing. 3) Withholding information that would result in applicant or property disqualification from the program. 4) Negligent or fraudulent misstatements or actions in regard to the Program. 5) Failure to conduct reasonable verification of applicant qualifications for the Program. 6) Failure to maintain complete applicant records for minimum of (7) years after loan closing. e) Authorized Lender Staff i) Staff members of participating lenders that have completed the annual NSP Lender Training Session are authorized to sign all NSP forms and to make submissions to the Program. Lenders are required to provide proof of the Certificate indicating that they have completed the necessary training to participate in the Program from the Lender Training provided by the Riverside County Economic Development Agency. 13 ii) Staff that has not completed the training may only participate in the Program under the supervision of a staff member who has attended the lender training. Staff that has not completed the training is not authorized to sign the form or to make submissions to the Program. V) PROCESSING PROCEDURES Completed NSP Applications will be processed by City of Palm Desert on a first -come, first -served basis, in chronological order as received from participating lenders. City of Palm Desert will maintain a running balance of funds available, and once funds are exhausted, City of Palm Desert will stop accepting applications and notify the participating lenders that the Program is out of funds. It is the participating lender's responsibility to verify the availability of funds prior to loan application submitted. The following procedures are to be followed for NSP applications. The Neighborhood Stabilization Program (NSP) will not accept any forms with whiteout. This includes the required City of Palm Desert NSP forms and all subsequent items that are requested to fund the NSP loan. If any changes need to be made to forms please lineout and initial the change. Please note any document submitted during the Reservation Phase that is incomplete or contains whiteout will cause the file to be returned back to the lender without being processed. This procedure is in place to maintain the validity of all documents submitted to the City of Palm Desert and allow other homebuyers with complete paperwork to move into the Reservation Phase. a) Pre -Qualification Phase i) Potential buyer contacts participating lender. ii) Participating lender screens the buyer for program eligibility (income & first-time buyer status). iii) Participating lender takes a loan application and pre -qualifies buyer for the maximum first loan that they can afford given their income, debts and prevailing interest rates. First loan must be a thirty-year, fully amortized, fixed rate loan. iv) Lender provides buyer with a pre -qualification letter that states: 1) the maximum home price that the buyer can afford, based on the maximum first loan amount plus the maximum NSP Program assistance (a maximum gap finance limit such that the housing payment to income ratio is between the range of twenty-five percent (25%) and thirty-five percent (35%) with an absolute maximum amount of $75,000 for both purchase price assistance {20% of purchase price} and home repair assistance; 2) the locations where the buyer may purchase; 3) the home must be a foreclosed or a REO property built after 1978; 4) that the buyer shall provide a Notice to the Sellers (Form NSP-3) by attaching this form to the Purchase Offer as an Addendum and request that the Seller(s) sign this form when they accept the purchase offer or at the earliest possible date following acceptance of the purchase offer; and 5) Any conditions imposed by the lender. 6) Buyer attends a City of Palm Desert -approved 8 hour Home Buyer Education seminar and receives a Certificate of Completion. The buyer is encouraged to complete this requirement as soon as possible in the home purchase process. A copy of the Certificate of Completion certifying that the buyer has completed this requirement is needed prior to the Request for Funding Phase. 14 7) Buyer locates a home and enters into a purchase agreement. Buyer provides Notice to Sellers (NSP-3) as an addendum to the purchase contract for the Seller to sign at acceptance of purchase offer. b) Application Phase i) Lender submits a request for reservation of funds to the City of Palm Desert. Incomplete applications will not be accepted. All items must be included in initial submittal - faxes will not be accepted for the Reservation Phase. Reservations that are missing any required items will not be processed and will be returned to the Lender. Request must include all of the following: 1) Neighborhood Stabilization Program Application Form (Form NSP-1). 2) Signed Certification of Homebuyer Form (Form NSP-2). 3) Copy of the signed Sales Agreement, or equivalent, including all counter offers and the Real Estate Transfer Disclosure Statement. 4) Notice to Sellers (Form NSP-3) fully signed and dated. 5) Copy of the Escrow Instructions. 6) Copy of the complete Preliminary Report of Title. 7) Completed NSP Program Financing Worksheet (Form NSP-4) and Signed Good Faith Estimate of Closing Costs. 8) Copy of fully completed and signed Loan Application. 9) Copy of last three years federal tax returns or Income Tax Affidavit (Form NSP-5 if applicable). PLEASE NOTE: The applicant must sign the tax returns stating that "This is a true and exact copy of the returns submitted to the IRS." 10) Copy of the Standard Flood Hazard Determination (FEMA Form 81-93). 11) For existing homes, a copy of the home inspection. 12) Initial Signed Voluntary Acquisition of Foreclosed Property (Form NSP-6) and Final Signed Voluntary Acquisition of Foreclosed Property with the amended sales agreement showing the discount requirements have been met. 13) Attached map showing location of property and eligibility of the property in the Target Area. 14) Copy of Certificate of Occupancy (for new homes only) and HCD Form 433(a) (for manufactured homes only). 15) Proof that property has been vacant for 90 days. NOTE: The Home Inspection Report should be submitted to City of Palm Desert as soon as it is available. Based on an evaluation of this Report, City of Palm Desert may require repairs to be completed prior to close of escrow. City of Palm Desert will mail a copy of this Report to the homebuyers, for their information. ii) An independent contract fee appraiser contracted by City of Palm Desert will conduct the required appraisal meeting the requirements of the URA at 49 CFR 24.103 for each property that submits an application for NSP funds. Upon preliminary review that the property and homebuyer's income meet the requirement of the Program, City of Palm Desert will order an appraisal. The appraisal will be completed within seven (7) working days of receipt of application. It is imperative that access to the house is available and can be 15 established. Delay in getting access will delay the completion of the appraisal work. The final purchase offer must be at least one percent (1 %) below the appraised value established by the appraisal obtained through City of Palm Desert. City of Palm Desert will provide final NSP Voluntary Acquisition of Foreclosed Property Form NSP-6 which will identify the purchase price City of Palm Desert is willing to accept on behalf of the homebuyer for the NSP program. The Seller's final offer must be at or below the established amount identified on this form. If sellers of the foreclosed homes do not agree to the required purchase price of one percent (1 %) or below the appraised value then the application will be denied. iii) Agency will review the Application and within ten (10) working days will issue an Acceptance letter or request that the final offer meeting the 1 % discount be obtained within 30 days of the appraisal report or reject the application. Application requests will be processed on a first come, first served basis. The application may be rejected for the following reasons: 1) Buyer or home does not meet the Program Requirements. 2) Application package is incomplete; or 3) City of Palm Desert does not have sufficient funds to provide the requested amount of assistance. c) Reservation Phase i) A written Funding Reservation will be issued within ten (10) working days of receipt of the Reservation Request. The Funding Reservation will be conditioned upon certain items, as follows: 1) Transaction must be completed within forty-five (45) days of the Funding Reservation. Requests for extensions of time shall be submitted in writing at least ten working days prior to expiration of the Funding Reservation and shall include the reason for the extension. City of Palm Desert will evaluate the request for reasonableness and will approve or deny the extension in writing. 2) Any other items needed to verify applicant or property eligibility for the Program. 3) Copy of a new signed sales agreement (if applicable) 4) Any outstanding items noted in the written Application Acceptance letter issued by City of Palm Desert. ii) The City of Palm Desert will establish the scope of work for all home repair items required for the home such as curb appeal and landscaping. The buyer will be required to accompany City of Palm Desert staff during the inspection of the home and agree to all items and their costs identified as needing repair. iii) Lender processes first loan and establishes a closing date. d) Request for Funding Phase i) Unless specifically requested by City of Palm Desert, faxes will not be accepted for the Request for Funding Phase documents. Upon final loan approval, at least fifteen (15) working days prior to scheduled funding, Lender submits the following: 1) A true and correct copy of the FNMA Summary Form 1008 or a true and correct copy of the FHA Mortgage Credit Analysis Worksheet, Form 92900-WS, as appropriate. 2) Copy of Certificate indicating buyer's completion of the Home Buyer Education class. 3) Any outstanding items noted in the written Funding Reservation letter issued by City of Palm Desert. 4) Written request from escrow officer for NSP funds to be deposited into escrow, including instructions for wire transfer, if applicable. Wire instructions are to be submitted legible with a minimum 10 point font 16 size and include the bank name, bank address, ABA number, account number, escrow/title number, and client vesting. City of Palm Desert requires a minimum of ten (10) working days, excluding holidays, to process a claim and wire funds to escrow. This time period begins when the Confirmation letter is issued. ii) The City of Palm Desert reviews these items within five (5) working days. If all items have been satisfied, City of Palm Desert will issue a confirmation letter to the Lender and Escrow Company approving the Agency Assistance and designating the date that funds will be deposited into escrow. The Agency will also prepare the loan documents and forward them to escrow to be signed by the homebuyer(s). e) Closing Phase i) Buyer(s) attend settlement appointment and sign all loan closing documents including all legal documents prepared by City of Palm Desert. City of Palm Desert documents to be signed at closing are as follows: 1) Neighborhood Stabilization Assistance Program Disclosure Statement. 2) Promissory Note. 3) Subordinate Deed of Trust. 4) Itemization of Amount Financed 5) Escrow Officer Checklist (to be initialed and signed by the Escrow Officer) ii) Escrow submits the signed Neighborhood Stabilization Assistance Program Disclosure Statement (Form NSP-7), Promissory Note, Buyer's Affidavit, Escrow Officer Checklist and proof of property insurance to City of Palm Desert as soon as they are executed. iii) Escrow submits a copy of the Estimated HUD-1 Statement with signed loan documents. iv) City of Palm Desert reviews Estimated HUD-1 Statement and executed loan documents and issues funding approval via fax to Escrow. v) Loans are funded and home purchase closes. vi) Lender notifies City of Palm Desert of the closing and Escrow submits a copy of the Final HUD-1 Statement vii) Title Company provides City of Palm Desert with a copy of the Title Insurance Policy insuring the City's interest in the property. viii)FAILURE TO SUBMIT CLOSING DOCUMENTS WITHIN THIRTY (30) DAYS OF CLOSING MAY RESULT IN SUSPENSION OF LENDER FROM THE NSP PROGRAM. CLOSING DOCUMENTS INCLUDE, THE PROOF OF PROPERTY INSURANCE, FINAL HUD-1, TITLE POLICY, AND THE CITY OF PALM DESERT LOAN DOCS. CITY OF PALM DESERT WILL NOT ACCEPT FUNDING RESERVATION REQUESTS FROM SUSPENDED LENDERS. ix) Escrow/Title Company closes out the NSP File and records a Request for Notice. f) Resubmission of Denied Applications i) City of Palm Desert will only process resubmissions of denied applications if it can be demonstrated that the reasons for denial were based on inaccurate or missing information. Back-up documentation to support all such resubmissions shall be submitted, and the Application will be processed as indicated above. For example, if an application was denied for not being a first-time home buyer, the resubmission shall include evidence that the buyer did not have any ownership interest in their principal residence. Examples of such 17 evidence may include, but are not limited to, a chain of title, copies of deeds, copies of divorce papers or other legal documents showing ownership of property. g) Changes in Information i) In some cases there may be changes in information between the date the Reservation Request is submitted and the date of the closing. All such changes shall be handled in the following manner: 1) Change in Home Being Purchased. No changes are allowed. The application will be rejected and City of Palm Desert must be notified immediately. Failure to notify City of Palm Desert within three days may result in suspension of Lender to participate in this Program. Homebuyer may resubmit up to two additional chances under this Program in one year if Buyer and Seller cannot agree on the final purchase price discount of 1%. 2) Changes in Income. The initial income determination is valid for six months. A re -verification of income will be required if more than six months elapse from date of income determination. Any changes in income that increase the household income must be re -submitted for an eligibility determination. This includes the addition of additional household members age 18 and older, or increases in the income of any household member. Changes in income shall be immediately reported by submitting a new, fully signed, Certification of Homebuyer (Form NSP-2). 3) Marriage and/or the Addition of New Adult Household Members. The addition of any new adults to the household shall be immediately reported by submitting a new, fully signed, Certification of Homebuyer (Form NSP-2), as well as the last three years tax returns for the new family members. All new adult household members must meet the first time home buyer requirement, and the income of all adult household members shall be included in determining income eligibility. 4) Interest. If the homebuyers acquire an ownership interest in their principal residence at any time prior to closing, the household no longer meets the first time buyer requirement and is ineligible for the Program. The Application and Reservation are automatically denied if this should occur. 5) Increase in Price. No changes are allowed. The application will be rejected and City of Palm Desert must be notified immediately. Failure to notify City of Palm Desert within three days may result in suspension of Lender to participate in this Program. 6) Decrease in Price. If the price of the home decreases, the amount of NSP assistance will decrease. The City of Palm Desert shall be notified no later than the Request for Funding. The Lender shall note the decrease on the Request for Funding Cover Sheet and shall include the new price in the Lender's Certification. VI) HOME REPAIR COMPONENT a) Requirements i) Minimum eligibility requirements include: 1) The Home Repair Assistance is in conjunction with the purchase price assistance received by the home buyer in purchasing the foreclosed home. No Home Repair Assistance will be provided as a stand alone activity. All scope of work is pre -identified and agreed on by the homebuyer prior to close of escrow. 2) All repair work will not be initiated until after close of escrow is complete. 3) City of Palm Desert staff or designee will make certain allowances to include items not identified prior to close of escrow but essential and incidental to the repair work. 18 3) The homebuyer will be required to sign a Deed of Trust and Note covering the portion of the repair assistance identified. All the terms and conditions will be the same as the purchase price assistance provided by City of Palm Desert under this Program. 4) All homebuyers shall indemnify and hold the City of Palm Desert and their elected officials, directors, officers, agents, employees and independent contractors free and harmless from any liability whatsoever, based or asserted upon any act or omission of the homebuyers and guarantors, its officers, agents, employees, contractors, subcontractors and independent contractors for property damage, bodily injury, or death or any other element of damage of any kind or nature, relating to or in any way connected with or arising from its used and responsibilities in connection therewith of the property or the condition thereof, and all homebuyers and guarantors shall defend, at its expense, including attorney fees, the City of Palm Desert and their elected officials, officers, agents, employees, and independent contractors in any legal action based upon such alleged acts or omission. b) Application Submission i) Applications are accepted, reviewed, and awards made on a first -come, first -served basis. ii) In order to request financial assistance for home repair, the homebuyer shall: 1) Indicate in the purchase price assistance program application their intention to apply for home repair assistance. 2) Provide City of Palm Desert with access to all contact information, prior to close of escrow, for the purpose of doing an on -site assessment of the property to determine repair needs. iii) Program activities will be coordinated between City of Palm Desert, contractor, and homebuyer throughout the initial assessment, home buying and home repair construction process. iv) The City of Palm Desert staff or designee will review findings on the property Home Inspection Report identified during escrow. City of Palm Desert will issue repair letters to be done prior to the close of escrow meeting the requirements of purchase price assistance standards. This repair work needs to be corrected by seller to the satisfaction of City of Palm Desert. In addition, City of Palm Desert will identify additional repairs needed to meet habitability, and energy -efficient improvements for long-term affordability. These repairs will be identified with the approval of homebuyer and the work will be done after the close of escrow. All home repairs are subject to final approval by City of Palm Desert management. The funding will be determined based on the amount left after the purchase price assistance for the purchase of the home and subject to the availability of funds for home repair c) Property Repair Assessment i) City of Palm Desert or designee will make a preliminary on -site cursory inspection of the property within three (3) working days of the purchase price assistance program application is received to verify the occupancy of the unit and to assess preliminary general condition of the home. A preliminary statement of work will be prepared. ii) Once eligibility has been determined, home inspection report received, correction letter issued, if applicable, City of Palm Desert or designee will schedule an initial on -site inspection of the property to include the homeowner. iii) City of Palm Desert staff or designee will inspect the property and ensure the homeowner is informed of all program requirements, terms of program participation, processes, and work write up in cooperation with the homeowner. Certain improvements are subject to specific requirements and limitations. Any rehabilitation work shall be to the extent necessary to comply with Housing Quality Standards meeting the 19 U.S. Department of Housing and Urban Development (HUD). All work shall comply with applicable laws, codes, and other requirements to housing safety, quality, and habitability. City of Palm Desert reserves the right to disallow certain improvements. d) Bid Process i) City of Palm Desert or designee will finalize the statement of work, prepare bid package and solicit bids on behalf of the homeowner. ii) A pre -bid walk thru will be set up by City of Palm Desert or designee and closing bids will be established. iii) City of Palm Desert or designee will review all bids received and select the lowest responsive bids in accordance to HUD procurement requirements. The bids will be reviewed for cost -reasonableness, consistency and accuracy with respect to the requested repairs. iv) Once the amount of repair assistance has been determined, a deed of trust and note for that amount will be prepared, approved and signed by homebuyer. A contract agreement between the contractor and homebuyer will also be prepared and executed. v) City of Palm Desert or designee will schedule a Pre -Construction Conference to review the home repair work order with the homeowner and the selected contractor. The conference will be used to go over the scope of work, time line, disbursement of funds process, and completion and close out of work. Contractor is expected to provide sample products and color selection for approval by homebuyer. vi) A Notice to proceed will be issued at the end of the pre -construction conference. All work must be completed within thirty days. vii) City of Palm Desert will require the contractor to provide warranty statements directly to the homebuyer. VII) CONSTRUCTION AND CHANGE ORDERS a) Construction Phase 1) City of Palm Desert staff or designee will schedule site visits inspection as needed during construction to ensure satisfactory work and progress. Periodic phone calls to the contractor or homeowner will also be done. 2) City of Palm Desert staff or designee will inspect the property at least once during the construction phase. 