HomeMy WebLinkAboutHabitat for Humanity (HFH) Resale - APN 621-061-026PALM DESERT HOUSING AUTHORITY
STAFF REPORT
REQUEST: APPROVAL OF AGREEMENTS WITH HABITAT FOR HUMANITY OF
THE COACHELLA VALLEY, INC. FOR THE RESALE OF A SINGLE
FAMILY HOME AT 74-016 EL CORTEZ AVENUE (621-061-026) AND
RELATED ACTIONS
SUBMITTED BY: Jessica Gonzales, Senior Management Analyst
DATE: June 22, 2017
CONTENTS: DRAFT of Restrictive Covenant and Loan Documents
Recommendation
By Minute Motion, that the Authority Board,
1. Accept a new eligible lower income household qualified pursuant to California
Health and Safety Code Section 50052.5 for the direct sale of 74-016 El Cortez
Avenue (also known as 621-061-026) as prescribed in the Disposition and
Development Agreement between the Authority and Habitat for Humanity of the
Coachella Valley, Inc. ("Habitat"), adopted on January 12, 2006 by Resolution
513 (the "Agreement"); and
2. Approve the transfer to a new qualified lower income buyer of a deferred
payment Trust Deed in the amount of $31,000 associated with the direct sale of
74-016 El Cortez, as originally secured by the property corresponding to the lot's
donation value; a restrictive covenant; and associated loan documents; and
3. Authorize legal counsel to finalize a restrictive covenant and associated loan
documents and the Mayor to execute the same; and
4. Authorize the Finance Director to allow the transfer of funds to facilitate the
transaction; and
Authorize the Authority Chairman and/or the Authority's Executive Director or her
designee to execute any ancillary documents necessary to effectuate the actions
taken herewith.
Executive Summary
The Authority received a written Notice from Habitat as the owner of the property located at 74-016
El Cortez Avenue (also known as 621-061-026) of their intent to sell the property to a low income
qualified buyer. Habitat has qualified a new low income buyer and has negotiated a direct sale of
the property to a new buyer pursuant the terms of the Agreement.
In order to ensure an affordable housing cost, the Authority will need to transfer the original secured
amount of the donation value of $31,000 in the form of a deferred payment Trust Deed. The
deferred payment Trust Deed terms will be consistent with the program funding requirements of the
Low and Moderate Income Housing Asset Fund.
Staff recommends acceptance of the new buyer for the resale and the transfer of a deferred
Staff Report
Approval of Agreements with Habitat for the Resale of APN 621-061-026
June 22, 2017
Page 2 of 2
payment Trust Deed in the amount of $31,000 for the identified buyer for the property located at
74016 El Cortez Avenue from the Low and Moderate Income Housing Asset Fund.
Strategic Plan Objective
The proposed action will further the goals identified in the Envision Palm Desert strategic plan for
Land Use, Housing and Open Space Priority No. 2 by preserving the availability of affordable
housing.
Background
In August of 2012, the State Department of Finance (DOF) approved the transfer of certain assets to
the Authority from the former redevelopment agency (the "former Agency") for the purpose of
affordable housing. This approved transfer included the Affordability Covenant and a deferred
payment Trust Deed recorded against the property located at 74-016 El Cortez, Palm Desert known
as APN 621-061-026. The property is part of the Habitat for Humanity of the Coachella Valley
projects developed in Palm Desert.
In January 12, 2006, the former Agency Board approved the land donation to Habitat. As required
by the Agreement, Habitat successfully built a single-family residence and transferred the property to
a qualified buyer. Due to a financial hardship of the previous buyer, Habitat has recently acquired
the property by way of a deed in lieu of foreclosure from the original qualified buyer.
Habitat has submitted a notice of intent to sell the property to a new qualified buyer and to preserve
the property as affordable. However, the restrictive covenant and loan documents to secure the
affordability restrictions and land donation value are in favor of the former Agency. Habitat is
requesting the Authority, as successor, to record a new affordable restriction and transfer the
existing deferred payment Trust Deed corresponding to the lot's donation value in the amount of
$31,000 in order for the new identified buyer to qualify to purchase the property at an affordable
housing cost.
The Agreement and related documents provide for the recording of a deferred payment Trust Deed
in the donation value, and a covenant restricting the homes as affordable, which includes resale
price controls, and an Authority option to purchase.
Staff recommends approval of this request and transfer documents to facilitate the sale to a new
qualified buyer and to continue to preserve the property as affordable.
Fiscal Analysis
There is no fiscal impact to the Authority in connection with the proposed request since the Trust
Deed is an assignment of the existing deferred Trust Deed. There will also be no impact to the
General Fund.
Submitted by:
Gonzales, Seniar Management Analyst
Approval:
LertglAylaian, Executive Director
Department Head:
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, California 92260
Attention: Housing Division
EXEMPT FROM RECORDING FEES PURSUANT TO G.C. 6103
PURCHASER'S RESTRICTIVE AGREEMENT
THIS PURCHASER'S RESTRICTIVE AGREEMENT (the "Restrictive
Agreement") including DECLARATIONS OF CONDITIONS, COVENANTS AND
RESTRICTIONS dated as of the day of , 20 (the "Effective
Date"), is by and between the PALM DESERT HOUSING AUTHORITY, a public body,
corporate and politic (the "Authority"), and , a
(the "Owner").
RECITALS
A. The Owner is concurrently herewith acquiring that certain real property
improved with a single-family residence and located in the City of Palm Desert, County
of Riverside, State of Califomia within the Palm Desert Redevelopment Authority's
Project Area No. 1, legally described in Exhibit "A" attached hereto and incorporated
herein by reference (the "Property").
B. The Authority and Habitat For Humanity of Coachella Valley, Inc., a
California nonprofit public benefit corporation ("Developer") are parties to that certain
Disposition and Development Agreement dated January 12, 2006 (the "DDA").
Pursuant to the DDA, the Developer has constructed a single-family residential dwelling
unit on the Property (the "Unit"), and agreed to sell the Property, as improved, to a
Qualified Household (as defined below). The Owner is a Qualified Household.
C. Concurrently herewith, the Owner has purchased the Property from
Developer and has assumed a promissory note secured by deed of trust (the "Note"),
which Note was made and delivered to Authority in consideration of the Authority's
transfer of title to the Property to Developer, in the sum of
Dollars ($ ) (the "Loan") and secured by a Deed of Trust, Assignments of
Rents and Security Agreement recorded against the Property in the official records of
the County Recorder of Riverside County (the "County Recorder") as Instrument No.
(as amended, the "Deed of Trust").
D. To further the interests of the Authority, and as required by the DDA,
Owner has agreed to enter into and record this Restrictive Agreement, the purpose of
which is to regulate and provide certain restrictions with regard to occupancy, resale,
and ownership of the Property.
