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Qualifications
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Available Homes
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Buyer's Documentation Package
Maximum Household Income Eligibility Requirements
(Combined Gross Income)
Family Size of 1 Person = $45,000
Family Size of 2 People = $51,400
Family Size of 3 People = $57,850
Family Size of 4 People = $64,250
Family Size of 5 People = $69,400
It is suggested that buyers interested in purchasing get
pre-qualified by calling one of our preferred
lenders and supplying the following information:
1.
Copy of three most recent paychecks or paycheck
statement
2. Copy of three most recent W-2/1099 forms from all
employers
3. Copy of three most recent tax returns
*Community
Housing Works Lending
Dee Sodano
619-282-6647 ext. 5694
dsodano@chworks.org
Cheryl D. Zenski
619-282-6647 ext. 5703
czenski@chworks.org
http://www.chworks.org/ - Community Housing Works:
1st time home buyer program that the City of
Carlsbad also participates in granting qualified
buyers no more than 5% of appraised value or $20,000
towards purchase (which ever is less).
Learn
more about the City of Carlsbad's Affordable Housing
by visiting their
website.
City of Carlsbad Program Guidelines:
*1. Home must be owner's principle residence.
*2. If you choose to sell within 15 years from date
of purchase, city will determine new maximum sale
price using low-income criteria & area median income.
*3. Monthly payments
(including all fees: mortgage, HOA, property tax,
insurance, estimated utilities, etc.) cannot exceed 35% of the household's
total monthly income at the time of purchase.
*4.
City of Carlsbad holds a silent second, due after 30
years from the purchase date, for the difference
between the sales price and the appraised value at
time of purchase.
**See more details about guidelines below.
Thinking of Selling?
Contact us for a free
consultation where we can explain the selling
process from start to finish.
City
of Carlsbad Affordable Housing
The following provides a brief summary of the City
of Carlsbad requirements for buyers of
homes sold to satisfy Affordable Housing Agreements
between the City and developers of
homes in Carlsbad.
The City requires developers to provide 15% of their
units to lower income households at an
affordable price. (Normally, this requires that
households make 80% or less than the area
median income for San Diego County as established by
the U.S. Dept. of Housing and Urban
Development. One developer will be selling to
households making up to 50% of the area
median income.) For housing to be considered
affordable, a households housing costs need
to be 35% or less of their income. Housing costs
include mortgage payments, property
taxes, homeowners association fees, insurance and
utilities.
Once it is determined that a household does not make
more than the maximum allowable
income, they must go through a loan application
process to determine if they qualify for the
loan needed to obtain the home at an affordable
price as determined by the developer and
approved by the City's Housing and Redevelopment
Director. The first step in establishing
the affordable price is to determine the maximum
income for a household size that would be
appropriate for the number of bedrooms in the unit
to be sold. (For example, 3 people in a 2
bedroom unit, and 5 people in a 3 bedroom unit.) The
developer must then take 35% of that
maximum income amount and subtract the estimated
cost of homeowner fees, insurance,
utilities, and property taxes. The remainder of the
35% of the household income would then
be available to pay the principal and interest on
the home loan. No adjustable or interest only
loans are allowed. If the loan amount needed to pay
for the affordable cost of the home
requires a monthly mortgage payment that would bring
the household monthly housing cost
above 35% of their income, then the down payment
amount will need to be increased until
the mortgage payments are reduced to an amount that
does not cause housing payments to
exceed 35% of the household income. In some
instances, the City may provide up to a
$20,000 loan to assist with down payments and
closing costs.
The difference between the market value of the
affordable unit established by an appraisal
and the affordable price paid by the buyer is a loan
made to the buyer from the developer.
The developer then assigns that loan to the City.
The buyer is required to sign a promissory
note, deed of trust, resale restriction agreement
and buyer disclosure statement regarding the
loan. The disclosure statement outlines the
restrictions placed on the property in return for
the loan, which provides the home at an affordable
price for the 30 year term of the City loan.
(Homes purchased in the Redevelopment Area have 45
year terms.) For example, the home
may not be rented, and the City has an option to
purchase the home at a restricted
(affordable) price if the owner wishes to sell the
home at any time during the term of the loan.
If the homeowner wishes to sell the home during the
first 15 years of the loan, it must be sold
to a lower income household, and the City loan is
transferred to the new owner. If the owner
wishes to sell the home after 15 years, and the City
does not use its option to purchase the
home at a restricted price, the owner may sell the
home at market value and the loan is due
with up to 50% of appreciation in the home's value
also to be shared with the City. If the
homeowner resides in the home for 30 years, the loan
is then due with no shared
appreciation due to the City.
PROCESSING OF DOCUMENTS FOR BUYERS OF AFFORDABLE
HOUSING UNITS
Potential buyers of affordable housing are required
to have their proposed lenders submit a file
with copies of various documents listed on a City
Checklist, which is provided to sellers. Once
the documents are submitted to the City, staff
reviews them to determine if the potential buyer is
eligible to purchase the affordable unit based on
the income of their household. The documents
are also reviewed to ensure that the potential buyer
will not be paying over 35% of their income
on housing costs. No adjustable or interest only
loans are allowed. The person submitting files
for review are contacted if a potential buyer is not
eligible, if all documents on the Checklist
have not been submitted, or if additional
documentation is required to complete the review.
The
City may require up to five working days to
determine eligibility after all necessary documents
are submitted. If the potential buyer is eligible, a
Funding Notice is signed by staff and faxed to
the person that submitted the potential buyer’s
file. A City file for the approved potential buyer
is then created to retain all of the documents.
Staff will submit instructions to the escrow
company to inform them of City requirements to close
escrow.
After a buyer is approved and escrow has been
opened, another set of documents from the City
Checklist must be provided to the City for review
and execution. These documents should be
provided at least ten days prior to the close of
escrow to allow sufficient time for review and
execution. Staff reviews the documents to ensure
that they are completed and executed
correctly. The Resale Restriction Agreement must be
executed by the City Manager and
notarized. The escrow company is then notified that
those two documents are available for pick-
up to close escrow. The other documents required for
submittal prior to close of escrow,
including the original copy of the promissory note,
certified copy of deed of trust, and buyer
disclosure statement, are then placed in the buyer’s
file.
If the City is providing financial assistance to the
buyer, documents must be prepared to wire
funds into the escrow account for the purchase.
These documents include a cover memo to
Finance Department staff, a Wire Transfer Request
form, Wire Instructions, and a supplemental
information sheet if needed. A promissory note for
each loan to potential buyers to be wired into
escrow must also be included in the Wire Transfer
Request package of documents. All of these
documents are submitted to the Finance Department
where the Wire Transfer Request documents
are processed for approval by the Finance Director,
and then submitted to Treasurer’s Office
staff to complete the wire transfer.
Once escrow closes, remaining documents on the City
Checklist, including the recorded Deed of
Trust and Resale Restriction Agreement are submitted
to the City and included in the buyer’s
file. Buyers must then annually submit a notarized
letter and documentation for their file
certifying that they continue to reside in the home.
CHECKLIST OF REQUIRED DOCUMENTS FOR PURCHASE OF
AFFORDABLE HOUSING
Documents Required for Submittal to the City for
Approval of Potential Buyers
Potential buyers must be approved as eligible by the
City prior to entering into purchase agreement.
(Allow five working days for review and approval
after all documents have been submitted.)
1. Cover Sheet (“Funding Notice”)
2. Summary Sheet (Showing calculation of income and
housing costs)
3. Uniform Residential Loan Application (signed
copy)
4. Copy of three most recent paychecks or paycheck
statement
5. Three most recent W-2/1099 forms from all
employers
6. Three most recent tax returns (Statement from IRS
is required if not required to file returns.)
7. Notorized gift letter if a gift of over $5,000
will be provided as part of a down payment.
8. Signed Buyer Disclosure Statement
9. Any other records needed to document income or
household size
Documents to be Submitted a Minimum of 10 Days Prior
to Close of Escrow
1. Final loan documents signed by buyer (note, deed,
and resale agreement)
2. Homebuyer Education Certificate from a HUD
approved course. Courses are provided by the
following groups: MAAC Project (619-426-3395),
Community Housing Works (619-282-
6647), Neighborhood House (619-263-7761), ACORN
Housing (619-231-8327), S.D. Urban
League (619-266-6258), and Consumer Credit
Counseling Services (800-308-2227).
Documents to be Provided After Close of Escrow
1. Original Title Insurance Policy
2. Recorded Deed of Trust
3. Recorded Resale Agreement
4. Certificate of Insurance
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Buyer's Disclosure Statement
AFFORDABLE HOMEOWNERSHIP PROGRAM
CITY OF CARLSBAD
(2008)
The City of Carlsbad (the "City") is providing you
with a loan to make your home
affordable to you (the "Homebuyer Loan"). The City
is making the Homebuyer Loan available to
you as part of its Affordable Housing Program.
The amount of the Homebuyer Loan will be included in
a Promissory Note that you will
execute prior to the close of escrow. The City is
providing this financing in order to enable low and
moderate-income households to own their own homes in
the City.
In exchange for providing you with the Homebuyer
Loan and in making your home
affordable to you, the City will require you to sign
a Promissory Note, Deed of Trust and a Resale
Restriction Agreement and Option to Purchase (the
"Resale Agreement"). The Deed of Trust and
the Resale Agreement will be recorded against your
property. These documents are
enforceable by the City.
In general, the Promissory Note, Deed of Trust and
the Resale Agreement set forth
conditions that you must meet, including but not
limited to the following:
• The Resale Agreement requires you to live in your
home as your principal place of
residence, and prohibits you from renting-out your
home.
• The Resale Agreement places controls on the sale
of your home. In addition, you must
follow certain steps and procedures when you decide
to sell your home.
• The City has an option to purchase your home at a
restricted price when you put the home
up for sale.
• If the City does not exercise its option, there is
a limit to the price at which you can sell the
home during the first fifteen (15) years that you
own your home.
• You will have to pay the City a share in your
home's appreciation.
• The Homebuyer Loan is due and payable upon any
default under the Promissory Note,
Resale Agreement, or Deed of Trust, upon any
transfer of the home, and at the end of the
term.