3) Upon receipt of notice from the contractor that the repairs have been completed, City of Palm Desert staff or designee will complete a final on -site property inspection in cooperation with the homeowner to verify all repairs are complete to their satisfaction. 4) Upon completion of all work, City of Palm Desert staff or designee will photograph the house and yard. b) Change Orders In the event certain repair works were not identified prior to close of escrow and deemed necessary as part of the repair work, City of Palm Desert staff or designee will review request for the change order. A change order shall be approved only if the additional work is a direct result of the scope of work and not caused by fault of the contractor. Under no circumstances can the total repair assistance including change order and purchase price assistance exceed $75,000. A revised deed of trust and note will be prepared together with the approved change order. 20 The engaged contractor must submit a request for change order to the City of Palm Desert staff or designee. Requests may be made verbally for field changes but need to be followed by a written request that provides justification for the change. Written request from engaged contractor must be submitted on contractor's company letterhead prior to performing repairs. VIII) PROJECT COMPLETION AND CONTRACTOR PAYMENT Upon receipt of notice from the contractor that the repairs have been completed, City of Palm Desert staff or designee will complete a final on -site property inspection in cooperation with the homeowner to verify all repairs are complete to their satisfaction. City of Palm Desert will ensure that all billings are submitted and processed in a timely manner. All work including punch list must be completed before any final payment can be issued. No progress or advance payment can be made. However, City of Palm Desert reserves the right to release the payment to the contractor if City of Palm Desert or designee determined that all repairs has been completed in accordance to the scope of work established and homeowner has been unreasonably withholding final inspection sign off. The final deed of trust for the home repair assistance will then be recorded and become a lien to the property. 21 APPENDICES A. INCOME AND PROPERTY PURCHASE LIMITS B. NEIGHBORHOOD STABILIZATION PROGRAM TARGET AREAS C. CALCULATING ANNUAL INCOME D. NEIGHBORHOOD STABILIZATION PROGRAM DEFINITIONS E. HOUSING QUALITY STANDARD CHECKLIST F. NEIGHBORHOOD STABILIZATION PROGRAM APPLICATION CHECKLIST G. NEIGHBORHOOD STABILIZATION PROGRAM APPLICATION PHASE FORMS H. NEIGHBORHOOD STABILIZATION PROGRAM REQUEST FOR FUNDING FORMS NEIGHBORHOOD STABILIZATION PROGRAM CLOSING PHASE FORMS 22 APPENDIX A NEIGHBORHOOD STABILIZATION PROGRAM INCOME AND PROPERTY VALUE LIMITS Maximum Annual Household Income Adjusted for Family Size Effective February 10, 2009 Household Size Maximum Annual Income 1 $ 54, 200 2 $61,900 3 $69,650 4 $77,400 5 $83,600 6 $89,800 7 $96,000 8 $102,150 MAXIMUM PROGRAM PURCHASE PRICE LIMIT The maximum property purchase shall be established by an appraisal prepared according to 49 CFR Part 24. This Neighborhood Stabilization Program purchase price limit cannot exceed the actual 95 percent of the area median sales price for the Riverside County published by U.S. Department of Housing and Urban Development. The maximum program purchase price for the property limit should not exceed $292,686. 23 APPENDIX B • Palma Village • Palm Desert Country Club • North Sphere Please refer to the Target Area Maps in the City of Palm Desert website www.City of Palm Desert.org 24 APPENDIX C CALCULATING ANNUAL INCOME 1) Annual income is the gross amount of income anticipated to be received by all adults in a family during the 12 months following the effective date of the determination. Anticipated income is generally determined by annualizing current income for the next 12 months. Annual income includes anticipated income from assets. The following chart generally describes how to calculate various types of income. A more detailed explanation is provided in the subsequent paragraphs. Source of Income Guidance for Calculation Earned Income Use current circumstances to anticipate future earnings. Include all family members over age 18, including income of a temporarily absent spouse or other usual family member. Make sure to use annual figures. If wages are paid hourly, assume 2080 hours for full time employment. Income from Assets (interest earning bank accounts, stocks and bonds, CDs, IRAs, Keogh accounts, etc.) If under $5,000, use the actual income. If over $5,000, use the greater of the actual or the imputed income based on the passbook rate established by HUD. Assets disposed of for less than fair market value are counted for two years. The current HUD Passbook rate is 3.5%. Contributions and gifts Include as income if contributions are made on a regular basis. Alimony and child support Include if the support is actually being provided. Income from a business Generally, this is gross income less expenses. Insurance settlements, inheritances, proceeds from sale of property and other lump sum payments Generally, these are assets and not income. Income from welfare assistance Count the basic welfare grant, and in states with separate welfare rents", the maximum allowed for shelter and utilities. Periodic payments, such as social security, pensions, etc. Make sure to calculate the annual value of periodic payments. Lump sum payments are treated as assets. 2) The following income is to be included when calculating annual income: a) All wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services (before any payroll deductions); b) Net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness cannot be used as deductions in determining net income; however, an allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession is included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the Family; 25 c) Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness cannot be used as a deduction in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the Family. Where the Family has Net Family Assets in excess of $5,000, Annual Income includes the greater of the actual income derived from Net Family Assets or a percentage of the value based on the current passbook savings rate, as determined by HUD; d) All gross periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump -sum payment for the delayed start of a periodic payment (except social security); e) Payments in lieu of earnings, such as unemployment, worker's compensation and severance pay (but see paragraph (3c) under Income Exclusions); f) Welfare Assistance. If the Welfare Assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the Welfare Assistance agency in accordance with the actual cost of shelter and utilities, the amount of Welfare Assistance income to be included as income consist of: i) The amount of the allowance or grant exclusive of the amount specially designated for shelter or utilities; plus ii) The maximum amount that the Welfare Assistance agency could in fact allow the Family for shelter and utilities. If the Family's Welfare Assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph is the amount resulting from one application of the percentage; g) Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling. Alimony and child support amounts awarded as part of a divorce or separation agreement are included as income unless the homebuyer (1) certifies that the income is not being provided, and (2) takes all reasonable legal actions to collect amounts due; and h) All regular pay, special pay, and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the Family, spouse, of other person whose dependents are residing in the unit (but see paragraph (g) under Income Exclusions); 3) The following income is to be excluded when calculating income: a) Income from employment of children (including foster children) under the age of 18 years; b) Payments received for the care of foster children; c) Lump -sum additions to Family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses (but see paragraph (e) of Income Inclusion); d) Amounts received by the Family that are specifically for, or in reimbursement of, the cost of Medical Expenses for any Family member; e) Income of a live-in aide; 26 f) Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the Government to a veteran, for use in meeting the costs of tuition, fees, books, equipment, materials, supplies, transportation, and miscellaneous personal expenses of the student. Any amount of such scholarships or payments to a veteran not used for the above purchases that is available for subsistence are to be included in income; g) The special pay to a Family member serving in the Armed Forces who is exposed to hostile fire; h) Amounts received under training programs funded by HUD; i) Amounts received by a Disabled person that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self Sufficiency (PASS); or j) Amounts received by a participant in other publicly assisted programs that are specifically for, or in reimbursement of, out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and that are made solely to allow participation in a specific program; k) Temporary, non -recurring, or sporadic income (including gifts); I) Reparation payments from foreign governments in connection with the Holocaust; m) Lump sum payments of SSI and Social Security benefits; or n) Amounts specifically excluded by other Federal Statute for consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the 1937 Act, including: i) The value of the allotment provided to an eligible household under the Food Stamp Act of 1977; ii) Payments to volunteers under the Domestic Volunteer Act of 1973 (employment through VISTA Retired Senior Volunteer Program, Foster Grandparents Program, youthful offenders incarceration alternatives, and senior companions); iii) Payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626 (a)); iv) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 259e); v) Payments of allowances made under the Department of Health and Human Services' Low Income Home Energy Assistance Program (42 U.S.C. 8624 (f)); vi) Payments received under programs funded in whole or in part under the Workforce Investment Act; vii) Income derived from the disposition of funds of the Grand River Band of Ottawa Indians; viii) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission, or the Court of Claims (25 U.S.C. 1407-1408), or from funds held in trust for an Indian tribe by the Secretary of Interior (25 U.S.C. 117); ix) Amounts of scholarships funded under Title IV of the Higher Education Act of 1965, including awards under the Federal work-study program or under the Bureau of Indian Affairs student - assistance programs (20 U.S.C. 1087 uu); 27 x) Payments received from program funded under Title V of the Older Americans Act of 1965 (42 U.S.C. 3056 (f)); xi) Any earned income tax credit; xii) Payments received after January 1, 1989 from the Agent Orange Settlement Funds or any other funds established pursuant to the settlement in Re Agent Orange product liability litigation, MDL No. 381 (E.D.N.Y.); xiii) The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990 (42 USC 9858q); and xiv) Payments received under the Maine Indian Claims Settlement Act of 1980. 4) Income from assets is to be included when determining total income. The income to be counted is: (a) the actual income from assets if total assets are $5,000 or less; or (b) if assets are more than $5,000, the greater of the actual income from assets, or the total assets times the passbook rate. 5) Assets include the following items: a) Amounts in savings and checking accounts. b) Stocks, bonds, savings certificates, money market funds and other investment accounts. c) Equity in real property or other capital investments. Equity is the estimated current market value of the assets less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset. d) The cash value of trusts that are available to the household. e) IRA, Keogh and similar retirement savings accounts, even though withdrawal will result in a penalty. f) Contributions to company retirement/pension funds that can be withdrawn without retiring or terminating employment. g) Assets which, although owned by more than one person, allow unrestricted access by the homebuyer. h) Lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements, and other claims. i) Personal property held as an investment such as gems, jewelry, coin collections, antique cars, etc. j) Cash value of insurance policies. k) Assets disposed of for less than fair market value during two years preceding the income determination. 6) Assets do not include the following items: a) Necessary personal property, except as noted in 5. i. above. b) Interest in Indian trust lands. 28 c) Assets that are part of an active business or farming operation. Note: Rental properties are considered personal assets held as an investment rather than business assets unless real estate is the homebuyer's main occupation. d) Assets not accessible to the family and which provide any income to the family. e) Vehicles especially equipped for the handicapped. f) Equity in owner -occupied cooperatives and manufactured homes in which the family lives. 29 APPENDIX D NEIGHBORHOOD STABILIZATION PROGRAM DEFINITIONS Abstract or Title Search Title Examination, Title Insurance Binder. These charges cover the costs of the search and examination of records of previous ownership, transfers, etc., to determine whether the seller can convey clear title to the property, and to disclose any matters on record that could adversely affect the buyer or the lender. Examples of title problems are unpaid mortgages, judgment or tax liens, and conveyances of mineral rights, leases, and power line easements or road right-of-ways that could limit use and enjoyment of the real estate. In some areas, a title insurance binder is called a commitment to insure. Additional Settlement Charges. The lender or the title insurance company may require that a surveyor conduct a property survey to determine the exact location of the home and the lot line, as well as easements and rights of way. This is a protection to the buyer as well. Usually the buyer pays the surveyor's fees, but sometimes this may be handled by the seller. Amortization. The gradual repayment of a mortgage with equal monthly payments over the life of the loan. Annual Assessments - Recurring. This reserve item covers assessments that may be imposed by subdivisions or municipalities for special improvements (such as sidewalks, sewers or paving) or fees (such as homeowners' association fees). Annual Income. Gross amount of income anticipated to be received by all adults in a household during the 12 months following the effective date of the determination. Anticipated income is generally determined by annualizing current income for the next 12 months. See Appendix C for income to be included and excluded from the annual income calculation. Appraisal Fee. The fee charged for the preparation of an appraisal of property value. Appraisal. The value of a foreclosed upon home completed within 60 days of the offer made for the property. The appraisal must meet the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) and its implementing regulations at 49 CFR Part 24 for real property acquisition appraisals for federally assisted programs. Assumption Fee. This fee is charged for processing papers for cases in which the buyer takes over the payments on the prior loan of the seller. Attorney's Fees. You may be required to pay for legal services provided to the lender in connection with the settlement, such as examination of the title binder or sales contract. Occasionally this fee can be shared with the seller, if so stipulated in the sales contract. If a lawyer's involvement is required by the lender, the fee will appear on this part of the form. The buyer and seller may each retain an attorney to check the various documents and to represent them at all stages of the transaction, including settlement. Where this service is not required and is paid for outside of closing, the person conducting settlement is not obligated to record the fee on the settlement form. California Housing Finance Agency (CaIHFA). California Housing Finance Agency (CaIHFA) assists first-time homebuyers by providing financing and programs that create safe, decent and affordable housing opportunities for individuals within specified income ranges. CaIHFA was chartered as the State's affordable housing bank to make below market -rate loans through the sale of tax-exempt bonds. A completely self-supporting State agency, bonds are repaid by revenues generated through mortgage loans, not taxpayer dollars. 