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NOW, THEREFORE, the parties agree as follows:
AGREEMENT
1. Fundamental Provisions. The following shall serve as the basic terms of
this Restrictive Agreement:
(a) The name of the Owner is
(b) The address of the Property is and legally
described as attached in Exhibit "A".
(c) References herein to statutes or regulations shall be to such
statutes or regulations as amended from time to time, and to any successor statutes
and regulations.
2. Term of Restrictive Agreement. This Restrictive Agreement shall
commence upon the date of recordation hereof in the official records of the County
Recorder, and shall continue through 45 years thereafter (the "Term"). The Authority
has determined that 45 years is the longest period feasible for continuing the Term of
this Restrictive Agreement. Upon resale of the Property, the Authority reserves the right
to require the new buyer to enter into a new Affordable Housing Restriction and Lien
Agreement with a 45-year term from the date of resale. The Owner's repayment of the
Loan shall not terminate this Restrictive Agreement.
3. Definitions. For purposes of this Restrictive Agreement, the terms listed
below shall have the meanings thereinafter specified.
(a) Authority's Executive Director means the Executive Director of the
Authority or a designee as he may so designate from time to time.
(b) AMI means the median family income of the Riverside -San
Bernardino Statistical Area (SMSA), as determined and published annually by the
United States Department of Housing and Urban Development ("HUD"), pursuant to
California Health and Safety Code Section 50093, and the regulations promulgated
thereunder. The AMI shall be adjusted for family size in accordance with state
regulations adopted pursuant to Califomia Health and Safety Code Section 50052.5.
(c) Affordable Housing Cost means a housing cost which is calculated
pursuant to Califomia Health and Safety Code Section 50052.5, as amended from time
to time, and for the purposes hereof, the term "housing cost" shall have the meaning
ascribed to such term in 25 California Code of Regulations Section 6920, as amended
from time to time, and the term "gross income" shall have the meaning ascribed to such
term in Title 25 of the California Code of Regulations Section 6914.
(d) Person, Family, or Household of Very Low or Low Income means a
person, family or household of one or more persons occupying the same housing unit
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whose household income does not exceed the limits set forth in California Health and
Safety Code Sections 50105 and 50079.5, and Title 25 of the California Code of
Regulations Section 6910, et seq., as the case or context may require, adjusted for
family size.
(e) Qualified Household means a Person, Family, or Household of
Very Low or Low Income that is a First -Time Homebuyer and that would not cause the
occupancy of the Unit to exceed the maximum occupancy allowed by the Palm Desert
Municipal Code.
(f) Escrow and Title Costs are to include only those customary fees
charged by an escrow agent and title insurance company with respect to the
administration of escrow and the issuance of an owner's policy of title insurance. These
are not to include loan fees, refinancing fees, broker commissions, prepaid items,
homeowner's dues, or other fees not directly related to the transfer of ownership.
(g) 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:
(i) 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;
(ii) 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
(h) Owner means both the party identified as "Owner" in first paragraph
of this Restrictive Agreement, and any successor in interest of such Owner with respect
to the Property.
4. Restriction on Transfer.
(a) The Owner shall not voluntarily or involuntarily, in whole or in part,
sell, convey, transfer, lease, sublease, assign, encumber, mortgage, refinance, or
hypothecate the Property, or enter into agreements to sell, convey, transfer, lease,
sublease, assign, encumber, mortgage, refinance, or hypothecate the Property, except
in compliance with the terms of this Restrictive Agreement and the DDA, and with the
prior written approval of the Authority's Executive Director. Failure to obtain the prior
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written approval of the Authority's Executive Director will be deemed a breach of this
Restrictive Agreement.
(b) Any violation or breach of the provisions hereof is prohibited and
any sale or other transfer of the Property enumerated in Section 4(a) above, in whole or
in part, during the Term, as defined herein, shall be null, void and unenforceable and
shall additionally, at the option of the Authority, result in an acceleration of the Note
requiring the Owner to immediately repay the Note in full.
(c) In the event of the death of the Owner with no qualified surviving
joint tenants, the Authority will work with the heirs, probate court, or other responsible
party to either exercise its option to reacquire the Property in accordance with Section 8
hereof or identify a Qualified Household to purchase the Property.
5. Covenant to Maintain Affordability.
(a) The Property is being conveyed to the Owner to increase and
improve the community's supply of low- and moderate -income housing available at an
Affordable Housing Cost in accordance with the affordable housing requirements of the
Community Redevelopment Law (California Health and Safety Code, Section 33000, et
seq). The Owner shall sell, convey, assign, or transfer ownership or occupancy of the
Property only to persons who cannot obtain comparable housing at affordable costs on
the open market as provided in Health and Safety Code Section 33334.2(e)(8). To this
end, the Owner agrees that during the Term the Property shall, except as provided in
Sections 6, 8 and 9 hereof, remain available only at an Affordable Housing Cost and
shall only be occupied by Qualifying Households. In addition, if, without the Authority's
Executive Director's consent, the Owner fails to occupy the Unit as the Owner's sole
and primary residence for a period of 90 calendar days, cumulatively, in any calendar
year, then the Owner shall be in breach of this Restrictive Agreement.
(b) Subject to the provisions of Section 12 hereof, if after the expiration
of the entire Term the Owner has not either (i) sold, conveyed, transferred, or assigned
the Property except to a Qualified Household, where expressly permitted by Section 6
hereof, or (ii) leased or subleased the Property in violation of the terms hereof, or (iii)
refinanced, hypothecated, encumbered, or mortgaged the Property in violation of the
terms hereof, or (iv) sold the Property at a price exceeding the maximum price permitted
under Section 11 hereof, or (v) otherwise breached the terms and provisions hereof,
then the Authority shall remove the affordability restriction and forgive the principal
balance outstanding and any accrued interest owed under the Note.
(c) As a condition to selling the Property, Owner and any person or
entity to whom Owner sells the Property or any other successors in interest to the
Property, who will then also be an "Owner", shall require the buyer of the Property to
execute, acknowledge and deliver to the Authority's Executive Director an assumption
of the Note and this Restrictive Agreement (in form and substance acceptable to the
Authority's Executive Director) which shall include a requirement that any subsequent
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buyer of the Property shall also execute, acknowledge and deliver to the Authority's
Executive Director such an assumption agreement.
6. Permitted Transfers and Mortgages.
(a) Conveyances to Qualified Households Property. Subject to the
option rights of the Authority herein, the Owner may convey the Property to Qualified
Households, on the condition that (i) the Owner complies with the requirements of
Sections 9 and 11 hereof, (ii) the purchaser covenants to occupy the Unit as such
party's sole and primary residence, and (iii) the purchase price does not exceed the
maximum permitted resale price set forth in Section 11 hereof. Any permitted
transferee shall acquire the Property subject to the terms and conditions hereof or a
new Affordable Housing Restriction and Lien Agreement at the Authority's Executive
Director's discretion. Any permitted transferee shall execute in recordable form any
documents necessary to accommodate the transfer in form and content satisfactory to
the Authority's Executive Director.