The purpose of the Resale Agreement is to ensure
that the goal of the City financing -- to
help low and moderate income households own their
own homes -- continues to be met by keeping
your house affordable to other low and moderate
income households should you choose to sell or
move. The City has helped you to buy a home; it
wants to help others as well.
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This Disclosure Statement explains the major
provisions of the Promissory Note and Resale
Agreement so that you will understand their
requirements. You should read the entire
Promissory Note, the Resale Agreement, and the Deed
of Trust and become completely
familiar with them. You may want to consult with an
attorney regarding the terms of these
documents.1
A. REQUIREMENTS IN EFFECT FOR TERM
The requirements that are in the Resale Agreement
apply until the earlier of (i) forty-five
(45) years from the date of the Resale Agreement, or
(ii) the date you sell or transfer your home in
accordance with the Resale Agreement and the Deed of
Trust. At the end of the term, you must
repay the Homebuyer Loan in full. However, if you
own and live in your home for the entire term,
all of the requirements of the Resale Agreement go
away. The Deed of Trust and Resale Agreement
will remain in effect even if you are required to
repay the Homebuyer Loan. (See Section 25 of the
Resale Agreement (TERM).)
B. PRIMARY RESIDENCE AND LEASING YOUR HOME
Your home must be your main place of residence. This
means you must live in your home
for at least ten (10) months out of each calendar
year. Each year during the term of the Resale
Agreement you must tell the City in writing that you
are meeting this requirement by sending in the
Owner Occupancy Certification which is attached as
Exhibit B to the Resale Agreement. You are
not allowed to lease or rent the home to anyone. If
you violate these requirements, you will also be
in default. You will also owe the City any rents you
receive which exceed your mortgage
payments, property taxes, and homeowner's
association fees. (See Section 4 of the Resale
Agreement (LEASING OF PROPRETY).)
C. MAINTAINING YOUR HOME/ PROPERTY INSURANCE
By signing the Resale Agreement, you agree to keep
your home and landscaping in good
repair and in neat, clean, and orderly condition and
to prevent deterioration of the home. You also
agree, to the extent not covered by your homeowner's
association, to keep a standard fire and
extended coverage homeowner's insurance policy, with
the City named as an additional insured.
The insurance policy shall be in an amount equal to
the replacement value of the home. Every five
(5) years, the City may request that you adjust your
policy to equal the replacement value of your
home. (See Section 6 of the Resale Agreement
(MAINTENANCE AND INSURANCE
PROCEEDS).)
1
Numerical examples are included in this Disclosure
Statement to help you better understand the
concepts, terms, and
provisions of the Buyer's Resale Agreement and
Promissory Note. Please be aware that these are
simply to show how
things work and that they are not intended to
represent your specific situation. If you follow
along with a calculator
"rounds-off" numbers.
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D. NOTICE TO CITY OF YOUR INTENT TO SELL YOUR HOME
When you decide to sell your home, you must let the
City know in writing before you
contact a real estate broker or lender and before
you list the home in the Multiple Listing Service.
To notify the City of your intent, you should
deliver the "Owner's Notice of Intent to Transfer".
A
form of this notice is attached as Exhibit C to the
Resale Agreement. This notice must be sent in a
particular way and must include specific information
as detailed in the Resale Agreement. If you
fail to send the City this notice, you will be in
default under the Resale Agreement and the sale of
your home may be delayed. (See Section 8 (NOTICE OF
INTENDED TRANSFER), Section 9
(OWNER PREPARATION OF HOME FOR SALE) and Section 33
(NOTICES) of the Resale
Agreement).
E. PREPARATION OF HOME FOR SALE
You are responsible for putting the home in good
condition for its sale. Once you have sent
the Owner's Notice of Intent to Transfer, you must
take the steps to prepare the home for sale as
described in Section 9 (PREPARATION OF HOME FOR
SALE) of the Resale Agreement.
F. CITY HAS OPTION TO PURCHASE
In exchange for the opportunity given to you to buy
your home at an affordable, below-
market price, you agree that the City has an option
to buy your home at a restricted price if you sell
your home during the entire term of the Resale
Agreement. In other words, the City has the first
opportunity to buy your home before anyone else. The
City may also give its option to purchase
your home to another public agency, a nonprofit
organization, or a person or family meeting
income and other requirements.
After you send in the Owner's Notice of Intent to
Transfer the City will then let you know in
a notice called the "City Response Notice" whether
or not it will use its option to purchase. See
Section 10 (CITY RESPONSE TO OWNER'S NOTICE OF
INTENDED TRANSFER) and
Section 11 and Exhibit E (OWNER ACKNOWLEDGMENT OF
CITY RESPONSE NOTICE) of
the Resale Agreement for details on what you must do
once you receive the City Response Notice.
If the City decides to use its option to purchase
(or assigns this right), the City or a City
designee will buy the home for the Maximum
Restricted Resale Price (which is described in
greater
detail in Section G below). The City will let you
know that it wants to buy your home and will
inform you of the Maximum Restricted Resale Price
amount in the City Response Notice. The
purchase by the City shall take place within ninety
(90) days of the date the City Response Notice
is sent to you.
When your home is bought by the City or a City
designee under the City's option to
purchase, you will pay to the City a transaction fee
equal to six percent (6%) of the sales price.
This fee takes the place of the fee for a broker's
services. The City will be performing those
services when it purchases the home or assigns its
option to another buyer who will purchase the
home
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G. SALES PRICE OF HOME IS RESTRICTED: MAXIMUM SALES
PRICE
The City has helped make the cost of buying a home
affordable to you. The City also wants
to make sure that others like you get the same
chance. Therefore, the Resale Agreement limits the
sales price of your home if the City exercises its
option to purchase your home at any time during
the term of the Resale Agreement or if you send in
the Owner's Notice of Intent to Transfer within
the first fifteen (15) years of the Resale
Agreement. The Maximum Restricted Resale Price that
you can receive is the lower of the result of the
"Full Sales Price" formula in Section G(1) below
and the Fair Market Value as described in Section
G(2).
1. FULL SALES PRICE The Full Sales Price is:
(a) The "Affordable Sales Price"
plus
(b) The amount of money that you owe to the City on
the Homebuyer Loan.
As noted above, to calculate the Full Sales Price
you must determine the Affordable Sales
Price. The Affordable Sales Price is:
(a) The "Original Affordable Purchase Price" that
you paid for your home
Increased by
(b) The percentage increase of median income from
the date you purchased your
home to the date the City received the Owner's
Notice of Intent to Transfer.
The "Original Affordable Purchase Price" is the
effective price that you paid for your home.
(The actual purchase price that you paid for your
home is called the "Full Purchase Price" in the
Resale Agreement. The Full Purchase Price is equal
to the Original Affordable Purchase Price plus
the original amount of the Homebuyer Loan.)
If your home has suffered from any damage or
deferred maintenance while you own it, the
Affordable Sales Price may be reduced by an amount
that equals the cost of repairs necessary to put
your home in a "sellable condition."
Example 1 shows how the Full Sales Price formula
works if you sell your home within the first
fifteen years that you own your home.
EXAMPLE 1 You sell your house at the end of eight
years. The Original Affordable Purchase Price of
your Home
was $225,000. The amount of the Homebuyer Loan was
$225,000. The actual sales price that you
paid is equal to the Original Affordable Purchase
Price plus the Homebuyer Loan amount or
$450,000.
The median income for a family of four in San Diego
County when the home was bought was
$69,400. Median income increases by 10% over the
eight years.
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(a) Original Affordable Purchase Price $ 225,000
(b) Median Income Increases by 10% over
eight years
multiply (a) by 10%,
then add result ($225,000) to (a)
$22,500
Affordable Sales Price $ 247,500
The Affordable Sales Price of $247,500 is then added
to the amount owed on the Homebuyer Loan, which in
this example and as described in Section H(1) below
would be $233,850.
The Full Sales Price is therefore equal to $247,500
+ $233,850 or $481,350.
Example 2 shows how the Full Sales Price formula
works if you sell your home at any time during
the Term of the Resale Agreement to the City or the
City's designee.
EXAMPLE 2 You sell your house at the end of twenty
years and the City buys it from you pursuant to the
City
Option. The Original Affordable Purchase Price of
your Home was $225,000. The amount of the
Homebuyer Loan was $225,000. The actual sales price
that you paid is equal to the Original
Affordable Purchase Price plus the Homebuyer Loan
amount or $450,000.
The median income for a family of four in San Diego
County when the home was bought was
$69,400. Median income increases by 20% over the
twenty years.
(a) Original Affordable Purchase Price $ 225,000
(b) Median Income Increases by 20% over
eight years
multiply (a) by 20%,
then add result ($225,000) to (a)
$45,000
Affordable Sales Price $ 270,000
The amount owed on of the Homebuyer Loan, which in
this example is $242,100, is then added to the
Affordable Sales Price of $270,000.
The Full Sales Price is therefore equal to $242,100
+ $270,000 + or $512,100.
2. FAIR MARKET VALUE
Under the Resale Agreement, the Fair Market Value
can be determined in one of two ways.
First, it can be established by a real estate
appraiser approved in advance by the City. If
possible,
the appraisal will be based on sales prices of homes
similar to yours that are sold in your market
area during the preceding three (3)-month period.
The appraisal will not take into account the fact
that the resale price of your home is restricted by
the Resale Agreement. The value of any damage
or deferred maintenance that occurred while you
owned the home that decreased its value shall be
included as a separate value in the appraisal. In
this case, the appraisal will state what the Fair
Market Value of the home would be without the damage
or deferred maintenance.
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You must pay the cost of the appraisal used to
determine Fair Market Value, unless a new
buyer has obtained an appraisal that you may
utilize. The City is not responsible for paying for
any
portion of an appraisal used for any purpose under
the Resale Agreement.
The Resale Agreement also allows you and the City to
set the Fair Market Value of your
home by mutual agreement instead of relying on an
appraiser. Both you and the City would have
to agree to this particular method (instead of
hiring an appraiser) and to the final Fair Market
Value
amount. If you and the City fail to agree on the
Fair Market Value, either one can require use of
the appraisal method.
Example3 shows how the Full Sales Price and the Fair
Market Value of the home are compared to
determine the Maximum Restricted Resale Price at
which you can offer your house for sale.
