HomeMy WebLinkAboutAGENDA REPORT 2004 1201 CC REG ITEM 10EMOORPARK CITY COUNCIL
AGENDA REPORT
ITEM 10. E.
CITYOFMOORPARK, CALIFORNIA
City Council Meeting
Of d
ACTION:
BY: (342U -^C-1 C7V 2z:jca
TO: Honorable City Council
FROM: Nancy Burns, Senior Management Analyst
DATE: November 19, 2004 (CC Meeting of December 1, 2004)
SUBJECT: Consider Purchase Documents for First -Time Home Buyer
Program; Accepting Agency Interest in the Ongoing
Affordability of Lots 12, 13 and 14 of Tract No. 5307;
and Authorizing City Manager to Execute All Documents,
Related to the First -Time Home Buyer Program
BACKGROUND
On June 16, 2004, the City Council approved preliminary
guidelines for a First -Time Home Buyer Program, and modified the
eligibility criteria on July 7, 2004. The guidelines were
developed to enable the City to select eligible, qualified
buyers for the seven (7) Below Market Rate (BMR) housing units
that were nearing completion at that time. In the same action,
a proposal was approved from Cabrillo Economic Development
Corporation (CEDC) for services related to the development and
implementation of the First -Time Home Buyer Program and the
selection of the initial buyers.
Six (6) of the dwelling units are in Tract 5307 (Colmer's
Moondance Project) and one (1) unit is in Tract 5181 (the TR
Partners Project). The six (6) units in the Moondance project
are completed and ready for occupancy. Three (3) of the six
affordable units in the Moondance Project are owned by the
Agency. Seven (7) buyers and two (2) back -ups have been
selected and pre- approved by the lender.
Honorable City Council
December 1, 2004, Meeting
Page 2
DISCUSSION
Purchase Documents, consisting of the following, have been
prepared and are attached to this report:
• Promissory Note
• Deed of Trust and Security Agreement
• Option in the Event of Transfer Agreement
• Resale and Refinance Restriction Agreement
• Disclosure Notice
• Declaration under Penalty of Perjury
These documents include deed restrictions of unlimited duration
which provide for the BMR units only to be resold to qualified
low or very low income households at an affordable housing
price. That price will be determined by the City at time of
resale in the same manner in which the original sales price has
been determined, consistent with statutory requirements, and is
based on Area Median Income.
The Promissory Note and Deed of Trust represent the difference
between the market rate price at which the BMR units would sell,
absent the deed restrictions, and the Effective Sales Price,
which is the price the Low and Very Low Income households will
pay for their homes. These two documents have the effect of
reinforcing the Resale and Refinance Restriction Agreement. The
resale restrictions survive repayment of the City Note. This
means that, even if the Promissory Note is paid in full, the
deed restrictions will continue in force.
At time of resale, a new Note is executed in the amount of the
difference between market value at the time of resale, as
determined by the City, and the Approved Resale Price, which is
the then - current affordable housing price. This will enable the
City to capture and secure the additional appreciation that may
accrue between the time of the original sale and subsequent
resales. Reasonable credit standards will be required of
subsequent buyers, as they were required of original buyers.
Honorable City Council
December 1, 2004, Meeting
Page 3
Restrictions affect the number of individuals that may be on
title and the manner in which title is vested. The purpose for
the restrictions is to ensure the units are always affordable to
low income households at time of resale, and to provide a
modest, equitable distribution of any proceeds that might be
realized in a resale of the property. Proceeds will be
available at resale only to the extent that Area Median Income
has increased from the time of the prior sale of the unit.
Monitoring will be conducted on an annual basis, or more often,
as needed. This will confirm that the property is being
maintained properly, that insurance and property taxes are paid,
the property is owner - occupied, etc. The City will monitor
recorded documents to ensure that no liens have been recorded
against the property without City approval. Owners and proposed
buyers are required to cooperate in promptly providing all
information requested by the City in monitoring compliance with
the Purchase Documents.
The deed restrictions address many types of "transfers ", when
individuals are added to or removed from title, and /or when
property interests are changed. The City is to be notified of
any intended transfer. Any transfer must satisfy provisions of
the recorded Agreements, or the transfer will be void.
If a transfer occurs and the owner or owners are no longer
income eligible, the City has the option to purchase the
property for the Approved Resale Price, which is the affordable
housing price at that time. If, for any reason, the City is not
able to exercise this option, then the City loan will begin to
accrue interest and monthly interest payments will immediately
become due.
In the event of a change in the persons who are on title, the
City will conduct an income re- certification. At that time, if
the combined income of all owners on title exceeds the Low
Income limit or Very Low Income limit, as applicable, this would
be considered a violation of the deed restrictions and the City
would have the right to accelerate its Note, foreclose on the
property, or initiate other action. Income will not
automatically be re- certified after escrow closes, unless a
triggering event such as a transfer, as described above, occurs.
Honorable City Council
December 1, 2004, Meeting
Page 4
At time of refinance or sale, the maximum proceeds will be the
Approved Resale Price. Under most circumstances, it is not
considered likely that there will be significant proceeds, as
the resale price will always be based on Area Median Income, not
on the real estate market at time of sale. If median income
increases substantially, however, and proceeds are available at
time of resale, the first $50,000 in net proceeds will be
distributed to the seller. Any remaining net proceeds will be
distributed as follows: one third (1/3) to seller and two
thirds (2/3) to City. There is a provision for the City to
recapture some of its administrative costs related to resales or
refinances.
MOORPARK REDEVELOPMENT AGENCY OWNED UNITS
The Agency owned units were constructed by Colmer Construction,
as authorized by the Redevelopment Agency on June 4, 2003. On
October 22, 2002, the City Council approved a General Plan
Amendment, Zone Change, Modification to the Tentative Tract Map,
and Modification to the Residential Planned Development to add
the Agency owned property as an additional three (3) lots for
the construction of three (3) affordable homes. The Agency's
interest in the ongoing affordability of these homes can more
effectively be secured through the City -wide housing program.
Staff Recommendation No. 2 has the City accepting the Agency's
obligation and interest in ensuring the ongoing affordability of
these three units.
SUMMARY
The documents submitted for Council approval for the City's
First -Time Home Buyer Program include the following provisions:
1. Restrictions are to continue for the longest feasible time,
including unlimited duration.
2. City has option to purchase when owner wishes to sell.
3. Resale price is based on any increase in Area Median
Income, not market value.
4. Shared equity provided at resale, providing proceeds are
available, with the first $50,000 distributed to the
00 1lac)
Honorable City Council
December 1, 2004, Meeting
Page 5
seller. One third (1/3) of the remaining net proceeds, if
any, also will be distributed to the seller and two thirds
(2/3) will be distributed to the City.
5. Transfers to add other owners to title are subject to
income eligibility.
6. Annual or more frequent monitoring of owner occupancy,
property tax, insurance and other matters.
7. Disclosure provides NNplain English" explanation of
restrictions and encourages buyers to obtain legal counsel
to assist them in understanding their obligations in the
program and the property restrictions.
8. Declaration provides acknowledgement of initial buyer
eligibility, based on no family members being associated
with developer or affiliates or other excluded groups.
Declaration further provides acknowledgement of opportunity
to select real estate agent /broker, translator, attorney,
lender, or others to assist buyer in this transaction, and
that conventional lenders may not be willing to loan on
this property.
With the approval of the six (6) referenced documents by the
City Council, these documents will be used in all similar sales
for other development projects participating in the First -Time
Home Buyer Program.
STAFF RECOMMENDATION:
1. Approve the Promissory Note, Deed of Trust and Security
Agreement, Option in the Event of Transfer Agreement,
Resale and Refinance Restriction Agreement, Disclosure
Notice, and Declaration under Penalty of Perjury for City's
First -Time Home Buyer Program, subject to final language
approval by City Manager and City Attorney;
2. Authorize City Manager to execute all documents, named
above, related to the First -Time Home Buyer Program; and
3. Accept Moorpark Redevelopment Agency's obligation and
interest in providing for the ongoing affordability of Lots
12, 13 and 14 of Tract No. 5307.
Honorable City Council
December 1, 2004, Meeting
Page 6
Attachments:
1. Promissory Note
2. Deed of Trust and Security Agreement
3. Option in the Event of Transfer Agreement
4. Resale and Refinance Restriction Agreement
5. Disclosure Notice
6. Declaration under Penalty of Perjury
/'� �'
NOTICE TO BORROWER:
THIS DOCUMENT CONTAINS PROVISIONS
RESTRICTING RESALES AND ASSUMPTIONS
PROMISSORY NOTE
Secured by Deed of Trust
$[AMOUNT OF LOAN]
[DATE OF CLOSING]
FOR VALUE RECEIVED, the undersigned
(the "Borrower ") promises to pay to the City of Moorpark, a
municipal corporation (the "City "), at 799 Moorpark Avenue,
Moorpark, California 93021, Attention: City Clerk, or such other
place as the City may designate in writing, or to the City's
assignee, the principal sum of Dollars
($ ), with interest as provided herein.
1. Definitions. The terms set forth in this Section
shall have the following meanings in this Note. Any capitalized
terms not defined in this Note shall have the meaning defined
for such capitalized terms in the Resale Restriction Agreement.
"Administrative Costs" shall include, but not be limited to
the following: City staff costs and legal, engineering and other
professional services.
"Affordable Housing Cost" shall have the meaning set forth
in California Health and Safety Code Section 50052.5(b), as the
same may be amended from time to time. Said Section 50052.5(b)
currently means Housing Cost that does not exceed the following:
(A) For any Low Income households whose gross incomes
exceed fifty percent (500) of County Median Income
adjusted for family size appropriate for the Unit, and
do not exceed seventy percent (70 %) of the County
Median Income adjusted for family size appropriate for
the Unit, the product of thirty percent (30 %) times
seventy percent (70 %) of the County Median Income
adjusted for family size appropriate for the Unit;
MOOR \FTHB \note6
11 -24 -04
-1-
")00093
(B) For any Low Income households whose gross incomes
exceed seventy percent (70 %) of County Median Income
adjusted for family size appropriate for the Unit, the
product of thirty percent (300) times the actual gross
income of the household; and
(C) For any Very Low Income household, the product of
thirty percent (30 %) times fifty percent (50 %) of the
County Median Income adjusted for family size
appropriate for the Unit.
"Approved Resale Price" shall have the meaning set forth in
Section 5 of the Resale Restriction Agreement.
"Borrower" shall mean the undersigned, any permitted
assignee of its rights, powers and responsibilities, or any
successor in interest to fee title to the Property.
"Capital Improvements" include, but are not limited to,
patios, mature trees; room additions; reroofing; additional
electrical outlets; interior remodeling involving electrical,
plumbing, wall removal or replacement; in- ground swimming pool
or spa; patio slab and cover; permanent accessory buildings or
structures; block walls over three feet in height;
irrigation/ sprinklers; exterior modification to the home; solar
hot water or photo voltaic panel installation; and, upgrades to
the electrical panel.
"City" shall mean the City of Moorpark, California, a
municipal corporation.
"City Loan" shall mean the deferred payment loan being made
by the City to assist Borrower to purchase the Property for an
Affordable Housing Cost, evidenced by this Note and secured by
the City Second Mortgage.
"City Second Mortgage" shall mean the deed of trust
securing this Note and performance of the Resale Restriction
Agreement.
"City Second Mortgage Documents" shall mean this Note, the
City Second Mortgage, the Resale Restriction Agreement, the
Disclosure Notice and the Declaration.
MOOR \FTHB \note6 —2—
11-24-04
I)GO 9
"Declaration" shall mean the Declaration Under Penalty of
Perjury executed by Borrower concurrently with this Note.
"Disclosure Notice" shall mean the First Time Homebuyer
Program Disclosure Notice executed by Borrower concurrently with
this Note.
"Eligible Purchaser" or "Eligible Transferee" shall mean a
purchaser who meets the criteria set forth in Section 7(b) of
the Option in the Event of Transfer Agreement.
"Excluded Transfer" shall mean any Transfer which is not
considered a Transfer for purposes of the Resale Restriction
Agreement, as provided in the definition of the term "Transfer"
below.
"First Lender" shall mean the beneficiary of the First
Mortgage, and its successors and assigns.
"First Mortgage" shall mean the deed of trust and other
security instruments securing the First Mortgage Loan.
"First Mortgage Loan" shall mean the first mortgage loan
being made concurrently with the City Loan to finance the
purchase of the Property.
"First Time Homebuyers" shall mean persons who have not
owned a home, condominium or mobile home, whether as sole
Borrower, tenant -in- common, joint tenant or other form of
ownership, at any time.
"Housing Cost" shall mean and include all of the following
associated with the Property, calculated as the average cost for
the next 12 -month period:
(A) Principal and interest on a mortgage loan;
(B) Property tax and assessments;
(C) Fire and casualty insurance covering replacement value
of property improvements;
MOOR \FTHB \note6
11 -24 -04
-3-
(D) Property maintenance and repairs;
(E) A reasonable Utility Allowance, as determined by the
City;
(F) Homeowner association fees, if applicable; and
(G) Mortgage insurance, if applicable.
"HUD" shall mean the United States Department of Housing
and Urban Development.
"Low Income" or "Lower Income" shall mean a household
income that does not exceed eighty percent (800) of the County
Median Income, adjusted for household size appropriate to the
Unit. The maximum household income amount for Lower Income
households shall be the amount published by HUD as the Household
Income Limits for Ventura County ( "HUD Income Limits ") or such
successor information in the event the referenced published
information is no longer available, but in no event less than
seventy -three percent (730) nor more than eighty percent (80 %)
of the County Median Income. If the HUD Income Limits household
income amount is less than 73% of the County Median Income, it
shall be set nevertheless at 73% of the County Median Income,
and if it is more than 80% of the County Median Income, it shall
be set nevertheless at 80% of the County Median Income.
"Low Income Household" or "Lower Income Household" shall
mean individuals or households qualified on the basis of a
"Certification of Eligibility" as certified by such individual
or household, who have an adjusted gross income which does not
exceed Low Income.