(b) Intra-Family Conveyances. The following transfers of title shall not
be breaches of this instrument: transfer by gift, devise, or inheritance to the Owner's
spouse; taking of title by surviving joint tenant that is the Owner's spouse; transfer of
title to a spouse as part of a divorce or dissolution proceeding; acquisition of title in
conjunction with marriage; transfers of title to adult child when the child is approved by
the Authority's Executive Director or his designee as a Qualified Household at the time
of transfer. A transfer to children of the Owner where the income of such children
exceeds the maximum household income permitted hereunder shall give rise to the
option in favor of the Authority to purchase the Property described in Section 8;
provided, however, such option shall be exercised by the Authority within 60 days after
receipt by the Authority of written notice of such transfer, and the purchase price shall
be the amount set forth in Section 8(e).
(c) First Trust Deed - Purchase. The Owner may encumber the
Property with a first position deed of trust or mortgage securing a purchase money loan
on the condition that the first position trust deed complies with the terms of this
Restrictive Agreement.
(d) Refinancing of First Trust Deed. Notwithstanding any restriction or
covenants to the contrary that are superior to the lien of the Deed of Trust, the Owner,
may refinance any first trust deed or mortgage encumbering the Unit provided that prior
written approval of the transaction is obtained from the Authority according to the
notification and approval process designated in Section 10 below. Approval will be
subject to the limitations that the principal amount, interest, terms and conditions are
reasonable at the time the refinancing takes place (in the opinion of the Authority), and
that the principal amount thereof does not exceed the original principal amount of the
loan secured by the first trust deed or mortgage being refinanced (plus reasonable loan
fees and costs) and together with all subordinate deeds of trust does not over encumber
the property. Failure to obtain prior Authority approval to refinance any first trust deed
or mortgage encumbering the Unit shall be deemed a violation or breach of terms of this
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Restrictive Agreement and at the option of the Authority shall constitute a default
hereunder.
(e) Junior Deeds of Trust. Notwithstanding any restriction or
covenants to the contrary that are superior to the lien of the Deed of Trust, any loan to
be secured by a junior deed of trust encumbering the Property shall require the prior
written approval of the Authority's Executive Director according to the notification and
approval process designated in Section 10 below. The Authority's Executive Director
shall consider in good faith whether to permit a loan of the aforementioned type, subject
to the restrictions that the proceeds of said loan are to be used to pay for repairs or the
construction of improvements to the Property, on the following terms and conditions: (i)
the principal amount of such loan shall not exceed the cost of the repairs or the
improvements (plus loan fees and loan costs), (ii) the loan is originated by a bank,
savings and loan association, or other institutional lender, (iii) the interest rate and
payment terms thereon are reasonable (in the Authority's Executive Director's opinion),
(iv) the Owner shall be capable of meeting the monthly payments provided by such loan
(in the Authority's opinion), and (v) the Property is not over encumbered. The
improvements to be finance with the proceeds of any loan shall not include any items
that are of a luxury nature, i.e., in or above ground pools or spas, interior or exterior
decorative items. Failure to obtain prior Authority approval for any loan to be secured
by a junior deed of trust encumbering the Property shall be deemed a violation or
breach of the terms of this Restrictive Agreement and at the option of the Authority shall
constitute a default hereunder.
7. Subordination to First Trust Deed Encumbrances.
(a) The Authority recognizes that immediately prior to the recordation hereof,
the Owner is or may be recording a deed of trust that shall be superior to this Restrictive
Agreement and the Deed of Trust, and the Authority agrees that, in such event, such
deed of trust recorded prior hereto shall be superior to this Restrictive Agreement and
the 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 lien holder acquires title to the Property pursuant to a
deed in lieu of foreclosure, then the terms hereof shall terminate only if (i) the Authority
has been given written notice of a default under the senior deed of trust and (ii) the
Authority shall not have cured the default under the senior deed of trust, or diligently
pursued the curing of the default as determined by the senior lien holder, within 60 days
after the date the notice is sent to the Authority.
On recording any such first deed of trust as described above, the borrower, at the
borrower's expense, shall cause to be recorded in the office of the County Recorder a
written request for a special notice of default in favor of the Authority.
(b) The Authority further agrees that, in the event of a resale of the Property
or a refinancing of a deed of trust that was superior to the lien hereof (in each case in
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compliance with the applicable provisions of this Restrictive Agreement), the Authority
agrees to execute a subordination agreement, in form and substance acceptable to the
Authority, subordinating this Restrictive Agreement and the Deed of Trust to any first
deed of trust, in favor of any bank, savings and loan association, or other institutional
lender, subject to the following terms and conditions:
(i) The principal amount of the new loan does not exceed the original
principal amount of the loan being refinanced, plus reasonable loan fees and costs;
(ii) The terms and provisions of the loan secured by such deed of trust,
including interest rate, term, amortization, fees, acceleration clauses, late payment
charges, and prepayment charges, shall conform substantially to the provisions in the
lender's loan documents for comparable loans, unless deviations are pre -approved in
writing in advance of the subordination by the Authority;
(iii) The borrower shall deliver to the Authority true and accurate copies
of the loan agreement, proposed promissory note, deed of trust, and a written statement
from the borrower certifying that such documents are true and accurate copies of the
loan documents which the borrower intends to execute in connection with the loan;
(iv) On recording the new first trust deed, the borrower, at the
borrower's expense, causes to be recorded in the office of the County Recorder a
written request for a special notice of default in favor of the Authority;
(v) The borrower shall deliver to the Authority, at the owner's expense,
evidence of insurance coverage satisfying the requirement of Section 30 hereof; and
(vi) The Authority may condition any such subordination upon its
receipt of assurances from a reputable title company that this Restrictive Agreement is
not being subordinated to any liens or encumbrances other than such new loan as the
result of such subordination.
If the Authority, at its sole election, advances any sums to any senior lien
holders that are due and payable by the Owner to the senior lien holder, such amounts
shall immediately be due and payable by the Owner to the Authority together with
interest thereon at the maximum legal rate permitted under California usury laws.