30 City/County Property Taxes - Recurring. The lender may require a regular monthly payment to the reserve account for property taxes. Closing Costs. Fees and expenses, in addition to the down payment, that are required to complete a real estate transaction. Closing costs may be non -recurring or recurring. Non -recurring costs are only paid once and include, but are not limited to items such as loan origination fees, points, title fees, recording fees, transfer taxes. Recurring costs are paid at closing and will be incurred again after purchase. Examples of recurring costs are property taxes, hazard insurance, interest, mortgage insurance and mortgage insurance premiums, and annual assessments. Closing costs are not eligible for payment by the Program. Closing. The final step in transferring ownership of a property from seller to buyer. Credit Report Fee. This fee covers the cost of the credit report, which shows how you have handled other credit transactions. The lender uses this report in conjunction with information you submitted with the application regarding your income, outstanding bills, and employment, to determine whether you are an acceptable credit risk and to help determine how much money to lend you. When credit reporting problems are encountered, you have protection under the Fair Credit Laws. Current Market Appraised Value. The current market appraised value means the value of a foreclosed upon home or residential property that is established through an appraisal made in conformity with the appraisal requirements of the URA at 49 CFR 24.103 and completed within 60 days prior to an offer made for the property by homebuyer. Deed. A legal document conveying title to a property. Discount. Any purchase of a foreclosed upon home under this Program shall be at a discount from the current market appraised value of the home, taking into account its current condition, and such discount shall ensure that homebuyers are paying below -market value for the home. Properties must be purchased at a minimum discount rate of one percent (1%) below the current market appraised value. Document Preparation. There may be a separate document fee that covers preparation of final legal papers, such as a mortgage, deed of trust, note, or deed. You should check with the settlement agent to see that these services, if charged for, are not also covered under some other service fees. Eligible Property. A foreclosed vacant property to be used as the buyers' principal residence which is located in a Target Area and has an appraised property value that does not exceed the property value limit established by the Program and meeting the discount value established. Equity. The owner's value or interest in a property. Equity is computed as the difference between the market value of a property and the owner's indebtedness incurred against the property. Escrow. The placement of money or documents with a third party for safekeeping pending the fulfillment or performance of a specific act or condition. Existing Home. Any residence that has been previously occupied for residential purposes. Foreclosed home. A property or home has been foreclosed upon at the point that, under state of local law, the mortgage or tax foreclosure is complete. HUD generally will not consider a foreclosure to be complete until after the title for the property has been transferred from the former homeowner under some type of foreclosure proceeding or transfer in lieu of foreclosure, in accordance with state or local law. FHA Mortgage. A mortgage loan insured by the Federal Housing Administration. 31 Fannie Mae. A nickname for the Federal National Mortgage Association (FNMA), a tax paying corporation created by Congress to support the secondary mortgage insured by FHA or guaranteed by VA, as well as conventional home mortgages. First Mortgage. A mortgage, the proceeds of which are used to purchase the property, issued by a participating lender and recorded in first position on the deed. First -Time Home Buyer. An individual or an individual and his or her spouse who have not owned their principal residence during the three-year period before the purchase of a home with HOME assistance, except that the following persons shall not be excluded from consideration as a first-time Home Buyer: A person who owns or owned a principal residence during the three year period which is not permanently affixed to a permanent foundation in accordance with local or other applicable regulations. Foreclosure. A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower. Foreclosure laws are based on the statutes of each state. Freddie Mac. A nickname for the Federal Home Loan Mortgage Corporation (FHLMC), a federally controlled and operated corporation to support the secondary mortgage market. Freddie Mac purchases and sells conventional home mortgages. Government Recording and Transfer Charges. These fees may be paid either by borrower or seller, depending upon your contract when you buy the home or accept the loan commitment. The borrower usually pays the fees for legally recording the new deed and mortgage. These fees collected when property changes hands or when a mortgage loan is made, may be quite large and are set by State and/or local governments. City, county and/or State tax stamps may have to be purchased as well. Hazard Insurance Premium - Recurring. This premium prepayment is for insurance protection for you and the lender against loss due to fire, windstorm, and natural hazards. This coverage may be included in a homeowner's policy which insures against additional risks which may include personal liability and theft. Lenders often require payment of the first year's premium at settlement. Hazard insurance or homeowner's policy may not protect you against loss caused by flooding. If your mortgage is federally insured and your property is within a special flood hazard area identified by FEMA, you may be required by Federal law to carry flood insurance on your home. Such insurance may be purchased in participating communities under the National Flood Insurance Act. Hazard Insurance - Recurring. The lender determines the amount of money that must be placed in the reserve in order to pay the next insurance premium when due. Home. A one -unit dwelling, including a single family home, condominium or manufactured home on a permanent foundation that will be the buyers' permanent residence. HOA. A homeowners' association (abbrev. HOA) is the legal entity created by a real estate developer for the purpose of developing, managing and selling a community of homes. It is given the authority to enforce the covenants, conditions, and restrictions (CC&Rs) and to manage the common amenities of the development. It allows the developer to legally exit responsibility of the community typically by transferring ownership of the association to the homeowners after selling off a predetermined number of lots. Most homeowners' associations are non-profit corporations, and are subject to state statutes that govern non-profit corporations and homeowners' associations. Home Buyer Education. A course or class designed to prepare persons for homeownership. Topic covered include the home buying process, obtaining a loan, and responsibilities associated with homeownership, including, but not limited to, maintenance and payment obligations. 32 Home Inspection Report. A pre -purchase inspection prepared by a qualified home inspector which documents the condition and working order of the home and all fixtures included in the home purchase agreement. The inspection and report shall be prepared in accordance with industry standards. The report shall list any and all conditions which impair the habitability of the unit. The Home Inspection Report is used to determine that the home is in standard condition and will comply with Housing Quality Standards upon occupancy. Home Warranty. A warranty provided by an independent company that provides for the repair of specified items in a home during the warranty period, usually for a small deductible. 11/3/2009 26 Homeownership. Ownership in fee simple title or a 99 year leasehold interest in a one- to four -unit dwelling or in a condominium unit, or ownership or membership in a cooperative. The ownership interest may be subject only to mortgages, deeds of trust, or other liens or instruments securing debt on the property; resale restrictions imposed through this Program; or any other restrictions or encumbrances that so not impair the good and marketable nature of title to the ownership interest. Household. One or more persons occupying a housing unit. Housing Quality Standard. A minimum standard of habitability established by the Public Housing Authority. HUD. The United States Department of Housing and Urban Development, a federal governmental agency established to implement certain federal housing and community development programs. Impound Account. That portion of a mortgagor's monthly payment held in trust by the lender to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other recurring items, as they become due. Also referred to as an escrow payment. Interest - Recurring. Lenders usually require that borrowers pay at settlement the interest that accrues on the mortgage from the date of settlement to the beginning of the period covered by the first monthly payment. For example, suppose your settlement takes place on April 16 and your first regular monthly payment will be due June 1 to cover interest charges for the month of May. On the settlement date, the lender will collect interest for the period from April 16 to May 1. If you borrowed $60,000 at 12 percent interest, the interest item would be $303.30. Items Required by Lender To Be Paid In Advance. You may be required to prepay certain items, such as interest, mortgage insurance premium and hazard insurance premium, at the time of settlement. Lender's Inspection Fee. This charge covers inspections, often of newly -constructed housing made by personnel of the lending institution or an outside inspector. Lender's Title Insurance. A one-time premium may be charged at settlement for a lender's title policy which protects the lender against loss due to problems or defects in connection with the title. The insurance is usually written for the amount of the mortgage loan and covers losses due to defects or problems not identified by title search and examination. The borrower may pay all, a part of, or none of this cost depending on the terms of the sales contract or local custom. Lien. A legal claim against a property that must be paid when property is sold. Loan Origination Fee. The charge assessed by a lender for processing a mortgage. Loan -to -Value Ratio. The ratio of the mortgage loan principal (amount borrowed) to the property's appraised value (selling price). Mortgage. A lien on real estate given by the buyer as security for money borrowed from a lender. Mortgagee. The lender of money or the receiver of the mortgage document. 33 Mortgagor. The borrower of money of the giver of a mortgage document. Mortgage Insurance Premium - Recurring. Mortgage insurance protects the lender from loss due to payment default by the borrower. The lender may require you to pay your first premium or a lump sum premium covering the life of the loan in advance, on the day of settlement. The premium may cover a specific number of months, a year in advance or the total amount. With this insurance protection, the lender is willing to make a larger loan, thus reducing your down payment requirements. This type of insurance should not be confused with mortgage life, credit life, or disability insurance designed to pay off a mortgage in the event of physical disability or death of the borrower. Mortgage Insurance - Recurring. The lender may require that part of the total annual premium be placed in the reserve account at settlement. The portion to be placed in reserve may be negotiable. Mortgage Insurer Application Fee. This fee covers processing the application for private mortgage insurance which may be required on certain loans. It may cover both the appraisal and application fee. New Home. A residence that has received a certificate of occupancy but has never been previously occupied for residential purposes by any person. Also referred to as newly constructed. Non -recurring Closing Costs. One-time fees and expenses paid at the time of closing. Non -recurring costs are paid in full at the time of closing. Notary Fee. This fee is charged for the cost of having a licensed person affix his or her name and seal to various documents authenticating the execution of these documents by the parties. Note. A written promise to pay a certain amount of money. Owner's Title Insurance. This charge is for owner's title insurance protection and protects you against losses due to title defects. In some areas it is customary for the seller to provide the buyer with an owner's policy and for the seller to pay for this policy. In other areas, if the buyer desires an owner's policy he or she must pay for it. Pest and Other Inspections. This fee is to cover inspections for termite or other pest infestation of the home. This may be important if the sales contract included a promise by the seller to transfer the property free from pests or pest -caused damage. Be sure that the inspection shows that the property complies with the sales contract before you complete the settlement. If it does not, you may wish to require a bond or other financial assurance that the work will be completed. This fee can be paid either by the borrower or seller depending upon the terms of the sales contract. Lenders vary in their requirements as to such an inspection. Purchase Discount. See definition under Discount. Point. One percent of the loan amount. Principal and Interest Payment (P&I). - A periodic (usually monthly) payment that includes the interest charges for the period plus an amount applied to amortization of principal balance. Principal, Interest Taxes, and Insurance Payment (PITI). The periodic payment that includes a principal and interest payment plus a contribution to the escrow account set up by the lender to pay insurance premiums and property taxes on the mortgage property. Principal Residence. The primary dwelling unit in which a family resides. The residence can be a single family property, a condominium unit, a manufactured home on a permanent foundation or a cooperative unit. Professional Property Inspection. A pre -purchase inspection that is conducted to determine the condition of a property prior to purchase. See also Home Inspection Report. 34 Purchase Price. The total purchase of a property as established in an appraisal by a qualified appraiser. The purchase price shall not exceed 95% of the area median purchase price for that type of housing, as annually determined by the United States Department of Housing and Urban Development (HUD). REO . Real Estate Owned Properties are properties that had been foreclosed upon and owned by a bank, lender, or other financial institution or third party due to a foreclosure -related proceeding. When a borrower avoids foreclosure by moving out and turning over the property's deed to the bank or loan servicer (a process known as a "deed in lieu"), the property also becomes part of the servicer's REO inventory. Reserves Deposited With Lenders. Reserves (sometimes called "escrow" or "impound" accounts) are funds held in an account by the lender to assure future payment for such recurring items as real estate taxes and hazard insurance. Settlement or Closing Fee. This fee is paid to the settlement agent. Responsibility for payment of this fee should be negotiated between the seller and buyer at the time the sales contract is signed. Short Sale. Short sales are typically used to prevent foreclosure. Owners use the proceeds of short sales to settle outstanding obligations with lenders. As such, the title to the property remains in the hands of the homeowner until the sale is executed. Accordingly, a short sale property would not meet the definition of a foreclosed upon property funded under this Program. Single parent. An individual who is (1) unmarried or legally separated from a spouse and (2) has one or minor children for whom the individual has custody or joint custody, or (3) is pregnant. Survey. The lender or the title insurance company may require that a surveyor conduct a property survey to determine the exact location of the home and the lot line, as well as easements and rights of way. This is a protection to the buyer as well. Usually the buyer pays the surveyor's fees, but sometimes this may be handled by the seller. Title. The accumulation of all rights in a property, often used interchangeably with the word ownership. Also refers to the document that is evidence of ownership. Title Charges. Title charges may cover a variety of services performed by title companies and others and include fees directly related to the transfer of title (title examination, title search, document preparation) and fees for title insurance, legal charges, which include fees for lenders, seller's or buyer's attorney or the attorney preparing title work and fees for settlement agents and notaries. Due to the great diversity in practice from area to area, your particular settlement may not include all of these items or may include others not listed. Ask your settlement agent to explain how these fees relate to services performed on your behalf. Title Insurance. The total cost of owner's and lender's title insurance is shown here. The borrower may pay all, a part or none of this cost depending on the terms of the sales contract or local custom. Title Search. A check of title records to identify liens, encumbrances and ownership rights to the property. VA Mortgage. A mortgage loan guaranteed by the Veterans Administration, an agency of the federal government that provides services for eligible veterans. 35 APPENDIX E HOUSING QUALITY STANDARD CHECKLIST The following checklist will be utilized by the City of Palm Desert to determine a minimum level of habitability for all homes purchased through the Neighborhood Stabilization Program. Home inspectors should not use this form - it is provided here for informational purposes only. Home inspectors should prepare their reports in accordance with industry standards for that profession, and should use forms and methods in accordance with those standards. 36 Housing Quality Standards (HQS) Inspection Form A. General Information Date of Inspection: Address of Inspected Unit: Street: City: County: State: Zip: Name of Family: Current Address of Family: Street: City: County: State: Zip: Current Telephone of Family: B. How to Fill Out This Checklist Proceed through the inspection as follows: Area Checklist Category Room by Room 1. Living Room 2. Kitchen 3. Bathroom 4. All Other Rooms Used for Living 5. All Secondary Rooms Not Used for Living Outside 6. Building Exterior Basement or Utility Room 7. Heating and Plumbing Overall 8. General Health and Safety Each part of the checklist will be accompanied by an explanation of the item to be inspected. Important: For each item numbered on the checklist, check one box only (e.g., check one box only for item 1.4 "Security," in the Living Room). In the space to the right of the description of the item, if the decision on the item is "Fail," write what repairs are necessary. Also, if "Pass" but there are additional code items or items not consistent with rehab standards or area codes, write these in the space to the right. 1. LIVING ROOM For each item numbered, check one box only. Item # Description Decision Repairs Required Yes, PASS No, FAIL 1.1 LIVING ROOM PRESENT Is there a living room? 1.2 ELECTRICITY Are there at least two working outlets or one working outlet and one working light fixture? 1.3 ELECTRICAL HAZARDS Is the room free from electrical hazards? 37 1.4 SECURITY Are all windows and doors that are accessible from the outside lockable? 1.5 WINDOW CONDITION Is there at least one window, and are all windows free of signs of severe deterioration or missing or broken out panes? 1.6 CEILING CONDITION Is the ceiling sound and free from hazardous defects? 1.7 WALL CONDITION Are the walls sound and free from hazardous defects? 1.8 FLOOR CONDITION Is the floor sound and free from hazardous defects? 1.9 LEAD PAINT Are all interior surfaces either free of cracking, scaling, peeling, chipping, and loose paint or adequately treated and covered to prevent exposure of the occupants to lead based paint hazards? 1.1 WEATHER STRIPPING Is weather stripping present and in good condition on all windows and exterior doors? 1.11 OTHER 1.12 OTHER 2. KITCHEN For each item numbered, check one box only. Item # Description Decision Repairs Required Yes, PASS No, FAIL 2.1 KITCHEN AREA PRESENT Is there a kitchen? 2.2 ELECTRICITY Is there at least one working electric outlet and one working, permanently installed light fixture? 2.3 ELECTRICAL HAZARDS Is the kitchen free from electrical hazards? 2.4 SECURITY Are all windows and doors that are accessible from the outside lockable? 38 2.5 WINDOW CONDITION Are all windows free of signs of deterioration or missing or broken out panes? 2.6 CEILING CONDITION Is the ceiling sound and free from hazardous defects? 2.7 WALL CONDITION Are the walls sound and free from hazardous defects? 2.8 FLOOR CONDITION Is the floor sound and free from hazardous defects? 2.9 LEAD PAINT Are all interior surfaces either free of cracking, scaling, peeling, chipping, and loose paint or adequately treated and covered to prevent exposure of the occupants to lead based paint hazards? 