EXAMPLE 3 The assumptions are the same as in Example
1. Therefore, the Full Sales Price is equal to
$481,350. The Fair Market Value of your home is
determined by appraisal, the cost of which
is paid by you. The appraisal determines the Fair
Market Value at $600,000.
FULL SALES is less FAIR MARKET MAXIMUM RESTRICTED
PRICE than VALUE then RESALE PRICE
$ 481,350 < $600,000 ==> $ 481,350
Since the Fair Market Value of the home is greater
than the Full Sales Price of the house, the
Maximum Restricted Resale Price which you can
receive from the sale of your home is $481,350.
H. HOMEBUYER LOAN – REPAYMENT AND PREPAYMENT
Your loan from the City is a "deferred" loan. This
means that you do not have to pay it
back until the end of the entire term as long as you
own the home and you do not violate any of the
terms of the Promissory Note, Deed of Trust, and the
Resale Agreement. As soon as you sell the
home, though, or if you break the terms of the loan
documents or Resale Agreement, the loan will
be due and you will have to pay it back. During the
term of the Homebuyer Loan, the Loan carries
"contingent interest" or "shared equity" which is
described in the next section. If you sell your
home to an Eligible Purchaser, the Eligible
Purchaser may assume the Homebuyer Loan.
1. CONTINGENT INTEREST
As mentioned earlier, the City wants to help low and
moderate income persons and families
who would not be able to buy homes in the City
without City funds. City resources, however, are
limited. You benefited from City financial help; it
is only fair that you repay the City in proportion
to that benefit. That is why the City has included
"contingent interest" (also known as "shared
equity") in your loan repayment. In general,
contingent interest is a percentage of the
difference
between the "Original Affordable Purchase Price" of
your home and the price paid to you by the
new purchaser when you sell your home.
The "Original Affordable Purchase Price" is the
effective price that you paid for your home.
The actual purchase price that you paid for your
home is the Full Purchase Price. The Full
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Purchase Price is equal to the Original Affordable
Purchase Price plus the original amount of the
Homebuyer Loan.
The contingent interest you pay represents the
benefit you received from the Homebuyer
Loan less a 25% credit for any capital improvements
that you may have made to your home. More
specifically, the Contingent Interest is 75% of the
percentage which is figured by dividing the
amount of the Homebuyer Loan by the Full Purchase
Price of the home. For example, if the
Homebuyer Loan is equal to 50% of the actual
purchase price of your home, when you sell the
home, 75% of 50% (or 38%) of the appreciation amount
would be owed to the City as contingent
interest. The City has agreed that it will recover
no more that 50% of shared appreciation on each
home.
Example 4 sets this out with numbers.
EXAMPLE 4 Using the assumptions set forth in Example
1, you sell your home after living in it for 8
years. The
"Original Affordable Purchase Price" is $225,000.
The amount of the Homebuyer Loan was initially
$225,000. As a result, the Full Purchase Price that
you paid for your home was $450,000. The
"Affordable Sales Price" of your Home is $247,500.
Homebuyer Loan ($225,000) divided by Full Purchase
Price ($450,000) = 50%
Contingent Interest: 75% of 50% = 38%
This means that the City will receive 38% of the
difference between the Original Affordable Purchase
Price,
which is the difference between the Original
Affordable Purchase Price of your home and the price
for which you sell
it.
Affordable Sales Price of Home $247,500
Original Affordable Purchase Price
-$225,000
Total Appreciation Amount $22,500
City Share of Appreciation
(38% of $22,500)
$8,550
Share of Appreciation That You Keep $13,950
Under these assumptions, if you sell your home in 8
years, the total you would owe the City is the
following:
Homebuyer Loan Amount
$225,000
City Share of Appreciation
+ $8,850
TOTAL AMOUNT YOU OWE CITY $233,850
Remember, an Eligible Purchaser may assume the
amount that you owe to the City when the Eligible
Purchaser purchases your Home. If the City purchases
your Home, the amount of money that you owe on the
Homebuyer Loan will be credited against the purchase
price.
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2. PREPAYMENT OF HOMEBUYER LOAN
You have the right to prepay part or all of the
Homebuyer Loan. If you prepay all or a
portion of the loan, contingent interest will be due
the City based on the Fair Market Value of your
home at the time of prepayment. Fair Market Value
shall be determined by an appraisal (conducted
as set forth in Section G.2 above entitled Fair
Market Value). In the case of prepayment, you will
be responsible for paying the cost of the appraisal.
If you prepay only a part of the Homebuyer
Loan, the payment that you make will be applied to
both the amount of principal and the amount of
Contingent Interest you owe the City based on the
following calculations:
Amount of Prepayment
Applied to Principal Amount of Prepayment
Applied to Interest
Principal Amount of Homebuyer
Loan
Divided By
(Total Principal + Interest Due at
Time of Prepayment)
City Contingent Interest
Divided By
(Total Principal + Interest Due at
Time of Prepayment)
In addition, your Contingent Interest percentage
will change because you paid off a portion
of the original Homebuyer Loan amount (the
principal).
I. SELLING YOUR HOME WITHIN THE FIRST FIFTEEN (15)
YEARS
Under the terms of the Resale Agreement, when you
sell your home within the first fifteen
(15) years of the term, there are two (2) different
ways that the sale can take place:
• The City chooses to use its option to purchase
your home at the Maximum Restricted
Resale Price or assigns the option to a third party
who purchases the home at the Maximum
Restricted Resale Price.
• If the City does not choose to use its option, you
sell the home for the Maximum Restricted
Resale Price to someone who meets specific income
requirements like you had to meet.
This buyer is called an "Eligible Purchaser" in the
Resale Agreement.
The City's option to purchase your home is described
in Section F above. The sale to the Eligible
Purchaser is described below.
1. SALE TO AN "ELIGIBLE PURCHASER" AT THE RESTRICTED
SALES
PRICE
If you have sent in your Owner's Notice of Intent to
Transfer during the first fifteen (15)
years that you own your home and the City notifies
you in the City Response Notice that it will not
execute its option to purchase your home, you will
have to find an Eligible Purchaser to buy the
home at the Maximum Restricted Resale Price which
the City will provide in the City Response
Notice. An Eligible Purchaser is a household who
will live in the home, and whose income meets
the requirements set by the City. An Eligible
Purchaser may assume your Homebuyer Loan
provided that the Eligible Purchaser executes a new
note, (in the amount of the total principal and
214112-2
1010\17\443571.2
9
contingent interest that you owe), deed of trust and
Resale Agreement in forms provided by the
City. The City will provide you with the current
income limits when you sell your home. See
Section 10 (CITY RESPONSE TO OWNER'S NOTICE OF
INTENDED TRANSFER) and
Section 15 (SALE BY OWNER IF CITY DOES NOT EXERCISE
OPTION TO PURCHASE
DURING INITIAL TERM) of the Resale Agreement.
Once you find a potential Eligible Purchaser, you
will refer the proposed buyer to the City
or its designee so that the City's designee can
determine if in fact the proposed buyer meets the
requirements of an Eligible Purchaser. You and the
proposed buyer must give specific information
and documents to the City as described in Section 15
(SALE OF HOME BY OWNER IF CITY
DOES NOT EXERCISE CITY OPTION TO PURCHASE DURING
INITIAL TERM) of the
Resale Agreement.
When the sale of your home to the Eligible Purchaser
is completed, you must submit to the
City the information and documents listed in Section
15.D (7) of the Resale Agreement.
2. SELLING YOUR HOME AFTER THE FIRST 15 YEARS THAT
YOU OWN
YOUR HOME
If you mail your Owner's Notice of Intent to
Transfer to the City after the first fifteen (15)
years that you own your home but within the term of
the Resale Agreement, there are still two (2)
ways the sale of your home can take place:
• The City can use its option to purchase your home
for the Maximum Restricted Resale Price
or assign its option to purchase your home for the
Maximum Restricted Resale Price to a
third party.
• If the City does not choose to exercise its option
to purchase your home, you sell the home
at an unrestricted price to a third party.
The City's option to purchase your home is described
in Section F above. If the City does not
exercise its option to purchase your home, the City
Response Notice will tell you that you may sell
the home on the market for a price that is greater
than or equal to your home's fair market value.
Fifteen (15) days before you close escrow on the
sale of you home, you will have to send in to the
City a copy of the sales contract and a declaration
certifying the sales price of your home to the
third party. At the close of escrow of the sale of
you will have to send in additional information
verifying the purchase price paid for your home by
the third party. (See Section 17 of Resale
Agreement SALE OF PROPERTY BY OWNER DURING EXTENDED
TERM).)
J. SALE IN VIOLATION OF THE RESALE AGREEMENT;
PAYMENT OF
"EXCESS SALES PROCEEDS" TO CITY
If you sell your home in violation of the Resale
Agreement (for example, if you sell your
home for more than the Maximum Restricted Resale
Price during the first fifteen (15) years that
you own your home or if, anytime during the entire
term of the Resale Agreement, you sell your
home without notifying the City and providing it
with the option to purchase your home), you will
214112-2
1010\17\443571.2
10
have to pay to the City the "Excess Sales Proceeds"
as a remedy for your violation. The term
Excess Sales Proceeds is defined in Section 16 of
the Resale Agreement (Payment To City Of
Excess Sales Proceeds) as ninety-four percent (94%)
of the amount by which the gross sales
proceeds you receive from the buyer exceed the
Maximum Restricted Resale Price for the home as
set out in the First City Response Notice. Another
way to put it is the following:
Gross Amount of Money the New Buyer Paid for the
Home
MINUS
Maximum Restricted Resale Price
(from First City Response Notice)
THE REMAINDER MULTIPLIED BY
Ninety-Four Percent (94%)
Equals the Payment to the City of Excess Sales
Proceeds
The reason that the City gets "94%" rather than the
full (or "100%") amount is so that the
real estate broker that assists in the sale of your
home can be paid his or her commission, even
though you will have violated this Resale Agreement.