8. Authority Option to Purchase.
(a) Option. In order to maintain and insure that the Unit shall remain
affordable to and only occupied by a Qualified Household, the Authority is hereby
granted an option, throughout the Term hereof, to purchase the Property if the Owner
desires to transfer the Property, or to find another Qualified Household to purchase the
Property. The option shall be exercised in writing by the Authority's Executive Director,
if at all, within sixty (60) days after the Authority's Executive Director's receipt of the
written notice (the "Notice of Proposed Sale") of the Owner's desire to transfer the
Property as provided in Section 9(a), below. During such sixty (60) day period Owner
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may also concurrently attempt to market the Property to sell it to a Qualified Household,
as provided in Section 9 hereof. With Authority approval, the Owner may enter into an
agreement to sell the Property to a Qualified Household at a price that does not exceed
the maximum price set forth in Section 11 hereof. Provided the Authority's Executive
Director approves the Qualified Household that the owner presents, then the Authority
shall not then exercise the option or find another buyer. If the Authority exercises the
Option, then the Authority's Executive Director shall promptly open escrow thereafter
and shall close escrow for the purchase of the Unit prior to the date that is sixty (60)
days after the Authority opens escrow. Title to the Property shall be delivered to the
Authority at the close of escrow free and clear of monetary liens and encumbrances,
and closing costs shall be allocated in the fashion as is customary for buyers and sellers
in Riverside County.
(b) Authority's Failure to Close Following Exercise of the Option. If the
Authority exercises the option to purchase but, due to the Authority's sole fault, the
Authority does not close escrow within one hundred twenty (120) days after the date the
Authority first received the Notice of Proposed Sale, then the Owner shall be entitled to
sell the Property to a person or family that is not a Qualified Household, provided,
however, (i) if the Property is sold to a person or family that is not a Qualified Household
or (ii) if the Property is sold at a price that exceeds the maximum resale price set forth in
Section 11 hereof, then the Owner shall repay the Loan (including all accrued interest
thereon) to the Authority as provided in Section 9(c) below.
(c) Terms of Purchase. If the Authority exercises the option, the
purchase price to be paid by the Authority shall be paid all in cash at the close of
escrow. The Owner may require a deposit to open escrow in an amount not to exceed
three percent (3%) of the purchase price. Title to the Property shall be delivered to the
Authority at the close of escrow free and clear of monetary liens and encumbrances.
Closing costs shall be allocated between the buyer and seller according to the
customary practices in Riverside County in effect at the time the option is exercised.
(d) Conditions to Close of Escrow. The escrow instructions may
provide for conditions or contingencies of the type and nature customarily included in
residential purchase escrows (including but not limited to inspection by the Authority
and elimination of pests, and preliminary title report approvals), provided that any such
conditions or contingencies (other than the status of title to the Property at the time of
conveyance and other conditions which by their nature cannot be satisfied prior to
closing) must be satisfied or waived on or before the close of escrow. The proceeds of
the sale shall be used to pay off all monetary liens and encumbrances upon the close of
escrow. Escrow shall close within 60 days after the Authority exercises its option to
purchase.
(e) Purchase Price. The purchase price of the Property to be paid by
the Authority pursuant to the Authority's exercise of the Option shall be the lesser of:
(i) The actual purchase price paid by the Owner for the
Property plus reasonable and customary Escrow and Title Costs actually incurred by
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the Owner in purchasing such Property, times a fraction, the numerator of which is the
AMI for the year in which the sale takes place, and the denominator of which is AMI in
which the Owner purchased the Property (and subtracting therefrom the amount of the
Loan, which the Authority shall assume from the Owner); or
(ii) the maximum resale price determined pursuant to
Section 11(a), below, assuming that the Authority, as purchaser, is of the same income
category as was the seller at the time the seller purchased the Property; or
(iii) the fair market value of the Property, as determined by an
appraiser approved by the Authority's Executive Director.
9. Resale Price Controls and Procedures.
(a) If the Owner elects at any time to sell the Property, then the Owner
shall, prior to signing a listing agreement or other authorization to sell with a real estate
broker, first provide to the Authority's Executive Director a notice (the "Notice of
Proposed Sale") setting forth the Owner's intention to sell the Property, and a property
information form to be prepared by the Authority. Such Notice shall contain information
about the Owner's original purchase price of the Property. Authority's Executive
Director shall have sixty (60) days from the time following the receipt by the Authority's
Executive Director of the Notice to find a new buyer for the Property being sold, or sixty
(60) days to exercise the Authority's option to purchase described in Section 7;
provided, however, the Authority or its designee may shorten such time period upon a
showing of hardship by the Owner. The Owner agrees to consider as purchasers those
Qualified Households identified on a list that may be maintained by the Authority.
Nothing contained herein shall be construed as imposing on the Authority any obligation
to find a purchaser of the Unit if the Owner has elected to sell the Property.
(b) If the Owner resells the Property to a Qualified Household at a price
that does not exceed the price set forth in Section 11, then the provisions hereof shall
continue to encumber the Property, and the Authority shall subordinate its interest in
this Restrictive Agreement and the Deed of Trust as provided in Section 7 hereof. Each
successor in interest to Owner that is a Qualified Household shall acquire the Property
subject to the affordability covenants of forty-five (45) years, and restrictions on such
property provided in this Restrictive Agreement and the Deed of Trust; and if Authority
purchases such property and resells the Property, such acquisition shall not operate to
merge this Restrictive Agreement and the Deed of Trust into the Authority's fee interest.
(c) If, after expiration of the sixty (60) day period, Authority or its
designee has failed to procure an eligible and qualified buyer and the Authority has not
exercised its option, then the Owner shall then be free to seek a buyer for the Property
without any limitation on resale price or income category of the purchaser; provided,
however, (i) if the purchaser is not a Qualified Household, or (ii) if the resale price
exceeds the maximum resale price set forth in Section 11 hereof, then the Owner shall
repay the Loan (including all accrued interest thereon) to the Authority, plus an amount
Restrictive Covenant -9
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equal to 25% of the amount by which the net sale proceeds received by the Owner
exceed the maximum resale price set forth in Section 11.
(d) The escrow instructions may provide for conditions or
contingencies of the type and nature customarily included in residential purchase
escrows (including but not limited to financing contingencies, inspection rights, and
preliminary title report approvals), provided that any such conditions or contingencies
(other than the status of title to the Property at the time of conveyance and other
conditions which by their nature cannot be satisfied prior to closing) must be satisfied or
waived on or before the close of escrow. The proceeds of the sale shall be used to pay
off all monetary liens and encumbrances upon the close of escrow. Escrow shall close
within a reasonable time after opening thereof.
(e) The Owner shall notify any proposed purchaser in writing prior to
such person's execution of escrow instructions, deposit receipt, purchase and sale
agreement or similar agreement, whichever is earliest, that the title to the Property will
be restricted in the manner described herein.
(f) The Owner may require a deposit to open escrow in an amount not
to exceed three percent (3%) of the purchase price. Title to the Property shall be
delivered to the purchaser at the close of escrow free and clear of monetary liens and
encumbrances, except as provided for in this Restrictive Agreement. Closing costs
shall be allocated between the buyer and seller according to the customary practices in
Riverside County in effect at the time the escrow is opened.