"Option in the Event of Transfer Agreement" shall mean the
Option in the Event of Transfer Agreement between the Borrower
and the City executed and recorded on or about the date of this
Note.
"Property" shall mean that real property in the City of
Moorpark, California described as set forth in the Legal
Description attached to the City Second Mortgage as Exhibit "A ".
MOOR \FTHB \note6 —4—
11-24-04
"Purchase Price" shall mean $ which is the
total consideration paid by Borrower to purchase the Property,
consisting of the First Mortgage Loan principal amount,
Borrower's downpayment and the principal amount of this Note.
"Resale Restriction Agreement" shall mean the Resale and
Refinance Restriction Agreement between the Borrower and the
City executed and recorded on or about the date of this Note.
"Term of this Note" shall mean the period commencing on the
date first above written and continuing for the longest feasible
time, which includes, but is not limited to unlimited duration,
except as otherwise provided in this Note.
"Transfer" shall mean any sale, transfer, assignment or
conveyance of the Property or any interest therein, including,
without limitation, any lease, exchange, or other disposition of
any interest in the Property, whether voluntary or involuntary,
including any refinancing of loan secured by a mortgage or deed
of trust on the Property, except transfers ( "'Excluded
Transfers ") for which the City is prohibited from accelerating
the indebtedness secured by the City Second Mortgage by
applicable state or federal law.
"Very Low Income" shall mean a household income that does
not exceed fifty percent (500) of the County Median Income,
adjusted for household size appropriate to the Unit.
"Very Low Income Household" shall mean individuals or
households qualified on the basis of a "Certification of
Eligibility" as certified by such individual or household, who
have an adjusted gross income which does not exceed Very Low
Income.
2. Security. This Note is secured by a Deed of Trust
dated the same date as this Note (the "City Second Mortgage ").
3. Interest. Except in the event of default, as provided
in Section 10 of this Note, the Borrower shall pay no interest
on the principal amount of this Note. In the event of default,
the principal amount of this Note shall bear interest as
provided in Section 6(g) below.
MOOR \FTHB \note6
11 -24 -04
-5-
1- )0009.
4. Term. The Term of this Note shall mean the period
commencing on the date first above written and continuing for
the longest feasible time, which includes, but is not limited to
unlimited duration, except as otherwise provided in this Note.
5. Restrictions on Resale of the Property. The Borrower
acknowledges that this Note is given in connection with the
purchase of property (the "Property ") as part of a program of
the City to assist in the purchase of homes by [Low Income /Very
Low Income] persons who are first -time homebuyers.
Consequently, this Note is not automatically assumable, but is
subject to Section 711.5 of the California Civil Code which
allows the City to accelerate all amounts due under this Note if
any subsequent Transfer, as defined in the Resale Restriction
Agreement, does not comply with the provisions of the Resale
Restriction Agreement.
6. Repayment. The City has provided the loan to the
Borrower as evidenced by this Note for the express purpose of
making the Property affordable to the Borrower. The Borrower
shall not be required to make payments under this Note so long
as the undersigned Borrower owns the Property and is not in
violation of any provisions of this Note, the Resale Restriction
Agreement, the Option in the Event of Transfer Agreement, or the
City Second Mortgage, subject to the following provisions:
(a) The total amount of the principal and interest, if
any, owed under this Note shall immediately become due and
payable (i) in the event of a default by the Borrower under this
Note, the City Second Mortgage, the Resale Restriction
Agreement, or the Option in the Event of Transfer Agreement,
(ii) on the date a Transfer is made whether voluntarily,
involuntarily, or by operation of law and whether by deed,
contract of sale, gift, devise, bequest or otherwise, unless
otherwise permitted by this Note or approved by the City
Manager, or (iii) on the date of any declaration of default
respecting the First Mortgage Loan. Failure to declare such
amounts due shall not constitute a waiver on the part of the
City to declare them due in the event of a subsequent Transfer.
(b) The total amount of the principal and interest, if
any, owed under this Note shall immediately become due and
payable in the event of a refinancing of a loan secured by any
MOOR \FTHB \note6 —6—
11-24-04
sS 9, ` ") ?fib
deed of trust on the Property, or in the event that the Borrower
encumbers the Property with a deed of trust that is junior in
priority to the City Second Mortgage, unless such refinancing or
new encumbrance is approved by the City Manager or his designee,
subject to the following:
(i) The City Manager or his designee shall not
unreasonably disapprove any refinancing of the First
Mortgage Loan, provided: (A) the refinancing occurs
not sooner than three years after the date of this
Note; and (B) the refinanced amount does not exceed
the Approved Resale Price, determined as of the date
of the proposed transaction, in accordance with
Section 5 of the Resale Restriction Agreement. Any
other proposed refinancing shall not be permitted.
(ii) The City Manager or his designee shall not
unreasonably disapprove any additional loans secured
by deeds of trust on the Property with a lien priority
junior to the City Second Mortgage (for example, a
"third" deed of trust), provided: (A) the proposed new
encumbrance occurs not sooner than three years after
the date of this Note; and (B) the new encumbrance
results in a combined total amount of liens on the
Property (not including the City Second Mortgage) that
does not exceed the Approved Resale Price, determined
as of the date of the proposed transaction, in
accordance with Section 5 of the Resale Restriction
Agreement.
(c) In the event of a breach of this Section 6, City shall
have the right to exercise any appropriate remedy, including but
not limited to injunction, specific performance and /or
acceleration of the City Loan evidenced hereby to the extent
permitted by law.
(d) Notwithstanding Section 6(a) above, in the event of a
sale of the Property to an Eligible Purchaser, the City shall
relieve the Borrower of all obligations under this Note upon
verification that the purchaser is an Eligible Purchaser and
upon the execution by the Eligible Purchaser of new City Second
Mortgage Documents, including a new promissory note (in a
principal amount equal to the difference between the Fair Market
MOOR \FTHB \note6 —7—
11 -24 -04
1)00059
Value of the Property at the time of such sale and the sum of
the Eligible Purchaser's downpayment plus first mortgage loan
principal amount).
(e) Subject to the terms of the Option in the Event of
Transfer Agreement, in the event of a Transfer, where upon
recertification of income, the City determines that the Owner or
subsequent Purchaser or Transferee is not an Eligible Purchaser
or Eligible Transferee, City shall have the option to purchase
the Property for an amount equal to the Approved Resale Price,
but City elects not to exercise this option and does not
purchase the Property, then this Note shall bear interest at
three percent (3 %) per annum, which shall commence to accrue
immediately and payments of interest shall become due and
payable monthly thereafter, on the first of each month.
(f) In the event of default in the repayment of this Note,
the Borrower shall pay the City the unpaid principal sum, from
and after the date of default, with interest, which interest
shall accrue until paid at the then maximum non - usurious rate of
interest allowed by law.
(g) In the event of a proposed Transfer, in order to offset
City's costs, the City shall be entitled to receive the
following: (1) in the event of a sale of subject Property, City
shall be entitled to receive its actual Administrative Costs,
not to exceed one half of one percent (.5 %) of the Affordable
Resale Price; (2) in the event of a re- finance of the Property,
the City shall be entitled to receive its actual Administrative
Costs, not to exceed one half of one percent (.5 %) of the
refinanced loan; and, (3) in the event of a change in title, the
City shall only receive the actual Administrative Costs.
7. Possible Forgiveness of Principal. Upon any Transfer
(as defined in the Resale Restriction Agreement), to the extent
necessary to ensure that the Borrower can repay the First
Mortgage Loan (as defined in the Resale Restriction Agreement)
and can recover the original downpayment paid by the Borrower,
any principal payments made by Borrower on the First Mortgage
Loan and the cost of any Capital Improvements made by Borrower
with the prior written consent of the City Manager or his
designee, the City shall forgive principal due on this Note at
MOOR \FTHB \note6
11 -24 -04
IWO -011- Y.' ca
the time of such Transfer or otherwise supplement the Approved
Resale Price as provided in the Resale Restriction Agreement.
8. Prepayments. The Borrower may prepay all or part of
the balance due under this Note, but such prepayment shall not
affect the Resale Restriction Agreement.
9. Other Deed of Trust; Notice Required. In the event
the Borrower desires or intends to encumber the Property with
any other Deed of Trust, the Borrower shall promptly notify the
City in writing of such intent. The written notice shall be
given at least thirty (30) days prior to the actual date the
Borrower executes the other Deed of Trust. Said notice from the
Borrower shall be sent to the City in the manner set forth in
Section 15 below.
10. Default.
(a) The Borrower shall be in default under this Note
if, after the notice and cure period provided by the City to the
Borrower pursuant to the notice and cure provisions of the City
Second Mortgage, the Borrower (i) fails to pay any money when
due under this Note; (ii) breaches any representation or
covenant made in this Note in any material respect; (iii)
breaches any provision of the City Second Mortgage or (iv)
breaches any provision of the Resale Restriction Agreement.
(b) Upon the Borrower's breach of any covenant or
agreement of the Borrower in this Note, the Resale Restriction
Agreement or the City Second Mortgage, including, but not
limited to, the covenants to pay, when due, any sums secured by
the City Second Mortgage, the City, prior to acceleration, will
send, in the manner set forth in Section 15, notice to the
Borrower specifying: (1) the breach; (2) the action required to
cure such breach; (3) a date, not less than thirty (30) days
from the date the notice is effective, by which such breach is
to be cured and (4) that failure to cure such breach on or
before the date specified in the notice may result in
acceleration of the sums secured by the City Second Mortgage and
sale of the Property. The notice will also inform the Borrower
of the Borrower's right to reinstate after acceleration and the
right to bring a court action to assert the nonexistence of
default or any other defense of the Borrower to acceleration and
MOOR \FTHB \note6 —9—
11 -24 -04
()01131?
sale.
(c) Upon an event of default under this Note, City may
require any successor or transferee of Borrower to met customary
credit standards applied loans secured by similar property, and
City may declare the loan due and payable pursuant to the terms
of the Agreement upon transfer to any successor or transferee of
Borrower who fails to meet such customary credit standards.
(d) Upon an event of default under this Note, City may
required any successor or transferee of Borrower to meet
customary credit standards applied to loans secured by similar
property and City may declare the loan due and payable pursuant
to the terms of this Note upon Transfer to any successor or
transferee of Borrower who fails to meet such customary credit
standards.
(d) Any failure by the City to pursue its legal and
equitable remedies upon default shall not constitute a waiver of
the City's right to declare a default and exercise all of its
rights under this Note and the City Second Mortgage.
11. Acceleration. Upon the occurrence of a default under
this Note or upon the occurrence of any other event described in
Section 6(a) or 6(b), the Resale Restriction Agreement, the
Option in the Event of Transfer Agreement or the City Second
Mortgage, the City shall have the right to declare the full
amount of the principal along with any interest under this Note
immediately due and payable. Any failure by the City to pursue
its legal and equitable remedies upon default shall not
constitute a waiver of the City's right to declare a default and
exercise all of its rights under this Note and the City Second
Mortgage. Nor shall acceptance by the City of any payment
provided for herein constitute a waiver of the City's right to
require prompt payment of any remaining principal and interest
owed.
12. No Offset. The Borrower hereby waives any rights of
offset it now has or may later have against the City its
successors and assigns, and agrees to make the payments called
for in this Note in accordance with the terms of this Note.
MOOR \FTHB \note6 _ 10 _
11 -24 -04
13. waiver; Attorney Fees and Costs. The Borrower and any
endorsers or guarantors of this Note, for themselves, their
heirs, legal representatives, successors and assigns,
respectively, severally waive diligence, presentment, protest,
and demand, and notice of protest, dishonor and non - payment of
this Note, and expressly waive any rights to be released by
reason of any extension of time or change in terms of payment,
or change, alteration or release or any security given for the
payments hereof, and expressly waive the right to plead any and
all statutes of limitations as a defense to any demand on this
Note or agreement to pay the same, and jointly and severally
agree to pay all costs of collection when incurred, including
reasonable attorney fees. If an action is instituted on this
Note the Borrower promises to pay, in addition to the costs and
disbursements allowed by law, such sum as a court may adjudge
reasonable as attorneys' fees in such action.
14. No waiver by the City. No waiver of any breach,
default or failure of condition under the terms of this Note
shall be implied from any failure of the City to take action
with respect to such breach, default or failure or from any
previous waiver of any similar or unrelated breach, default or
failure.
15. Notice. All notices required in this Note shall be
sent by certified mail, return receipt requested, or express
delivery service with a delivery receipt, or personally
delivered with a delivery receipt obtained and shall be deemed
to be effective as of the date shown on the delivery receipt as
the date of delivery, the date delivery was refused, or the date
the notice was returned as undeliverable as follows:
To the Borrower:
At the address of the Property.
To the City:
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Attn: City Manager
The parties may subsequently change addresses by providing
written notice of the change in address to the other parties in
MOOR \FTHB \note6 — 11-
11-24-04
{)!Zlo() L0 3
accordance with this Section 15.
16. Joint and Several Obligations. This Note is the joint
and several obligations of all makers, sureties, guarantors and
endorsers, and shall be binding upon them and their successors
and assigns.
17. Controlling Law. This Note shall be construed in
accordance with and be governed by the laws of the State of
California.
18. Invalid Provisions. If any one or more of the
provisions contained in this Note shall for any reason be held
to be invalid, illegal or unenforceable in any respect, then
such provision or provisions shall be deemed severable from the
remaining provisions contained in this Note, and this Note shall
be construed as if such invalid, illegal or unenforceable
provision had never been contained in this Note.
19. Attorney's Fees. If any action or proceeding is
brought to enforce this Note or any provision of this Note, the
City Second Mortgage, or the Resale Restriction Agreement, the
prevailing party shall be entitled to its attorney's fees and
the cost of such action or proceeding.
20. Entire Agreement. This Note (along with the City
Second Mortgage, the Resale Restriction Agreement and the Option
in the Event of Transfer Agreement) sets forth the entire
understanding and agreement of the City and the Borrower and any
amendment, alteration or interpretation of this Note must be in
writing signed by both the City and the Borrower. In the event
of a conflict between the terms of this Note and the Resale
Restriction Agreement, the terms of the Resale Restriction
Agreement shall prevail.