The Excess Sales Proceeds formula is
intended to ensure that you receive the same net
amount of sales proceeds from an unrestricted sale
(in violation of the Resale Agreement) that you
would have received if the City had purchased your
home at the Maximum Restricted Resale Price. This
provision is intended to eliminate any
incentive for homeowners to violate the Resale
Agreement when the home is sold.
The amount of Excess Sales Proceeds that you pay to
the City is used by the City for other
affordable housing programs it runs. You were given
the chance to buy your home at a price that
was affordable to you. When you pay the Excess Sales
Proceeds because of a sale in violation of
the Resale Agreement, those funds are going to help
other low and moderate income families who,
like you, would not be able to obtain affordable
housing without assistance. Example 5 shows how
the Excess Sales Proceeds are calculated.
EXAMPLE 5 You sell your home at the end of eight
years. The Maximum Restricted Resale Price at
$481,350.
The house is appraised at $600,000. You sell the
home in violation of the Resale Agreement to a
third party for $600,000. You must pay the City
Excess Sales Proceeds as calculated below:
Total Amount
Paid For House $600,000
MINUS
Maximum Restricted Resale Price (from
First City Response Notice) - $481,350
$118,650
MULTIPLIED BY
Ninety-Four Percent (94%)
x .94
Amount of Excess Sales
Proceeds You Pay to City $111,531
(in addition to original
Homebuyer Loan amount)
214112-2
1010\17\443571.2
11
K. DEFAULT PROVISIONS
You have agreed to meet all conditions of all of the
City documents, including the
Promissory Note, Resale Agreement, and Deed of
Trust. If you violate any provisions of the
documents, you will be in default. Also, if you
default under any other loan on the home, such as
the first mortgage, you would also be considered to
be in default. If you do not correct the
violation, the City could require you to repay the
Homebuyer Loan and/or exercise its option and
buy your home. The City could also go to court and
get a court order to enforce the provisions of
the City documents, which may result in a
foreclosure on your home.
L. REFINANCE OF YOUR FIRST MORTGAGE
The Resale Agreement allows you to refinance your
First Lender Loan but places
restrictions on the amount received by you from the
refinancing. As a requirement of refinancing,
First Lenders usually require that the City
subordinate its documents to them. The City will
only
subordinate the Resale Agreement and City Deed of
Trust if the loan amount of such refinancing
does not exceed the then outstanding balance of
principal and interest (plus refinancing and closing
costs) of the existing First Lender Loan and if the
refinance does not result in higher monthly
payments on the first mortgage than were due prior
to the refinancing. If you refinance your First
Lender Loan for an amount that is greater than the
outstanding principal and interest plus
refinancing and closing costs, you will be in
default under the Resale Agreement and the Deed of
Trust. (See Section 28 (REFINANCE OF FIRST LENDER
LOAN).)
********************************
Please sign this Buyer's Disclosure Statement in the
space provided below, and keep a
signed copy for your records, and return the
original to the City at the following address:
City of Carlsbad
Housing and Community Development Dept.
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-2389
Attn: Homebuyer Program
I have read and understand the above Buyer's
Disclosure Statement.
By: __________________________________ Dated:
__________________
Signature of Buyer
___________________________________
Print Name of Buyer
By: __________________________________ Dated:
__________________
Signature of Buyer
___________________________________
Print Name of Buyer
1010\17\443569.2
CITY OF CARLSBAD HOMEBUYER PROGRAM - _____
RESALE RESTRICTION AGREEMENT
AND OPTION TO PURCHASE
ADMINISTRATIVE COVER SHEET
(Remove Upon Completion)
BLANK LINES: CHECKLIST
______ Name of Owner, p. 1, upper right
______ Address of Home, p. 1, upper right
______ Date of Document, p.1, first paragraph
______ Developer's Name, p.1, first paragraph
______ Owner's Name, p. 1, first paragraph
______ Date of Affordable Housing Agreement, p.1,
Recital B
______ Amount of Homebuyer Loan, p. 1, Recital B
______ Purchase Price of Home, p. 2, Recital C
______ Income of Buyer, p. 2, Recital C
______ First Lender Amount and Lender, p. 2, Recital
D
______ First Lender Deed of Trust Recordation
Information, p.2, Recital D
______ Delete Recital H if inapplicable
______ Median Income for a Household of Four on Date
of this Agreement, p. 10,
Section 14A(1)
______ Insert Appropriate Term, Section 25
______ Address of First Lender, p. 19, Section 33
______ Signatures of City and Owner, p. 21
______ Attach Legal Description of the Property, p.
A-1
______ Notary
1010\17\443569.2 1
RECORDING REQUESTED PURSUANT
TO GOVERNMENT
CODE SECTION 27383
When Recorded Mail To:
City of Carlsbad
City Clerk's Office
Attn: City Clerk
1200 Carlsbad Village Drive
Carlsbad, CA 92008
(SPACE ABOVE THIS LINE FOR RECORDER’S USE)
RESALE RESTRICTION AGREEMENT,
AND OPTION TO PURCHASE
CITY OF CARLSBAD
HOMEBUYER PROGRAM – 2008
Owner:
Address of Home:
This Resale Restriction Agreement and Option to
Purchase (the "Agreement ") is entered
into as of this _____ day of ________________, 200_,
by and between the City of Carlsbad (the
"City "), and _______________________ (the "Owner
").
RECITALS
A. The City has developed a second mortgage program
designed to assist qualified
low or moderate income households purchase their
homes located within the City of Carlsbad
(the "Homebuyer Program ").
B. In connection with its affordable homeownership
program the City made a loan
(the "Homebuyer Loan ") in the amount of
________________
Dollars ($___________________) to Owner to
purchase a single-family dwelling located in
Carlsbad, California on that certain real property
and more particularly described in Exhibit A (the
"Home "). The Homebuyer Loan in is an
amount that will make the Home affordable to low and
moderate income households.
1010\17\443569.2 2
C. As used herein, the term "Home " includes both
the real property and all
improvements now or hereafter erected on the
property and all easements, rights, appurtenances,
and all fixtures now or hereafter attached to the
property.
D. The "Original Affordable Purchase Price" of the
Home is _____________
Dollars ($___________).The Original
Affordable Purchase Price is the effective price of
the Residence paid by the Owner. The actual
price of the Residence is equal to the Original
Affordable Purchase Price plus the amount of the
Promissory Note (the "Full Purchase Price"). Owner
is a low income household.
E. The Owner is receiving a First Lender Loan in the
amount of ________________
Dollars ($__________) (the "First Lender
Loan ") from ___________________________ (the "First
Lender "). The First
Lender Loan is secured by a deed of trust dated
_______________ , 200__,
executed by the Buyer in favor of First Lender and
recorded in the County of San Diego on
_________________, 200__, and assigned Recorder's
Serial No. _____________ (the "First
Lender Deed of Trust ").
F. The Loan is evidenced by a promissory note in the
amount of the Loan (the "City
Note "). This Agreement and the City Note shall be
secured by a deed of trust (the "City Deed of
Trust ") subordinate to the lien of First Lender
Deed of Trust.
G. The purpose of this Agreement is to place resale
controls on the Home, to provide
the City an option to purchase the Home at a
restricted price and to ensure that the Owner
complies with the Homebuyer Program requirements.
H. This Agreement and the City Note require
repayment of the loan plus contingent
interest and, in certain instances, payment of
excess proceeds of sale. This Agreement will
remain in full effect as an encumbrance on the
Property after any prepayment of the City Note by
the Buyer.
NOW, THEREFORE, in consideration of the benefits
received by the Owner and the
City, the Owner and the City agree, as follows:
1. DEFINITIONS AND EXHIBITS
A. The following terms are specifically defined for
this Agreement and their
definitions can be found in the Sections indicated
below:
(1) "Affordable Sales Price" – Section 14A(1)(a).
(2) "Agreement" - first sentence of the Agreement on
page 1.
(3) "City" – first sentence of the Agreement on page
1.
1010\17\443569.2 3
(4) "City Deed of Trust" - Recital F.
(5) "City Designated Purchaser" – Section 12B.
(6) "City Note" - Recital F.
(7) "City Option" - Section 12A.
(8) "City Response Notice" - Section 10.
(9) "Eligible Purchaser " Section 15B.
(10) "Extended Term" – 10C.
(11) "Excess Sales Proceeds" - Section 16.
(12) "Fair Market Value" - Section 14B.
(13) "First Lender" - Recital E.
(14) "First Lender Deed of Trust" - Recital E.
(15) "First Lender Loan" - Recital E.
(16) "Full Purchase Price" – Recital D.
(17) "Full Sales Price" - Section 14A.
(18) "Home" - Recital B.
(19) "Homebuyer Loan" - Recital B.
(20) "HUD" – Section 30.
(21) "Initial Term" – 10B.
(22) "Market Purchaser" – Section 10C.
(23) "Maximum Restricted Resale Price" – Section 14.
(24) "Median Income " – Section 14A.
(25) "Original Affordable Purchase Price" – Recital
D.
(26) "Owner " - first sentence of the Agreement on
page 1.
1010\17\443569.2 4
(27) "Owner's Notice of Intent to Transfer " -
Section 8.
(28) "Proposed Purchaser " - Section 15A.
(29) "Transfer " - Section 7.
B. The following Exhibits are attached to this
Agreement:
(1) Exhibit A: Legal Description of Property (Home)
(2) Exhibit B: Form of Owner Occupancy Certification
(3) Exhibit C: Form of Owner's Notice of Intent to
Transfer
(4) Exhibit D: Form of City Response Notice
(5) Exhibit E: Form of Owner Acknowledgement of City
Response
Notice
(6) Exhibit F: Form of Owner Request for City
Subordination to
Refinanced First Lender Loan
2. OWNER CERTIFICATIONS
The Owner certifies that (i) the financial and other
information previously provided in
order to qualify to purchase the Home is true and
correct as of the date first written above, (ii) the
Owner is an Eligible Purchaser, and (iii) the Owner
shall occupy the Home as the Owner's
principal place of residence.
3. OCCUPANCY AND LEASING OF HOME
A. The Owner shall occupy the Home as the Owner's
principal place of residence
within sixty (60) days of close of escrow on the
Homebuyer Loan. Failure by the Owner to
occupy the Home as the Owner's principal place of
residence shall constitute a default under this
Agreement for which the City may exercise its option
to purchase pursuant to Section 21 below.