2.1 STOVE OR RANGE WITH OVEN Is there a working oven and a stove (or range) with top burners that work? 2.11 REFRIGERATOR Is there a refrigerator that works and maintains a temperature low enough so that food does not spoil over a reasonable period of time? 2.12 SINK Is there a kitchen sink that works with hot and cold running water? 2.13 SPACE FOR STORAGE AND PREPARATION OF FOOD Is there space to store and prepare food? 2.14 WEATHER STRIPPING Is weather stripping present and in good condition on all windows and exterior doors? 2.15 OTHER 2.16 OTHER 3. BATHROOM For each item numbered, check one box only. Item # Description Decision Repairs Required Yes, PASS No, FAIL 3.1 BATHROOM (see description) Is there a bathroom? 39 3.2 ELECTRICITY Is there at least one permanently installed light fixture? 3.3 ELECTRICAL HAZARDS Is the bathroom free from electrical hazards? 3.4 SECURITY Are all windows and doors that are accessible from the outside lockable? 3.5 WINDOW CONDITION Are all windows free of signs of deterioration or missing or broken out panes? 3.6 CEILING CONDITION Is the ceiling sound and free from hazardous defects? 3.7 WALL CONDITION Are the walls sound and free from hazardous defects? 3.8 FLOOR CONDITION Is the floor sound and free from hazardous defects? 3.9 LEAD PAINT Are all interior surfaces either free of cracking, scaling, peeling, chipping, and loose paint, or adequately treated and covered to prevent exposure of the occupants to lead based paint hazards? 3.10 FLUSH TOILET IN ENCLOSED ROOM IN UNIT Is there a working toilet in the unit for exclusive private use of the tenant? 3.11 FIXED WASH BASIN OR LAVATORY IN UNIT Is there a working, permanently installed wash basin with hot and cold running water in the unit? 3.12 TUB OR SHOWER IN UNIT Is there a working tub or shower with hot and cold running water in the unit? 3.13 VENTILATION Are there operable windows or a working vent system? 3.14 WEATHER STRIPPING Is weather stripping present and in good condition on all windows and exterior doors? 3.15 OTHER 40 3.16 OTHER 4. OTHER ROOMS USED FOR LIVING AND HALLS For each item numbered, check one box only. Item # Description Decision Repairs Required Yes, PASS No, FAIL 4.1 ROOM CODE and ROOM LOCATION: right/left ROOM CODES 1 = Bedroom or any other room used for sleeping (regardless of type of room) 2 = Dining Room, or Dining Area 3 = Second Living Room, Family Room, Den, Playroom, TV Room 4 = Entrance Halls, Corridors, Halls, Staircases 5 = Additional Bathroom 6 = Other front/rear floor level 4.2 ELECTRICITY If Room Code = 1, are there at least two working outlets or one working outlet and one working, permanently installed light fixture? If Room Code does not = 1, is there a means of illumination? 4.3 ELECTRICAL HAZARDS Is the room free from electrical hazards? 4.4 SECURITY Are all windows and doors that are accessible from the outside lockable? 4.5 WINDOW CONDITION If Room Code = 1, is there at least one window? And, regardless of Room Code, are all windows free of signs of severe deterioration or missing or broken out panes? 4.6 CEILING CONDITION Is the ceiling sound and free from hazardous defects? 4.7 WALL CONDITION Are the walls sound and free from hazardous defects? 4.8 FLOOR CONDITION Is the floor sound and free from hazardous defects? 4.9 LEAD PAINT Are all interior surfaces either free of cracking, scaling, peeling, chipping, an loose paint, or adequately treated and covered to prevent exposure of the occupants to lead based paint hazards? 4.10 WEATHERSTRIPPING Is weather stripping present and in good condition on all windows and exterior doors? 41 4.11 OTHER 4.12 OTHER 5.ALL SECONDARY ROOM NOT USED FOR LIVING For each item numbered, check one box only. Item # Description Decision Repairs Required Yes, PASS No, FAIL 5.1 NONE. GO TO PART 6 5.2 SECURITY Are all windows and doors that are accessible from the outside lockable in each room? 5.3 ELECTRICAL HAZARDS Are all these rooms free from electrical hazards? 5.4 OTHER POTENTIALLY HAZARDOUS FEATURES IN ANY OF THESE ROOMS Are all of these rooms free of any other potentially hazardous features? For each room with an other potentially hazardous feature" explain hazard and means of control of interior access to room." 5.5 OTHER 5.6 OTHER 6. BUILDING EXTERIOR For each item numbered, check one box only. Item # Description Decision Repairs Required Yes, PASS No, FAIL 6.1 CONDITION OF FOUNDATION Is the foundation sound and free from hazards? 6.2 CONDITION OF STAIRS, RAILS, AND PORCHES Are all the exterior stairs, rails and porches sound and free from hazards? 6.3 CONDITION OF ROOF AND GUTTERS Are the roof, gutters and downspouts sound and free from hazards? 6.4 CONDITION OF EXTERIOR SURFACES Are exterior surfaces sound and free from hazards? 42 6.5 CONDITION OF CHIMNEY Is the chimney sound and free from hazards? 6.6 LEAD PAINT: EXTERIOR SURFACES Are all exterior surfaces which are accessible to children under seven years of age free of cracking, scaling, peeling, chipping, and loose paint, or adequately treated or covered to prevent exposure of such children to lead based paint hazards? 6.7 MOBILE HOMES: TIE DOWNS If the unit is a mobile home, it is properly placed and tied down? If not a mobile home, check Not Applicable." " 6.8 MOBILE HOMES: SMOKE DETECTORS If unit is a mobile home, does it have at least one smoke detector in working condition? If not a mobile home, check Not Applicable." " 6.9 CAULKING Are all fixed joints including frames around doors and windows, areas around all holes for pipes, ducts, water faucets or electric conduits, and other areas, which may allow unwanted air flow appropriately caulked. 6.10 OTHER 6.11 OTHER 7.HEATING, PLUMBING AND INSULATION For each item numbered, check one box only. Item # Description Decision Repairs Required Yes, PASS No, FAIL 7.1 ADEQUACY OF HEATING EQUIPMENT a. Is the heating equipment capable of providing adequate heat (either directly or indirectly) to all rooms used for living? b. Is the heating equipment oversized by more than 15%? c. Are pipes and ducts located in unconditioned space insulated? 7.2 SAFETY OF HEATING EQUIPMENT Is the unit free from unvented fuel burning space heaters, or any other types of unsafe heating conditions? 43 7.3 VENTILATION AND ADEQUACY OF COOLING Does this unit have adequate ventilation and cooling by means of operable windows or a working cooling system? 7.4 HOT WATER HEATER Is hot water heater located, equipped, and installed in a safe manner? 7.5 WATER SUPPLY Is the unit served by an approvable public or private sanitary water supply? 7.6 PLUMBING Is plumbing free from major leaks or corrosion that causes serious and persistent levels of rust or contamination of the drinking water? 7.7 SEWER CONNECTION Is plumbing connected to an approvable public or private disposal system, and is it free from sewer back up? 7.8 INSULATION Are the attic and walls appropriately insulated for regional conditions? 7.9 OTHER 7.1 OTHER 8. GENERAL HEALTH AND SAFETY For each item numbered, check one box only. Item # Description Decision Repairs Required Yes, PASS No, FAIL 8.1 ACCESS TO UNIT Can the unit be entered without having to go through another unit? 8.2 EXITS Is there an acceptable fire exit from this building that is not blocked? 8.3 EVIDENCE OF INFESTATION Is the unit free from rats or severe infestation by mice or vermin? 8.4 GARBAGE AND DEBRIS Is the unit free from heavy accumulation of garbage or debris inside and outside? 44 8.5 REFUSE DISPOSAL Are there adequate covered facilities for temporary storage and disposal of food wastes, and are they approved by a local agency? 8.6 INTERIOR STAIRS AND COMMON HALLS Are interior stairs and common halls free from hazards to the occupant because of loose, broken or missing steps on stairways, absent or insecure railings; inadequate lighting, or other hazards? 8.7 OTHER INTERIOR HAZARDS Is the interior of the unit free from any other hazards not specifically identified previously? 8.8 ELEVATORS Where local practice requires, do all elevators have a current inspection certificate? If local practice does not require this, are they working and safe? 8.9 INTERIOR AIR QUALITY Is the unit free from abnormally high levels of air pollution from vehicular exhaust, sewer gas, fuel gas, dust, or other pollutants? 8.1 SITE AND NEIGHBORHOOD CONDITIONS Are the site and immediate neighborhood free from conditions, which would seriously and continuously endanger the health or safety of the residents? 8.11 LEAD PAINT: OWNER CERTIFICATION If the owner of the unit is required to treat or cover any interior or exterior surfaces, has the certification of compliance been obtained? If the owner was not required to treat surfaces, check Not Applicable." " 8.12 OTHER 8.13 OTHER 45 APPENDIX F NEIGHBORHOOD STABILIZATION PROGRAM (NSP) APPLICATION CHECKLIST All applications must be typed or printed neatly. All forms should be filled out completely. Make sure applications are signed, and notarized, where required. Incomplete applications will not be accepted. All items must be included in initial submittal - faxes will not be accepted for the Reservation Phase. Applications that are missing any required items or contain white -out will not be processed and will be returned to the Lender. The Program uses a four -phase process: application, reservation, request for funding, and closing. NSP Application. The following items are required in order to accept an application for a specific homebuyer. NSP Reservations are accepted on a first come, first served basis. City of Palm Desert will accept a maximum of two applications per lender branch, per day. City of Palm Desert will review the following items according to the NSP Manual guidelines and respond to any application acceptance request within ten (10) working days. n Cover Letter ❑ Neighborhood Stabilization Program Application (NSP-1) ❑ Certification of Homebuyer (NSP-2) ❑ Notice to Sellers and Disclosure of Information on Lead -Based Paint and Lead -Based Paint Hazards (NSP-3) ❑ NSP Program Financing Worksheet (NSP-4) ❑ Income Affidavit (NSP-5) — (if applicable) ❑ Voluntary Acquisition of Foreclosed Property (NSP-6) — Initial and Final Form In addition to these forms, please submit these non -City of Palm Desert forms: ❑ Copy of Signed Sales Agreement, including all counter offers and Transfer Disclosure Statements o Copy of Escrow Instructions ❑ Attached Map showing location of the house inside NSP Target Area ❑ Copy of Complete Preliminary Report o Copy of Certificate of Occupancy (for new homes only) ❑ Copy of HCD Form 433 (a) (for manufactured homes only) ❑ Copy of Fully Completed and Signed Loan Application ❑ Copy of Home Inspection for existing homes. (This can be submitted after Final NSP-6 is signed and completed establishing the final value). ❑ Copy of the Signed Good Faith Estimate closing form ❑ Copy of Standard Flood Hazard Determination (FEMA Form 81-93), or copy of FEMA website determination. 46 o Last three (3) years of federal tax returns PLEASE NOTE: For each year of tax returns submitted the statement "This is a true and exact copy of the tax returns submitted to the IRS" must be added to each tax return with the homebuyer's wet signature next to the statement. 47 APPENDIX G NEIGHBORHOOD STABILIZATION PROGRAM (NSP) APPLICATION PHASE (Application is on separate attachment) 48 APPENDIX H NEIGHBORHOOD STABILIZATION PROGRAM REQUEST FOR FUNDING FORMS ❑ Cover Letter o True and Correct copy of FNMA Summary Form 1008, OR True and Correct copy of FHA Mortgage Credit Analysis Worksheet, Form 92900-WS ❑ Copy of Certificate of Completion of Home Buyer Education Class ❑ Written Proof of items listed in Home Inspection or Purchase Agreement completed prior to occupancy have been completed ❑ Written request from escrow officer for deposit of NSP funds (wire instructions must be submitted in a font size 10 or larger and include the bank name, bank address, ABA/routing number, account number, escrow/title number, and client vesting) NOTE: These documents will be drawn by City of Palm Desert and delivered to escrow for the homebuyer to sign. ❑ Disclosure Statement Promissory Note for the Purchase Price Assistance ❑ Subordinate Deed of Trust for Purchase Price Assistance ❑ Subordinate Deed of Trust for Home Repair Assistance (outside of escrow) ❑ Promissory Note for the Home Repair Assistance (outside of escrow) O Itemization of Amount Financed o Escrow Officer Checklist (to be initialed and signed by Escrow Officer) 49 APPENDIX I NEIGHBORHOOD STABILIZATION PROGRAM CLOSING PHASE FORMS Escrow to submit the following: ❑ NSP Disclosure Statement. ❑ NSP Promissory Note. ❑ NSP Subordinate Deed of Trust. (certified copy) ❑ Request for Notice (certified copy) ❑ NSP Itemization of Amount Financed ❑ Escrow Officer Checklist (to be initialed and signed by the Escrow Officer) ❑ Proof of Property Insurance ❑ Estimated HUD-1 NOTE: Escrow submits a copy of the Final HUD-1 statement within ten (10) working days after closing. Title Company provides City of Palm Desert with a copy of the Title Insurance Policy insuring the City's Interest in the property Table of Contents. 50 STATE OF CALIFORNIA STANDARD AGREEMENT STD 213 (Rev 06/03) 1 This Agreement is entered into between the State Agency and the Contractor named below: STATE AGENCY'S NAME DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT CONTRACTOR'S NAME County of Riverside 2 . The term of this Agreement is: The maximum amount of this Agreement is: 4 The parties agree to comply with the terms and conditions of the following exhibits which are by this referent made a part of the Agreement. Upon HCD Approval through 09/30/2011 AGREEMENT NUMBER 09-NSP1-6300 REGISTRATION NUMBER 52,300,234.00 Exhibit A - Authority, Purpose and Scope of Work 11 Exhibit B - Budget Detail and Payment Provisions 7 Exhibit C - HCD General Terms and Conditions 8 Exhibit D - State of California General Terms and Conditions 6 Exhibit E - Special Terms and Conditions 6 Exhibit F - Additional Provisions TOTAL NUMBER OF PAGES ATTACHED: 38 pages IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. CONTRACTOR CONTRACTOR'S NAME - ,in ividual, County of Riverside BY (Authorized Signature) PRINTED NAME AND TITLE OF PERSON SIGNING ADDRESS 1325 Spruce Street, Suite 400, Riverside, CA 92507 STATE OF CALIFORNIA AGENCY NAME Department of Housing and Community Development �d Si80 is ND T1TtE ERSON SIGNING Hedez, Contracts Manager, Bud t and Contracts Branch DATE SIGNED (Do nor type) DATE SIGNED (Do nyt type) ADDRESS 1800 Third Street, Room 350, Sacramento, CA 958] ] California Department of General Service Use Only FEB B U 4 2 i U X Exempt per:SCM 4.043 (DGS Memo dated 6/12/81) CITY OF PALM DESERT NEIGHBORHOOD STABILIZATION PROGRAM GENERAL INFORMATION This brochure is intended to provide a general overview of the City of Palm Desert Neighborhood Stabilization Program for prospective first-time home buyers and other interested persons. After reviewing this material, if you feel that you qualify for the program, please contact a participating lender. February 5, 2010 For more information. If you would like to apply for the NSP Program, please contact one of the participating lenders. They will review your qualifications and assist in applying for the program. If you have any questions or need additional information about the NSP Program, please contact: City of Palm Desert Neighborhood Stabilization Program Phone: (760)346-0611 Located at: 73-510 Fred Waring Drive, Palm Desert, CA 92260 CITY OF PALM DESERT NEIGHBORHOOD STABILIZATION PROGRAM INFORMATION PACKET What is the Neighborhood Stabilization Program (NSP)? The primary objective of the Neighborhood Stabilization Program (hereafter called "Program") is to stabilize neighborhoods affected by large number of foreclosed homes. The Program addresses the problem of abandoned and foreclosed homes in Targeted areas within the City of Palm Desert, which will be available for purchase by first-time homebuyers of low and moderate income. The Program will be available to anyone who has not owned a home in the last three years, has an annual income that is not greater than 120% of the area median income as published by the U.S. Department of Housing and Urban Development (HUD), and is purchasing a vacant foreclosed home in the designated Target areas in the City of Palm Desert. This Program will provide purchase price assistance as a silent -second loan and recorded as a second deed of trust to low and moderate income first-time homebuyers in the amount of twenty percent (20%) of the purchase price of the home. What is the Neighborhood Stabilization Home Repair Assistance Program? In addition to purchase price assistance, the program also offers optional Home Repair Assistance which provides neighborhood stabilization to the foreclosed homes purchased within the program by incorporating energy -efficient improvements for long-term affordability and increased sustainability to housing and neighborhoods. Home Repair Assistance must meet Housing Quality Standard (HQS) standards and identified by City of Palm Desert prior to the close of escrow. The City of Palm Desert home repair component will include items such as curb appeal and landscaping after the close of escrow. However, all home repair items will be identified prior to closing. The total combined amount of purchase price assistance and home repair assistance cannot exceed $75,000. City of Palm Desert Home Repair Assistance will be secured by a third deed of trust recorded in subordinate position to the first mortgage and second respectively. Closing cost assistance is not available under this Program. How does the City of Palm Desert assess home repair needs? Once eligibility has been determined, home inspection report received, correction letter issued, if applicable, City of Palm Desert staff or designee will schedule an initial on -site inspection of the property to include the homeowner to go over items that are covered under the home repair assistance. Certain repairs that will not affect the homebuyer from moving in after the close of escrow and deem beyond the scope of the lender habitability standard can be included as part of the additional repair assistance. All repair that affects the move -in and habitability standard must be corrected and completed prior to close of escrow as a condition of NSP assistance requirements. Any repair work shall be to the extent necessary to comply with Housing Quality Standards meeting the U.S. Department of Housing and Urban Development (HUD). All work shall comply with applicable laws, codes, and other requirements to housing safety, quality, and habitability. The City of Palm Desert reserves the right to disallow certain improvements. How is the Bid Process Performed? City of Palm Desert staff will finalize the statement of work, prepare bid package and solicit bids from an established list of licensed qualified general contractors. A pre -bid walk thru will be set up by City of Palm Desert staff or designee and closing bids will be established prior to close of escrow. City of Palm Desert staff or designee will review all bids received and select the lowest responsive bids in accordance to HUD procurement requirements. The bids will be reviewed for cost -reasonableness, consistency and accuracy with respect to the requested repairs. Once the amount of repair assistance has been determined, a deed of trust and note for that amount will be prepared, approved and signed by homebuyer. A contract agreement between contractor and homebuyer will also be prepared and executed. Contractor will be notified however no work will initiate until after the close of escrow. The deed of trust will not be recorded until after the completion of the repair work and the final payment of the work. How soon can the home repair work start? After the close of escrow, City of Palm Desert staff or designee will schedule a Pre -Construction Conference to review the home repair work order with the homeowner and the selected contractor. The conference will be used to go over the scope of work, time line, disbursement of funds process, and completion and close out of work. Contractor is expected to provide sample products and color selection for approval by homebuyer. A Notice to proceed will be issued at the end of the pre -construction