(g) For the purpose of confirming with the Authority that a proposed
purchaser is a Qualified Household that will be paying a purchase price that is in
compliance with the terms hereof, the Owner shall notify the Authority's Executive
Director in writing of any offer from a prospective purchaser which the Owner intends to
accept, disclosing the identity of such prospective purchaser and providing the Authority
with such financial, credit, and other information on such prospective purchaser as
required by the Authority, including the following:
(i) Name and address of the purchaser.
(ii) Number of persons comprising the purchaser's household
and their names and ages.
(iii) Proposed purchase price of the Property, and any other
consideration for the purchase of the Property.
(iv) Verification purchaser is a First Time Home Buyer.
(v) Amount of down payment.
(vi) Terms of any loan that will be used by the purchaser to
finance the purchase of the Unit, including, but not limited to, principal, interest rate,
term, and loan fees.
Restrictive Covenant -10
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(vii) Closing date.
(viii) Aggregate annual income of the purchaser's household.
(ix) Most recent federal and state income tax returns of the
purchaser and all other members of the purchaser's household for the preceding two (2)
calendar years, and verification of the proposed purchaser's salary or wages from the
purchaser's employer or from current pay stubs showing year to date as well as period
payroll for the preceding two (2) calendar years.
(x) Copy of any proposed purchase and sale agreement,
escrow instructions, loan application, or other agreements between the Owner and the
purchaser of the Property or relating to the sale of the Unit including closing documents
or any other documentation that the Authority deems appropriate to implement this
Restrictive Agreement.
(xi) A written statement signed by the proposed purchaser that
the Unit will be occupied by the purchaser of such Unit and used as his or her primary
residence.
In lieu of providing the foregoing information, these requirements shall be deemed to
have been satisfied by delivery to the Authority's Executive Director of a written
certification of the foregoing information from the purchaser's lender who shall hold a
first position trust deed encumbering the Property, which certification shall be furnished
to the Authority's Executive Director at least 15 days prior to the close of escrow for the
Property.
The Authority's Executive Director shall have 30 days to review the information (unless
the Authority received the certification from prospective purchaser's lender, in which
case the Authority shall have 15 days to review the information). If the Authority's
Executive Director fails to approve the purchaser within such period of time, then the
purchaser shall be deemed approved by the Authority. The Authority's Executive
Director may require the purchaser to submit other written documentation reasonably
requested by the Authority's Executive Director to verify the information set forth herein
and to determine that the Affordable Housing Cost restrictions of this instrument are
being satisfied. If the Authority's Executive Director receives all such prospective
purchaser information requested by the Authority's Executive Director, the Authority's
Executive Director shall determine whether the prospective purchaser is a Qualified
Household, and shall thereafter immediately notify the Owner in writing that the
prospective sale is authorized and approved, or that the prospective purchaser does not
qualify to purchase the Unit as a Qualified Household.
If the Authority's Executive Director notifies the Owner that the sale is authorized and
approved, the Owner shall proceed to complete the sale of the Property within seventy-
five (75) days of the date of such approval from the Authority's Executive Director.
Restrictive Covenant -11
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10. Notification Prior to Mortgage, Encumbrance or Hypothecation. If Owner
desires to refinance any loan secured by a first trust deed encumbering the Unit
pursuant to Section 6(d), or to borrow funds for a new loan to be secured by a junior
trust deed encumbering the Unit the proceeds of which are to be used to pay for repairs
or the construction of improvements to the Property pursuant to Section 6(e), prior
written approval of the Authority's Executive Director is required. To request approval,
at least 30 days prior to the recordation of the intended deed of trust or mortgage, the
Owner shall submit to the Authority's Executive Director in writing the following
information:
(a) Name and address of lender.
(b) Terms of the loan, including, but not limited to, principal, interest
rate, term, and loan fees.
(c) Closing date of the loan.
(d) Copy of any proposed escrow instructions, loan application, or
other agreements between the Owner and the lender.
(e) Written documentation of compliance with the conditions for
Authority approval as set forth in Section 6(d) or Section 6(e), whichever applies.
(f) Other written documentation reasonably requested by the Authority
to verify the information set forth herein.
The Authority's Executive Director shall have twenty (20) working days,
after its receipt of all of such information to approve or disapprove the proposed
refinancing or loan.
11. Restriction on Resale Price. Except as otherwise provided in by
Sections 8 and 9, the Owner shall not resell the Property at a price higher than the
lesser of the following:
(a) An Affordable Housing Cost for the prospective purchaser,
assuming (i) a reasonable down payment, and (ii) a 30 year fixed rate mortgage at
prevailing interest rates.
(b) The sum of:
(i) the selling Owner's original purchase price for the Property
times a fraction, the numerator of which is the AMI for the year in which the sale takes
place, and the denominator of which is AMI in which the Owner purchased the Property;
plus
(ii) Escrow and Title Costs; plus
Restrictive Covenant -12
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(iii) if the Owner sells the Property after a default under a
mortgage or deed of trust, but prior to a trustee's sale or foreclosure sale, the purchase
price shall be further increased by all expenses actually incurred by the holder of such
mortgage or beneficiary under such deed of trust due to the Owner's default including,
but not limited to, trustee's fees, attorney's fees, costs of sale and debt service on the
debt secured by such mortgage or deed of trust.
(c) the fair market value of the Property, as determined by an appraiser
approved by the Authority's Executive Director.
12. Repayment of the Loan. Upon any resale of the Property, the Loan shall
be due and payable, except as follows:
If the resale of the Property is to another Qualified Household, 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 Household 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 Household). At the end of the forty-five (45) year Term hereof, if there have
been no resales to any person, family or household other than a Qualified Household,
the principal balance outstanding and any accrued interest shall be forgiven by the
Authority subject to and in accordance with the provisions of Section 5(b) hereof.
13. Annual Report. The Authority's Executive Director shall have the option of
requesting information not more than once annually, to implement this Restrictive
Agreement.
14. Nondiscrimination Covenants. By the Owner's acceptance hereof, the
Owner agrees, for itself and its successors and assigns, to refrain from restricting the
transfer of the Unit on the basis of race, color, creed, religion, ancestry, sex, marital
status, national origin or age of any person. All such deeds and leases entered into with
respect to the Property shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
(a) In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons claiming
under or through them, that there shall be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the California Government Code, as those bases are defined in
Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of
Section 12955, and Section 12955.2 of the California Government Code, in the sale,
transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor
shall the Grantee himself or herself, or any person claiming under or through him or her,
establish or permit any practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of vendees in the
premises herein conveyed. The foregoing covenants shall run with the land.