The Owner shall be considered as occupying the Home
if the Owner is living in the unit for at
least ten (10) months out of each calendar year. The
Owner shall provide an annual written
certification in the form shown in the attached
Exhibit B, to the City that the Owner is occupying
the Home as his or her principal place of residence.
1010\17\443569.2 5
4. LEASING OF PROPERTY
The Owner shall not lease the Property to another
party. Any lease of the Property in
violation of this Agreement is prohibited, and shall
be a default under this Agreement and the
City Deed of Trust. The Owner further agrees that,
in the event the Owner leases the Property to
a third party in violation of this section, any
rents in excess of the Owner's monthly housing
payment, which includes the principal mortgage
payment and interest, property taxes and
insurance ("Excess Rental Proceeds ") paid to the
Owner by the lessee which exceed the
Affordable Rent shall be due and payable to the City
immediately upon receipt thereof by the
Owner. Such Excess Rental Proceeds shall be
considered a recourse debt of the Owner to the
City, as evidenced by the Note, which the City may
collect by legal action against the Owner
and/or by foreclosure under the City Deed of Trust.
5. HOMEBUYER EDUCATION CLASS
The Owner shall attend all sessions of a first-time
homebuyer education class offered by
___________________________.
6. MAINTENANCE AND INSURANCE PROCEEDS
A. The Owner shall maintain the Home, including
landscaping, in good repair and in
a neat, clean and orderly condition and will not
commit waste or permit deterioration of the
Home. Failure by the Owner to maintain the Home
shall constitute a default under this
Agreement for which the City may exercise the City
Option to purchase the Home pursuant to
Section 21 below.
B. The Owner shall maintain a standard fire and
extended coverage Home insurance
policy equal to the replacement value of the Home
(adjusted every five (5) years by appraisal, if
requested by City), naming the City as an additional
insured. Additional insurance requirements
are set forth in Section 6 of the City Deed of
Trust.
7. TRANSFER AND SALE RESTRICTIONS
Any Transfer of the Home will be subject to the
provisions of this Agreement including,
without limitation, exercise of the City Option
pursuant to Section 12 below. "Transfer " shall
mean any sale, assignment or transfer, voluntary or
involuntary, of any interest in the Home,
including, but not limited to, a fee simple
interest, a joint tenancy interest, tenancy in
common
interest, a life estate, a leasehold interest, an
interest evidenced by a land contract by which
possession of the Home is transferred and Owner
retains title. Any Transfer without satisfaction
of the provisions of this Agreement is prohibited. A
Transfer shall not include a transfer: (i) to
an existing spouse who is also an obligor under the
City Note; (ii) by the Owner to a spouse
where the spouse becomes the co-owner of the Home;
(iii) between spouses as part of a marriage
dissolution proceeding; (iv) to an existing spouse
of Owner by devise or inheritance following
1010\17\443569.2 6
the death of Owner; (v) by Owner into an inter vivos
revocable trust in which Owner is the
Trustor; (vi) by deed of trust or imposition of a
lien subordinate to the City Deed of Trust or (vii)
refinance of the First Mortgage meeting the
requirements of Section 28 of this Agreement;
provided, however, that Owner shall provide written
notice of all such transfers to City pursuant
to Section 8 below; and Owner shall continue to
occupy the Home as his or her principal place of
residence (except where the transfer occurs pursuant
to subsection (iii) or (iv) above, in which
event the transferee shall owner-occupy the Home and
affirmatively assume Owner's obligations
under this Agreement, the City Note and the City
Deed of Trust).
8. NOTICE OF INTENDED TRANSFER
A. In the event the Owner intends to transfer
(including without limitation all
"Transfers " as defined in Section 7) or vacate the
Property, the Owner shall promptly give the
City written notice of such intent (the "Owner's
Notice of Intent to Transfer ") in the form shown
in the attached Exhibit C. The Owner shall give the
City the Owner's Notice of Intent to
Transfer prior to notifying real estate brokers or
lenders of Owner's intent to Transfer the
Property and prior to listing of the Property on the
Multiple Listing Service. The Owner's Notice
of Intent to Transfer shall be sent to the City in
the manner and at the address provided in Section
33 of this Agreement. The Owner's Notice of Intent
to Transfer shall include the information
necessary for the City to determine the Maximum
Restricted Resale Price of the Property,
including the following information:
(1) the address of the Property;
(2) the date of purchase of the Property by the
Owner;
(3) the Original Affordable Purchase Price of the
Property;
(4) the Full Purchase Price of the Property (which
is the Original Affordable
Purchase Price plus the original amount of the
Homebuyer Loan).
(5) a copy of the HUD-1 Settlement Statement or
equivalent document from
the close of escrow on the Owner's purchase of the
Property;
(6) the date on which Owner intends to vacate
Property;
(7) the date the Property will be placed on the
market; and
(8) the name and phone number of the person to
contact to schedule
inspection of the Property by the City.
1010\17\443569.2 7
9. OWNER PREPARATION OF HOME FOR SALE
A. The Owner may not wish to contract with a real
estate broker to sell the
Home until the Owner has received the City Response
Notice pursuant to Section 10 below,
as the services of a broker will not be required if
the City exercises the City Option to
purchase the Home pursuant to Section 12 below.
B. Following delivery to the City of the Owner's
Notice of Intent to Transfer, the
Owner shall prepare the Home for sale, as follows:
(1) within thirty (30) days of delivery of the
Owner's Notice of Intent to
Transfer, the Owner shall obtain and deliver to the
City a current written report of inspection of
the Home by a licensed structural pest control
operator;
(2) within the sooner of (a) sixty (60) days from
the date of delivery of the
Owner's Notice of Intent to Transfer, or (b) prior
to close of escrow on the Transfer, the Owner
shall repair all damage noted in the pest report
including damage caused by infestation or
infection by wood-destroying pests;
(3) within thirty (30) days of the date of the
Owner's Notice of Intent to
Transfer, the Owner shall allow the City to inspect
the Home to determine its physical condition;
(4) if the Home is vacant, the Owner shall maintain
utility connections until
the close of escrow on the Transfer;
(5) in the event of purchase of the Property by the
City or City Designated
Purchaser, the Owner shall permit a final
walk-through of the Property by the City or City
Designated Purchaser, in the final three (3) days
prior to close of escrow on the Transfer.
10. CITY RESPONSE TO OWNER'S NOTICE OF INTENDED
TRANSFER
City shall respond in writing (the "City Response
Notice ") to the Owner's Notice of
Intent to Transfer. The form of City Response Notice
is attached as Exhibit D. The City
Response Notice shall inform the Owner of the City's
election to proceed under one (1) of the
following two (2) alternatives:
A. City Exercise of City Purchase Option. The City
Response Notice may notify the
Owner that the City or a City Designated Purchaser
elects to exercise the City Option to purchase
the Home. The City Response Notice shall be sent
within thirty (30) days of City receipt of
Owner's Notice of Intent to Transfer and shall
include the City's calculation of the (i) Maximum
Restricted Resale Price pursuant to Section 14 below
to be paid by the City or a City Designated
Purchaser and (ii) the transaction fee to be paid by
the Owner pursuant to Section 12 below.
B. Initial Term: Owner Sale at a Restricted Sales
Price to Eligible Purchaser.
Alternatively, the City Response Notice may notify
the Owner that the City or a City Designated
1010\17\443569.2 8
Purchaser will not exercise the City Option to
purchase the Home. In this case, if the Owner has
sent the Notice of Intent to Transfer within fifteen
(15) years of the date of recordation of this
Agreement (the "Initial Term"), the City Response
Notice shall tell the Owner that the Owner
may proceed to sell the Home to an Eligible
Purchaser at a price not to exceed the Maximum
Restricted Resale Price, as set forth in Section 14
and pursuant to the procedure set forth in
Section 14 below. In this event, the City Response
Notice shall include the following
information: (1) the maximum qualifying income for
an Eligible Purchaser (which shall be the
same income category as the Owner at the time of the
Owner's purchase); (2) the certifications
required of an Eligible Purchaser; (3) the Maximum
Restricted Resale Price the Owner may
receive for the Home, calculated by the City
pursuant to Section 14 below; (4) whether
Homebuyer Program assistance from the City may be
available to an Eligible Purchaser, (5)
Owner's repayment obligation as required by Section
13.
C. Extended Term Owner Sale to Market Purchaser. If
the City Response Notice
notifies the Owner that the City or a City
Designated Purchaser will not exercise the City
Option
to purchase the Home, and the Owner has sent the
Notice of Intent to Transfer between the
fifteenth (15th) year of the Term and the end of the
Term, (the "Extended Term "), the City
Response Notice shall inform Owner that Owner may
proceed to sell the Home to a third party at
any income level (the "Market Purchaser ") for an
unrestricted price. The City Response Notice
shall also inform Owner of Owner's repayment
obligation as required by Section 13.
11. OWNER ACKNOWLEDGEMENT OF CITY RESPONSE NOTICE
No later than seven (7) days following the date of
the City Response Notice, the Owner
shall acknowledge in writing to the City, in the
form shown in the attached Exhibit E, that he/she
has received the City Response Notice and still
intends to Transfer the Home.
12. CITY PURCHASE OPTION
A. The Owner agrees that if the Owner decides to
Transfer the Home, the City shall
have the option to purchase the Home for the Maximum
Restricted Resale Price calculated
pursuant to Section 14 of this Agreement (the "City
Option "). The Owner shall pay the City a
transaction fee up to six percent (6%) of the
Maximum Restricted Resale Price if the City or a
City Designated Purchaser exercises the City Option
and purchases the Home. The City Option
may be exercised by the City or by a City Designated
Purchaser in the City Response Notice. If
the City Response Notice notifies the Owner that the
City or a City Designated Purchaser will
exercise the City Option to purchase the Home, the
City or the City Designated Purchaser shall
purchase the Home within ninety (90) days of the
date of the City Response Notice and title shall
be delivered by the Owner to the City by grant deed
free and clear of any mortgage or other
liens, unless approved in writing by the City.