21. Assignment. Borrower hereby acknowledges that the City
has the right to assign all of the City's right, title and
interest in this Note and all payments hereunder to the
Redevelopment Agency of the City of Moorpark, upon written
notice to the Borrower.
22. Exhibits. Any exhibits referred to in this Note are
incorporated by such reference.
MOOR \FTHB \note6 —12—
11-24-04
MOOR \FTHB \note6
11 -24 -04
BORROWER
-13-
(Signature)
(Print Name)
(Signature)
(Print Name)
Recording Requested and
When Recorded Mail To:
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Attn: City Manager
NOTE TO BORROWER:
THIS DEED OF TRUST CONTAINS
PROVISIONS RESTRICTING ASSUMPTIONS
SPACE ABOVE THIS LINE FOR RECORDER'S USE
DEED OF TRUST
AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Deed of
Trust" or the "City Second Mortgage ") made as of this day
of 1 2004, among
( "Borrower ") as trustor, and First American Title
Company ( "Trustee "), and the City of Moorpark, a
corporation (the "City "), as beneficiary.
Insurance
municipal
The Borrower, in consideration of the promises herein
recited and the trust herein created, irrevocably grants,
transfers, conveys and assigns to the Trustee, in trust, with
power of sale, the property located in the City of Moorpark,
State of California, described in the attached Exhibit "A" (the
"Property ").
TOGETHER with all the improvements now or hereafter erected
on the Property, and all easements, rights, appurtenances, and
all fixtures now or hereafter attached to the Property, all of
which, including replacements and additions thereto, shall be
deemed to be and remain a part of the Property covered by this
Deed of Trust; and
TOGETHER with all articles of personal property or fixtures
now or hereafter attached to or used in and about the building
or buildings now erected or hereafter to be erected on the
Property which are necessary to the complete and comfortable use
and occupancy of such building or buildings for the purposes for
which they were or are to be erected, including all other goods
and chattels and personal property as are ever used or furnished
1
Moor \FTHB \dots
11 -24 -04
9 10,6
in operating a building, or the activities conducted therein,
similar to the one herein described and referred to, and all
renewals or replacements thereof or articles in substitution
therefore, whether or not the same are, or shall be attached to
said building or buildings in any manner; and all of the
foregoing, together with the Property, is herein referred to as
the "Security ";
To have and to hold the Security together with acquittances
to the Trustee, its successors and assigns forever;
TO SECURE to the City the repayment of the sums evidenced
by a promissory note executed by the Borrower in favor of the
City dated f 20 in the amount of
Dollars ($ ) (the "City Note "); and
TO SECURE to the City the performance of the covenants and
agreements of the Borrower contained in that certain Resale and
Refinance Restriction Agreement executed by and between the
Borrower and the City (the "Resale Restriction Agreement ") and
the Option in the Event of Transfer Agreement executed by and
between the Borrower and the City, without regard to whether the
City Note has been repaid;
TO SECURE to the City the payment of all other sums, with
interest thereon, advanced in accordance herewith to protect the
security of this Deed of Trust; and the performance of the
covenants and agreements of the Borrower herein contained.
TO SECURE the performance of any obligations of Borrower in
any other agreements with respect to the financing of the
Property or the Security the failure of which would adversely
affect Beneficiary, whether or not Beneficiary is a party to
such agreements.
BORROWER COVENANTS AND AGREES AS FOLLOWS:
1. Borrower's Estate. That the Borrower is lawfully
seized of the estate hereby conveyed and has the right to grant
and convey the Security, that other than this Deed of Trust, the
Security is encumbered only by: (1) that deed of trust executed
by the Borrower in connection with a loan (the "First Mortgage
Loan ") made to the Borrower by or its
successors and assigns (the "First Lender "), dated
, 20 , executed by the Borrower in favor of
2
Moor \FTHB \dot5
11 -24 -04
First Lender, and recorded in the County of Ventura on
20 11 and assigned Recorder's Serial No.
(the "First Mortgage "), securing a promissory note
executed by the Borrower in favor of the First Lender ( "First
Mortgage Note "), to assist in the purchase of the Property; (2)
the Resale Restriction Agreement; and (3) the Option in the
Event of Transfer Agreement. The Borrower agrees to warrant and
defend generally the title to the Security against all claims
and demands, subject to any declarations, easements or
restrictions listed in a schedule of exceptions to coverage in
any title insurance policy insuring the City's interest in the
Security. (As used in this Deed of Trust, the term "First
Lender" shall include all successors and assigns of the First
Lender.)
2. Repayment of Loan. The Borrower will promptly repay,
when due, the principal and interest required by the City Note.
The City Note contains the following provisions concerning
repayment of the loan under certain conditions:
Borrower(s) acknowledges that this Note is given in
connection with the purchase of the Property as part of a
program of the City of Moorpark to assist in the purchase of
homes by low income persons. Consequently, this Note is not
automatically assumable, but is subject to Section 711.5 of the
California Civil Code which allows the City to accelerate all
amounts due under this Note if any subsequent sale or transfer
of the Property of any kind does not comply with the provisions
of the Resale and Refinance Restriction Agreement ( "Resale
Restriction Agreement ") and Option in the Event of Transfer
Agreement executed by the Borrower and the City and dated the
same date as this Note
3. Resale Restriction Agreement. The Borrower will
observe and perform all of the covenants and agreements of the
Resale Restriction Agreement. The Borrower acknowledges and
agrees that the Resale Restriction Agreement will remain in
effect even after repayment in full of the City Note.
4. Option in the Event of Transfer A,
Borrower will observe and perform all of
agreements of the Option in the Event of
The Borrower acknowledges and agrees that
Event of Transfer Agreement will remain
repayment in full of the City Note.
3
Moor \FTHB \dot5
11 -24 -04
jreement. The
the covenants and
Transfer Agreement.
the Option in the
in effect after
5. First Mortgage Loan. The Borrower will observe and
perform all of the covenants and agreements of the First
Mortgage Loan.
6. Charges; Liens. The Borrower will pay all taxes,
assessments and other charges, fines and impositions
attributable to the Security which may attain a priority over
this Deed of Trust, by the Borrower making any payments, when
due, directly to the payee thereof. The Borrower will promptly
furnish to the City all notices of amounts due under this
paragraph, and in the event the Borrower makes payment directly,
the Borrower will promptly discharge any lien which has priority
over this Deed of Trust; provided, that the Borrower will not be
required to discharge the lien of the First Mortgage or any
other lien described in this paragraph so long as the Borrower
will agree in writing to the payment of the obligation secured
by such lien in a manner acceptable to the City, or will, in
good faith, contest such lien by, or defend enforcement of such
lien in, legal proceedings which operate to prevent the
enforcement of the lien or forfeiture of the Security or any
part thereof.
7. Hazard Insurance. The Borrower will keep the Security
insured by a standard fire and extended coverage insurance
policy in at least such amounts and for such periods as the City
may require, which amounts shall be the replacement cost of the
Security, but in no event less than the amount necessary to
prevent the Borrower from becoming a co- insurer under the terms
of the policy.
The insurance carrier providing this insurance shall be
licensed to do business in the State of California and be chosen
by the Borrower subject to approval by the City; provided, that
such approval will not be withheld if the insurer is also
approved by the First Lender, the Federal Home Loan Mortgage
Corporation ( "FHLMC "), the Federal National Mortgage Association
( "FNMA "), the United States Department of Housing and Urban
Development ( "HUD "), the United States Department of Veterans
Affairs (the "VA "), or successors thereto.
All insurance policies and renewals thereof will be in a
form acceptable to the City and will include a standard
mortgagee clause with standard lender's endorsement in favor of
the holder of the First Mortgage Note and the City as their
4
Moor \FTHB \dot5
11 -24 -04
4
interests may appear and in a form acceptable to the City. The
City shall have the right to hold, or cause its designated agent
to hold, the policies and renewals thereof, and upon request by
the City, the Borrower shall promptly furnish to the City, or
its designated agent, the original insurance policies or
certificates of insurance, all renewal notices and all receipts
of paid premiums. In the event of loss, the Borrower will give
prompt notice to the insurance carrier and the City or its
designated agent. The City, or its designated agent, may make
proof of loss if not made promptly by the Borrower. The City
shall receive thirty (30) days advance notice of cancellation of
any insurance policies required under this section.
Unless the City and the Borrower otherwise agree in
writing, insurance proceeds, subject to the rights of the First
Lender, will be applied to restoration or repair of the Security
damaged, provided such restoration or repair is economically
feasible and the Security of this Deed of Trust is not thereby
impaired. If such restoration or repair is not economically
feasible or if the security of this Deed of Trust would be
impaired, the insurance proceeds will be used, subject to the
rights of the First Lender, to repay the City Note and all sums
secured by this Deed of Trust, with the excess, if any, paid to
the Borrower. If the Security is abandoned by the Borrower, or
if the Borrower fails to respond to the City, or its designated
agent, within thirty (30) days from the date notice is mailed by
either of them to the Borrower that the insurance carrier offers
to settle a claim for insurance benefits, the City, or its
designated agent, is authorized, subject to the rights of the
First Lender, to collect and apply the insurance proceeds at the
City's option either to restoration or repair of the Security or
to repay the City Note and all sums secured by this Deed of
Trust.
If the Security is acquired by the City, all right, title
and interest of the Borrower in and to any insurance policy and
in and to the proceeds thereof resulting from damage to the
Security prior to the sale or acquisition will pass to the City
to the extent of the sums secured by this Deed of Trust
immediately prior to such sale or acquisition subject to the
rights of the First Lender.
8. Preservation and Maintenance of Security. The
Borrower will keep the Security in good repair and will not
Moor \FTHB \dot5
11 -24 -04
fl) O 0 110
commit waste or permit impairment or deterioration of the
Security.
9. Protection of the City's Security. If the Borrower
fails to perform the covenants and agreements contained in this
Deed of Trust, the First Mortgage Note, the First Mortgage, or
if any action or proceeding is commenced which materially
affects the City's interest in the Security, including, but not
limited to, default under the First Mortgage, the First Mortgage
Note or any other deed of trust encumbering the Property,
eminent domain, insolvency, code enforcement, or arrangements or
proceedings involving a bankrupt or decedent, then the City, at
the City's option, upon notice to the Borrower, may make such
appearances, disburse such sums and take such action as it
determines necessary to protect the City's interest, including
but not limited to, disbursement of reasonable attorney's fees
and entry upon the Security to make repairs.
Any amounts disbursed by the City pursuant to this
paragraph, with interest thereon, will become an indebtedness of
the Borrower secured by this Deed of Trust. Unless the Borrower
and City agree in writing to other terms of payment, such amount
will be payable upon notice from the City to the Borrower
requesting payment thereof, and will bear interest from the date
of disbursement at the rate payable from time to time on
outstanding principal under the City Note unless payment of
interest at such rate would be contrary to applicable law, in
which event such amounts will bear interest at six percent (6 %)
per annum. Nothing contained in this paragraph will require the
City to insure any expense or take any action hereunder.
10. Inspection. The City may make or cause to be made
reasonable entries upon and inspections of the Security;
provided that the City will give the Borrower reasonable notice
of inspection.
11. Forbearance by the City Not a Waiver. Any forbearance
by the City in exercising any right or remedy will not be a
waiver of the exercise of any such right or remedy. The
procurement of insurance or the payment of taxes or other liens
or charges by the City will not be waiver of the City's right to
accelerate the maturity of the indebtedness secured by this Deed
of Trust.
6
Moor \FTHB \dot5
11 -24 -04
12. Remedies Cumulative. All remedies provided in this
Deed of Trust are distinct and cumulative to any other right or
remedy under this Deed of Trust or any other document, or
afforded by law or equity, and may be exercised concurrently,
independently or successively.
13. Successors and Assigns Bound /Third Party Beneficiary.
The covenants and agreements herein contained shall bind, and
the rights hereunder shall inure to, the respective successors
and assigns of the City and the Borrower subject to the
provisions of this Deed of Trust.
14. Joint and Several Liability. All covenants and
agreements of the Borrower shall be joint and several.
15. Notice. Except for any notice required under
applicable law to be given in another manner, all notices
required in this Deed of Trust shall be sent certified mail,
return receipt requested or express delivery service with a
delivery receipt, or personally delivered with a delivery
receipt obtained, and shall be deemed to be effective as of the
date shown on the delivery receipt as the date of delivery, the
date delivery was refused, or the date the notice was returned
as undeliverable as follows:
To the Borrower:
At the address of the Property.
To the City:
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Attn: City Manager
The parties may subsequently change addresses by providing
written notice of the change in address to the other parties in
accordance with this Section 14.
16. Controlling Law. This Deed of Trust shall be
construed in accordance with and be governed by the laws of the
State of California.
17. Invalid Provisions. If any one or more of the
provisions contained in this Deed of Trust or the City Note
shall for any reason be held to be invalid, illegal or
rA
Moor \FTHB \dots
11 -24 -04
0 1- . 2,
unenforceable in any respect, then such provision or provisions
shall be deemed severable from the remaining provisions, and
this Deed of Trust and the City Note shall be construed as if
such invalid, illegal or unenforceable provision had never been
contained in this Deed of Trust or the City Note.
18. Captions. The captions and headings in this Deed of
Trust are for convenience only and are not to be used to
interpret or define the provisions hereof.