Restrictive Covenant -13
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Notwithstanding the immediately preceding paragraph, with respect to
familial status, said paragraph shall not be construed to apply to housing for older
persons, as defined in Section 12955.9 of the California Government Code. With
respect to familial status, nothing in said paragraph shall be construed to affect Sections
51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the California Civil Code, relating to housing
for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the California Civil
Code and subdivisions (n), (o) and (p) of Section 12955 of the California Govemment
Code shall apply to said paragraph."
(b) In contracts: "The contracting party or parties hereby covenant by
and for himself or herself and their respective successors and assigns, that there shall
be no discrimination against or segregation of any person or group of persons, on
account of any basis listed in subdivision (a) or (d) of Section 12955 of the California
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision
(m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the
California Government Code, in the sale, transfer, use, occupancy, tenure or enjoyment
of the premises, nor shall the contracting party or parties, any subcontracting party or
parties, or their respective assigns or transferees, establish or permit any such practice
or practices of discrimination or segregation.
Notwithstanding the immediately preceding paragraph, with respect to
familial status, said paragraph shall not be construed to apply to housing for older
persons, as defined in Section 12955.9 of the California Government Code. With
respect to familial status, nothing in said paragraph shall be construed to affect Sections
51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the California Civil Code, relating to housing
for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the California Civil
Code and subdivisions (n), (o) and (p) of Section 12955 of the California Government
Code shall apply to said paragraph."
The foregoing shall be a covenant running with the land for the benefit of,
and as a burden upon the Property, and shall remain in effect in perpetuity. Nothing
contained herein shall be construed as permitting the Owner or Successors to rent or
lease the Property without the Authority's prior written consent.
15. Maintenance of the Unit/Prohibition Against Waste. The Owner shall not
commit waste upon the Property. The Owner shall not remove or demolish the
improvements on the Property. The Owner shall, throughout the Term hereof, keep and
maintain the Property and the improvements thereon in good condition and repair. If the
Owner at any time fails to so keep and maintain the Property in good condition and
repair, after 30 days notice from the Authority's Executive Director, the Authority shall
have a right to enter onto the Property and perform such deferred maintenance, and the
Owner shall promptly reimburse the Authority for all costs incurred by the Authority in
performing such maintenance.
16. Default. If either party defaults with regard to any of the provisions of this
Restrictive Agreement, the nondefaulting party shall serve written notice of such default
upon the defaulting party. If the default is not cured by the defaulting party within thirty
Restrictive Covenant -14
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(30) days after service of the notice of default, or if the default is not commenced to be
cured within thirty (30) days after service of the notice of default and is not cured
promptly within a reasonable period of time after commencement, the defaulting party
shall be liable to the other party for damages caused by such default.
17. Notices. All notices to be delivered to the parties pursuant to the terms
hereof shall be in writing and shall be delivered in person or by U.S. Mail or other
delivery service to the addresses listed below.
Any of the following addresses may be changed by written notice. If notice is
given it shall be deemed effective upon 3 business days after deposit of same, postage
prepaid, in the U.S. Mail, or the date of actual receipt as evidenced by personal
acknowledgment, return receipt or other comparable means.
If to Owner:
Habitat for Humanity
34500 Gateway Drive, Suite 100
Palm Desert, CA 92211
If to the Authority: Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, Califomia 92260
Attn: Executive Director
18. Covenants to Run With the Land. The covenants established in this
Restrictive Agreement shall be binding on the Owner and any successor in interest of
the Owner, and shall be for the benefit and in favor of the Authority, its successors and
assigns, the City of Palm Desert, and Alphonso Sanchez the real party in interest under
that certain Stipulation for Entry of Judgment, Riverside County Superior Court Case
No. INDIO 51124; and such covenants shall run with the land in favor of the Authority
and shall be a burden upon the Property and shall be for the benefit of the parcels that
comprise the Project Area owned by the City of Palm Desert, as described in Instrument
No. 23610, recorded on December 22, 1981 in the Official Records of Riverside County.
The Authority is deemed the beneficiary of the terms and provisions of this Restrictive
Agreement and of the covenants running with the land, for and in its own rights and for
the purposes of protecting the interests of the community and other parties, public or
private, in whose favor and for whose benefit this Restrictive Agreement and the
covenants running with the land have been provided. The covenants hereof shall be
enforceable by any of the persons or entities set forth in Health and Safety Code
Section 33334.3(f). The covenants established in this Restrictive Agreement shall be
incorporated by reference in all deeds conveying all or any portion of the Property. The
Owner (and each successor in interest, as the case may be) shall furnish a copy of this
instrument to any successors in interest and assume all restrictions and conveyances
as recorded on all said instruments secured by the Deed of Trust. The Authority shall
have the right, in the event of any breach by the Owner of any covenant or agreement
herein, to exercise all the rights and remedies, and to maintain any actions at law or
suits in equity or other proper proceedings to enforce the curing of such breach of
covenant or agreement. Notwithstanding the foregoing, however, the Owner and the
Restrictive Covenant -15
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successors in interest to the Owner named herein shall be liable for performance hereof
only during their respective period of ownership of the Unit, provided that the
"transferee" Owner has in writing assumed and agreed to perform the "transferor"
Owner's obligations hereunder.
19. No Speculative Investment. The Owner acknowledges that the acquisition
of the Property by the Owner pursuant to this Restrictive Agreement is not intended as a
speculative financial investment.
20. Administration. The Authority may administer the terms hereof or may,
from time to time assign its rights hereunder or designate another entity, person,
licensed real estate broker or organization to administer the terms hereof.
21. Independent and Severable Provisions. If any provision of this instrument
is held by a court of competent jurisdiction to be unenforceable or invalid, such holding
shall not render unenforceable any other provision hereof, each provision hereof being
expressly severable and independently enforceable to the fullest extent permitted by
law.
22. Further Assurances and Recordations. The Owner covenants that upon
request of the Authority's Executive Director, the Owner, or its heirs, successors or
assigns, will execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, such further instruments and agreements and do such further acts as
may be necessary, desirable or proper to carry out more effectively the purpose of this
instrument. At the expiration of the Term, the Authority's Executive Director agrees to
provide to the Owner an instrument in recordable form that has the effect of confirming
the termination of the affordable housing requirements of this instrument.
23. Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not be used in construing this instrument.
24. No Waiver. No waiver by the Authority of its rights hereunder, or of any
breach by the Owner of any covenant, restriction, or condition herein contained, shall be
effective unless such waiver is in writing, signed by the Authority's Executive Director
and delivered to the Owner. Any waiver by the Authority of its power to terminate the
Owner's estate herein or of any covenant, restriction, or condition herein contained, or
the failure by the Authority to exercise any right or remedy with respect to any breach or
breaches, shall not constitute a waiver or relinquishment for the future of any rights
regarding subsequent sales, or of any such covenant or condition nor bar any right or
remedy of the Authority in respect of any subsequent breach.