B. The City may assign the City Option to another
public agency, a nonprofit
corporation, or an Eligible Purchaser selected by
the City (any of which shall be referred to
herein as a "City Designated Purchaser "). If the
City assigns the City Option to a City
1010\17\443569.2 9
Designated Purchaser, the City Response Notice shall
be executed by the City Designated
Purchaser and shall notify the Owner that a City
Designated Purchaser is exercising the City
Option in lieu of the City.
C. In the event of exercise of the City Option and
purchase of the Home by the City
or a City Designated Purchaser, the Owner shall
permit a final walk-through of the Home by the
City or the City Designated Purchaser in the final
three (3) days prior to close of escrow on the
Transfer.
13. REPAYMENT OF CITY NOTE
Upon any Transfer of the Property, the outstanding
principal and interest due under the
City Note shall be repaid pursuant to the City Note
unless (i) such principal and interest is
assumed by an Eligible Purchaser in accordance with
Section 9 of the City Note or (ii) the City
exercises the City Option to purchase the Home, in
which event the outstanding amount of
principal and Contingent Interest due under the City
Note shall be paid to the City in the form of
a credit against the purchase price to be paid by
the City to the Owner. Repayment of the City
Note shall not affect Owner's obligation to comply
with this Agreement, which shall remain in
full force and effect following any repayment of the
City Note.
14. DETERMINATION OF MAXIMUM RESTRICTED RESALE PRICE
The maximum sales price (the "Maximum Restricted
Resale Price ") that the Owner shall
receive from the resale of the Home from purchase of
the Home by the City or City Designated
Purchaser or from other sale or Transfer by the
Owner when the Owner sends the Notice of
Intent to Transfer during the Initial Term shall be
the Full Sales Price or the Fair Market Value,
whichever is less.
A. Full Sales Price.
(1) The Full Sales Price of the Home means: (a) the
Affordable Sales Price
plus (b) the principal and contingent interest then
due on the City Note. The Affordable Sales
Price means the Original Affordable Purchase Price,
as set forth in Recital D to this Agreement,
increased by the percentage of increase in the
Median Income from the date of the original
purchase of the Home by the Owner to the date of
receipt by the City of the Owner's Notice of
Intent to Transfer "Median Income " shall refer to
the median yearly income, adjusted for a
household size of four, in San Diego County, as
published by the California Department of
Housing and Community Development ( "HCD "), or, in
the event such income determination is
no longer published by HCD, or has not been updated
for a period of at least eighteen (18)
months, the City may use or develop such other
reasonable method as it may choose in order to
determine the median yearly income in San Diego
County. As of the date of Owner's purchase
of the Property, the Median Income for a household
of four persons is ____________________
Dollars ($______).
1010\17\443569.2 10
(2) The Affordable Sales Price shall include a
downward adjustment, where
applicable, in an amount necessary to repair any
violations of applicable building, plumbing,
electric, fire or housing codes or any other
provisions of the City of Carlsbad Building Code, as
well as any other repairs needed to put the Home
into a "sellable condition". Items necessary to
put a Home into sellable condition shall be
determined by the City, and may include cleaning,
painting and making needed structural, mechanical,
electrical, plumbing and fixed appliance
repairs and other deferred maintenance repairs.
B. Fair Market Value. In certain circumstances it
may be necessary to determine the
fair market value of the Property without taking
account of the resale restrictions imposed by this
Agreement (the "Fair Market Value"). These
circumstances include but are not limited to: (1)
where the parties wish to determine if the Full
Sales Price exceeds the Fair Market Value in
order to determine the Maximum Restricted Resale
Price pursuant to this section; (2) where the
parties wish to determine if the sales price of the
Home to a Market Purchaser is comparable to
the Fair Market Value; and (3) to calculate the
amount due under the City Note at the end of the
term of the City Note or upon prepayment. If it is
necessary to determine the Fair Market Value
of the Property, it shall be determined by a
certified MAI or other qualified real estate
appraiser
approved in advance by the City. If possible, the
appraisal shall be based upon the sales prices of
comparable properties sold in the market area during
the preceding three (3)-month period. The
cost of the appraisal shall be paid by the Owner,
unless the appraisal is obtained from a new
purchaser. Nothing in this section shall preclude
the Owner and the City from establishing the
Fair Market Value of the Property by mutual
agreement in lieu of an appraisal pursuant to this
section.
15. SALE BY OWNER DURING INITIAL TERM IF CITY DOES
NOT EXERCISE
OPTION TO PURCHASE
In the event the City Response Notice notifies the
Owner to proceed to sell the Home to
an Eligible Purchaser at a price not exceeding the
Maximum Restricted Resale Price, the Owner
may proceed to sell the Home in compliance with the
following requirements:
A. Marketing. The Owner shall use bona fide good
faith efforts to sell the Home to
an Eligible Purchaser in compliance with this
section, including listing the Home on the Multiple
Listing Service, keeping the Home in an orderly
condition, making the Home available to show
to agents and prospective buyers, and providing
buyers with Eligible Purchaser requirements,
including income qualifications and the City's form
of disclosure statement summarizing the
terms of the buyer's occupancy and resale
restriction agreement with option to purchase. A
proposed purchaser ( "Proposed Purchaser ") who the
Owner believes will qualify as an Eligible
Purchaser shall be referred to the City for an
eligibility determination. If the Proposed Purchaser
qualifies as an Eligible Purchaser the City will
also determine if such Eligible Purchaser is
eligible for City housing-related financial
assistance that may be available at the time of
resale.
B. Eligible Purchaser. A Proposed Purchaser shall
qualify as an "Eligible Purchaser
"if he or she meets the following requirements, as
determined by the City:
1010\17\443569.2 11
(1) Income Eligibility. The combined maximum income
for all household
members of the Proposed Purchaser shall not exceed
the income level designated by the City in
the City Response Notice.
(2) Intent to Owner Occupy. The Proposed Purchaser
shall certify that he or
she will occupy the Home as to his or her principal
place of residence throughout his or her
ownership. Co-signers are not required to occupy the
Home.
(3) Agreement to Sign Resale Restriction Agreement
and to Cooperate with
the City. The Proposed Purchaser shall agree to sign
a resale restriction agreement restricting
future resale of the Home and shall agree to
cooperate fully with the City in promptly providing
all information requested by the City to assist the
City in monitoring the Proposed Purchaser's
compliance with the resale restriction agreement.
C. Maximum Restricted Resale Price. The purchase
price for the sale of the Home
by the Owner to the Eligible Purchaser shall not
exceed the Maximum Restricted Resale Price
calculated by the City pursuant to Section 14 above,
as set forth in the City Response Notice.
The closing costs paid by the Eligible Purchaser
shall not exceed reasonable customary buyer's
closing costs in the County of San Diego. Pursuant
to Section 13 of this Agreement and Section
9 of the City Note, the Eligible Purchaser may
assume the Homebuyer Loan and the effective
purchase price that the Eligible Purchaser will pay
for the Home is likely to be the Affordable
Sales Price.
D. Disclosure and Submittals. The Owner and the
Proposed Purchaser shall provide
the following information and documents to the City:
(1) The name, address and telephone number in
writing of the Proposed
Purchaser.
(2) A signed financial statement of the Proposed
Purchaser in a form
acceptable to the City and any other supporting
documentation requested by the City. The
financial information shall be used by the City to
determine the income eligibility of the
Proposed Purchaser.
(3) The proposed sales contract and all other
related documents which shall
set forth all the terms of the sale of the Home.
Said documents shall include at least the
following terms: (a) the sales price; and (b) the
price to be paid by the Proposed Purchaser for
the Owner's personal Home, if any, for the services
of the Owner, if any, and any credits,
allowances or other consideration, if any.
(4) A written certification, from the Owner and the
Proposed Purchaser in a
form acceptable to the City 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. The certification shall also
provide that the Proposed Purchaser 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 any
other party, money or other consideration, including
personal property, in addition to what is set
1010\17\443569.2 12
forth in the sales contract and documents submitted
to the City. The written certification shall
also include a provision 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 certification
submitted to the City, the City shall have the right
to foreclose on the Home 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 the Proposed Purchaser for the
return of any moneys paid or received in
violation of this Agreement or for any of the
Owner's and/or the Proposed Purchaser's costs and
legal expenses, shall be borne by the Owner and/or
the Proposed Purchaser and they shall hold
the City harmless and reimburse the City's expenses,
legal fees and costs for any action they
reasonably take in good faith in enforcing the terms
of this Agreement.
(5) An executed buyer's resale agreement and deed of
trust to the City from
the Proposed Purchaser in forms provided by the
City. If the Proposed Purchaser is receiving
assistance from the Homebuyer Program, a promissory
note to the City shall also be required.
The recordation of the new deed of trust and buyer's
resale agreement shall be a condition of the
City's approval of the proposed sale.
(6) The name of the title company escrow holder for
the sale of the Home, the
escrow number, and name, address, and phone number
of the escrow officer.
(7) Upon the close of the proposed sale, certified
copies of the recorded City
deed of trust and buyer's resale agreement, a copy
of the final sales contract, settlement
statement, escrow instructions, and any other
documents which the City may reasonably request.
16. PAYMENT TO CITY OF EXCESS SALES PROCEEDS
If the Owner makes a Transfer in violation of this
Agreement at any time during the
Initial Term or Extended Term, the Owner shall pay
the Excess Sales Proceeds to the City. If the
Owner Transfers the Home in violation of this
Agreement, the Appreciation Amount (as such
term is defined in the City Note) shall be
calculated using the Maximum Restricted Resale Price
of the Home, rather than the actual sales price. For
purposes of this Agreement, "Excess Sales
Proceeds " shall mean ninety-four percent (94%) of
the amount by which the gross sales
proceeds received by the Owner from the new
purchaser exceed the Maximum Restricted Resale
Price for the Home. This amount shall be a debt of
the Owner to the City, further evidenced by
the City Note, and secured by the City Deed of
Trust. The Owner acknowledges that the City
shall have no obligation to cause reconveyance of
this Agreement or of the City Deed of Trust
until the Excess Sales Proceeds are paid to the
City. The City shall utilize the Excess Sales
Proceeds for City affordable housing programs. The
Owner and the City acknowledge that the
formula for calculation of the amount of Excess
Sales Proceeds due from the Owner to the City
is intended to cause the Owner to receive the same
net sales proceeds (following payment by
Owner of a standard broker's commission) from sale
of the Home at an unrestricted price to a
market purchaser (in violation of this Agreement) as
the Owner would receive from sale of the
Home to the City, City Designated Purchaser or to an
Eligible Purchaser at the Maximum
Restricted Resale Price.