19. Default; Remedies. Upon the Borrower's breach of any
covenant or agreement of the Borrower in this Deed of Trust,
including, but not limited to, the covenants to pay, when due,
any sums secured by this Deed of Trust, the City, prior to
acceleration, will send, in the manner set forth in Section 15
of this Deed of Trust, notice to the Borrower specifying: (1)
the breach; (2) the action required to cure such breach; (3) a
date, not less than thirty (30) days from the date the notice is
effective as set forth in Section 15 of this Deed of Trust, by
which such breach is to be cured; and (4) that failure to cure
such breach on or before the date specified in the notice may
result in acceleration of the sums secured by this Deed of Trust
and sale of the Security. Notice shall be effective as of the
date shown on the delivery receipt as the date of delivery, the
date delivery was refused or the date the notice was returned as
undeliverable. The notice will also inform the Borrower of the
Borrower's right to reinstate after acceleration and the right
to bring a court action to assert the nonexistence of default or
any other defense of the Borrower to acceleration and sale. If
the breach is not cured on or before the date specified in the
notice, the City, at the City's option, may: (a) declare all of
the sums secured by this Deed of Trust to be immediately due and
payable without further demand and may invoke the power of sale
and any other remedies permitted by California law; (b) either
in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without
regard to the adequacy of its security, enter upon the Security
and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of the Trustee, and
do any acts which it deems necessary or desirable to preserve
the value or marketability of the Security, or part thereof or
interest therein, increase the income therefrom or protect the
security thereof. The entering upon and taking possession of
the Security shall not cure or waive any breach hereunder or
invalidate any act done in response to such breach and,
8
Moor \FTHB \dot5
11 -24 -04
0 0011 s
notwithstanding the continuance in possession of the Security,
the City shall be entitled to exercise every right provided for
in this Deed of Trust, or by law upon occurrence of any uncured
breach, including the right to exercise the power of sale; (c)
commence an action to foreclose this Deed of Trust as a
mortgage, appoint a receiver, or specifically enforce any of the
covenants hereof; (d) deliver to the Trustee a written
declaration of default and demand for sale, pursuant to the
provisions for notice of sale found at California Civil Code
Sections 2924, et sec.., as amended from time to time; or (e)
exercise all other rights and remedies provided herein, in the
instruments by which the Borrower acquires title to any
Security, or in any other document or agreement now or hereafter
evidencing, creating or securing all or any portion of the
obligations secured hereby, or provided by law.
The City shall be entitled to collect all reasonable costs
and expenses incurred in pursuing the remedies provided in this
paragraph, including, but not limited to, reasonable attorney's
fees.
20. Acceleration. Upon the occurrence of a default under
the City Note, the Resale Restriction Agreement, the Option in
the Event of Transfer Agreement or this Deed of Trust, the City
shall have the right to declare the full amount of the principal
along with any interest under the City Note immediately due and
payable. Any failure by the City to pursue its legal and
equitable remedies upon default shall not constitute a waiver of
the City's right to declare a default and exercise all of its
rights under the City Note and this Deed of Trust. Nor shall
acceptance by the City of any payment provided for in the City
Note constitute a waiver of the City's right to require prompt
payment of any remaining principal and interest owed.
21. Borrower's Right to Reinstate. Notwithstanding the
City's acceleration of the sums secured by this Deed of Trust,
the Borrower will have the right to have any proceedings begun
by the City to enforce this Deed of Trust discontinued at any
time prior to five (5) days before sale of the Security pursuant
to the power of sale contained in this Deed of Trust or at any
time prior to entry of a judgment enforcing this Deed of Trust
if: (a) the Borrower pays City all sums which would be then due
under this Deed of Trust and no acceleration under the City Note
has occurred; (b) the Borrower cures all breaches of any other
covenants or agreements of the Borrower contained in this Deed
9
MOOr\FTHB\dot5
11 -24 -04
00014
of Trust; (c) the Borrower pays all reasonable expenses incurred
by City and the Trustee in enforcing the covenants and
agreements of the Borrower contained in this Deed of Trust, and
in enforcing the City's and the Trustee's remedies, including,
but not limited to, reasonable attorney's fees; and (d) the
Borrower takes such action as City may reasonably require to
assure that the lien of this Deed of Trust, City's interest in
the Security and the Borrower's obligations to pay the sums
secured by this Deed of Trust shall continue unimpaired. Upon
such payment and cure by the Borrower, this Deed of Trust and
the obligations secured hereby will remain in full force and
effect as if no acceleration had occurred.
22. Reconveyance. Upon payment or forgiveness of all
sums secured by this Deed of Trust, the City will request the
Trustee to reconvey the Security and will surrender this Deed of
Trust and the City Note to the Trustee. The Trustee will
reconvey the Security without warranty and without charge to the
person or persons legally entitled thereto. Such person or
persons will pay all costs of recordation, if any.
23. Substitute Trustee. The City, at the City's option,
may from time to time remove the Trustee and appoint a successor
trustee to any trustee appointed hereunder. The successor
trustee will succeed to all the title, power and duties
conferred upon the Trustee herein and by applicable law.
24. Subordination to First Mortgage. Notwithstanding any
other provision of this Deed of Trust, this Deed of Trust shall
not diminish or affect the rights of the First Lender, and the
provisions of this Deed of Trust shall be subordinate to the
lien of the First Mortgage and shall not impair the rights of
the First Lender or such lenders' assignee or successor -in-
interest (including but not limited to any government agency
insuring such First Mortgage) to exercise its remedies under the
First Mortgage in the event of default under the First Mortgage
by the Owner or to exercise its remedies. Such remedies under
the First Mortgage include, but are not limited to, the right of
foreclosure or acceptance of a deed or assignment in lieu of
foreclosure. After such foreclosure or acceptance of a deed in
lieu of foreclosure, this Deed of Trust shall be forever
terminated and shall have no further effect as to the Property
or any transferee thereafter; provided, however, if the holder
of such First Mortgage acquires title to the Property pursuant
to foreclosure or a deed or assignment in lieu of foreclosure,
10
Moor \FTHB \dots
11 -24 -04
000111-S
this Deed of Trust shall automatically terminate upon such
acquisition of title, provided that (i) the City has been given
written notice of default under such First Mortgage, and (ii)
the City shall not have cured the default under such First
Mortgage within 30 days after such notice, or commenced to cure
the default within such 30 -day period, and shall have given its
firm commitment to complete the cure in form and substance
acceptable to the First Lender.
25. Attorney's Fees. If any action or proceeding is
brought to enforce this Deed of Trust or any provision of this
Deed of Trust, the City Note or the Resale Restriction
Agreement, the prevailing party shall be entitled to its
attorney's fees and the cost of such action or proceeding.
26. Assignment. Borrower hereby acknowledges that the
City has the right to assign all of the City' s right, title and
interest in this Deed of Trust to the Redevelopment Agency of
the City of Moorpark, upon written notice to the Borrower.
27. Exhibits. Any exhibits referred to in this Deed of
Trust are incorporated by such reference.
IN WITNESS WHEREOF, the Borrower has executed this Deed of
Trust as of the date first written above.
By:
(Signature of Borrower
(Print Name)
(Signature of Borrower
(Print Name)
11
Moor \FTHB \dots
11 -24 -04
ok Mi 16
STATE OF CALIFORNIA )
ss.
COUNTY OF VENTURA )
On before me, , personally
appeared personally known
to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is /are subscribed to the within
instrument and acknowledged to me that he /she /they executed the
same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
Signature
STATE OF CALIFORNIA )
ss.
COUNTY OF VENTURA )
On before me, , personally
appeared personally known
to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is /are subscribed to the within
instrument and acknowledged to me that he /she /they executed the
same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
Signature
0 �t +� �.
OFFICIAL BUSINESS
Document entitled to free
recording per Government Code
Sections 6103 and 27383
Recording Requested By:
THE CITY OF MOORPARK
799 Moorpark Avenue
Moorpark, California 93021
Attention: City Manager
SPACE ABOVE THIS LINE FOR RECORDER'S USE
OPTION IN THE EVENT
OF TRANSFER AGREEMENT
ADDRESS TO BE INSERTED,
Moorpark, California
RECITALS:
A. THE CITY OF MOORPARK ( "City ") has a public purpose to
assist [Low /Very Low] Income persons and families to obtain
housing at affordable housing cost; and
B. [NAME OF DEVELOPER TO BE INSERTED] (the "Developer ") is
selling to the undersigned purchaser ( "Owner ") a single
family home or condominium unit located in the City of
Moorpark, (the "Property "), further described in Exhibit A
attached to the "Resale and Refinance Restriction
Agreement "; and
C. The City requires that the Property must be owned and
occupied by a [Low /Very Low] Income Household that is a
First Time Homebuyer, for the Term of this Agreement, as
defined below; and
D. The City also requires that the City shall have the right
to purchase the Property from Owner and its successors and
assigns, or to designate a purchaser for the Property; and
E. City desires to provide Owner with options, and
restrictions, in the event of a Transfer, in order to
maintain City's public purpose of assisting [Low /Very Low]
Income persons and families.
MOOR\FTHB\optionagreement4 _
11 -24 -2004 _1 �b
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the
receipt and sufficiency of which are hereby acknowledged, the
City and the Owner hereby agree and NOTICE IS HEREBY GIVEN that
the Property shall be subject to this OPTION IN THE EVENT OF
TRANSFER AGREEMENT(this "Agreement "), as of , 20_
(the "Date of this Agreement ").
1. Definitions
For purposes of this Agreement, the following terms shall
be defined as follows:
"Administrative Costs" shall include, but not be limited to
the following: City staff costs and legal, engineering and other
professional services.
"Affordable Housing Cost" shall have the meaning set forth
in California Health and Safety Code Section 50052.5(b), as the
same may be amended from time to time. Said Section 50052.5(b)
currently means Housing Cost that does not exceed the following:
(A) For any Low Income households whose gross incomes
exceed fifty percent (500) of County Median Income
adjusted for family size appropriate for the Unit, and
do not exceed seventy percent (700) of the County
Median Income adjusted for family size appropriate for
the Unit, the product of thirty percent (30 %) times
seventy percent (70 %) of the County Median Income
adjusted for family size appropriate for the Unit;
(B) For any Low Income households whose gross incomes
exceed seventy percent (70 %) of County Median Income
adjusted for family size appropriate for the Unit, the
product of thirty percent (30 %) times the actual gross
income of the household; and
(C) For any Very Low Income household, the product of
thirty percent (30 %) times fifty percent (50 %) of the
County Median Income adjusted for family size
appropriate for the Unit.
"Approved Resale Price" shall have the meaning set forth in
Section 9 of this Agreement.
"Capital Improvements" include, but are not limited to,
patios, mature trees; room additions; reroofing; additional
MOOR \FTHB \optionagreement4 —2 _
11 -24 -2004
100120
electrical outlets; interior remodeling involving electrical,
plumbing, wall removal or replacement; in- ground swimming pool
or spa; patio slab and cover; permanent accessory buildings or
structures; block walls over three feet in height;
irrigation/ sprinklers; exterior modification to the home; solar
hot water or photo voltaic panel installation; and, upgrades to
the electrical panel.
"City" shall mean the City of Moorpark, California, a
municipal corporation.
"City Loan" shall mean the deferred payment loan being made
by the City to assist Owner to purchase the Property for an
Affordable Housing Cost, evidenced by the City Second Mortgage
Note and secured by the City Second Mortgage.
"City Second Mortgage" shall mean the deed of trust
securing the City Second Mortgage Note and performance of the
"Option in the Event of Transfer Agreement" and this Agreement.
"City Second Mortgage Documents" shall mean the City Second
Note, City Second Mortgage, this Agreement, Resale and Refinance
Restriction Agreement, the Disclosure Notice and the
Declaration.
"City Second Mortgage Note" shall mean the promissory note
executed by Owner concurrently with this Agreement, evidencing
the obligation to repay the City Loan when and as provided in
the City Second Mortgage Note.
"County" shall mean Ventura County.
"County Median Income" shall mean the Median Income
adjusted by actual household size as published annually by HUD
for the County, which Median Income levels shall be adjusted
concurrently with publication of adjustment of the same by HUD.
"Date of this Agreement" shall mean the date first written
above.
"Declaration" shall mean the Declaration Under Penalty of
Perjury executed by Owner concurrently with this Agreement.
"Disclosure Notice" shall mean the First Time Homebuyer
Program Disclosure Notice executed by Owner concurrently with
this Agreement.
MOOR \FTHB \optionagreement4 — 3—
11-24-2004 f)00 :.qq 1
"Eligible Purchaser" or "Eligible Transferee" shall mean a
purchaser or transferee who meets the criteria set forth in
Section 7 below.
"First Lender" shall mean the beneficiary of the First
Mortgage, and its successors and assigns.
"First Mortgage" shall mean the deed of trust and other
security instruments securing the First Mortgage Loan.
"First Mortgage Loan" shall have the meaning set forth in
Recital "C" of the Resale and Refinance Restriction Agreement.
"First Time Homebuyers" shall mean persons who have not
owned a home, condominium or mobile home, whether as sole owner,
tenant -in- common, joint tenant or other form of ownership, at
any time.
"Housing Cost" shall mean and include all of the following
associated with the Property, calculated as the average cost for
the next 12 -month period:
(A) Principal and interest on a mortgage loan;
(B) Property tax and assessments;
(C) Fire and casualty insurance covering replacement value
of property improvements;
(D) Property maintenance and repairs;
(E) A reasonable Utility Allowance, as determined by the
City;
(F) Homeowner association fees, if applicable; and
(G) Mortgage insurance, if applicable.
"HUD" shall mean the United States Department of Housing
and Urban Development.
"Low Income" or "Lower Income" shall mean a household
income that does not exceed eighty percent (80 %) of the County
Median Income, adjusted for household size appropriate to the
Unit. The maximum household income amount for Lower Income
MOOR \FTHB \optionagreement4 — 4—
11-24-2004
households shall be the amount published by HUD as the Household
Income Limits for Ventura County ( "HUD Income Limits ") or such
successor information in the event the referenced published
information is no longer available, but in no event less than
seventy -three percent (73 %) nor more than eighty percent (800)
of the County Median Income. If the HUD Income Limits household
income amount is less than 73% of the County Median Income, it
shall be set nevertheless at 73% of the County Median Income,
and if it is more than 80% of the County Median Income, it shall
be set nevertheless at 80% of the County Median Income.
"Low Income Household" or "Lower Income Household" shall
mean individuals or households qualified on the basis of a
"Certification of Eligibility" as certified by such individual
or household, who have an adjusted gross income which does not
exceed Low Income.
"Owner" shall mean the undersigned, any permitted assignee
of its rights, powers and responsibilities, or any successor in
interest to fee title to the Property.
"Property" shall mean that real property in the City of
Moorpark, California described as set forth in the Legal
Description attached to this Agreement as Exhibit "A ".