25. Entire Agreement. This instrument constitutes the entire agreement of the
parties hereto, and the provisions hereof may be modified or amended only by a written
instrument signed by the party to be charged.
26. Attorneys' Fees. In any action brought to declare the rights granted herein
or to enforce or to interpret any of the terms of this Restrictive Agreement, the prevailing
Restrictive Covenant -16
I \habitat\Ilahitat for Humanity of Coachcll Valley Inc - I)RAI-T Loan Documents Serrate) 6-12-17 doc
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party shall be entitled to an award of reasonable attorney's fees in an amount
determined by the court.
27. Amendments. Only the Authority, its successors and assigns, and the
Owner and its successors and assigns, [in and to all or any part of the fee title to the
Property] shall have the right to consent and agree to changes in, or to eliminate in
whole or in part, any of the covenants, easements, or other restrictions contained in this
Restrictive Agreement, or to subject the Property to additional covenants, easements or
other restrictions.
28. Successors and Assigns. This Restrictive Agreement shall be binding
upon and inure to the benefit of the Authority and the Owner, and their respective
successors and assigns. The terms and provisions hereof shall run with the land and
shall be a burden upon the land, including the Property Unit, and shall be binding upon
the Owner's successors in interest as purchasers of the Property Unit, for the benefit of
the Authority.
29. Foreclosure of Superior Mortgage. In the event of the foreclosure of a
deed of trust or mortgage superior to the lien hereof, or the conveyance by deed in lieu
of foreclosure of the Unit to a bank, savings and loan, or other institutional lender
holding a deed of trust or mortgage superior to the lien hereof, the provisions hereof
shall terminate and be of no force or effect; provided, however, if the senior lien holder
acquires title to the Unit pursuant to a deed in lieu of foreclosure, then the terms hereof
shall terminate only if (i) the Authority has been given written notice of a default under
the senior deed of trust and (ii) the Authority shall not have cured the default under the
senior deed of trust, or diligently pursued the curing of the default as determined by the
senior lien holder, within 60 days after the date the notice is sent to the Authority's
Executive Director.
30. Insurance. Owner shall maintain, during the Term, an all-risk Property
insurance policy insuring the Property in an amount equal to the full replacement value
of the structure on the Property. The policy shall name the Authority as loss payee and
shall contain a statement of obligation on behalf of the carrier to notify the Authority of
any material change, cancellation or termination of coverage at least thirty (30) days in
advance of the effective date of such material change, cancellation or termination.
Owner shall transmit a copy of the certificate of insurance and loss payee endorsement
to the Authority's Executive Director within thirty (30) days of the effective date of this
Agreement, and Owner shall annually transmit to Authority a copy of the certificate of
insurance and Toss payee endorsement, signed by an authorized agent of the insurance
carrier setting forth the general provisions of coverage. The copy of the certificate of
insurance and loss payee endorsement shall be transmitted to the Authority's Executive
Director as follows:
Palm Desert Housing Authority, it's successors or assigns
73-510 Fred Waring Drive
Palm Desert, California 92260
Attention: Executive Director
Restrictive Covenant -17
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Any certificate of insurance must be in a form, content, and with companies
approved by Authority's Executive Director.
IN WITNESS WHEREOF, the parties hereto have executed this Restrictive
Agreement as of the day and year first above written.
"AUTHORITY" PALM DESERT HOUSING AUTHORITY,
public body, corporate and politic
"OWNER"
By:
, Chairman
By:
Name:
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1- \ habitat \Hahnat for Humanity of Coachell Valley Inc - DRAFT Loan Documents I Scrratol 6-12-17 dos:
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State of California
) ss.
County of Riverside
On , 20, before me, , a Notary
Public, personally appeared , who 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.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal. (Seal)
Signature
State of California
ss.
County of Riverside
On , 20 , before me, , a Notary
Public, personally appeared , who 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.
I certify under PENALTY OF PERJURY under the laws of the State of Califomia that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal. (Seal)
Signature
Restrictive Covenant -19
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EXHIBIT A
LEGAL DESCRIPTION
That certain real property situated in the City of Palm Desert, County of Riverside, State
of California, described as follows:
APN: 621-061-026
Restrictive Covenant -20
I- \hahnat\Hahnat tor Humanity of Coachell Valley Inc - DRAFT Loan Documents (krratol (* 12- I7 doc
Recording Requested By, and
When Recorded, Mail To:
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Housing Division
Free Recording Requested Pursuant To Government Code Section 27383
Space Above This Line for Recorder's Use
DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
APN(s): 621-061-026
This Deed of Trust, Assignment of Rents and Security Agreement is made this
th day of , 2017, by HABITAT OF HUMANITY OF THE COACHELLA
VALLEY, INC., herein called Trustor, whose address is 34500 Gateway Drive, Suite
100, Palm Desert, California in favor of First American Title Insurance Company, as
Trustee, for the benefit of the PALM DESERT HOUSING AUTHORITY, 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 property in
Riverside County, California, described in Exhibit A attached hereto and incorporated
herein by this reference, together with all improvements and fixtures thereon and all
goods and other personal property owned by Trustor and located thereon (collectively,
the "Property").
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 a promissory note of even
date herewith, and any extension or renewal thereof, in the principal sum of $31,000
executed by Trustor in favor of Beneficiary or order.
3. The obligations of the Trustor, and its successors -in -interest to the
Property, under that certain Affordable Housing Restriction and Lien Agreement dated
(the "Restrictive Agreement"), by and between Trustor and
Beneficiary, and recorded concurrently herewith.
To Protect the Security of This Deed of Trust, Trustor Agrees:
Deed of Trust -1
1 \hahttat\l lahnat lur Humanity of Cnachell Valley Inc 1)RAIT Loan Documents i Serratol h 12 17 Jot:
(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 fumished
thereof; 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 attomey'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,
which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided,
then Beneficiary or Trustee, but without obligation so to do and without notice to or
demand upon Trustor and without releasing Trustor from any obligation hereof, may:
(a) 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; (b) appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of Beneficiary
or Trustee; (c) pay, purchase, contest or compromise any encumbrance, charge or lien
which in the judgment of either appears to be prior or superior hereto; and (d) in
exercising any such powers, pay necessary expenses, employ counsel and pay his
reasonable fees.
(5) To pay immediately and without demand all sums so expended by
Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by
law in effect at the date hereof, and to pay for any statement provided for by law in
effect at the date hereof regarding the obligation secured hereby any amount demanded
Deed of Trust -2
I°:\hahuat\Habitat for Humanity of ('oachcll Valley Inc - DRAFT Loan Documents I krratoI2-17.doc
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
said note for endorsement, and without affecting the personal liability of any person for
payment of the indebtedness secured hereby, Trustee may: (a) reconvey any part of
said Property; (b) consent to the making of any map or plat thereof; (c) join in granting
any easement thereon; or (d) 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 said 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 said 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
Deed of Trust -3
I-\hahi( I\Habitat for Ilumamt} of Coachell ‘'alley Inc DRAFT Loan Document, 1So-raw) 6- 12-17 doc
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, or default by Trustor under the
DDA or Restrictive Agreement, 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.