1010\17\443569.2 13
17. SALE OF PROPERTY BY OWNER DURING EXTENDED TERM
In the event the City Response Notice notifies the
Owner to proceed to sell the Home to a
Market Purchaser at a price greater than or equal to
the Fair Market Value of the Home, the
Owner may proceed to sell the Home in compliance
with the following requirements:
Upon any sale of the Home, the Owner shall submit to
the City at least fifteen (15) days
prior to the close of escrow, a copy of the
appraisal, and a copy of the sales contract and a
written
declaration, under penalty of perjury, from the
Owner and the proposed purchaser in a form
acceptable to the City stating the gross sales price
of the Home. The certification shall also
provide that the proposed purchaser 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 any
other party, money or other consideration, including
personal property, in addition to what is set
forth in the sales contract. At close of escrow,
Owner shall submit to the City a copy of the
HUD-1 Settlement Statement showing the purchase
price paid for the Home.
18. DEFAULTS
A. The following events shall constitute a Default
by the Owner under this
Agreement:
(1) The City determines that the Owner has made a
misrepresentation to
obtain the benefits of purchase of the Home or in
connection with its obligations under this
Agreement;
(2) The Owner fails to owner occupy the home, as
required pursuant to
Section 3 above, and such failure continues
following written notice by the City and sixty (60)
days opportunity to cure following the date of such
notice.
(3) The Owner rents the Home in violation of Section
4 above, and such
failure continues following written notice by the
City and sixty (60) days opportunity to cure.
(4) The Owner fails to provide information to the
City necessary to determine
Owner's compliance with the requirements of this
Agreement.
(5) The Owner makes a Transfer in violation of this
Agreement;
(6) The Owner otherwise fails to comply with the
requirements of this
Agreement and such violation is not corrected to the
satisfaction of the City within ten (10) days
after the date of written notice by the City to the
Owner of such violation; or
(7) A notice of default is issued under First Lender
Loan or other financing
secured by the Home.
1010\17\443569.2 14
(8) A lien is recorded against the Home other than
the lien of a bona fide
mortgage loan.
(9) Owner places a mortgage on the Home in violation
of Section 28 below.
(10) Owner declares bankruptcy or makes an
assignment of assets for the
benefit of creditors.
B. Upon a declaration of Default by the City under
this Agreement, the City may
exercise any remedies at law or in equity, including
without limitation, any or all of the
following:
(1) Declare all Excess Sales Proceeds immediately
due and payable without
further demand, accelerate payments due under the
City Note and invoke the power of sale under
the City Deed of Trust;
(2) Apply to a court of competent jurisdiction for
such relief at law or in
equity as may be appropriate;
(3) Declare a Default under the City Note and the
City Deed of Trust and
pursue all City remedies under the City Note and the
City Deed of Trust; and
(4) Exercise the City Option upon Default as
described in Section 21 below.
19. NOTICE AND CURE
Upon Default or a violation of any of the provisions
of this Agreement, 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 within a
reasonable period of time, not longer than thirty
(30) days after the date the notice is mailed, or
within such further time as the City determines is
necessary to correct the violation, or if the Owner
is in default under any other mortgage loan on
the Home, the City may declare a default under this
Agreement.
The City shall notify First Lender at the address
provided by the First Lender to the City
in the manner set forth in Section 33 of this
Agreement, if the City has declared a default under
this Agreement or under the City Note or City Deed
of Trust.
20. NOTICE TO CITY OF DEFAULT
A request for notice of default and any notice of
sale under any deed of trust or mortgage
with power of sale encumbering the Home shall be
recorded by the City in the Office of the
Recorder of the County of San Diego for the benefit
of the City. The City may declare a default
1010\17\443569.2 15
under this Agreement upon receipt of any notice
given to the City pursuant to Civil Code Section
2924b, and may exercise its rights as provide in
Sections 18 and 21.
In the event of default and foreclosure under the
First Lender Loan or any other mortgage
loan on the Home, the City shall have the same right
as the Owner to cure defaults and redeem
the Home prior to the foreclosure sale. Nothing
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.
If the City failed to file the request for notice of
default, the City's right to purchase the
Home shall commence from the date a notice of
default is given by the City to the Owner.
21. PURCHASE OPTION UPON DEFAULT
A. Purchase Option. Notwithstanding, and in addition
to, the remedies provided the
City in Section 18, and the City Option provided in
Section 12, the Owner hereby grants to the
City or the City Designated Purchaser the option to
purchase the Home effective upon the
declaration of a default by the City pursuant to
Section 18 and Section 19 above, and subject to
notice and cure rights set forth in Section 19. Said
option to purchase is given in consideration
of the economic benefits received by the Owner
resulting from ownership of the Home made
possible by the financial assistance of the City in
the purchase of the Home.
B. Exercise of Option. The option to purchase may be
exercised upon a default
under this Agreement or upon default under any
promissory note, deed of trust or any other lien,
including a judgment lien, recorded against the
Home. The City shall have thirty (30) days after
a default is declared to notify the Owner and the
First Lender of its decision to exercise its option
to purchase. Not later than ninety (90) days after
the notice is given by the City to the Owner of
the City's intent to exercise its option, the City
shall purchase the Home for the Maximum
Restricted Resale Price set forth in Section 14. The
City may assign its rights to purchase the
Home under this section to a City Designated
Purchaser.
22. NONLIABILITY OF THE CITY
A. No Obligation to Exercise Option. The City shall
have no obligation to exercise
any option granted it under this Agreement. 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 its
option to
purchase under Sections 12 and 21 nor shall the City
be in any way obligated or liable to the
Owner or any successor-in-interest to the Owner for
any failure to exercise its option to
purchase.
B. Nonliability for Negligence, Loss, or Damage.
Owner acknowledges,
understands and agrees that the relationship between
Owner and the City is solely that of an
owner and an administrator of a City inclusionary
housing program, and that the City does not
undertake or assume any responsibility for or duty
to Owner to select, review, inspect, supervise,
1010\17\443569.2 16
pass judgment on, or inform Owner of the quality,
adequacy or suitability of the Property or any
other matter. The City owes no duty of care to
protect Owner against negligent, faulty,
inadequate or defective building or construction or
any condition of the Property and Owner
agrees that neither Owner, or Owner's heirs,
successors or assigns shall ever claim, have or
assert
any right or action against the City for any loss,
damage or other matter arising out of or
resulting from any condition of the Property and
will hold the City harmless from any liability,
loss or damage for these things.
C. Indemnity. Owner agrees to defend, indemnify, and
hold the City harmless from
all losses, damages, liabilities, claims, actions,
judgments, costs, and reasonable attorneys fees
that the City may incur as a direct or indirect
consequence of: (1) Owner's default, performance,
or failure to perform any obligations as and when
required by this Agreement or the Deed of
Trust; or (2) the failure at any time of any of
Owner's representations to the City to be true and
correct.
23. RESTRICTIONS ON FORECLOSURE PROCEEDS
If a creditor acquires title to the Home 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 otherwise payable to the Owner
when added to the proceeds paid or credited
to the creditor exceed the Maximum Restricted Resale
Price. The Owner shall instruct the holder
of such excess proceeds (in addition to other
amounts due to the City pursuant to the City Note
and this Agreement) to pay such proceeds to the City
in consideration of the benefits received by
the Owner through purchase of the Home under this
Agreement.
24. RESTRICTION ON INSURANCE PROCEEDS
If the Home is damaged or destroyed and the Owner
elects not to rebuild or repair the
Home, the Owner shall pay the City the portion of
any insurance proceeds received by the
Owner for such destruction or damage which is in
excess of the Maximum Restricted Resale
Price calculated pursuant to Section 14 above.
25. TERM OF AGREEMENT
All the provisions of this Agreement, including the
benefits and burdens, run with the
land and the Home and this Agreement shall bind, and
the benefit hereof shall inure to, the
Owner, his or her heirs, legal representatives,
executors, successors in interest and assigns, and
to
the City and its successors until the earlier of (i)
thirty (30) years from the date of recordation of
this Agreement or (ii) the date of Transfer of the
Property to the City or another purchaser in
compliance with this Agreement (including execution
by the purchaser of a new resale restriction
agreement for the benefit of the City).
1010\17\443569.2 17
26. SUPERIORITY OF AGREEMENT
The Owner covenants that he or she has not, and will
not, execute any other agreement
with provisions contradictory to or in opposition to
the provisions of this Agreement hereof, and
that, in any event, this Agreement is controlling as
to the rights and obligations between and
among the Owner, the City and their respective
successors.
27. SUBORDINATION
Notwithstanding any other provision hereof, the
provisions of this Agreement shall be
subordinate to the lien of the First Lender Loan and
shall not impair the rights of the First
Lender, or the First Lender's successor or assign,
to exercise its remedies under the First Lender
Deed of Trust in the event of default under the
First Lender Deed of Trust by the Owner. Such
remedies under the First Lender Deed of Trust
include the right of foreclosure or acceptance of a
deed or assignment in lieu of foreclosure. After
such foreclosure or acceptance of a deed or
assignment in lieu of foreclosure, this Agreement
shall be forever terminated and shall have no
further effect as to the Home or any transferee
thereafter; provided, however, if the holder of
such First Lender Deed of Trust acquired title to
the Home pursuant to a deed or assignment in
lieu of foreclosure, this Agreement shall
automatically terminate upon such acquisition of
title,
provided that (i) the City has been given written
notice of default under such First Lender Deed
of Trust and (ii) the City shall not have cured or
commenced to cure the default within such
thirty (30)-day period and given its firm commitment
to complete the cure in the form and
substance acceptable to the First Lender. Owner
agrees to record any necessary documents to
effect such termination, if applicable.