"Term of this Agreement" shall mean the period commencing
on the date first above written and continuing for the longest
feasible time, which includes, but is not limited to unlimited
duration, except as otherwise provided in this Agreement. The
Term of this Agreement shall survive the repayment of the City
Second Mortgage Note.
"Transfer" shall, for the purposes of this Agreement, mean
any sale, transfer, assignment or conveyance of the Property or
any interest therein, including, without limitation, any lease,
exchange, or other disposition of any interest in the Property,
or any change in the persons who are on title, whether voluntary
or involuntary, including any refinancing of a loan secured by a
mortgage or deed of trust on the Property and specifically
including, but not limited to the following: a transfer
resulting from the death of Borrower, where transfer is to the
spouse who is also a Borrower; a transfer of an ownership
interest to Borrower's spouse or child; a transfer resulting
from a decree of dissolution of marriage or legal separation; a
transfer by Borrower into an inter vivos trust in which Borrower
is a beneficiary; a transfer to a relative resulting from the
MOOR \FTHB \optionagreement4 — 5—
11-24-2004
death of the Borrower; transfer in which Borrower dies and an
existing joint tenant takes Borrower's interest; Property or any
portion thereof is made subject to a junior encumbrance or lien;
creation of a purchase -money security interest for household
appliances; and, the granting of a leasehold interest of three
years or less and that does not contain an option to purchase.
"Very Low Income" shall mean a household income that does
not exceed fifty percent (50 %) of the County Median Income,
adjusted for household size appropriate to the Unit.
"Very Low Income Household" shall mean individuals or
households qualified on the basis of a "Certification of
Eligibility" as certified by such individual or household, who
have an adjusted gross income which does not exceed Very Low
Income.
2. Covenants, Representations and Certifications
The Owner hereby covenants, represents and certifies as
follows:
(a) The financial and other information previously
provided by the Owner to the City in order to qualify to for the
City Loan and to purchase the Property is true and correct as of
the Date of this Agreement;
(b) Owner does not own any other real property as of
the Date of this Agreement;
(c) Owner shall occupy the Property as the Owner's
principal place of residence;
(d) Owner shall fully cooperate with the City in
promptly providing all information requested by the City in
monitoring compliance with this Agreement; and
(e) Owner shall maintain the interior and exterior of
the improvements and the landscaping on the Property in a manner
consistent with community standards which will uphold the value
of the Property, in accordance with all applicable City codes.
3. Transfer Restrictions
MOOR \FTHB \optionagreement4 — 6—
11-24-2004 ; 12
Any Transfer of the Property shall be subject to the
provisions of this Agreement. Any Transfer without satisfaction
of the provisions of this Agreement shall be void.
4. Notice of Intended Transfer
(a) In the event Owner intends to sell or otherwise
transfer the Property, or vacate the Property for any period
longer than sixty (60) consecutive days, or make any change in
the persons who are on title, Owner shall promptly notify the
City in writing of such intent or event. The written notice
shall be given in accordance with Section 11 of this Agreement
at least sixty (60) days prior to the actual date of any
Transfer or vacation of the Property. Provided, that in the
event of a Transfer occurring as the result of the death of any
person, written notice shall be given by the successor Owner as
soon as possible, but not later than 90 days following such
event. Following receipt of any notice pursuant to this Section
4, the City may notify proposed Eligible Purchasers or Eligible
Transferees of the Property that the Property is available for
purchase, and the City shall have an option to purchase the
Property as provided in Section 5, below.
(b) In the event of a Transfer as the result of the
death of an Owner, where there remains another Owner on title,
the remaining Owner on title shall not be subject to an income
recertification by the City, for this event, as provided in
Section 7(b)(2) below.
5. Citv's Option to Purchase.
City shall have the option to purchase the Property from
the Owner (the "City Option ") for an amount equal to the
Approved Resale Price, calculated as set forth in Section 9 of
this Agreement. If the City decides to exercise its option to
purchase the Property, it shall within twenty (20) days of
receipt of the notice specified in Section 4, above, notify the
Owner in writing that it chooses to exercise the option. If the
City exercises its option to purchase, it shall purchase the
Property within forty -five (45) days after the date it sends the
notice to exercise its option, or at such other date as may be
mutually agreed upon, at the price as set forth in Section 9.
The City may, instead of purchasing the Property itself, assign
its right to purchase the Property to a person who meets the
criteria established by the City or to a governmental agency or
MOOMFTHMoptionagreement4 — 7 -
11 -24- 20041) 00 125
nonprofit organization which is
preserving low income housing.
6. Transfer by Owner
devoted to developing or
(a) Only in the event that the City does not exercise
its option to purchase the Property, or to designate a
purchaser, pursuant to Section 5, above, the Owner may sell the
Property, but only to an Eligible Purchaser or Eligible
Transferee, approved by the City, in which case the maximum
amount of proceeds that the Owner may receive for the Transfer
shall be an amount that does not exceed the Approved Resale
Price.
(b) In the event of a re -sale of the subject
Property, where as a result of an increase in the Area Median
Income, there is a net amount of the Affordable Sale Price
proceeds remaining after the payment of the First Mortgage and
closing costs, such net proceeds shall be distributed as
follows: $50,000 net proceeds shall first be provided to the
Seller and then any net proceeds above $50,000 shall then be
split among Borrower and City as follows: one -third to Borrower
and two - thirds to the City.
(c) In the event of a proposed Transfer, in order to
offset City's costs, the City shall be entitled to receive the
following: (1) in the event of a sale of the Property, City
shall be entitled to receive its actual Administrative Costs,
not to exceed one half of one percent (.5 %) of the Affordable
Sale Price; (2) in the event of a re- finance of the Property,
the City shall be entitled to receive its actual Administrative
Costs, not to exceed one half of one percent (.5 %) of the
refinanced loan amount; and, (3) in the event of a change in
title, the City shall be entitled to receive its actual
Administrative Costs.
7. Eliaible Transfer
In the event that the City does not exercise its option to
purchase the Property, or to designate a purchaser, pursuant to
Section 5, above, Owner shall have the right to Transfer the
Property to an Eligible Purchaser or Eligible Transferee meeting
the qualifications described in paragraph (b) of this Section 7,
for an Approved Resale Price (defined in Section 9, below), in
MOOR \FTHB \optionagreement4 — 8—
11-24-2004
I) ) b 12 Ca
accordance with the following procedures (referred to as an
"Eligible Transfer "):
(a) Disclosures and Submittals: The Owner and the
proposed purchaser or transferee shall provide the following
written information and documents to the City:
(1) The name, address and telephone number of the
proposed purchaser or transferee;
(2) A signed financial statement of the proposed
purchaser or transferee in a form acceptable to the City Manager
or designee, and any other supporting documentation requested
by the City Manager or designee, demonstrating the income of the
proposed purchaser or transferee, which shall be used by the
City to determine the income eligibility of the proposed
purchaser or transferee;
(3) The proposed sales contract and all other
related documents which shall set forth all the terms of the
sale of the Property, including, at a minimum, the following:
(A) the price to be paid by the proposed
purchaser or transferee for the Property,
and any credits, allowances or other
consideration, if any; and
(B) the price to be paid by the proposed
purchaser or transferee for the Owner's
personal property, if any, and any credits,
allowances or other consideration, if any;
and
(C) the proposed
proposed close of
demonstrate that ti
one person; or (ii)
tenants and not
community property
ownership.
vesting following the
escrow, which shall
tle shall vest in: (i)
two persons, as joint
as tenants -in- common,
or other form of
(4) A written certification from the Owner and
proposed purchaser or transferee, in a form acceptable to the
City Manager or designee, that the sale shall be closed in
accordance with the terms of the sales contract and other
documents submitted to and approved by the City Manager or
MOOR \FTHB \optionagreement4 — 9—
11-24-2004
designee. The certification shall also provide that the proposed
purchaser or transferee or any other party has not paid and will
not pay to the Owner, and the Owner has not received and will
not receive from the proposed purchaser or transferee or any
other party, money or other consideration, including personal
property, in addition to what is set forth in the sales contract
and documents submitted to the City Manager or designee. The
written certification shall also include a provision stating
that in the event a Transfer is made in violation of the terms
of this Agreement, or false or misleading statements are made in
any documents or certifications submitted to the City, the City
shall have the right to accelerate the City Second Mortgage
Note, foreclose on the Property or file an action at law or in
equity as may be appropriate. In any event, any costs,
liabilities or obligations incurred by the Owner and proposed
purchaser or transferee for the return of any moneys paid or
received in violation of this Agreement or for any costs and
legal expenses, shall be borne by the Owner and /or the proposed
purchaser or transferee and they shall hold the City and its
designees harmless and reimburse their expenses, legal fees and
costs for any action they -reasonably take in good faith in
enforcing the terms of this Agreement.
(5) The City Second Mortgage Documents, executed
by the proposed purchaser or transferee in favor of the City,
with terms that are acceptable to the City Manager or designee.
The new City Second Note shall be in a principal amount equal to
the difference between the Fair Market Value of the Property, as
determined by the City, at the time of such sale or transfer,
and the Approved Resale Price. The delivery of the executed new
Promissory Note and recordation of the new Deed of Trust, Resale
and Refinance Restriction Agreement and the Option in the Event
of Transfer Agreement shall be a condition of the City's
approval of the proposed sale or transfer.
(6) Upon the close of the proposed sale or
transfer, the original City Second Mortgage Note, certified
copies of the recorded City Second Mortgage, Option in the Event
of Transfer Agreement and Resale and Refinance Restriction
Agreement, a copy of the final sales contract, settlement
statement, escrow instructions and any other documents which the
City Manager or designee may reasonably request.
(b) Eligibility of Purchaser or Transferee. A
proposed purchaser or transferee who meets the following
M00R \FTHB \opti0nagreement4 _ 10 _
11 -24 -2004
requirements shall be an Eligible Purchaser or Eligible
Transferee:
(1) Each proposed purchaser or transferee shall
certify, in writing, as follows:
(A) All financial and other information
provided to the City in order to qualify to purchase the
Property is true and correct;
(B) the proposed purchaser or transferee is
a First -Time Homebuyer;
(C) the proposed purchaser or transferee
does not own any other real property;
(D) the proposed purchaser or transferee
shall occupy the Property as his or her or their principal place
of residence;
(E) the proposed purchaser or transferee
shall fully cooperate with the City in promptly providing all
information requested by the City in monitoring compliance with
this Agreement;
(F) the proposed purchaser or transferee
shall maintain the interior and exterior of the improvements and
the landscaping on the Property in a manner consistent with
community standards which will uphold the value of the Property,
in accordance with all applicable City codes; and
(G) the proposed purchaser or transferee
shall have completed a City- approved home buyer education
program and provide to the City a certification to that effect.
(H) the proposed purchaser or transferee
shall provide to the City financial information, or any other
additional information, showing the income of every person in
the household. Further, in the event of a transfer of title to
a living trust, the proposed Transferee shall provide to the
City financial information, or any other additional information,
showing the income of all the beneficiaries of the living trust.
(2) The City shall determine that the combined
income for all household members of the proposed purchaser or
transferee shall not exceed the maximum income for a Low Income
MOOR \FTHB \optionagreement4 -
11 -24 -2004 �yy
Household or Very Low Income Household, as applicable. Also, in
the event of a transfer of title to a living trust, City will
include the income of each beneficiary of the living trust in
calculating eligibility as Low Income Household or Very -Low
Income Household.
8. Transfer to Ineliqible Purchaser or Transferee
(a) In the event of a Transfer, where upon
recertification of income, as described in Section 7(b)(2)
above, the City determines that the Owner or subsequent
Transferee is not an Eligible Purchaser or Eligible Transferee,
City shall have the option to purchase the Property for an
amount equal to the Approved Resale Price as provided in Section
5 above. However, if City elects not to exercise or is
precluded from exercising this option and does not purchase the
Property, then the terms of the City Loan shall be such that the
City Loan begins to accrue interest at three percent (3 %)
interest rate per annum, with monthly interest only payments
becoming immediately due. The conditions contained in the
Resale Restriction Agreement and the Option in the Event of
Transfer Agreement shall continue in force in the event the City
Loan is paid in whole or in part.
(b) In the event of a Transfer to an Eligible
Purchaser or Eligible Transferee, upon notice to City and
recertification of income, such Transfer shall proceed under the
Eligible Transfer provisions contained in Section 7 of this
Agreement and shall remain subject to the City Second Mortgage
Documents.
9. Determination of Resale Price
(a) The maximum proceeds that the Owner shall receive
for any type of Transfer of the Property, whether sale or
refinancing (the "Approved Resale Price "), shall be calculated
as the sum of ( A ) a downpayment of f ive percent ( 5 %) ( but only
in the case of a sale), plus (B) the amount that may be financed
with a First Mortgage Loan, the payments of principal and
interest on which, when combined with other Housing Costs,
results in an "Affordable Housing Cost" as defined in Section 1,
above.
(b) In the event of a re -sale of the Property, where
as a result of an increase in the Area Median Income, there is a
net amount of the Affordable Sale Price proceeds after the
MOOR \FTHB \optionagreement4 — 12 —
11 -24- 2004 < (�
payment of the First Mortgage and closing costs, such net amount
shall be distributed as follows: $50,000 net proceeds shall
first be provided to the Seller and then any proceeds above
$50,000 shall then be split among Borrower and City as follows:
one -third to Borrower and two - thirds to the City.
10. Defaults and Remedies
Upon a violation of any of the provisions of this Agreement
by the Owner or a proposed purchaser or transferee, the City may
give written notice to the Owner specifying the nature of the
violation. If the violation is not corrected to the satisfaction
of the City Manager or designee within a reasonable time, not
longer than thirty (30) days after the date of notice, or within
such further time as the City Manager or designee may determine
is necessary to correct the violation, the City may declare a
default under this Agreement. The City shall provide notice to
the First Mortgage lender that the City has declared a default
under this Agreement. The notice to the First Mortgage lender
shall indicate that the City may exercise the City's Option to
purchase the Property pursuant to this Agreement. Upon the
declaration of default or if the Owner or the proposed purchaser
or transferee makes, or has made, any misrepresentation in
connection with receiving any benefits under this Agreement, the
City may exercise all available remedies.