conference. All work must be completed within thirty days. The City of Palm Desert will require the contractor to provide warranty statements directly to the homebuyer What takes place during the Construction Phase? City of Palm Desert staff or designee will schedule site visits inspection as needed during construction to ensure satisfactory work and progress. Upon receipt of notice from the contractor that the repairs have been completed, City of Palm Desert staff or designee will complete a final on -site property inspection in cooperation with the homeowner to verify all repairs are complete to their satisfaction. Who qualifies for the NSP Program? The three basic qualifications for the NSP Program are (1) the buyer must be a first time homebuyer; (2) buyer's annual income must be one hundred twenty percent (120%) or less of the area median income; and (3) the home being purchased must be located in the NSP qualifying areas with the maximum purchase price of $292,686 or 95% of the maximum home price for Riverside County and the home must be a foreclosed property that has been vacant for over 90 days. All applicants must either be a US Citizen or a Permanent Resident Alien. What is a first time homebuyer? In order to qualify as a first time homebuyer, purchaser(s) cannot have owned a home for the previous three years from date of the NSP application. The purchaser(s) must attest that they have not owned a home during the previous three year period. In addition, the last three years tax returns will be reviewed to ascertain that no mortgage interest or real estate tax deductions have been claimed. Exception: For the purposes of determining home ownership, a dwelling unit that was not permanently affixed to a permanent foundation (i.e. a mobile home) shall not be included in the three-year requirement. What are the qualifying incomes? In order to be eligible for this program, the buyers' annual income shall not exceed 120% of the area median income, as determined by HUD, adjusted for family size. In addition, assets shall not exceed these limits. Currently, the income limits are as follows: Maximum Annual Household Income Adjusted for Family Size Effective March 17, 2009 Household Size Maximum Annual Income 1 $54,200 2 $61,900 3 $69,650 4 $77,400 5 $83,600 6 $89,800 7 $96,000 8 $102,150 What are the other home buyer requirements? The home buyer must have sufficient income and creditworthiness to qualify for a first mortgage through one of the participating lenders. In addition, the buyer must accept the highest loan -to -value ratio first loan for which they qualify. In order to be eligible for participation in the NSP Program, prospective purchasers must complete the minimum requirements of education in a Home Buyer's Seminar through an agency approved by the City of Palm Desert. What is the maximum home price? The maximum home purchase price under this program is currently $292,686 or 95% of the maximum home price for Riverside County. The purchase price of the property must be at least 1% below City of Palm Desert's market value appraisal. Purchase price assistance will be based on 20% of the home sales price and shall not exceed $75,000. What are the qualifying locations? The Program will be offered in Targeted areas of the City of Palm Desert that have been identified to have the greatest need. The Targeted areas include the areas, which are listed below: Palma Village Palm Desert Country Club North Sphere Palm Desert Note: Please check the Target Areas Map listed on the City of Palm Desert website. What types of properties are eligible? The NSP Program may be used to purchase any foreclosed single family home, condominium /town home that meets all of the following minimum criteria: 1) The home is permanently fixed to a permanent foundation; and 2) The home is currently vacant. Home must have been vacant for at least 90 days prior to Program application or it is ineligible. 3) The home must be built after 1978 and not be listed on, or eligible for listing on the National Register of Historic Places. 4) In -ground Pools and Spas. Single -Family home with in -ground pools or spas are eligible for the Program. What is the process to apply for the NSP Program? (1) If you are a first-time homebuyer whose income are within the Program limits, the first step is to contact a participating lender for eligibility screening. (2) The lender will take a loan application at this time and pre -qualify you for a first loan and the NSP Program. The lender will determine the maximum home price that you can afford, and will also determine whether you are eligible for assistance under the City of Palm Desert NSP Program. (3) After the lender has determined if you are eligible for the program, you will need to attend an eight hour Homebuyer Education class for the NSP Program. The lender will provide the names and phone numbers of approved homebuyer education providers, and you will need to call one of the providers to schedule a class. There may be a minimal charge to attend this class. Note: Please schedule for Home Buyer Education classes early, for they fill up quickly. (4) Once you are pre -qualified for the program and have a maximum home price, you may locate a home to purchase. If you are interested in an existing home, it is recommended that you contact a Realtor to assist you in locating a home to purchase. Note: Make sure that you look for foreclosed homes in NSP target areas. (5) Once you have located a home, you will need to make a purchase offer and start escrow. Your real estate representative or new home salesperson and your lender can assist in this process. You must provide the NSP-3 (Notice to Sellers) and NSP-6 (Voluntary Acquisition of Foreclosed Property) forms as addendums to the purchase contract (your lender can provide you with a copy of these Notices). Once your purchase offer is accepted and escrow begins, your lender will assist you in completing the application materials for the NSP Program. (6) During escrow your lender will process your loan application for the first mortgage and NSP Second mortgage. You will be required to sign forms authorizing the lender to submit a NSP Reservation on your behalf and disclosing your current income from all sources. Prior to the close of escrow you will sign loan documents and both the first and second mortgages will be funded. If NSP Home Repair Assistance was utilized, a third deed of trust will be signed by the home buyer and recorded. (7) When escrow closes, you will become a homeowner and will be responsible for maintaining the property in sound condition. You will begin making monthly payments on your first mortgage. The NSP second and third mortgages will not require payments unless you sell your property or perform cash out refinance on the first mortgage. After the 15 year affordability period, the NSP assistance is converted to a grant with no repayment of funds. What are the first loan terms? The purchaser shall apply for a first mortgage from a participating lender. The first loan must be a fully amortized, fixed rate, thirty-year mortgage. The City of Palm Desert Purchase Price Assistance will be a deed of trust recorded in second position to the first mortgage and amount received for Home Repair Assistance will be recorded as a deed of trust in third position. The purchaser must accept the highest first mortgage amount (principal amount at going interest rate) for which they can qualify. Loan terms and qualifications (interest rate, creditworthiness, etc.) in addition to those specified above will be determined by the participating lender. What costs can be paid by NSP Program? The NSP financial assistance will be provided as purchase price assistance and repair assistance. The amount of assistance available depends upon the buyer's qualifications. In general, NSP funds shall be used exclusively for purchase price assistance. However, repair assistance is available to all eligible homebuyers who qualify for the NSP program. The NSP maximum assistance amount is $75,000. What are the terms of the Purchase Price Assistance? The minimum amount of assistance that may be provided is $1,500 per home purchase. The maximum amount of assistance is 20% of the purchase price of the home. However, this assistance amount may be further reduced if the buyer does not need the full amount to purchase a home. The NSP assistance is recorded as a second mortgage on your home. This deferred second mortgage does not require any monthly payments and is not interest bearing. In exchange for receiving funds to assist in the purchase of a home, the purchaser must agree to a fifteen (15) year affordability period. If the home is sold during the term of the affordability period, it must be sold to a low income buyer who qualifies for the NSP Program or the full amount of the assistance must be repaid. What are the terms of the Repair Assistance? If repair assistance is utilized, the minimum amount of repair assistance shall be $1,500. The maximum amount of repair assistance in conjunction with NSP purchase price assistance shall not exceed $75,000 combined. The repair assistance is provided in the form of a loan and is forgiven after fifteen (15) years. However, this assistance amount may be reduced depending on the home buyer's assistance needs. Is there a deadline to apply for this program? The City will continue to accept Reservation applications as long as NSP funds are available. Who are the Approved Lenders? The City of Palm Desert has many participating lenders, with multiple branches throughout the County and Coachella Valley, participating in the Neighborhood Stabilization Program (NSP) Program. The current list of participating lenders and branch offices are attached. Purchasers must use one of the listed approved lenders and are encouraged to compare home financing terms between them. Note: Additional credit checks by lenders will add "inquiries" to your credit report which may reduce your overall credit score. How were the Approved Lenders selected for the NSP Program? The Riverside County Economic Development Agency published a Request for Qualifications (RFQ) for qualified lenders. The RFQ was published in a newspaper of general circulation, and invitations were mailed to lenders participating in other homebuyer assistance programs administered by EDA as well as lenders requesting to be placed on our mailing list. All lenders were invited to submit materials detailing their qualifications for the program. All submittals that were received prior to the deadline were evaluated and ranked according to the criteria within the RFQ. Lenders that demonstrated in their submittals that they met all the program requirements were selected as participating lenders. These approved lenders will be used for the City of Palm Desert NSP Program. NEIGHBORHOOD STABILIZATION PROGRAM (NSP) APPLICATION CHECKLIST All applications must be typed or printed neatly. All forms should be filled out completely. Make sure applications are signed, and notarized, where required. Incomplete applications will not be accepted. All items must be included in initial submittal - faxes will not be accepted for the Reservation Phase. Applications that are missing any required items or contain white -out will not be processed and will be returned to the Lender. The Program uses a four -phase process: application, reservation, request for funding, and closing NSP Application. The following items are required in order to accept an application for a specific borrower. NSP Reservations are accepted on a first come, first served basis. The City of Palm Desert will accept a maximum of two applications per lender branch, per day. The City of Palm Desert will review the following items according to the NSP Manual guidelines and respond to any application acceptance request within ten (10) working days. Cover Letter Neighborhood Stabilization Program Application (NSP-1) with wet signature(s) Certification of Homebuyer (NSP-2) with wet signature(s) Notice to Sellers (NSP-3) copy of seller's signature ok NSP Program Financing Worksheet (NSP-4) with wet signature(s) Income Affidavit (NSP-5) — if applicable — with wet signature(s) Voluntary Acquisition of Foreclosed Property (NSP-6 Initial) with wet signature(s) (copy of seller's signature is ok) In addition to these forms, please submit these non -county forms: Copy of 1008 or FLUTS (FHA Loan Underwriting Transmittal Summary) signed and dated by the underwriter Copy of Fully Executed Sales Agreement, including all counter offers and Transfer Disclosure Statements Copy of Escrow Instructions Copy of Target map showing location of property and eligibility of the property in the NSP Target Area Copy of Complete Preliminary Report including Plat Map Copy of Fully Completed Loan Application signed by LO and borrower(s) Copy of Home Inspection for existing homes (Home Inspector must be a member of either the California Real Estate Inspectors Association, the American Society of Home Inspectors or the International Conference of Building Officials) Copy of the Good Faith Estimate closing form signed by the borrower(s) Copy of Standard Flood Hazard Determination (FEMA Form 81-93) or copy of FEMA website determination Last three (3) years of federal tax returns (all pages and schedules) — PLEASE NOTE: For each year of tax returns submitted the statement "This is a true and exact copy of the tax returns submitted to the IRS" must be added to each tax return with the applicant's wet signature next to the statement. Copy of Complete Certificate of Occupancy (for new homes only) Copy of HCD Form 433(a) (for manufactured homes only) Page 1 of 1 RIVERSIDE COUNTY NEIGHBORHOOD STABILIZATION PROGRAM (NSP) APPLICATION PHASE COVER LETTER (Lenders should use this form or provide their own cover letter containing all of the following information.) The City of Palm Desert will accept application only from approved participating lender. Date Submitted: Lender Submitting NSP Reservation: Authorized Loan Officer: Address: Telephone: Fax: Cell: Email: Name(s) of NSP Applicant(s): Address and of Home Being Purchased: Special Comments or Notes: Page 1 of 1 CITY OF PALM DESERT 73-510 FRED WARING DRIVE, PALM DESERT, CA 92260 PHONE (760) 346-0611 FAX (760) 341-6372 WWW.CITYOFPALMDESERT.ORG NEIGHBORHOOD STABILIZATION PROGRAM (NSP) APPLICATION Lender: Lender Address: Lender Telephone: Name of Authorized Lender Representative: Are you on the list of approved agents to submit application: Yes No — If the answer is "no" you will not be able to submit an application. Cell: Email: We are processing a mortgage loan application for the below listed applicant(s). Our preliminary review indicates that this household meets the eligibility for Neighborhood Stabilization Program Assistance as set forth in the Program Guidelines of the City of Palm Desert. Upon preliminary eligibility review of the application, the City will initiate the appraisal process and preliminary repair assessment within 3 days of receipt of application and will need immediate access to the property. It is imperative that Seller, Seller's or Buyer's agents are notified in advance at the time of application and provide the following information. Primary Contact Relationship (check one) Seller's Agent Buyer's Agent Lender Telephone: Cell: Email: Secondary Contact Relationship (check one) Seller's Agent Buyer's Agent Lender Telephone: Cell: Email: Does the property have a Iockbox? Yes No If yes, will you provide access to the City staff to inspect the house and the City contract fee appraisal to perform an appraisal? Yes No Lock Box Code: Page 1 of 3 The following request for Purchase Price Assistance and/or Home Repair funds are for the following applicant(s): Name of Applicant(s): Current Address: Applicant's Work Phone Number: ( ) Applicant's Home Phone Number: ( ) Applicant's Cell Phone Number: ( ) Address of Property Being Purchased: Assessor Parcel Number (APN): Initial Purchase Price: $ Gross Annual Household Income: $ Gross Monthly Income: $ Down -Payment Assistance Requested (Cannot exceed 20% of the Purchase Price): $ (Estimate pending final sales price determination from the City) Repair Assistance Requested (To be determined by the City after the repair work has been identified and bid out): $ (Estimate pending final sales price determination from the City) Total Amount of Assistance Requested (Cannot exceed $75,000): $ Has applicant submitted an NSP application in the last six months? If yes, was the property at the time of purchase appraised by the City? Is the applicant a participant in the Palm Desert Housing Program? Yes No Is the applicant a participant in the Authority Family Self Sufficient (FSS) Program? Yes No Is applicant applying for the Minor Repair Assistance of the NSP? Yes No Is household income within the limit the Program Limits? Yes No Is property being purchased located in the City Limits? Yes No Unincorporated Is property inside the NSP Target Areas? Yes No (If no, property is not eligible, do not submit application.) Attach a copy of the map printed from the City's website showing the location of the home that is located inside of the Target Areas. Type of property being purchased: Single Family Detached Condo (Total Units: Number of Bedrooms: Number of Bathrooms: In -ground Pool/Spa: Yes No Yes Yes No No Is the property a bank owned foreclosure/REO? Yes No (If no, property is not eligible, do not submit application.) Short sell does not qualify. Seller must be a lender owned property. Preliminary Title Report must be attached showing the ownership. Page 2 of 3 Date property was constructed: Is the property vacant? (If no, property is not eligible, do not submit application.) Attach proof that the home has been vacant more than 90 days from the Application Date. Yes No Status of Prior Home Ownership: First -Time Homebuyer Last Date of Home Ownership: Applicant Information (For Statistical Purposes Only) Marital Status: Married Single Divorced Family Size: Age of applicant: (Please use the letter "H" to signify head of household, and the letter "X" for each family member) Under 20 36 — 40 20 — 25 41 — 50 26 — 30 51 — 60 31 — 35 Over 61 Head of Household: Male Female Hispanic: Yes No Race: (Select One Below) Black/African American Asian American Indian/Alaskan Native and White Black/African American and White American Indian or Alaskan Native White Native Hawaiian/Pacific Islander Asian and White American Indian/Alaskan Native and Black/African American Other Citizenship Status Applicant 1: US Citizen Qualified Alien Applicant 2: US Citizen Qualified Alien Applicant 3: US Citizen Qualified Alien Applicant 4: US Citizen Qualified Alien Neither (Applicant does not qualify) Neither (Applicant does not qualify) Neither (Applicant does not qualify) Neither (Applicant does not qualify) Date of Application: Authorized Lender Signature: Printed Name: Title: Page 3 of 3 CITY OF PALM DESERT 73-510 FRED WARING DRIVE, PALM DESERT, CA 92260 PHONE (760) 346-0611 FAX (760) 341-6372 WWW.CITYOFPALMDESERT.ORG NEIGHBORHOOD STABILIZATION PROGRAM (NSP) CERTIFICATION OF HOMEBUYER 1) The undersigned, has applied for the Neighborhood Stabilization Assistance from the City of Palm Desert, hereinafter referred to as the City, in conjunction with the Neighborhood Stabilization (NSP) Program, and hereby acknowledges and understands the following a) The NSP Program is to be used in conjunction with a mortgage loan for the purchase of a foreclosed single-family residence, which is required to be used as your principal residence within sixty (60) days after the closing of the mortgage loan. The home shall not be used as a business or as a vacation (second) home. b) The decision to grant the first mortgage loan is completely within the discretion of the mortgage lender to whom you have applied. The City makes no decision in regard to the approval of any first mortgage loan. c) The decision to grant Neighborhood Stabilization Assistance is within the sole discretion of the City, and is dependent upon your application meeting all requirements of the City's Neighborhood Stabilization Homeownership Assistance Program as well as the availability of funds. d) The decision of which home to buy is within the sole discretion of the buyer and the buyer understands that Neighborhood Stabilization Assistance is limited to foreclosed homes located in specific target areas within the City of Palm Desert. The buyer has performed their investigation of the home market, and has independently selected a home to purchase. e) The buyers shall satisfy themselves as to the condition of the home prior to closing escrow. The buyer shall confirm the requested repairs are identified prior to close of escrow, and that all systems are operating improperly are identified by the City staff to be repaired. f) The buyers understand that they shall attend an 8 hour Home Buyer Education Class as soon as possible in the purchase process and that NSP Assistance shall not be approved until the buyers attend this class. To schedule a class, call Fair Housing at 1-800-6551812 or Neighborhood Housing Service at 951-300-1757, or in the Desert, Rancho Housing Alliance at 760-391-5883 and ask for a first time home buyer appointment. 