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 highest
bidder 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
may purchase the Property 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 include the owner and holder, including
pledges, of the note secured hereby, whether or not named as Beneficiary herein. In
Deed of Trust -4
P \hahnatUlahuat for Humanity nl Coachcll Valley Inc - DRAFT 1 oan Documents ( Serrano 6-12-17 dnc
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
pursuant to the terms and conditions set forth in the DDA and Restrictive Agreement),
or if 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 DDA and Restrictive Agreement,
this Deed of Trust or the note secured hereby, 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.
(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 Restrictive Agreement shall be deemed a
breach of this Deed of Trust.
(18) This Deed of Trust is also intended to be and shall constitute both a
Security Agreement and a "fixture filing" as defined in the California Commercial Code,
the Trustor being the Debtor and the Beneficiary being the Secured Party. Trustor
hereby grants Beneficiary a security interest in all fixtures, and in all goods which are or
are to become fixtures on the Land, for the purpose of securing all indebtedness and
other obligations of Trustor now or hereafter secured by this Deed of Trust. The
products of such collateral are also covered hereby. This Deed of Trust, as a fixture
filing, is to be recorded in the real estate records covering the real property covered
hereby. Trustor authorizes Beneficiary to execute, deliver, file and record (as
necessary) financing and continuation statements covering such property from time to
time in such form as Beneficiary may require to perfect and continue the perfection of
Deed of Trust -5
1 :\hahnat\Hahltat lur Ilumamn nl (baLhe11 Valley Ine - 1/RAIT Loan Ihuumrnh iSerratni fi 12 17.J0/.
Beneficiary's security interest with respect to such property, and to reimburse
Beneficiary for any costs incurred in filing such financing statements and any
continuation statements. Trustor shall not create or allow the creation of any other
security interest in such property. Upon the occurrence of any default by Trustor
hereunder, Beneficiary shall have the rights and remedies of a secured party under the
California Commercial Code, as well as all other rights and remedies available at law or
in equity or as provided herein, all at Beneficiary's option. Trustor and Beneficiary
agree that the filing of a financing statement in the records normally having to do with
personal property shall never be construed as in any way derogating from or impairing
this declaration and the hereby stated intention of the parties hereto that everything
used in connection with the operation or occupancy of such property or the production
of income therefrom is and, at all times and for all purposes and in all proceedings, both
legal and equitable, shall be regarded as real property encumbered by this Deed of
Trust and fixture filing, irrespective of whether (a) any such item is physically attached to
the buildings and improvements, (b) serial numbers are used for the better identification
of certain equipment, or (c) any such item is referred to or reflected in any such
financing statement so filed at any time. Such mention in the financing statement is
declared to be for the protection of the Beneficiary in the event any court or judge shall
at any time hold that notice of Beneficiary's priority of interest must be filed in the
Uniform Commercial Code records to be effective against a particular class of persons,
including, but not limited to, the federal govemment and any subdivisions or entities of
the federal government.
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.
By:
Name:
Title:
By:
Name:
Title:
Deed of Trust -6
I':\habitat\Habitat for Humanity of Coalhell Valley Inc - DRAFT loan I) ocumcnte (Serrate) 6-12-17 Joe
State of California
ss.
County of Riverside
On , 20, before me,
, a Notary Public, personally appeared
, who 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.
certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal. (Seal)
Signature
State of California
) ss.
County of Riverside
On , 20, before me,
, a Notary Public, personally appeared
, who 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.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal. (Seal)
Signature
Deed of Trust -7
1.'\hahaat\Ila1,nal for Humana} of Co4Lhell Valley Inc - DRAI-T I oan DoLumenh ISirralol 6-12-17.JUC
APN: 627-092-050
EXHIBIT A
LEGAL DESCRIPTION
Deed of Trust -8
1 :\hahnat\Hahnat for Humanity of Coachell balky Inc - DRAFT Loan Document. (tierraht) 6-12-17 doe
PROMISSORY NOTE
SECURED BY DEED OF TRUST
$31,000.00 Palm Desert, California
, 2017
FOR VALUE RECEIVED, the undersigned Habitat of Humanity of the Coachella
Valley, Inc. ("Maker") hereby promises to pay to the order of the Palm Desert Housing
Authority, a public body, corporate and politic ("Holder"), at Palm Desert, California,
without deduction or offset, the sum of THIRTY ONE THOUSAND Dollars ($31,000.00)
(the "Note"), together with simple interest at the rate of 3% per annum. 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, Assignment of Rents and
Security Agreement 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 a Affordable Housing Restriction and Lien Agreement dated
, between Habitat of Humanity of the Coachella Valley, Inc. and
Holder ("Restrictive Agreement") and recorded concurrently with the Deed of Trust
securing this Note.
The principal amount of this Note shall be due and payable on the later of
(i) , or (ii) the forty-fifth (45th) anniversary of the date on which the
Property (as defined in the Deed of Trust) is first sold to a Qualified Household (as
defined in the Restrictive Agreement) (the "Maturity Date"); provided, however, if Maker
has not breached the terms and conditions of any the Restrictive Agreement, 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 the Restrictive Agreement, this
Note, or the Deed of Trust, 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
Promissory Note - 1
I \hahiat\I ldhllal Mr Humanity UI Coddle!! VJIh Inc - !WAIT Loan Documents i Scrrawl n-12-17 doe
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, except as expressly
permitted by and in conformance with the terms and conditions contained in the Deed of
Trust and Restrictive Agreement, 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.
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.
If a law which applies to this Note and which sets maximum loan charges is
interpreted so that the interest or other loan charges collected or to be collected in
connection with this Note exceeds the permitted limits, then: (a) any such interest or
loan charge shall be reduced by the amount necessary to reduce the interest or loan
charge to the permitted limit; and (b) any sums already collected which exceed
permitted limits will be refunded. The Holder may choose to make this refund by
reducing the principal owed under this Note or by making a direct payment to the
Maker. If a refund reduces principal, the reduction will be treated as a partial
prepayment.
[SIGNATURES TO FOLLOW ON THE NEXT PAGE]
Promissory Note - 2
P\hahnat\Hahnat for Flunwmty of Coachcll Valley Inc - DRAFT Loan Document., (Sim -ram) 6-12-17 doc
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.
Owner(s)
By:
Name:
Title:
By:
Name:
Title:
Promissory Note - 3
I \hahuat\l labuat for Humana) uI ('uaLhcll Valley Inc - DRAIT I uan Document.. I Serratui 6• 12-17 doe