11. Notices.
Except for any notice required under applicable law to be
given in another manner, all notices required in this Agreement
shall be in writing and shall not be effective for any purpose
unless served (i) personally, (ii) by independent, reputable,
overnight commercial courier, or (iii) by deposit in the United
States mail, postage and fees fully prepaid, registered or
certified mail, with return receipt requested, addressed as
follows:
To Owner: At the address of the Property set
forth on the first page of this
Agreement
To City: The City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Attention: City Manager
MOOR \FTHB \optionagreement4 — 13 —
11 -24 -2004 5 R G10131
12. Nonliabilitv of Cit
In no event shall the City become in any way liable or
obligated to the Owner or any successor in interest to the Owner
by reason of the City's option to purchase the property, nor
shall the City be in any way obligated or liable to the Owner or
any successor in interest to the Owner for its failure to
exercise the City's option to purchase.
13. Enforcement of Agreement
This Agreement, without regard to technical classification
or designation, shall be binding for the benefit of the City,
and such covenants shall run in favor of the City for the entire
period during which such covenants shall be in force and effect,
without regard to whether the City is or remains an owner of any
land or interest therein to which such covenants relate. The
City, in the event of any breach of any such covenants, shall
have the right to exercise all the rights and remedies, and to
maintain any action at law or suits in equity or other proper
proceedings to enforce the curing of such breach.
14. Bindinq on Successors and Assigns
Notwithstanding any other provision of law, this Agreement
shall run with the land and shall be enforceable against the
Owner and successors in interest by the City. The requirements
of this Agreement shall remain in effect with respect to the
Property for the longest feasible time, which includes, but is
not limited to unlimited duration, except as otherwise provided
in this Agreement.
15. Amendments
Subject to the prior consent of the First Lender, the City,
its successors and assigns, and the Owner and the successors and
assigns of the Owner in and to the Property, shall have the
right to consent and agree to changes in, or to eliminate in
whole or in part, this Agreement or to subject the Property to
additional covenants, easements, or other restrictions without
the consent of any tenant, lessee, easement holder, licensee,
trustee, beneficiary under a deed of trust (other than the First
MOOR \FTHB \optionagreement4 — 14 —
11 -24 -2004 f)Od��� tti
Mortgage Loan or the City Loan) or any other person or entity
having an interest less than a fee in the Property.
16. No Third Partv Beneficiaries
Except as provided in this Section 16, this Agreement,
without regard to technical classification or designation, shall
not benefit or be enforceable by any person, or firm, or
corporation, public or private, except the City and the Owner
and their respective successors and assigns. The Redevelopment
Agency of the City of Moorpark, acting pursuant to State law,
shall have the right, power and authority to enforce this
Agreement in its own name and in the name of the City, and shall
be the beneficiary of all rights of the City in this Agreement.
17. Invalid Provisions
If any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions
shall be deemed severable from the remaining provisions
contained in this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable
provisions had never been contained in this Agreement.
18. Controllina Law
This Agreement shall be construed in accordance with and be
governed by the laws of the State of California.
19. Interpretation of Agreement
The terms of this Agreement shall be interpreted so as to
avoid speculation in the value of the Property and to ensure to
the maximum extent feasible that the sales price and mortgage
payment on the Property remain affordable to Low Income
Households.
20. Counterparts
This Agreement may be executed
counterparts, each of which shall be
document.
21. Entire Agreement
in any number of
considered an original
MOOR \FTHB \optionagreement4 — 15 —
11 -24 -2004 0 C 0 �'
This Agreement (along with the Resale and Refinance
Restriction Agreement, Declaration, Disclosure Notice, City
Second Mortgage and Second Mortgage Note) sets forth the entire
understanding and agreement of the Owner and the City, and any
amendment, alteration or interpretation of this Agreement shall
be in writing and signed by each of the parties hereto.
m
[SIGNATURES APPEAR ON NEXT PAGE]
MOOR \FTHB \optionagreement4 — 16 —
11 -24 -2004 9 00 134
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the Date of this Agreement.
OWNER
By:_
Name:
By:_
Name:
THE CITY OF MOORPARK
By: _
Name:
Title:
MOOR \FTHB \optionagreement4 _ 17 _
11 -24 -2004
STATE OF CALIFORNIA )
ss.
COUNTY OF VENTURA )
On before me, , personally
appeared , personally known
to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is /are subscribed to the within
instrument and acknowledged to me that he /she /they executed the
same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
Signature
STATE OF CALIFORNIA )
ss.
COUNTY OF VENTURA )
On before me, , personally
appeared personally known
to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is /are subscribed to the within
instrument and acknowledged to me that he /she /they executed the
same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
Signature
� ")1.19 1.3 E:
OFFICIAL BUSINESS
Document entitled to free
recording per Government Code
Sections 6103 and 27383
Recording Requested By:
THE CITY OF MOORPARK
799 Moorpark Avenue
Moorpark, California 93021
Attention: City Manager
SPACE ABOVE THIS LINE FOR RECORDER'S USE
RESALE AND REFINANCE RESTRICTION AGREEMENT
ADDRESS TO BE INSERTED,
Moorpark, California
RECITALS:
A. THE CITY OF MOORPARK ( "City ") has a public purpose to
assist [Low /Very Low] Income persons and families to obtain
housing at affordable housing cost; and
B. [NAME OF DEVELOPER TO BE INSERTED] (the "Developer ") is
selling to the undersigned purchaser ( "Owner ") a single
family home or condominium unit located in the City of
Moorpark, as described on the attached Exhibit "A"
incorporated herein by this reference (the "Property "); and
C. The Developer is selling the Property to Owner for a sales
price of $ , which is being financed as follows:
a first priority deed of trust loan of $ ( "First
Mortgage Loan ") ; Owner Downpayment of $ and a
second priority, deferred payment loan (the "City Loan ")
from the City of Moorpark (the "City ") in the amount of
$ , such that Owner's monthly housing payments
will generally not exceed an Affordable Housing Cost, as
defined below; and
D. The City requires that the Property must be owned and
occupied by a [Low /Very Low] Income Household that is a
First Time Homebuyer, for the Term of this Agreement, as
defined below; and
E. The City also requires that the City shall have the right
to purchase the Property from Owner and its successors and
assigns, or to designate a purchaser for the Property, on
the terms and conditions set forth in this Agreement; and
MOOR\FTHB\resa1eagreement6 _ 1 _ �`�� �1�
F. City desires to assist Owner in purchasing the Property by
providing this Agreement; Owner acknowledges that this
Agreement allows them to purchase property they could not
otherwise qualify to purchase in exchange for the
limitations and restrictions contained in this Agreement,
including, without limitation, restrictions on to whom the
Property may be sold and restrictions on refinancing, all
as provided below in this Agreement.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the
receipt and sufficiency of which are hereby acknowledged, the
City and the Owner hereby agree and NOTICE IS HEREBY GIVEN that
the Property shall be subject to this RESALE AND REFINANCE
RESTRICTION AGREEMENT (this "Agreement "), as of ,
20 (the "Date of this Agreement ").
1. Definitions
For purposes of this Agreement, the following terms shall
be defined as follows:
"Administrative Costs" shall include, but not be limited to
the following: City staff costs and legal, engineering and other
professional services.
"Affordable Housing Cost" shall have the meaning set forth
in California Health and Safety Code Section 50052.5(b), as the
same may be amended from time to time. Said Section 50052.5(b)
currently means Housing Cost that does not exceed the following:
(A) For any Low Income households whose gross incomes
exceed fifty percent (500) of County Median Income
adjusted for family size appropriate for the Unit, and
do not exceed seventy percent (700) of the County
Median Income adjusted for family size appropriate for
the Unit, the product of thirty percent (30 %) times
seventy percent (70 %) of the County Median Income
adjusted for family size appropriate for the Unit;
(B) For any Low Income households whose gross incomes
exceed seventy percent (70 %) of County Median Income
adjusted for family size appropriate for the Unit, the
product of thirty percent (30 %) times the actual gross
income of the household; and
(C) For any Very Low Income household, the product of
thirty percent (30 %) times fifty percent (50 %) of the
M00R \FTHB \resa1eagreement6 —2 _
11 -24 -04
County Median Income adjusted for family size
appropriate for the Unit.
"Approved Resale Price" shall have the meaning set forth in
Section 5 of this Agreement.
"Capital Improvements" include, but are not limited to,
patios, mature trees; room additions; reroofing; additional
electrical outlets; interior remodeling involving electrical,
plumbing, wall removal or replacement; in- ground swimming pool
or spa; patio slab and cover; permanent accessory buildings or
structures; block walls over three feet in height;
irrigation/ sprinklers; exterior modification to the home; solar
hot water or photo voltaic panel installation; and, upgrades to
the electrical panel.
"City" shall mean the City of Moorpark, California, a
municipal corporation.
"City Loan" shall mean the deferred payment loan being made
by the City to assist Owner to purchase the Property for an
Affordable Housing Cost, evidenced by the City Second Mortgage
Note and secured by the City Second Mortgage.
"City Second Mortgage" shall mean the deed of trust
securing the City Second Mortgage Note and performance of the
Option in the Event of Transfer Agreement and this Agreement.
"City Second Mortgage Documents" shall mean the City Second
Note, City Second Mortgage, this Agreement, Option in the Event
of Transfer Agreement, the Disclosure Notice and the
Declaration.
"City Second Mortgage Note" shall mean the promissory note
executed by Owner concurrently with this Agreement, evidencing
the obligation to repay the City Loan when and as provided in
the City Second Mortgage Note.
"County" shall mean Ventura County.
"County Median Income" shall mean the Median Income
adjusted by actual household size as published annually by HUD
for the County, which Median Income levels shall be adjusted
concurrently with publication of adjustment of the same by HUD.
M00R \FTHB \resa1eagreement6
-3 -
11 -24 -04 ���
"Date of this Agreement" shall mean the date first written
above.
"Declaration" shall mean the Declaration Under Penalty of
Perjury executed by Owner concurrently with this Agreement.
"Disclosure Notice" shall mean the First Time Homebuyer
Program Disclosure Notice executed by Owner concurrently with
this Agreement.
"Eligible Purchaser" of "Eligible Transferee" shall mean a
purchaser or other transferee who is a Low Income Household or a
Very -Low Income Household, as is applicable.
"Excluded Transfer" shall mean any Transfer which is not
considered a Transfer for purposes of this Agreement, as
provided in the definition of the term "Transfer" below.
"First Lender" shall mean the beneficiary of the First
Mortgage, and its successors and assigns.
"First Mortgage" shall mean the deed of trust and other
security instruments securing the First Mortgage Loan.
"First Mortgage Loan" shall have the meaning set forth in
Recital " "C" above.
"First Time Homebuyers" shall mean persons who have not
owned a home, condominium or mobile home, whether as sole owner,
tenant -in- common, joint tenant or other form of ownership, at
any time.
"Housing Cost" shall mean and include all of the following
associated with the Property, calculated as the average cost for
the next 12 -month period:
(A) Principal and interest on a mortgage loan;
(B) Property tax and assessments;
(C) Fire and casualty insurance covering replacement value
of property improvements;
(D) Property maintenance and repairs;
M00R \FTHB \resa1eagreement6 — 4—
11-24-04
>wP140
(E) A reasonable Utility Allowance, as determined by the
City;
(F) Homeowner association fees, if applicable; and
(G) Mortgage insurance, if applicable.
"HUD" shall mean the United States Department of Housing
and Urban Development.
"Low Income" or "Lower Income" shall mean a household
income that does not exceed eighty percent (80 %) of the County
Median Income, adjusted for household size appropriate to the
Unit. The maximum household income amount for Lower Income
households shall be the amount published by HUD as the Household
Income Limits for Ventura County ( "HUD Income Limits ") or such
successor information in the event the referenced published
information is no longer available, but in no event less than
seventy -three percent (73 %) nor more than eighty percent (80 %)
of the County Median Income. If the HUD Income Limits household
income amount is less than 73% of the County Median Income, it
shall be set nevertheless at 73% of the County Median Income,
and if it is more than 80% of the County Median Income, it shall
be set nevertheless at 80% of the County Median Income.
"Low Income Household" or "Lower Income Household" shall
mean individuals or households qualified on the basis of a
"Certification of Eligibility" as certified by such individual
or household, who have an adjusted gross income which does not
exceed Low Income.
"Option in the Event of Transfer Agreement" shall mean the
Option in the Event of Transfer Agreement between the Borrower
and the City.
"Owner" shall mean the undersigned, any permitted assignee
of its rights, powers and responsibilities, or any successor in
interest to fee title to the Property.
"Property" shall mean that real property in the City of
Moorpark, California described as set forth in the Legal
Description attached to this Agreement as Exhibit "A ".
"Term of this Agreement" shall mean the period commencing
on the date first above written and continuing for the longest
feasible time, which includes, but is not limited to unlimited
M00R \FTHB \resa1eagreement6 — 5—
11-24-04 T.�rt ql
duration, except as otherwise provided in this Agreement. The
Term of this Agreement shall survive the repayment of the City
Second Mortgage Note.
"Transfer" shall mean, for the purposes of this Agreement,
any sale, transfer, assignment or conveyance of the Property or
any interest therein, including, without limitation, any lease,
exchange, or other disposition of any interest in the Property,
or any change in the person(s) who are on title, whether
voluntary or involuntary, including any refinancing of loan
secured by a mortgage or deed of trust on the Property.
"Very Low Income" shall mean a household income that does
not exceed fifty percent (50 %) of the County Median Income,
adjusted for household size appropriate to the Unit.
"Very Low Income Household" shall mean individuals or
households qualified on the basis of a "Certification of
Eligibility" as certified by such individual or household, who
have an adjusted gross income which does not exceed Very Low
Income.