2) In addition to the purchase price assistance provided by the Neighborhood Stabilization Program, the undersigned is also interested in applying for minor home repair assistance as part of the Program. Yes No 3) The undersigned further understands that the home repair assistance within this Program is to stabilize the neighborhoods by incorporating energy -efficient improvements for long-term affordability and increased sustainability to housing and neighborhoods. Activities in the home repair items will include items such as curb appeal and landscaping, and will be identified prior to close of escrow and determined by City staff. 4) The undersigned further understands that City will inspect the property and certain improvements are subject to specific requirements and limitations. Any rehabilitation work shall be to the extent necessary to comply with Housing Quality Standards meeting the U.S. Department of Housing and Urban Development (HUD). All work shall comply with applicable laws, codes, and other requirements to housing safety, quality, and habitability. The City reserves the right to disallow certain improvements. Page 1 of 3 Listed below are the names of all persons who intend to reside in the residence and include the income of all adults age 18 and older: Name Relation to Head of Household Age Social Security Number Employer / Source of Income Gross Annual Income You certify that the following as listed above: The Total Household Gross Annual Income is: The number of family members is: 5) You certify that you have not had a previous ownership interest in a principal residence during the last three (3) years. Neighborhood Stabilization Assistance will not be granted if you have had a previous ownership interest in a principal residence during the last three (3) years. Owners of manufactured homes (not fixed to a permanent foundation) are not required to meet the definition of a "First-time Homebuyer". In connection with the requirement listed above, you will be required to submit copies of your previous three (3) years federal income tax returns, and if unavailable, you will cooperate with the lender to submit alternative documentation acceptable to the lender and the City of Palm Desert. 6) You acknowledge that a material misstatement negligently made in any statement by you in connection with an application for the Neighborhood Stabilization Assistance will constitute a violation of law punishable by a fine; and a material misstatement fraudulently made by you will constitute a violation of law punishable by a fine and a revocation of the Neighborhood Stabilization Assistance, in addition to any criminal penalty imposed by law. 7) If the loan is approved, the buyer's vesting on the property will be as follows: Page 2 of 3 By affixing your signature to this document, you acknowledge that you have read and understand all of the elements as indicated, and give your consent to proceed with the application for the Neighborhood Stabilization Program through the City of Palm Desert. Date: Signature of Applicant 1: Printed Name of Applicant 1: Home Phone Number: Work Phone Number: Email: Date: Signature of Applicant 2: Printed Name of Applicant 2: Home Phone Number: Work Phone Number: Email: Date: Signature of Applicant 3: Printed Name of Applicant 3: Home Phone Number: Work Phone Number: Email: Name of Participating Lender: Signature of Authorized Lender Representative: Printed Name and Title Of Lender Representative: PLEASE SUBMIT ORIGINAL TO THE CITY OF PALM DESERT AND GIVE THE BORROWER'S A COPY OF THIS FORM. Page 3 of 3 CITY OF PALM DESERT 73-510 FRED WARING DRIVE, PALM DESERT, CA 92260 PHONE (760) 346-0611 FAX (760) 341-6372 WWW.CITYOFPALMDESERT.ORG NEIGHBORHOOD STABILIZATION PROGRAM (NSP) NOTICE TO SELLERS Name of Seller(s): Name of Buyer(s): Property address located at: Before a binding sales contract may be executed between the Seller(s) and the Buyer(s), as listed above, Seller warrants that the following is true: Seller's Disclosure: 1) Seller(s) has/have been advised that the Property is being purchased with Federal assistance. 2) Seller(s) is/are voluntarily selling the Property. 3) Seller(s) acknowledge the Property is a foreclosure/REO. 4) Seller(s) will receive notice of the current market appraised value of the Property through the Final Notice of Voluntary Acquisition of Foreclosed Property form NSHP-6. 5) Seller(s) has/have been advised that the Buyer(s) will apply to the Riverside County Neighborhood Stabilization Program (NSP) for financial assistance in purchasing the Property, and that said assistance is subject to both the Buver(s) and the Property qualifying for the NSP. Property must be in standard condition and ready for occupancy upon close of escrow, as determined by the NSP Program. 6) At time of foreclosure, was Property occupied by the former mortgagor (owner occupied)? Yes (Continue to Question 7) No (Skip to Question 8) 7) Was a lease executed with the former mortgagor allowing them to remain in the property after time of foreclosure? Yes (Continue to Question 8) No (Skip to Question 10) 8) Property is presently (check one): Vacant and has been for at least 90 days prior to date of execution of purchase contract Date last Occupied: (Continue to Question9) Vacant and has been for less than 90 days prior to date of execution of purchase contract Date last Occupied: (Continue to Question9) Currently Tenant Occupied (Stop here, property does not qualify.) Page 1 of 2 9) All of the following qualifications must be met in order for a property which was tenant occupied at or after foreclosure to qualify for NSP (check all that apply). Currently Tenant Occupied (Stop here, property does not qualify.) Currently Tenant Occupied (Stop here, property does not qualify.) Currently Tenant Occupied (Stop here, property does not qualify.) 10) Counterparts: This notice may be signed by the different parties hereto in counterparts, each of which shall be an original but all of which together shall constitute one and the same notice. , the Seller(s), certify that I/we have reviewed this notice and agree to the above conditions regarding the selling of my/our property located at To the above -noted buyer(s) who are participating in the City of Palm Desert Neighborhood Stabilization Program. *Signature of Seller — Corporate Representative (if applicable) Date *Signature of Seller — Corporate Representative (if applicable) Date *(attach a copy of the Corporate Resolution, if seller is a corporation) *Signature of Seller's Real Estate Agent Date THIS NOTICE MUST BE ATTACHED TO THE PURCHASE AGREEMENT AND EXECUTED PRIOR TO OR CONCURRENT WITH SELLERS ACCEPTANCE OF PURCHASE OFFER. FAILURE TO DO SO WILL RESULT IN AN INCOMPLETE APPLICATION FROM THE HOME BUYER. THE CITY OF PALM DESERT WILL DENY AN INCOMPLETE APPLICATION. Page 2 of 2 BUYER NAME: CITY OF PALM DESERT 73-510 FRED WARING DRIVE, PALM DESERT, CA 92260 PHONE (760) 346-0611 FAX (760) 341-6372 WWW.CITYOFPALMDESERT.ORG NEIGHBORHOOD STABILIZATION PROGRAM (NSP) FINANCING WORKSHEET 1. PURCHASE PRICE (must not exceed $292,686) = (Max. Purchase Limit Limit) 1. 2. NSP Purchase Price Assistance Requested 2. FINANCING: 3. First Trust Deed Amount 3. 4. NSP Loan Amount 4. 5. Funding from Other Assistance Programs 5. 6. Total Funding (add lines 3, 4 and 5) 6. The next sections will show the details of the above listed totals. Please complete the following, giving best estimate and matching the Good Faith Estimate (GFE) figures: 7. First Mortgage, Interest Rate 7. 8. First Mortgage Loan Type (FHA, VA, Cal-HFA, etc.) 8. 9. Term of Loan (30-yr. fully amortized fix loan) 9. 1st TRUST DEED: 10. First Mortgage Amount 10. 11. Additional Amount Financed (PMI, funding fees, etc.) 11. 12. First Trust Deed Total (add lines 10 and 11; total should match line 3) 12. SUBORDINATE FINANCING AND DOWN PAYMENT: 13. Down payment from Buyer 13. 14. Down payment from Other Ass't Programs (List other Programs & Amounts on pg.2) 14. 15. NSHP Purchase Price Assistance (total includes cost of appraisal) 15. 16. Total (add lines 13, 14 and 15; must match GFE) 16. CLOSING COSTS: 17. Closing Costs paid by Buyer 17. 18. Closing Costs paid by Seller 18. 19. Closing Costs financed in Loan (PMI, etc.) 19. 20. Closing Costs Paid by other Ass't Programs (List other Programs & Amounts on pg.2) 20. 21. Total Closing Costs (add lines 17 thru 21; must match GFE) 21. *The sum of lines 16 and line 21 must not exceed the requested NSP Assistance amount. LENDER CERTIFICATION The amounts above indicate my best possible estimate at this time. (Lender Signature) $ Date (Lender Name) Page 1 of 1 FINANCING WORKSHEET All Assistance Programs: (including the NSP Assistance — exclude Home Repair Assistance) AMOUNT (Dollar Amount) (Dollar Amount) PORTION TOWARD PORTION TOWARD PURCHASE PRICE ASSISTANCE CLOSING COSTS 2"" POSITION NAME OF PROGRAM: Loan or Grant: CITY/COUNTY/STATE: 3"" POSITION NAME OF PROGRAM: Loan or Grant: CITY/COUNTY/STATE: 4'" POSITION NAME OF PROGRAM: Loan or Grant: CITY/COUNTY/STATE: 5'" POSITION NAME OF PROGRAM: Loan or Grant: CITY/COUNTY/STATE: 6TM POSITION NAME OF PROGRAM: Loan or Grant: CITY/COUNTY/STATE: TOTAL: LENDER CERTIFICATION The amounts above indicate my best possible estimate at this time. (Lender Signature) (Lender Name) Date Page 2 of 3 FINANCING WORKSHEET PROGRAM RATIO WORKSHEET MONTHLY INCOME: TOTAL HOUSEHOLD INCOME (including family members 18 years and older who will not be on the loan) Base Monthly Income Other Monthly Income (Overtime, Bonuses, Commissions, etc.) Applicant #1 Applicant #2 Applicant #3 Applicant #4 1a 2a 3a 4a $ 1b 2b 3b 4b $ TOTAL MONTHLY INCOME: 5. BASE INCOME (add lines la, 2a, 3a and 4a): 5 6. OTHER INCOME (add lines 1b, 2b, 3b and 4b): 6 7. ASSET INCOME (Asset in excess of $5,000 x 3.5%)(HUD Passbook Rate): 7 8. TOTAL INCOME (add lines 5, 6 and 7): 8 Ratios: Please include the MCC credit in calculating the ratios, if receiving the MCC credit. Proposed Monthly Payments Borrower's Primary Residence (Subtract the MCC credit from the Monthly Housing Expense) 9. First Mortgage P & I (30-year): 9 10. Second Mortgage P & I (if applicable): 10 11. Property Taxes: 11 12. Mello -Roos: 12 13. Fire Insurance: 13 14. Private Mortgage Insurance 14 15. Flood / Hazard Insurance: 15 16. Home Owner's Association Fees: 16 17. Other: 17 18. Primary Housing Expense (add lines 9 thru 15): 18 19. Monthly MCC Credit Amount: 19 20. Total Primary Housing Expense (linel6 less line 17): 20 Monthly Housing Expense 21. Total Primary Housing Expense (from line 18): Monthly Household Income 22. Total Gross Monthly Income (from line 8): 21 22 23. Front End Ratio "Housing Ratio" (line 21 divided by line 22): 23 $ LENDER CERTIFICATION Front end ratio minimum: 25% The amounts above indicate my best possible estimate at this time. (Lender Signature) Front end ratio maximum: 35% Date (Lender Name) Page 3 of 3 CITY OF PALM DESERT 73-510 FRED WARING DRIVE, PALM DESERT, CA 92260 PHONE (760) 346-0611 FAX (760) 341-6372 WWW.CITYOFPALMDESERT.ORG NEIGHBORHOOD STABILIZATION PROGRAM (NSP) INCOME AFFIDAVIT (MUST ATTACH A COPY OF SIGNED IRS FORM 4506-T) 1. I (We) hereby certify that I (we) was (were) not required by law to file a Federal Income Tax Return for the following year(s): For the following reason(s) stated below: NO INCOME: OTHER: 2. I (We) acknowledge and understand that this Affidavit will be relied upon for purposes of determining my (our) eligibility for Neighborhood Stabilization Program Assistance. I (We) acknowledge that a material misstatement negligently made in any statement by me (us) in connection with an application for purchase price and/or home repair assistance will constitute a federal violation punishable by a fine; and a material misstatement fraudulently made in any statement by me (us) in connection with an application for the Program will constitute a federal violation punishable by a fine and repayment of all Assistance received, which will be in addition to any criminal penalty imposed by law. 3. I (We) hereby acknowledge and understand that any false pretense, including false statement or representation, or the fraudulent use of any instrument, facility, article or other valuable thing or service pursuant to participation in any Riverside County program is punishable by imprisonment or by a fine. 4. In addition, I (we) understand that I am (we) (are) required to submit a completed IRS Form 4506-T Request for Transcript of Tax Return to be attached with this application. The City of Palm Desert may use this information to verify your statements with the IRS. Signature of Applicant Signature of Applicant Signature of Applicant Printed Name Date Printed Name Date Printed Name Date Page 1 of 1 CITY OF PALM DESERT 73-510 FRED WARING DRIVE, PALM DESERT, CA 92260 PHONE (760) 346-0611 FAX (760) 341-6372 WWW.CITYOFPALMDESERT.ORG NEIGHBORHOOD STABILIZATION PROGRAM (NSP) VOLUNTARY ACQUISITION OF FORECLOSED PROPERTY - Informational Notice To Seller - Select One: ❑ Initial Notice or ❑ Final Notice Date , (hereafter called "Buyer") is interested in acquiring property you (Seller) own at (address) which may receive funding assistance from the U.S. Department of Housing and Urban Development (HUD) under the Neighborhood Stabilization Program (NSP) created under the Housing and Economic Recovery Act of 2008 to purchase foreclosed homes at a discount. The Buyer intends to apply and qualify for the City of Palm Desert's (the "City") Neighborhood Stabilization Program (NSP) assistance for purchase price and home repair assistance to purchase the property. Acquisitions financed with NSP funds are subject to Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA). Please be advised that Buyer does not have authority to acquire your property by eminent domain. In the event the Buyer cannot reach an amicable agreement for the purchase of your property, the proposed acquisition cannot be consummated under the Neighborhood Stabilization Program and the application for the assistance will be denied. In accordance with the URA, owner -occupants who move as a result of a voluntary acquisition are not eligible for relocation assistance. A tenant -occupant who moves as a result of a voluntary acquisition for a federally -assisted project may be eligible for relocation assistance. Such displaced persons may include not only current lawful occupants, but also former tenants required to move for any reason other than an eviction for cause in accordance with applicable federal, state, and local law. If the property is currently tenant -occupied or a tenant lawfully occupied the property within the past 90 days prior to this offer, the City and Buyer need to know immediately. Further, you should not order current occupant(s) to move, or fail to renew a lease, in order to sell the property to Buyer as vacant. Initial Notice - Under the NSP, Buyer is required to purchase foreclosed property at a discount from its current market appraised value. Upon receipt of the NSP application and preliminary review of the eligibility, the City, through an independent fee contract appraiser will conduct an appraisal of the property. The appraisal must be completed meeting the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) and its implementing regulations at 49 CFR Part 24. The contract fee appraiser contracted by the City must be State licensed or certified in accordance with title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). All purchase price at the time of application of NSP funds is received will be considered as initial offer. The City will determine the appraisal value of the house within ten (10) working days of the receipt of the application. The final purchase price must be at least one percent (1%) below the appraised value. If the initial purchase price meets the one percent (1%) discount, the City will submit Final NSP-6 form to Buyer acknowledging the requirement has been met and both Buyer and Seller must execute Final NSP-6. If the initial purchase price does not satisfy the one percent (1%) discount, the Buyer will be required to negotiate a minimum 1% discount and both Buyer and Seller must execute Final NSP-6. The fully executed Final NSP-6 form must be received by the City and dated within sixty (60) days of the completed City appraisal report. Failure to submit this in a timely manner will result in denial of the NSP application. If the Seller and Page 1 of 3 Buyer could not reach an amicable agreement for the purchase price of the property, the NSP application by the Buyer will be denied and the cost of the appraisal will be absorbed by the City. Initial Purchase Price Negotiated by Buyer and Seller: $ By signing below, both Buyer and Seller acknowledge and understand the purchase price discount requirements of the transaction. Buyer's initial purchase price is contingent and subject to the discount requirement of the Neighborhood Stabilization Program and the current market appraised value. (See Note) Signature of Seller Date Signature of Buyer Date Print Name Print Name Signature of Seller Date Signature of Buyer Date Print Name Print Name Signature of Seller Date Signature of Buyer Date Print Name Print Name If you have any questions about this notice and the Neighborhood Stabilization Program, please contact the City of Palm Desert at (760) 346-0611, Housing Department, or visit our website at www.cityofpalmdesert.orq. Note: Section 2301(d) (1) of Housing and Economic Recovery Act of 2008 (HERA) limits the purchase price of a foreclosed home, as follows: "Any purchase of a foreclosed upon home or residential property under this section shall be at a discount from the current market appraised value of the home or property, taking into consideration its current condition, and such discount shall ensure that purchasers are paying below -market value for the home or property." To ensure that uncertainty over the meaning of this section does not delay program implementation, HUD is defining "current market appraised value" as the value of a foreclosed upon home or residential property that is established through an appraisal made in conformity with the appraisal requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) at 49CFR24.103 and completed within 60 days prior to an offer made for the property by a grantee, sub -recipient, developer, or individual homebuyer. For mortgagee foreclosed properties, HUD is requiring that grantees seek to obtain the maximum reasonable discount from the mortgagee, taking into consideration likely carrying costs of the mortgagee if it were to not sell the property to the grantee or sub -recipient. Final Notice — To be filled out by the City of Palm Desert. The City of Palm Desert has obtained an appraisal of the property under consideration, and the following applies: Page 2 of 3 The appraisal indicates the property's market value is $ The appraisal report is dated The fifteen (15%) discount is $ ( ) The final purchase price must be equal to or less than $ and will expire on midnight of Buyer's Initial Purchase Price dated is $ Buyer's Initial Purchase Price Ci does G does not meet the 15% discount of the current market appraised value. Final Notice — To be filled out by Buver and Seller (if PP > 15%). If Buyer's Initial Purchase Price is at least fifteen (15%) or more below the current marked appraised