2. Covenants, Representations and Certifications
The Owner hereby covenants, represents and certifies as
follows:
(a) The financial and other information previously
provided by the Owner to the City in order to qualify to for the
City Loan and to purchase the Property is true and correct as of
the Date of this Agreement;
(b) Owner does not own any other real property as of
the Date of this Agreement;
(c) Owner shall occupy the Property as the Owner's
principal place of residence, as provided in Section 3 of this
Agreement;
(d) Owner shall fully cooperate with the City in
promptly providing all information requested by the City in
monitoring compliance with this Agreement; and
(e) Owner shall maintain the interior and exterior of
the improvements and the landscaping on the Property in a manner
M00R \FTHB \resa1eagreement6 _ 6—
11 -24 -04 Q0014
consistent with community standards which will uphold the value
of the Property, in accordance with all applicable City codes.
(f) Owner shall not make any Capital Improvements to
the Property without the prior written consent of the City.
3. Owner- Occupancv; Prohibition Against Leasin
(a) For the Term of this Agreement, Owner shall
occupy the Property as his or her or their primary residence,
and the Property shall be used as the primary residence of Owner
and Owner's household and for no other purpose.
(b) For the Term of this Agreement, the Owner shall
not lease the Property or any portion of the Property. Any lease
in violation of this restriction shall be void and shall
constitute a default by the Owner under this Agreement.
(c) The City shall have the right to monitor
compliance with this Section 3 by requesting that the Owner
provide the City, once per year or more often, in the City
Manager's sole discretion, with the following: a written
certification under penalty of perjury that the Property is
owner - occupied, accompanied by supporting documentation
reasonably satisfactory to the City Manager or designee.
(d) In the event of a breach or threatened breach of
this Section 3, the City shall be entitled to institute legal
action to enforce performance of this Section 3, to enjoin any
actions which are in breach of this Section 3, and to seek to
recover any excess rent that may have been paid to Owner.
(e) These owner - occupancy restrictions may be
modified or terminated only upon the approval of the City. Any
modification must be in writing and recorded in the Offical
Records of the office of the County Recorder of Ventura County.
(f) It shall not be a breach of these Owner - occupancy
requirements if an adult child who co -owns the Property with
that child's parent(s) ceases to own or occupy the Property as
his or her principal place of residence.
(g) Owner shall be considered as occupying the
Property if Owner is living on the Property for at least ten
(10) months out of each calendar year. Owner shall be
M00R \FTHB \resa1eagreement6 —7—
11-24-04 9"00 )143
considered as no longer occupying the Property if Owner has
vacated the Property for any period longer than sixty (60)
consecutive days.
4. Resale and Refinancinq Restrictions
Any Transfer of the Property shall be subject to the
provisions of this Agreement and the Option in the Event of
Transfer Agreement. Any Transfer without satisfaction of the
provisions of this Agreement and the Option in the Event of
Transfer Agreement shall be void.
5. Determination of Resale Price
(a) The maximum proceeds that the Owner shall receive
for any type of Transfer of the Property, whether sale or
refinancing (the "Approved Resale Price "), shall be calculated
as the sum of (A) a downpayment of five percent (5 %) (but only
in the case of a sale), plus (B) the amount that may be financed
with a First Mortgage Loan, the payments of principal and
interest on which, when combined with other Housing Costs,
results in an "Affordable Housing Cost" as defined in Section 1,
above.
(b) In the event of a re -sale of the subject
Property, where as a result of an increase in the Area Median
Income, there is a net amount of Affordable Sale Price proceeds
remaining after the payment of the First Mortgage and closing
costs, such net proceeds shall be distributed as follows:
$50,000 net proceeds shall first be provided to the Seller and
then any proceeds above $50,000 shall then be split among
Borrower and City as follows: one -third to Borrower and two -
thirds to the City.
6. Refinancinas and Junior Liens
(a) Owner shall not refinance the Property without the
prior written approval of the City Manager or his designee. The
City Manager or his designee shall not unreasonably disapprove
any refinancing of the First Mortgage Loan, provided: (i) the
refinancing occurs not sooner than three years after the Date of
this Agreement; and (ii) the refinanced amount does not exceed
the Approved Resale Price, determined as of the date of the
proposed transaction, in accordance with Section 5. Any other
proposed refinancing shall not be permitted.
M00R \FTHB \resa1eagreement6 — _
11 -24 -04 8 f)00,144
(b) The City Manager or his designee shall not
unreasonably disapprove any additional loans secured by deeds of
trust on the Property with a lien priority junior to the City
Second Mortgage (for example, a "third" deed of trust),
provided: (i) the proposed new encumbrance occurs not sooner
than three years after the Date of this Agreement; and (ii) the
new encumbrance results in a combined total amount of liens on
the Property (not including the City Second Mortgage) that does
not exceed the Approved Resale Price, determined as of the date
of the proposed transaction, in accordance with Section 5.
(c) The City shall have the right to enforce this
Section 6 by any appropriate remedy, including but not limited
to injunction, specific performance and /or acceleration of the
City Loan to the extent permitted by law.
7. Defaults and Remedies
Upon a violation of any of the provisions of this Agreement
by the Owner or a proposed purchaser, the City may give written
notice to the Owner specifying the nature of the violation. If
the violation is not corrected to the satisfaction of the City
Manager or designee within a reasonable time, not longer than
thirty (30) days after the date of notice, or within such
further time as the City Manager or designee may determine is
necessary to correct the violation, the City may declare a
default under this Agreement. The City shall provide notice to
the First Mortgage lender that the City has declared a default
under this Agreement. The notice to the First Mortgage lender
shall indicate that the City may exercise any remedies available
to the City. Upon the declaration of default or if the Owner or
the proposed purchaser makes, or has made, any misrepresentation
in connection with receiving any benefits under this Agreement,
the City may exercise all available remedies.
8. Notice of Default and Foreclosure
The City may record a request for notice of default and any
notice of sale under any deed of trust or mortgage with power of
sale encumbering the Property in the Office of the Recorder of
Ventura County. The Owner shall provide to the City a written
copy of any notice of default or notice of sale under any deed
of trust or mortgage with power of sale encumbering the Property
immediately upon receipt by the Owner. The City may declare a
default under this Agreement upon receipt of any notice given to
the City pursuant to Civil Code Section 2924b or this Agreement,
M00R \FTHB \resa1eagreement6 —9—
11 -24 -04 10,0 14 S
and may exercise its remedies as provided in Section 7. In the
event of default or foreclosure of such deed of trust or
mortgage, the City shall have the same right as the Owner to
cure defaults and redeem the Property prior to foreclosure sale.
Nothing contained herein shall be construed as creating any
obligation of the City to cure any such default, nor shall this
right to cure and redeem operate to extend any time limitations
in the default provisions of the underlying deed of trust or
mortgage.
9. Notices.
Except for any notice required under applicable law to be
given in another manner, all notices required in this Agreement
shall be in writing and shall not be effective for any purpose
unless served (i) personally, (ii) by independent, reputable,
overnight commercial courier, or (iii) by deposit in the United
States mail, postage and fees fully prepaid, registered or
certified mail, with return receipt requested, addressed as
follows:
To Owner: At the address of the Property set
forth on the first page of this
Agreement
To City: The City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Attention: City Manager
10. Restrictions on Foreclosure Proceeds
If a creditor acquires title to the Property through a deed
in lieu of foreclosure, a trustee's deed upon sale or otherwise,
the Owner shall not be entitled to the proceeds of sale to the
extent that such proceeds exceed the proceeds paid or credited
to the creditor until the City has received the amount of
principal and interest due the City on the City Second Mortgage
Note. The Owner shall instruct the holder of such excess
proceeds to pay such proceeds to the City as repayment for, and
in consideration of, the financial assistance provided in the
purchase of the Property.
M00R \FTHB \resa1eagreement6 — 10 eg
11 -24 -04
11. Enforcement of Agreement
This Agreement, without regard to technical classification
or designation, shall be binding for the benefit of the City,
and such covenants shall run in favor of the City for the entire
period during which such covenants shall be in force and effect,
without regard to whether the City is or remains an owner of any
land or interest therein to which such covenants relate. The
City, in the event of any breach of any such covenants, shall
have the right to exercise all the rights and remedies, and to
maintain any action at law or suits in equity or other proper
proceedings to enforce the curing of such breach.
12. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUSTS
Notwithstanding any other provision of this Agreement, this
Agreement shall not diminish or affect the rights of the First
Lender, and the provisions of this Agreement shall be
subordinate to the lien of the First Mortgage and shall not
impair the rights of the First Lender or such lenders' assignee
or successor -in- interest (including but not limited to any
government agency insuring such First Mortgage) to exercise its
remedies under the First Mortgage in the event of default under
the First Mortgage by the Owner or to exercise its remedies.
Such remedies under the First Mortgage include, but are not
limited to, the right of
assignment in lieu of f,
acceptance of a deed in
shall be forever terminat
to the Property or any tr
if the holder of such
Property pursuant to fore(
of foreclosure, this Ag
upon such acquisition of
been given written notice
and (ii) the City shall
First Mortgage within 30
cure the default within s'
its firm commitment to c(
acceptable to the First LE
= oreclosure or acceptance or a aeea or
reclosure. After such foreclosure or
lieu of foreclosure, this Agreement
!d and shall have no further effect as
.nsferee thereafter; provided, however,
irst Mortgage acquires title to the
losure or a deed or assignment in lieu
eement shall automatically terminate
title, provided that (i) the City has
of default under such First Mortgage,
lot have cured the default under such
ays after such notice, or commenced to
ch 30 -day period, and shall have given
mplete the cure in form and substance
zder.
13. Bindina on Successors and Assigns
Notwithstanding any other provision of law, this Agreement
shall run with the land and shall be enforceable against the
M00R \FTHB \resa1eagreement6 -
11 -24 -04
Owner and successors in
of this Agreement shall
Property for the longest
not limited to unlimited
in this Agreement.
14. Amendments
interest by the City. The requirements
remain in effect with respect to the
feasible time, which includes, but is
duration, except as otherwise provided
Subject to the prior consent of the First Lender, the City,
its successors and assigns, and the Owner and the successors and
assigns of the Owner in and to the Property, shall have the
right to consent and agree to changes in, or to eliminate in
whole or in part, this Agreement or to subject the Property to
additional covenants, easements, or other restrictions without
the consent of any tenant, lessee, easement holder, licensee,
trustee, beneficiary under a deed of trust (other than the First
Mortgage Loan or the City Loan) or any other person or entity
having an interest less than a fee in the Property.
15. No Third Party Beneficiaries
Except as provided in this Section 15, this Agreement,
without regard to technical classification or designation, shall
not benefit or be enforceable by any person, or firm, or
corporation, public or private, except the City and the Owner
and their respective successors and assigns. The Redevelopment
Agency of the City of Moorpark, acting pursuant to State law,
shall have the right, power and authority to enforce this
Agreement in its own name and in the name of the City, and shall
be the beneficiary of all rights of the City in this Agreement.
16. Invalid Provisions
If any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions
shall be deemed severable from the remaining provisions
contained in this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable
provisions had never been contained in this Agreement.
17. Controlling Law
This Agreement shall be construed in accordance with and be
governed by the laws of the State of California.
M00R \FTHB \resa1eagreement6 — 12 —
11 -24 -04
18. Interpretation of Aareement
The terms of this Agreement shall be interpreted so as to
avoid speculation in the value of the Property and to ensure to
the maximum extent feasible that the sales price and mortgage
payment on the Property remain affordable to Low Income
Households.
19. Attorneys' Fees
If any action or proceeding is brought to enforce this
Agreement or any provision of this Agreement or the City Second
Mortgage or Second Mortgage Note, the prevailing party shall be
entitled to its attorney's fees and costs of such action or
proceeding.
20. Counterparts
This Agreement may be executed in any number of
counterparts, each of which shall be considered an original
document.
21. Entire Agreement
This Agreement (along with the "Option in the Event of
Transfer Agreement ", Declaration, Disclosure Notice, City Second
Mortgage and Second Mortgage Note) sets forth the entire
understanding and agreement of the Owner and the City, and any
amendment, alteration or interpretation of this Agreement shall
be in writing and signed by each of the parties hereto.
[SIGNATURES APPEAR ON NEXT PAGE]
M00R \FTHB \resa1eagreement6
11 -24 -04 -13- 10 01115
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the Date of this Agreement.
OWNER
By:_
Name:
By:_
Name:
THE CITY OF MOORPARK
By: _
Name:
Title:
M00R \FTHB \resa1eagreement6 — 14 —
��� ��
11 -24 -04 f �'
STATE OF CALIFORNIA )
ss.
COUNTY OF VENTURA )
On before me, , personally
appeared personally known
to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is /are subscribed to the within
instrument and acknowledged to me that he /she /they executed the
same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
Signature
STATE OF CALIFORNIA )
ss.
COUNTY OF VENTURA )
On before me, , personally
appeared personally known
to me (or proved to me on the basis of satisfactory evidence) to
be the person(s) whose name(s) is /are subscribed to the within
instrument and acknowledged to me that he /she /they executed the
same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
Signature
EXHIBIT "A"
[Insert legal description of Applicable Unit]
FIRST TIME HOMEBUYER PROGRAM
DISCLOSURE NOTICE
The First -Time Homebuyer Program of the City of Moorpark ( "City ") has made it possible for
[low- income /very low- income] families like yours to buy a home in the
development at a price that is affordable. The price that you are paying for your home is below
the fair market value of the property. In other words, if the First Time Homebuyer Program did
not exist, you would have to pay much more for your unit. You are paying less than the fair
market value for your property. The home may only be sold to another [low income /very low
income] household, for a price that is "affordable;" this price will be less than the fair
market value of the home.