value, by signing below, Buyer and Seller acknowledged that they mutually accepted the Final Purchase Price of $ ( ). (worded) Signature of all parties below must be dated before the expiration of offer to be valid. Signature of Seller Date Signature of Buyer Date Print Name Print Name Signature of Seller Date Signature of Buyer Date Print Name Print Name Final Notice — To be filled out by Buver and Seller (if PP < 15%). If Buyer's Initial Purchase Price is Tess than fifteen (15%) of the current marked appraised value, Buyer is prepared to offer you $ to purchase your property. This offer is less than the current market appraised value as required by the NSP. Please contact Buyer at your convenience if you are interested in selling your property. By signing below, Buyer and Seller acknowledged that they mutually accepted the Final Purchase Price of $ ,( ). (worded) Signature of all parties below must be dated before the expiration of offer to be valid. Signature of Seller Date Signature of Buyer Date Print Name Print Name Signature of Seller Date Signature of Buyer Date Print Name Print Name Page 3 of 3 NEIGHBORHOOD STABILIZATION PROGRAM (NSP) REQUEST FOR FUNDING FORMS Cover Letter Copy of Certificate of Completion of 8 hour Home Buyer Education Class from HUD approved homebuyer Education Provider (On -Line classes are not acceptable and certificates expire after one year) Written Proof that items listed on the City of Palm Desert's repair request letter have been repaired or replaced as requested (This must be in the form of a signed letter by a licenses contractor or the original inspector, itemizing the items which were repaired) Written request from the escrow officer for deposit of NSP funds in a font size 10 or larger. To process the funding request, the wire instructions must include all of the following: 1. Bank name 2. Bank address 3. ABA/routing number 4. Account number 5. Escrow number 6. Title number 7. Client vesting NOTE: These documents will be drawn by the City of Palm Desert and delivered to escrow for the borrower to sign. Disclosure Statement Promissory Note for Purchase Price Assistance Subordinate Deed of Trust for Purchase Price Assistance Promissory Note for Home Repair (outside of escrow) Subordinate Deed of Trust for Home Repair (outside of escrow) Itemization of Amount Financed Escrow Officer Checklist (to be initialed and signed by Escrow Officer) Page 1 of 2 RIVERSIDE COUNTY NEIGHBORHOOD STABILIZATION PROGRAM (NSP) REQUEST FOR FUNDING PHASE COVER LETTER (Lenders should use this form or provide their own cover letter containing all of the following information) Date Submitted: Lender Submitting NSP Reservation: Contact Person: Address: Telephone: Fax: Cell: Email: Name(s) of NSP Applicant(s): Address and of Home Being Purchased: Special Comments or Notes: Page 2 of 2 CITY OF PALM DESERT NEIGHBORHOOD STABILIZATION PROGRAM (NSP) REQUEST FOR RESERVATION PHASE COVER LETTER (Lenders should use this form or provide their own cover letter containing all of the following information.) The City of Palm Desert will accept application only from approved participating lender. Date Submitted: Lender Submitting NSP Reservation: Contact Person: Address: Telephone: Fax: Cell: Email: Name(s) of NSP Applicant(s): Address and of Home Being Purchased: Close of Escrow Date: Special Comments or Notes: Page 1 of 2 NEIGHBORHOOD STABILIZATION HOMEOWNERSHIP PROGRAM (NSP) REQUEST FOR FUNDING FORMS Cover Letter True and Correct copy of FNMA Summary, Form 1008, OR True and Correct copy of FHA Mortgage Credit Analysis Worksheet, Form 92900-WS Copy of Certificate of Completion of Home Buyer Education Class Written Proof of items listed in Home Inspection or Purchase Agreement completed prior to occupancy have been completed Written request from the escrow officer for deposit of NSP funds in a font size 10 or larger. To process the funding request, the wire instructions must include all of the following: 1. Bank name 2. Bank address 3. ABA/routing number 4. Account number 5. Escrow number 6. Title number 7. Client vesting NOTE: These documents will be drawn by the City of Palm Desert and delivered to escrow for the borrower to sign. The following attached documents are provided as samples for informational purposes only. Disclosure Statement Promissory Note for Purchase Price Assistance Subordinate Deed of Trust for Purchase Price Assistance Promissory Note for Home Repair (outside of escrow) Subordinate Deed of Trust for Home Repair (outside of escrow) Itemization of Amount Financed Escrow Officer Checklist (to be initialed and signed by Escrow Officer) Page 2 of 2 APPENDIX 1 NEIGHBORHOOD STABILIZATION PROGRAM (NSP) CLOSING PHASE FORMS Escrow submits the following to the City of Palm Desert: NSP Disclosure Statement (signed original) NSP Promissory Note (signed original) NSP Subordinate Deed of Trust (certified copy) Itemization of amount financed (signed original) Request for Notice (certified copy) Escrow Officer Checklist (signed by the Escrow Officer) Proof of Property Insurance showing the City of Palm Desert as additional insured Estimated HUD-1 NOTE: Escrow submits a copy of the Final HUD-1 Statement within ten (10) working days after closing. NOTE: The Title Company provides the City of Palm Desert with a copy of the Title Insurance Policy within ten (10) working days insuring the City's Interest in the property. Page 1 of 1 DISCLOSURE NOTICES Applicant(s) Property Address F C R A FAIR CREDIT REPORTING ACT An investigation will be made as to the credit standing of all individuals seeking credit in this application. The nature and scope of any investigation will be furnished to you upon written request made within a reasonable period of time. In the event of denied credit due to an unfavorable consumer report, you will be advised of the identity of the Consumer Reporting Agency making such report and of right to request within sixty (60) days the reason for the adverse action, pursuant to provisions of Section 615 (b) of the Fair Credit Reporting Act. You have the right under the Fair Credit Reporting Act to know the information contained in your credit file at the Consumer Reporting Agency if an adverse action is taken on your loan application. Under Section 612 of the Fair Credit Reporting Act you have the right to obtain within 60 days of an adverse action a free copy of the report from the Consumer Reporting Agency. You also have the right to dispute the accuracy or completeness of any information in a consumer credit report furnished by the Consumer Credit Reporting Agency. wQO4 I EQUAL CREDIT OPPORTUNITY ACT The Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on a basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. Income which you receive as alimony, child support or separate maintenance need not be disclosed to this creditor unless you choose to rely on such sources to qualify for the loan, Income from these and other sources, including part- time or temporary employment, will not be discounted by this lender because of your sex or marital status. However, we will consider very carefully the stability and probable continuity of any income you disclose to us. The Federal Agency that administers compliance with this law concerning this creditor is: L 0 A N S FHA LOANS ONLY IF YOU PREPAY YOUR LOAN ON OTHER THAN THE REGULAR INSTALLMENT DATE, YOU MAY BE ASSESSED INTEREST CHARGES UNTIL THE END OF THAT MONTH. GOVERNMENT LOANS ONLY RIGHT TO FINANCIAL PRIVACY ACT OF 1978 - This is notice to you as required by the Right to Financial Privacy Act of 1978 that the Department of Housing and Urban Development of Department of Veterans Affairs has a right of access to financial records held by a financial institution in connection with the consideration of administration of assistance to you. Financial records involving your transaction will be available to the Department of Housing and Urban Development or Veterans Affairs without further notice or authorization but will not be disclosed or released to another Government agency or Department without your consent except as required or permitted by law. NSP LOAN DISCLOSURE 1 certify that I am applying for a FirstHome Mortgage loan with an NSP second mortgage through the City of Palm Desert NSP Program. The second mortgage has a 0% interest rate and requires no monthly payments. I understand that if I do not satisfy the terms of the Promissory Note for this 15-year forgivable loan, then this loan must be repaid as stated in the Promissory Note 1) when the house transferred, 2)when the house is refinanced, 3)when I no longer occupy the home, or 4) at the end of the 15 year term, whichever occurs first. In the event of a refinance, the NSP second mortgage cannot be subordinated; it must be paid in full in accordance with the terms of the Promissory Note if not earlier satisfied as stated therein. E M P L 0 Y EMPLOYMENT CERTIFICATION An approval for a loan is based upon employment that, income and obligations as shown on the loan application. At closing, the applicant and co-applicant/spouse, if applicable, are required to execute a sworn statement affirming that they are currently working as previously reported, have not received notice of layoff nor have knowledge of pending layoff, and that outstanding obligations are substantially the same as reported on the application. Should a change occur in your employment or financial status prior to loan closing, immediately notify your loan officer, as it will be necessary to obtain approval of any changes. I N s R A N C E S T A T E M E N T ..__1I IANTI-COERCION STATEMENT The insurance laws of this state provide that the lender may not require the applicant to take insurance through any particular insurance agent or company to protect the mortgaged property. The applicant, subject to the rules adopted by the Insurance Commissioner, has the right to have the insurance placed with an insurance agent or company of his choice, provided the company meets the requirements of the lender. The lender has the right to designate reasonable financial requirements as to the company and the adequacy of the coverage. I have read the foregoing statement, or the rules of the Insurance Commissioner relative thereto, and understand my rights and privileges and those of the lender relative to the placing of such insurance. I have selected the following agencies to write the insurance covering the property described above: Insurance Company Name Agent Agent's Address Agent's Telephone Number CI FLOOD INSURANCE NOTIFICATION Federal regulations require us to inform you that the property used as security for this loan is located in an area identified by Federal Emergency Management Agency (FEMA) as having special flood hazards and that in the event of damage to the property caused by flooding in a Federally -declared disaster, Federal disaster relief assistance, if authorized, will be available for the properly. At the closing you will be asked to acknowledge your receipt of this information. If you have any questions concerning this notice, kindly contact your loan officer. IMPORTANT: Please notify your insurance agent that the "loss payable" clause for the mortgagee on both be hazard and flood insurance must read as follows, unless otherwise advised. E D u c A T I 0 N REQUIRED PRE -PURCHASE HOME BUYER COUNSELING CERTIFICATION I (the lender) certify I have notified the borrower(s) of this 8-hour pre -purchase counseling requirement. A copy of the completion certificate verifying that the borrower(s) have completed an 8-hour home buyer counseling course conducted by a HUD -approved organization is included with this loan application. Signature of Lender Representative Date N 0 T I F I C A T 0 N I/We hereby certify that I/we have read the Notices set forth above and fully understand all of the above. In addition to these Notices, 1/we the applicant(s) certify that I/we have received the "Buying Your Home -Settlement Costs and Helpful information" booklet and the "Consumer Handbook on Adjustable Rate Mortgages: (CHARM booklet). If applicable. Applicant Date Applicant Date Applicant Date Applicant Date BUYERS AFFIDAVIT Date: Applicant: Co -Applicant: Address: Telephone: (home) (work) Are you a First Time Home Buyer: ❑ Yes ❑ No Is the Head of Household (Check all that apply): ❑ Male ❑ Female ❑ Over 55 Names and ages of all intended occupants: (If additional space is required, please include a separate sheet with all of the remaining household members) Name Age Sex Relationship to Applicant Ethnicity* (M/F) Total number of person(s) in my/our house who will live in the applied -for home is Household income: Gross Annual Income: $ *ETHNICITY: (Select ONLY one of three race/multi-race categories that best defines each family members' ethnicity): Single race category W White B Black/African American A Asian I American Indian/Alaskan Native P Native Hawaiian/Other Pacific Islander Multi -race category IW American Indian/Alaskan Native & White BW Black/African American/White AW Asian & White IB American Indian/Alaskan Native & Black/African American Single Hispanic/Multi-Hispanic combination race category (Select from ONLY one - either Hispanic only or a combination thereof) H Hispanic (only) HW Hispanic/White HB Hispanic/Black/African American HA Hispanic/Asian HAW Hispanic/Asian & White HBW Hispanic/Black/African American & White HIW Hispanic/American Indian/ HIB Hispanic/American Indian/Alaskan 0 Other (ONLY if none of the above racial Alaskan Native & White Native & Black/African American categories identifies you.) I certify that the statements above as well as those contained in my application and supporting documents provided by me as part of a request for assistance from the City of Palm Desert Redevelopment Agency and/or Palm Desert Housing Authority, for the purpose of purchasing a home are true and complete to the best of my knowledge and belief under penalty of perjury I understand the information will be verified. I understand that any false statements or failure to make any required disclosures may cause me to be disqualified from initial or continuing eligibility for housing assistance. Date Date Redevelopment Agency Use Only Date Received: / / Received by: LOT # HUD Income year used to qualify: Maximum Actual Housing Cost (MaxAHC): Minimum Actual Housing Cost (MInAHC): % of AMI: Actual Housing Cost (ActIAHC): % Income to Actual Housing Cost (%Incm): ❑Very Low ❑Low ❑Medium Entered by: Date: RECORDING REQUESTED BY CITY OF PALM DESERT AND WHEN RECORDED MAIL TO City of Palm Desert 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: Housing Dept. SPACE ABOVE THIS LINE FOR RECORDER'S USE No Recording Fee Required Pursuant to Gov. Code § 6103 LONG FORM DEED OF TRUST AND ASSIGNMENT OF RENTS A. P. N. (APN Number) This Deed of Trust, made this (Day) day of (Month), (Year), between (Borrower(s), herein called Trustor, whose address is (Property Address) Palm Desert, California, in favor of Title Company, as Trustee, for the benefit of the CITY OF PALM DESERT, a public body, corporate and politic, herein called Beneficiary, Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, that certain real property and all improvements located thereon (the "Property") in Riverside County, California, described as: LOT (LOT Number) OF TRACT MAP NO. 27546, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 249 OF MAPS, PAGES 63 THROUGH 68, INCLUSIVE, RECORDS OF SAID COUNTY. TOGETHER WITH the rents, issues and profits thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and supply such rents, issues and profits. For the Purpose of Securing: (1) Performance of each agreement of Trustor herein contained. (2) Payment of the indebtedness evidenced by one promissory note of even date herewith, and any extension or renewal thereof, in the principal sum of $ (STD Amount) executed by Trustor in favor of Beneficiary or order (the "Note"). To Protect the Security of This Deed of Trust, Trustor Agrees: (1) To keep said Property 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 said 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 said Property in violation of law; and to do all other acts which from the character or use of said 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 superior trust deed holder, as their interests may appear. The amount collected under any fire or other 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: at least ten days before delinquency all taxes and assessments affecting said Property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof; 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 said 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 incumbrance, charge or lien; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. All such payments, costs and expenses made or incurred by Beneficiary or Trustee shall constitute obligations of Trustor secured by this Deed of Trust. (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 said statement is demanded. (6) That any award of damages in connection with any condemnation for public use of or injury to said Property or any part thereof is hereby assigned and shall be paid to Beneficiary (and to any superior trust deed holder, as their interests may appear) who may apply or release such moneys received by him 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 his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. (8) That at any time or from time to time, without liability therefore 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: 2 reconvey any part of said 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 subordinating 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 persons 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 as additional security, subject to the rights of superior trust deed holders, as their interests may appear, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said Property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said Property or any part thereof, in his own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said Property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (11) 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 to be sold said Property, 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 said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said Property at the time and place fixed by it in said 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 said 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. (12) 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 said 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. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new Trustee. (13) 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 pledgees, 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. (14) 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. (15) If the Trustor shall sell, lease, transfer, assign, convey, encumber, mortgage, hypothecate or alienate the real Property described herein, or any part thereof, or any interest therein, or shall be divested of title or any interest therein in any manner or way, whether voluntarily or involuntarily (except as permitted by Beneficiary), or if Trustor shall fail to make any payments due under the Note, or fail to perform any other obligation under this Deed of Trust or the Note, or any other deed of trust encumbering the subject Property, then Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby, irrespective of the maturity date specified in any note evidencing the same, immediately due and payable. Notwithstanding the foregoing, if the resale of the Property is to another Qualified Person and such purchaser assumes in writing the obligations of the Note and this Deed of Trust, then (i) all interest accrued from the date of the seller's acquisition of the Property through the closing date of the resale to the new Qualified Person shall be paid at Close of Escrow, (ii) interest shall then accrue from and after the closing date of the resale (with such accrued interest again to be subject to payment upon another resale to yet another Qualified Person), and (iii) the principal amount of the Loan shall be due only to the extent that the purchase price paid by the purchaser exceeds the amount that would have been the maximum resale price to another purchaser at the same income level of the seller (at the time of the seller's original acquisition of the Property). (Thus, if the seller and the purchaser are of the same income level, then none of the principal would be due, but if the purchaser is of a higher income level, then it is possible that some of the principal may be due because the maximum resale price calculated pursuant to the program requirements may be higher if the purchaser is of a higher income level than was the seller at the time of the seller's acquisition of the Property.) At the end of the 15 year term of the Note hereof, if there have been no resales to any person or family other than a Qualified Person, the principal balance outstanding and any accrued interest shall be forgiven by the Beneficiary subject to and in accordance with the provisions of the Note. (16) Notwithstanding anything provided herein to the contrary, the Beneficiary agrees to look solely to the Trustor's interest in the Property encumbered hereby and improvements thereon (or the proceeds thereof) for the satisfaction of any remedy of the Beneficiary, and for the collection of a judgment (or other judicial process) requiring the payment of money by the Trustor, except where such judgment results from a claim of fraud; intentional misrepresentation; misapplication; misappropriation; or wrongful retention of rental income; casualty insurance; condemnation proceeds; or other funds attributable to the Property; the commission of any act of deliberate waste with respect to the Property encumbered hereby; or the deposit of any hazardous or toxic materials on the Property encumbered hereby; in which events there shall be no such limitation on the Beneficiary's recourse against the Trustor. (17) Any breach or default under the Note shall be deemed a breach of this Deed of Trust. (18) Immediately prior to the recordation hereof the Trustor is or may be recording a deed of trust that shall be superior to this Deed of Trust. In such event, such Deed of Trust recorded prior hereto shall be superior to this Deed of Trust. Therefore, in the event of the foreclosure of such Deed of Trust, or the conveyance by deed in lieu of foreclosure of the Property to a bank, savings and loan, or other institutional lender that is the beneficiary of such Deed of Trust superior to the lien hereof, the provisions hereof shall terminate and be of no force or effect; provided however, if the senior lender acquires title to the Property 4 pursuant to a deed in lieu of foreclosure, then this Deed of Trust shall terminate only if (i) Beneficiary has been given written notice of a default under the senior lender's Deed of Trust, and (ii) the Beneficiary shall not have cured the default under the senior lender's Deed of Trust. The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to him at his address hereinbefore set forth. Borrower Name Date Borrower2 Name Date State of California } ss. 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. (seal) Signature State of California County of } ss. } 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. (seal) Signature Name Street Address City & State RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 SPACE ABOVE THIS LINE FOR RECORDER'S USE Exempt from recording fees pursuant to Gov. Code § 6103 Request for Notice A.P.N. (APN Number) In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded concurrent herewith in the official records of Riverside County, California, and describing land therein as: LOT (LOT NUMBER) OF TRACT MAP NO. 27546 IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 249 OF MAPS, PAGES 63 THROUGH 68, INCLUSIVE, RECORDS OF SAID COUNTY. Executed by as Trustors, in which is named as Beneficiary and as Trustee, be mailed to: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 Borrower Name Date Borrower2 Name State of California County of Date } ss. } 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. (seal) Signature PROMISSORY NOTE SECURED BY DEED OF TRUST $ (STD Amount) Palm Desert, California (Prep Date) FOR VALUE RECEIVED, the undersigned (Borrower(s)) ("Maker") hereby promises to pay to the order of the CITY OF PALM DESERT, a public body, corporate and politic ("Holder"), at Palm Desert, California, without deduction or offset, the sum of (STD Wording) Dollars ($ STD Amount) (the "Loan"), together with simple interest at the rate of 0% per annum from (Prep Date), the close of escrow. If more than one person is signing this as Maker, then the obligations of the Maker shall be joint and several. This Note is secured by that certain Deed of Trust and Assignment of Rents of even date herewith executed by Maker for the benefit of Holder (the "Deed of Trust"). In addition, this Note is issued pursuant to and arises out of the terms and conditions of the Neighborhood Stabilization Program with a Deed of Trust securing this Note. The principal amount of this Loan shall be due and payable transfer, however, if Maker has not breached the terms and conditions of the NSP Program Guidelines, this Note or the Deed of Trust, then Holder agrees to forgive all principal and interest, if any, on the Maturity Date. Maker may prepay, without penalty or premium, any amount of the interest, if any, or principal under this Note prior to the due date hereof. Prepayments shall be credited first against accrued interest, if any, and the balance shall be credited to principal. Should default be made by the undersigned in the performance of any of the covenants or agreements of the Maker contained in this Note or the Deed of Trust, and if such default is not cured within five (5) days from Holder's notice to Maker of such default, then, at Holder's option, all sums owing hereunder shall, at once, become due and payable. 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. This Note and the Deed of Trust by which it is secured 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 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 according to its tenor. The undersigned hereby covenants and agrees to pay all costs and expenses of collection, whether by suit or otherwise, at any time or from time to time incurred, including without limitation attorney's fees and all costs and expenses actually incurred in connection with the protection or realization of the property secured by the Deed of Trust. If Maker shall sell, lease, sublease, assign, convey, transfer, encumber, mortgage, hypothecate or alienate the real property (the "Property") encumbered by the Deed of Trust, or any part thereof, or any interest therein, or shall be divested of their title in any manner or way, whether voluntarily or involuntarily, the indebtedness evidenced hereby, irrespective of the maturity date expressed herein, at the option of the Holder, upon demand, shall immediately become due and payable, except as permitted by Holder pursuant to the terms and conditions set forth in the NSP Program Guidelines. To this end, the Deed of Trust securing this Note provides as follows: If the Trustor shall sell, lease, sublease transfer, assign, convey, encumber, mortgage, hypothecate or alienate the real property described herein, or any part thereof, or any interest therein, or shall be divested of title or any interest therein in any manner or way, whether voluntarily or involuntarily (except as permitted by Beneficiary pursuant to the terms and conditions set forth in the NSP Program Guidelines), or Trustor shall fail to make any payments due under the note secured by this Deed of Trust, or fail to perform any other obligation under said NSP Program Guidelines of even date herewith, this Deed of Trust or the Note, or any other deed of trust encumbering the subject property, then Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby, irrespective of the maturity date specified in any note evidencing the same, immediately due and payable. Notwithstanding the forgoing, if the resale of the Property is to another Qualified Person (as defined in the NSP Program Guidelines), and such purchaser assumes in writing the obligations of this Note and the Deed of Trust, then (i) all interest accrued from the date of the seller's acquisition of the Property through the closing date of the resale to the new Qualified Person shall be paid at close of escrow, (ii) interest shall then accrue from and after the closing date of the resale (with such accrued interest again to be subject to payment upon another resale to yet another Qualified Person), and (iii) the principal amount of the Loan shall be due only to the extent that the purchase price paid by the purchaser exceeds the amount that would have been the maximum resale price to another purchaser at the same income level of the seller (at the time of the seller's original acquisition of the Property). (Thus, if the seller and the purchaser are of the same income level, then none of the principal would be due, but if the purchaser is of a higher income level, then it is possible that some of the principal may be due because the maximum resale price calculated pursuant to the NSP Program Guidelines may be higher if the purchaser is of a higher income level than was the seller at the time of the seller's acquisition of the Property). At the end of the 15-year term of the Note, if there have been no resales to any persons or families other than Qualified Persons, then the principal balance outstanding and any accrued interest shall be forgiven by the Holder subject to and in accordance with the provisions of the NSP Program Guidelines. 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 the undersigned and the Holder. This note may be subject to Section 2966 of the California Civil Code, which provides that the Holder of this Note shall give written notice to Maker, or its successor in interest, of prescribed information at least 60 (sixty) and not more than 150 days before any balloon payment is due. Time is of the essence with respect to each and every provision hereof. If any provision hereof is found to be invalid or unenforceable by a court of competent jurisdiction, the invalidity thereof shall not affect the enforceability of the remaining provisions of this Note. Borrower Name Date Borrower2 Name Date G:\RDA\Veronica Tapia\NSP Program\Program Documents\Loan Documents\NSP PromissoryNote.doc 2 a Z_ E 0) 0 a a c ▪ • (22 N c o d J a O > cI2 > CI_c • Q .O N .p 0 O t 0 0) Z Last Updated December 11, 2009 0 y 0) N E 0 0) 0 0) 0. 0) ; a E O a) O Q) U VI W E U o a o > m • m • CD • a) m 0 o as •- • 0 cB >- 0 0 So 0 O 0 L m10 m • a 0) 0 m o O 0 m 0 to O N Z � • co L a , c `0 - m c m ,0 o E m o m n m 0 17) 0 V Email Address felixhomeloans@vmail.com Steve@loanmover.com duffv@loanmover.com lois.kennev@bankofamerica.com Jennifer.roblee@bankofamerica.com marv.culbertson@bankofamerica.com ben.mireles@bankofamerica.com E O0 N „ N.- C M _a c 2] m VI Y E ° ra _ p C M .0 C O V u v N L U E E O u G) E Vim. Y M c c U no 'O O robvn.trinci@bankofamerica.com 0 u u w Y c .0 O Y Y t f6 .fl y 13 s h a ron. sosa @ ba n kofa m e ri ca. com vanessa.reves@bankofamerica.com 0 " u E @ O Y .0 c Sia)c E O 6 -0"O 0) E O u G) E ... Y c at co "' w c N Contact Person Felix Nieves Steve Rodgers Duffy Finlay Lois Kenney Jennifer Roblee Maria Culbertson Ben Mireles Krysta Bryan Michael Encarnacion Charlotte Odilia Chan Robyn Trinci 0 g E 2. Sharon Sosa Vanessa Reyes Debbie Thompson Dawn Tiszai Phone 951-202-8938 909-772-8138 951-582-2655 951-377-7410 909-556-5055 760-268-4382 866-298-7423 909-553-9094 909-200-9946 951-977-0028 760-233-6506 909-618-2616 951-375-7598 951-816-3608 909-702-6917 760-773-6938 _0. i....70 0 O . OP, O., l� NI 01 O CVNIN. NI 01 - NO QN , N 0 Cs. NI- O\ on N N a M M NI 0 M �O el- 01 ,..c)\D 0. O NI N 0' y>, c.1 Chino Hills Corona 0 E 0 Carlsbad o o v Corona Escondido °? w Ontario Palm Desert Address 2110 Chino Avenue #290 1451 S. Rimpau #103 1096 Calimesa Blvd. #A200 6005 Hidden Valley Rd. #110 1100 S. Mt Vernon #D 1250 Corona Pointe Ct. #409 800 W. Valley Parkway, Ste. 200 1899 W. Malvern Avenue #A 40484 Murrieta Hot Springs Rd. 975 N. Haven Avenue, Ste. 200 73261 Hwy 111 Lender Name American Financial Network V 5 Q 4. 0 1 q7 4t N Email Address O ai N A Y N 3 its E c_� w to u ai N 0 O (O N TOm fa m p t G/ Y .D a, N N c N Ou u E w Y O A > na u ro iennv2.hall@bankofamerica.com cindi.green@bankofamerica.com O u ai N " E 3 .� (U O landreas@broadviewmortgage.com msmith@broadviewmortgage.com recl@verizon.net E O u tie ro t O E D > O Jo - v ` Q u CU O 3 3 > two O .a y v to i andreab@broadviewmortgage.com colin@hlcteam.com leslie@hicteam.com ssanchez@frankiinIc.com dgiannone@guildmortgage.com O v re t -a _ 7 smagana@guildmortgage.com Contact Person Franc Marquez Yadira Galarza Elena Zazueta Blanca Alvarado Jenny Hall Cindi Green John Rigler Laurie Andreas Mike Smith David Lawson Rick Kent Nadine Del Valle Andrea Barochiere Colin Williams Leslie Magodoro Sylvia Sanchez Darrell Giannone Erika Luna Sandra Magana Phone 760-773-6912 760-773-6944 909-578-1500 951-354-3413 951-506-8772 951-506-8758 951-371-2264 951-371-2264 951-371-2264 877-369-3552 N N n 00 00 951-757-9431 951-676-2727 909-920-5260 909-920-5260 760-779-8168 951-929-7617 760-272-7179 760-702-9244 _ o N O, o N O, � CV N O, � N O, � o, N O1 00 n O1 �a N O, '^ N O, o N O, Riverside Temecula 0 i z 0 o al u u u b CIO 0. Palm Desert Hemet 0) ae I. lo ^O a 5295 Arlington Avenue 27546 Ynez Road, Ste. P2A 2191 5th Street, #107 1521 E. Katella Avenue 43460 Ridge Park Drive, Ste. 200 1164 N. Monte Vista Ave. Ste. 4 44800 Village Court 155 N. Cawston Avenue, #265 82500 Hwy. 111, Ste 2 Lender Name 00 0) 1 IP. COo a) oo co t oil0 g CI m Franklin Loan Center Guild Mortgage 4k N M d' 4-0 Email Address jelizonda@guildmortgage.com ahuitin@guildmortgage.com rmcmahon@guildmortgage.com teverson@guildmortgage.com Iloangirl@vahoo.com V 0J CO E L ` `m E sindv.freehill@imortgage.com lauren.mccroskev-zoghbi@imortgage.com laura.neves@imortgage.com E OV G1 re t± E .Q N 3 1j dduchene@mhmb.com vavala@mhmb.com jmendoza@mhmb.com E xi = E C m c a E u Vf N x £ al O m .� f0 c E U N El x E m 7 a E mIsecreta@aol.com Iori92201@hotmail.com monicaq@mwfinc.com Contact Person Joe Elizonda Aaron Hultin Robert McMahon Tamra Leverson Maria Fernandez Judy Marburger Sindy Freehill Lauren McCroskey-Zoghbi Laura Neves Julie Webb Delia Duchene Vivian Ayala Johanna Aberin-Mendoza Linda Benjamin Ignacia Flores Melissa Luna Leticia Navarro Lorena Aguilar Monica Quintana Phone 760-831-2688 760-271-1179 619-857-1657 951-609-4625 562-693-4072 909-821-7741 951-735-6267 951-735-6267 951-735-6267 951-735-6267 0 N 0 D 0 n O n 760-779-9629 951-677-6638 760-779-9629 c M O N ,-r n n O r- 760-771-2036 760-771-2036 760-771-2036 909-793-1500 x261 O. N N N_ N O O 01 [� 00 N O 0 N M v1 N l� en U San Diego Whittier Corona Palm Desert La Quinta Redlands H H st L Q 5075 Shoreham Place #260 6528 Greenleaf Drive 1250 Corona Pointe Ct. #301 44-300 Monterey Avenue, Ste. A 47050 Washington Street, #4202 1209 Nevada Street #200 Lender Name (5 by 0 0 d C7 0 U N PP O 'E Mission Hills Mortgage Mortgage Express Mountain West 4k tr, ,rt n co cp, Email Address E o C c w E L G U) bslovak@prmR.net cRomez@prmR.net rrivera@prmg.net Hilarv@HWLoans.com cwilsonmacias@patrionmortRaRe.com nellie.fernandez@prospectmtR.com cammie.braRa@prospectmtR.com erik.kinslev@ProspectmtR.com tamara.mallonee@prospectmtg.com collinseedv@prospectmtR.com kstolte@sll.com scampbell@sierra-pacific.com susan.Ruarino@sierra-pacific.com veronicamiranda@sierra-pacific.com hutchins@sierra-pacific.com willie.barnes@sierra-pacific.com tduran@stanpac.com mike.chapa@wvmb.com Contact Person Ben Holloway Beth Slovak Claudio Gomez Raquel Rivera Hilary Wilkinson Crystal Wilson -Macias Nellie Fernandez Cammie Braga Erik Kinsley Tamara Mallonee Collin Reedy Kristin Stolte Steve Campbell 0 0 p co en cn Veronica Miranda William "Hutch" Hutchins y CO .. Tony Duran Q as U a x Phone 909-336-5377 O+ en r` ., N 951-294-2274 951-219-0170 951-571-5756 951-571-5775 M enX 00 1. Ch . , N 951-294-9122 951-970-5034 951-294-9130 951-294-9125 951-676-3050 951-275-9500 x101 951-275-9500 x111 s O0 N N N.+ a 951-275-9500 x102 951-275-9500 x104 951-898-5590 00 .r) enen t� O, t� NO C.ON i...1 O ON 7 rn t— N OONi t-- N eV 0, ON, O, ONi O rn t. T T L.7) Temecula Hemet Moreno Valley Moreno Valley Temecula U g a) F-� Riverside N .� Palm Desert Address 100 Better World Circle, Ste. 100 1995 E. Florida Avenue 12125 Day Street, Ste. E-309 24318 Hemlock Avenue #A-5 27450 Ynez Road #124 27555 Ynez Road, Ste# 206 3585 Main Street, Ste. 205 125 Technology Drive #150 44901 Village Court, Ste. B Lender Name 0. Patrion Mortgage tcs ell NI on E.0 O 0. Security One Lending d a cii o0 U ,w~ „ 0. cd 2..., Standard Pacific Mortgage, Inc # o '. - - Z Email Address a .0 r ro claudia.duffle@wvmb.com frances.garcia@wymb.com maria.martinez@wvmb.com vik.kumar@wellsfargo.com o ni ai O merci.prado@wellsfargo.com terry.ohillips@wellsfargo.com stephanie.d.saucedo@wellsfargo.com 0 11;! y y co andv.hoeflin@wellsfargo.com 0 To— 73 u . N a mfrater@wellsfargo.com joseph.a.fillippelli@wellsfargo.com 0 111 .fl m 0 N N u O X N victor.diaz@wellsfargo.com ray.moore@wellsfargo.com Contact Person Patricia Sanchez Claudia Duffle n+ 1 N [i Maria Martinez Vik Kumar Jorge Nila Merci Prado N o. :2 P. E"' Stephanie Saucedo Gabriel Gomez Andy Hoeflin Cristian Del Valle Marcia Frater Joseph Fillippelli Alex Bejenaru Irene Turner Alessandro Gomez Victor Diaz Ray Moore Phone 760-578-6202 760-275-3281 4, ON Cli VI oD 6 760-469-7856 951-817-2003 562-307-2362 951-817-2011 951-271-5412 951-271-5416 951-818-5385 951-485-6115 951-300-7670 951-830-2065 951-485-6119 951-642-8942 951-485-6113 951-485-6119 951-485-6119 951-485-3113 a N N oo N ON a N N ON o� N ON M 4") N ON t.' C Corona Corona Mission Viejo Moreno Valley Address 1112 W. Sixth Street 355 E. Rincon St. #210 27201 Puerta Real, Ste. 110 23883 Sunnymead Blvd Lender Name Wallick & Volk, Inc N g O .a N P O x 0 L L.1-I N N 3 Email Address dennis.leon@wellsfargo.com jr.seagoPwellsfa rgo.com hector.huezo@ wellsfargo.com biake.adams@ wellsfargo.com sonia.r.schmader@welllsfargo.com E 0 0 m 3 as .fl =' 0 14 as cristina.olivares@wellsfargo.com linda.m.summers@wellsfargo.com edhoffmanPwccloans.com Contact Person Dennis Leon LJ.R. Seago Hector Huezo Blake Adams Sonya Schmader Aaron Baker Cristina Olivares Linda Summers Edwin Hoffman Phone 951-485-6118 951-369-4161 909-900-2588 951-369-4171 951-970-9834 951-491-0869 951-491-0868 951-302-1016 951-488-3122 G N O N O1 O N O, n CA CA C1 C Riverside Temecula T O cE C 0. Or Address 4069 Chicago Avenue #102 41619 Margarita Rd. #100 23328 Olivewood Plaza Drive Lender Name N G 0 O .a N E O O hU LT.. N N Wholesale Capital Corp CITY OF PALM DESERT NEIGHBORHOOD STABILIZATION PROGRAM LISTING OF HOMEBUYER EDUCATION PROVIDERS On -Line Home Buyer Education is NOT accepted by the City. Neighborhood Housing Services Riverside 525 Technology Court, Suite 101 Riverside, CA 92507 (951)300-1757 lupe@nhsie.org Fair Housing — Riverside 3933 Mission Inn Avenue Riverside, CA 92501 (800)655-1812 hmerino@fairhousing.net Springboard Non -Profit Consumer Counseling 1555 W. Florida Avenue Hemet, CA 92543 (800)947-3752 springboardcredit.org Neighborhood Partnership Housing Services Inc. 320 W. "G" Street, Suite 103 Ontario, CA 9 (800)761-6747 (909)988-5979 jeffanphousingservices.orq *Please note that NPHS charges a fee for service Neighborhood Housing Services San Bernardino 1390 North D Street San Bernardino, CA 92405 (909)884-6891 Louis@nhsie.orq Rancho Housing Alliance 53-990 Enterprise Way, Suite 1 Coachella, CA 92236 (760)391-5883 Enrique@dace-rancho.orq Consumer Credit Counseling Service of Orange County 1920 Old Tustin Avenue Santa Ana, CA 92705 (714)569-0823 ccdsoc(a�cccsoc.orq FOR OTHER HUD APPROVED HOUSING COUNSELING PROVIDERS PLEASE VISIT: http://www.hud/gov/offices/hsg /sfh/hcc/hcs.cfm?webListAction=search&searchstate=CA PARK VIEWDR Alt 4! MAGNESIA FALL$ OR i FRED WARING DR FRED WARING DR OUNTAMDR- PEVINE'ST- rTTT HAYSTACK RD CITY OF PALM DESERT NSP TARGET AREAS - Palm Desert North Sphere Palm Desert CC Boundary - Palma Village City Boundary 0 DATE: 2/2010 GRAN 0 EW_DR_ CASTELLANA MAGNESIAFALLS DR ALUMMW AY 3 1 ALUMNII AY C4LLD41- VERANO _ CO 0. 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