In exchange for giving you the opportunity to buy your home at a below- market affordable price,
you will be required to sign a Resale and Refinancing Restriction Agreement, Option in the
Event of Transfer Agreement, a Promissory Note, a Deed of Trust, a Declaration Under Penalty
of Perjury and this Disclosure Notice. In general, the documents set forth how you may take title
to the Property, how much money you may receive when you sell your property, to whom you
may sell your property, how you may refinance your property, what procedures you must follow
when you want to sell your property, and other restrictions that are not normally associated with
the purchase, sale, refinancing and ownership of property . These documents include many
provisions that affect your rights, including but not limited to the following provisions:
General Provisions:
1. Your household income, to qualify to purchase a unit, must be [80 %/50 %] or less of the
area median income, ( *currently that income limit is $ , or less), as
adjusted for family size appropriate for the unit, as published by the U.S. Department of
Housing and Urban Development for Ventura County. Your income after you purchase
the property may exceed the limit mentioned above without violating the Resale and
Refinance Restriction Agreement. You may not have ever owned a home before. You
may not, and no member of your household may, own any real property at the time of
closing. In addition, you may not, and no member of your household may, hold, directly
or indirectly, liquid assets with an aggregate value exceeding the area median income for
a family of four. If you want to sell your home, you must offer to sell it to the City, or a
person designated by the City, or, if the City elects not to purchase the Property or to
designate a purchaser, you may only sell or transfer the property to a person or persons
whose income and assets are [80 %/50 %] or less of the area median income at the time of
your sale. You will need to notify the City of Moorpark of your intention to sell or
transfer title of your home, within the time limits specified in one or more of the varied
documents; the City will then advise you of the price for which you may sell your home.
2. You must live in the home as your primary place of residence. If , at any time, you do
1
moor \fthb \disc1osure6
11 -24 -04
9001F3
not occupy your home as your primary place of residence, this will result in a breach of
your agreement with the City and the City may begin procedures to either require you to
reside in the unit, or to acquire your property through foreclosure or through the exercise
of the option described in the Option in the Event of Transfer Agreement
3. At least once a year you will be asked to supply information in writing confirming: (a)
that you still live in the home; (b) that you did not lease or rent your home for more than
sixty days; (c) that your property taxes have been paid; (d) that the Homeowners
Association dues, if any, are current; (e) that your property insurance is paid; and (f) any
other information reasonably needed to assure compliance with the terms of the Resale
and Refinance Restriction Agreement. The City has the right to verify this information
more often than once per year.
4. Your home must be maintained in good condition and repair throughout your ownership
of the property. If you want to make any Capital Improvements (defined as to include,
but not limited to: patios, mature trees; room additions; reroofing; additional electrical
outlets; interior remodeling involving electrical, plumbing, wall removal or replacement;
in- ground swimming pool or spa; patio slab and cover; permanent accessory buildings or
structures; block walls over three feet in height; irrigation /sprinklers; exterior
modification to the home; solar hot water or photo voltaic panel installation; and,
upgrades to the electrical panel.) to your property, you will have to contact the City of
Moorpark first. You must maintain liability insurance and casualty insurance
(replacement value) at all times.
5. Restrictions will be recorded against your property and will remain in effect for the
longest feasible time. The Resale and Refinance Restriction Agreement will limit the
sales price that you or any future owner may charge for your home. This price will
be lower than the price you would be able to charge if the home wasn't restricted by
the Resale and Refinance Restriction Agreement.
6. You must sign a Promissory Note that will make certain your property will continue to be
affordable. The Promissory Note will be your promise to pay the City of Moorpark an
amount equal to the difference between (i) the fair market value of the property at the
time you buy your home, and (ii) the amount of your first mortgage loan and the
downpayment you actually paid to purchase the home. There will be no interest charged
on the Promissory Note unless you default under the terms of the Promissory Note. Then
you will owe interest at a default rate described in the Promissory Note. You will not
have to make any payments on the Promissory Note unless you default in the promises
that you have made in the Note, the Affordable Housing Resale Restriction, the Option in
Event of Transfer Agreement or the Deed of Trust. If you do not default, you will not
have to make any payments under the Promissory Note and no interest will be charged.
7. You cannot refinance your home for at least three years and only if the total amount
2
moor \fthb \disc1osure6
11 -24 -04
refinanced does not exceed the "Approved Resale Price" determined in accordance with
the Resale and Refinance Restriction Agreement and Option in the Event of Transfer
Agreement. If you do refinance your home, the City will be entitled to receive from you
its administrative costs, not to exceed one -half of one percent (0.5 %) of the refinanced
loan amount to offset any costs of the City relating to the refinancing. Most banks and
lenders will not make a loan if long -term resale and refinancing restrictions, such as
these, are recorded against the property. is making a First Mortgage
Loan to you for the purchase of your home under a special program approved by
. If you want to refinance your home, you may do so, only if the lender is
willing to make the loan even though the Resale and Refinance Restriction Agreement
and Option in the Event of Transfer Agreement are recorded against the home. There
may not be any lenders other than that are willing to make such a loan.
This may prevent you from being able to refinance your home. Failure to adhere to these
requirements could jeopardize your ability to participate in this Program.
8. You cannot record other loans against your home for at least three years. After the intital
three years, you may record loans against the Property only if the total amount of all the
loans recorded against the Property do not exceed the "Approved Resale Price"
determined in accordance with the Resale and Refinance Restriction Agreement and
Option in the Event of Transfer Agreement, and only if the City approves.
9. The Redevelopment Agency of the City of Moorpark, acting pursuant to State law, shall
have the right, power and authority to enforce the Resale and Refinance Restriction
Agreement and Option in the Event of Transfer Agreement in its own name and in the
name of the City, and shall be the beneficiary of all rights of the City in these
Agreements.
Sale of the Property
1. If you want to sell or transfer your property you must first notify the City
of Moorpark in writing of your plans. The notice must be sent by certified mail to
City of Moorpark, 799 Moorpark Avenue, Moorpark, California 93021; or other
address as may be designated by the City of Moorpark.
The City of Moorpark has the option to buy your home or to choose the buyer of
your home. If the City of Moorpark decides to buy your home or to choose a
buyer for you, the City of Moorpark will mail you a written notice within 20 days
of receiving your notice of intent to sell the property, telling you that the City of
Moorpark will buy your home or select the buyer of your home.
The Resale and Refinance Restriction Agreement and Option in the Event of
3
moor\fthb \disc1osure6
11 -24 -04
000IFS
Transfer Agreement limit the price at which you can sell or transfer your home.
The maximum price will be calculated as the sum of (a) a downpayment of 5 %
(but only in the case of a sale), plus (b) the amount that may be financed with a
First Mortgage Loan, the payments of the principal and interest on which, when
combined with other Housing Costs, results in an "Affordable Housing Cost ".
The maximum amount you may charge for the home will be determined by the
City of Moorpark. Within 20 days of receiving your notice of intent to sell the
property, the City of Moorpark will inform you of the maximum amount at which
your home may be sold. In the event of a sale of the property, City shall be
entitled to receive its actual administrative costs, not to exceed one half of one
percent (.5 %) of the Affordable Sale Price offset any costs of the City relating to
the sale. In addition, in the event of a re -sale of the Property, where as a result of
an increase in the Area Median Income, there is a net amount of the Affordable
Sale Price proceeds remaining after the payment of the First Mortgage and closing
costs, such net proceeds shall be distributed as follows: $50,000 net proceeds shall
first be provide to the Seller and then any net proceeds above $50,000 shall then
be split among Borrower and City as follows: one -third to Borrower and two -
thirds to the City. At the time of resale, you will be responsible for paying for the
usual and customary seller's closing costs.
2. You must maintain your home in good condition and repair throughout your
ownership of the property. Upon receiving your notice of intent to sell your
home, the City of Moorpark will schedule a date to inspect your property to
determine whether it has been maintained in good condition; and that there are no
building, plumbing, electrical, fire, housing or other applicable code violations.
The City of Moorpark will notify you of any code violations or maintenance
problems. You will have 60 days from the date of the notice to complete the
repairs, at your cost and expense. If you do not complete the repairs, you may not
be able to sell your house; or the money needed to do the repairs may be withheld
from the money due you from the sale.
3. If the City of Moorpark does not elect to buy your home or to select a buyer for
your home, the buyer or transferee of your home must also meet the eligibility
criteria provided in the other documents. The City of Moorpark will provide you
with the current income limits upon receiving the notice that you intend to sell
your home. The buyer or transferee must submit documentation to the City of
Moorpark to verify if they are income eligible. As mentioned earlier, most banks
and lenders will not make a loan if long term resale and refinancing restrictions
are recorded against the property. is making the first mortgage
loan to you for the purchase of your home under a special program approved by
. If you sell your home, the buyer's lender must be willing to make
11
moor \fthb \disc1osure6
11 -24 -04
0001 -G
the loan even though the long -term Resale and Refinance Restriction Agreement
and Option in the Event of Transfer Agreement are recorded against the home.
There may not be any lenders other than that are willing to
make such a loan. This may limit your ability to sell your home.
Default Provisions
1. If you violate the Resale and Refinance Restriction Agreement or Option in the
Event of Transfer Agreement , such as if you do not occupy the property as your
primary residence, you will receive a written notice stating the nature of the
violation. If the violation is not corrected within 30 days, you will be in default.
Upon notice of default, the City of Moorpark may: (i) apply to the court to
prohibit any sale of the property; or (ii) foreclose under the terms of the Note
and Deed of Trust and take your property from you; or (iii) exercise its
option to purchase your home. The City of Moorpark is not required to
exercise its option to purchase your home, however, at any time.
2. As stated above, in the event of a default under the Resale and Refinance
Restriction Agreement or under the Option in the Event of Transfer Agreement,
the City of Moorpark also has an option to purchase your property for a restricted
price. In such event, the City of Moorpark may purchase your property for a price
equal to the sum of (a) a downpayment of 5 % (but only in the case of a sale), plus
(b) the amount that may be financed with a First Mortgage Loan, the payments of
the principal and interest on which, when combined with other Housing Costs,
results in an "Affordable Housing Cost ". or (b) the amount needed to pay off
your First Mortgage Loan. In addition, in the event of a re -sale of the Property,
where as a result of an increase in the Area Median Income, there is a net amount
of the Affordable Sale Price proceeds remaining after the payment of the First
Mortgage and closing costs, such net proceeds shall be distributed as follows:
$50,000 net proceeds shall first be provided to the Seller and then any net
proceeds above $50,000 shall then be split among Borrower and City as follows:
one -third to Borrower and two - thirds to the City.
The purpose of the Resale and Refinance Restriction Agreement and the Option in the Event of
Transfer Agreement is to make certain that the City of Moorpark's goal of providing affordable
homeownership opportunities to pow- income /very low income] buyers continues to be met. The
City of Moorpark has helped you to buy a home at an affordable price; it wants to help others as
well.
This Disclosure Notice explains some of the major requirements; however, you should read the
entire Resale and Refinance Restriction Agreement, Option in the Event of Transfer
Agreement, Promissory Note and Deed of Trust and become completely familiar with them
5
moor\fthb \disc1osure6
11 -24 -04
f)00ilr"",-
before you sign them and become obligated under them, as there are other provisions
contained within the documents that are not discussed in this Disclosure Notice. THIS
DISCLOSURE NOTICE IS ADVISORY ONLY. In the event of any conflict, the terms of
the Resale and Refinance Restriction Agreement, Option in the Event of Transfer
Agreement, Promissory Note and Deed of Trust will control.
You should contact an attorney to help you understand your obligations under the Resale
and Refinance Restriction Agreement, Option in the Event of Transfer Agreement,
Promissory Note and Deed of Trust. You may also wish to hire a housing inspector to
inspect the home before you decide to purchase it.
Buyer hereby acknowledges receipt of this Disclosure Notice and by signing below
acknowledges that Buyer understands the nature of the restrictions on the Buyer's ability to rent,
sell, refinance, lease or otherwise enjoy the Property.
Date:
(Buyer Signature)
(Buyer Signature)
no
moorlthb \disclosure6
11 -24 -04
(Type or Print Name)
(Type or Print Name)
f )00-1 S
DECLARATION UNDER PENALTY OF PERJURY
The undersigned acknowledge(s) as follows:
1. I/We are purchasing an affordable home in the
development project.
2. I am not/Neither of us are, an employee, director, investor, shareholder or member of
[Developer] or any subsidiaries, divisions or affiliates of [Developer].
3. I am not/Neither of us are, the spouse, mother, father, sister, brother, child, aunt, uncle,
niece, nephew, stepchild, mother in -law, father in -law, brother in -law, sister in -law, ex-
spouse, grandchild or grandparent of any officer, director, member, manager or other
principal of [Developer] or any subsidiaries, divisions or affiliates of [Developer].
4. I/We have been given the opportunity to thoroughly review and discuss all aspects of this
purchase and the terms and conditions of the Note, the Deed of Trust, the Resale and
Refinance Restriction Agreement and Option in the Event of Transfer Agreement with
my /our legal counsel, if any, to the fullest extent I /we deemed necessary; and I /we enter
into the Note, the Deed of Trust and the Resale and Refinance Restriction Agreement and
Option in the Event of Transfer Agreement with a full and complete understanding of
their terms and conditions.
5. Furthermore, I /we have been provided the opportunity, at my /our own expense and
choosing, to (a) select a real estate agent or broker to represent me /us in any and all
aspects of this purchase; and (b) select a person to translate the documents into Spanish
or any other language and to speak on my /our behalf. However, all official documents
associated with the purchase of affordable dwelling units through the City of Moorpark's
First -Time Home Buyer Program shall be in English.
6. In addition, buyers acknowledge that I /we may apply for a mortgage loan through any
lender of my /our choice, in addition to or instead of the lenders available through the
City's First -Time Home Buyer Program. However, I /we understand that conventional
lenders may not be willing to fund a loan when such lenders review the deed restrictions
that will be recorded on each property sold through this program. For this reason, the
City has encouraged me /us to apply through lender(s) available through the City's First -
Time Home Buyer Program, even if I /we choose to apply for a mortgage loan elsewhere,
as well.
7. A funding delay caused by a lender could cause my /our purchase to be canceled, in which
case the next eligible applicant would be processed for the affordable dwelling unit.
8. I /we understand and agree that any new home warranty is between me /us and
and that the City of Moorpark has no obligation to me /us
relating to the condition of the home under any new home warranty or otherwise.
Moor \FTHB \Dec1aration4
11 -24 -04
I DECLARE UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF
CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT.
Date:
Date:
Moor \FTHB \Declaration4
11 -24 -04
Name:
Name:
fb() 41 co