28. REFINANCE OF FIRST LENDER LOAN
The outstanding principal on the City Note shall not
be due upon prepayment and
refinancing of the First Lender Loan, and this
Agreement and the City Deed of Trust shall be
subordinated to the refinanced First Lender Loan,
provided that (i) such refinancing is approved
by the City, (ii) the amount refinanced does not
exceed the outstanding principal balance of the
First Mortgage at the time of refinance plus
reasonable costs of refinance, and (iii) the
refinance
does not result in higher monthly payments on the
First Lender Loan than were due prior to the
refinance. Mortgage loans or equity lines of credit
junior in lien priority to the City deed of trust
are not permitted. The City and the Owner agree that
the requirements of this section are
necessary to ensure the continued affordability of
the Property to Owner and to minimize the risk
of loss of the Property by Owner through default and
foreclosure of mortgage loans. Owner
further acknowledges that violation of the
provisions of this section shall constitute a
Default
under this Agreement. A form for use by the Owner in
requesting City subordination to a
refinanced First Lender Loan is attached hereto as
Exhibit F.
1010\17\443569.2 18
29. NONDISCRIMINATION
The Owner covenants by and for itself and its
successors and assigns that there shall be
no discrimination against or segregation of a person
or of a group of persons on account of race,
color, religion, creed, age, disability, sex, sexual
orientation, marital status, ancestry or national
origin in the sale, transfer, use, occupancy, tenure
or enjoyment of the Home, nor shall the
Owner or any person claiming under or through the
Owner establish or permit any such practice
or practices of discrimination or segregation with
reference to the use, occupancy, or transfer of
the Home. The foregoing covenant shall run with the
land.
30. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUSTS
This Agreement shall not diminish or affect the
rights of the City under the City Note and
the City Deed of Trust.
Notwithstanding any other provision in this
Agreement to the contrary, this Agreement
shall not diminish or affect the rights of the
California Housing Finance Agency ( "CHFA "), the
United States Department of Housing and Urban
Development ( "HUD "), the Federal National
Mortgage Association ( "FNMA "), or the Veterans
Administration ( "VA ") under the First
Lender Deed of Trust or any subsequent First Lender
deeds of trust hereafter recorded against
the Home in compliance with Section 28 above.
31. HUD FORBEARANCE RELIEF
Notwithstanding other provisions of this Agreement,
the Option shall not be exercised by
the City when a deed of trust insured by HUD is
secured by the Home, and (i) the Owner is
undergoing consideration by HUD for assignment
forbearance relief, or (ii) the Owner is
undergoing consideration for relief under HUD's
Temporary Mortgage Assistance Payment
(TMAP) program.
32. 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 provision had never
been contained herein.
33. NOTICES
All notices required herein shall be sent by
certified mail, return receipt requested or
express delivery service with a delivery receipt or
personally delivered with delivery receipt
1010\17\443569.2 19
obtained and shall be deemed to be effective as of
the date shown on he delivery receipt as the
date of delivery, or the date delivery was refused
as indicated on the return receipt, or the date
Notice was returned as undeliverable as follows:
To the Owner:
At the address of the Home.
To the City:
City of Carlsbad
Housing and Redevelopment Department
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-2389
Attn: Homebuyer Program
To the First Lender:
[to be inserted]
The parties may subsequently change addresses by
providing written notice of the change in
address to the other parties in accordance with this
section.
34. INTERPRETATION OF AGREEMENT
The terms of this Agreement shall be interpreted so
as to avoid speculation on the Home
and to insure to the extent possible that the
mortgage payments remain affordable to low and
moderate income households.
35. CONTROLLING LAW
The terms of this Agreement shall be interpreted
under the laws of the State of California.
36. EXHIBITS
Any exhibits referred to in this Agreement are
incorporated in this Agreement by such
reference.
1010\17\443569.2 20
IN WITNESS WHEREOF, the parties have executed this
Agreement on or as of the date
first written above.
CITY: OWNER:
City of Carlsbad, a municipal corporation
______________________________
a municipal corporation Print Name
By: _____________________________
______________________________
Signature
Name: __________________________
Title: ___________________________
______________________________
Print Name
______________________________
Signature
1010\13\530682.1
State of California )
County of _____________________)
On _____________________________ before me, , Notary
Public, personally
appeared____________________________________, who
proved to me on
the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that
he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of
the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ______________________________________
(Seal)
State of California )
County of _____________________)
On _____________________________ before me, , Notary
Public, personally
appeared____________________________________, who
proved to me on
the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that
he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of
the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ______________________________________
(Seal)
A-1
1010\17\443569.2
EXHIBIT A
Legal Description of Property (Home)
B-1
1010\17\443569.2
EXHIBIT B
Form of Owner Occupancy Certification
To: City of Carlsbad ( "City ")
From: _________________________ [name of owner(s)] (
"Owner(s) ")
Address of Home: __________________________ (
"Property ")
Date: _______________________
By signature below, I _____________________ [insert
name or names of Owner] hereby
certify to the City under penalty of perjury that
I/we occupy the home located at
_______________________________________ [insert
address] (the "Home ") as my/our
principal place of residence and that I/we have
occupied the Home for ___________ (___)
[insert number] months of the calendar year
_____________ [insert previous calendar year].
Attached to this letter is a copy of _________
[insert utility bill or driver's license] showing
my place of residence.
This Owner Occupancy Certification is signed on
_______________ __, 20__, under penalty of
perjury.
By:________________________________
Owner [type name]
By:________________________________
Owner [type name]
Due Date: __________ of each calendar year.
Attach copy of utility bill or driver's license
showing address of Home.
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EXHIBIT C
Form of Owner's Notice of Intent to Transfer
To: City of Carlsbad ( "City ")
From: _________________________ [name of owner(s)] (
"Owner(s) ")
Address of Home: __________________________ (
"Property ")
Date: _______________________
Please be notified pursuant to Section 8 of the
Resale Restriction Agreement and Option to
Purchase between Owner and City dated _____________,
that the Owner intends to transfer the
Property listed above.
A. The following information is provided to the City
pursuant to Section 8 of the Resale
Agreement:
1. Address of Property:
_______________________________________________
2. Date Owner purchased Property:
______________________________________
3. Original Affordable Purchase Price:
___________________________________
4. Original amount of Homebuyer Loan:
_______________________________________
5. Full Purchase Price:
________________________________________________
6. Date Owner intends to vacate Property:
_________________________________
7.. Date Property will be placed on market:
________________________________
8. Name and phone number of person for City to
contact to schedule inspection:
____________________ and __________________
(name) (phone number)
B. As required by Section 8 of the Resale Agreement,
the following the HUD-1 Settlement
Statement from Owner's purchase of the property is
attached.
C. I have not yet listed the Property for sale with
a multiple listing service, or contacted a
real estate broker or financial institution. I agree
to prepare the Property for sale by:
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1. obtaining a pest control report within thirty
(30) days of the date of this notice,
2. repairing all damage noted in the pest report
within the sooner of: (i) sixty (60)
days from the date of this notice, or (ii) two (2)
weeks prior to close of escrow or the transfer of
the Property,
3. allowing the City or its designee to inspect the
Property within thirty (30) days of
this notice,
4. maintaining utility connections until the
Property is transferred,
5. permitting a walk through by the City prior to
close of escrow or the transfer.
This Owner's Notice of Intent to Transfer is
certified by Owner to be true and correct and
is signed on ____________________________ [insert
date] under penalty of perjury.
By:_______________________________
Owner
By:_______________________________
Owner
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EXHIBIT D
FORM OF CITY RESPONSE NOTICE
To: ______________________ ( "Owner ")
From: The City of Carlsbad (the "City")
Address of Home: __________________________ ( "Home
")
Date: _______________________
Thank you for delivering the Notice of Intent to
Transfer. This letter is the City Response Notice
described in Section 10 of the Resale Agreement that
was recorded against title to your home.
The City:
1. _____ City will check this Sentence #1 and
complete other information listed in #1 if the
City intends to exercise its option to purchase the
Home or assign its option the Home to a
Designated Purchaser at any point during the entire
Term of Resale Agreement
A. Affordable Sales Price: $_________________
B. Amount owed on Homebuyer Loan:
$____________________
C. Full Sales Price (add numbers in 1(A) and 1(B)):
$______________
D. Fair Market Value (as estimated by the City):
$_______________
The Price for which you may sell your Home (or the
Maximum Restricted Resale Price)
(the greater of 1(C) and 1(D)): $___________________
In connection with the City's Option, you will owe a
$_______ to City.
If the City has assigned its option, the name of
Designated Purchaser is _____________
The City or its Designated Purchaser will follow up
with you to complete the sale of your Home.
If a Designated Purchaser purchases your Home, that
Designated purchaser may assume the
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amount you owe on the Homebuyer Loan. If the City
purchases your home the amount you owe
on the Homebuyer Loan shall credited against the
purchase price e paid by the City.
2. ______ City will check this Sentence #2 and
complete other information listed in #2 if
the City intends for Owner to sell the Home to an
Eligible Purchase during years 1-15 of the
Resale Agreement.
A. Affordable Sales Price: $_________________
B. Amount owed on Homebuyer Loan:
$____________________
C. Full Sales Price (add numbers in 1(A) and 1(B)):
$______________
D. Fair Market Value (as estimated by the City):
$_______________
The total rice for which you may sell your Home (or
the Maximum Restricted Resale
Price) (the greater of 1(C) and 1(D)):
$___________________
As noted in 2(B) above, the amount owed on the
Homebuyer Loan is $________. An
Eligible Purchaser is likely to assume the City Note
and will then agree to repay the
amount of the Homebuyer Loan.
You must market your home to an "Eligible Purchaser"
as required by Section 15 of the
Resale Agreement.
The Maximum Qualifying Income of Eligible Purchaser
is:
______Low Income Household
1 person household $_______________
2 person household $_______________
3 person household $_______________
4 person household $_______________
5 person household $_______________
6 person household $_______________
______ Moderate Income Household
1 person household $_______________
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2 person household $_______________
3 person household $_______________
4 person household $_______________
5 person household $_______________
6 person household $_______________
When you locate a proposed purchaser of your Home,
you must provide the City with the
information listed in Section 15(B) of the Resale
Agreement and 15(D)(1) through (4). Upon
sale of your home to a proposed purchaser who has
been approved by the City as an Eligible
Purchaser, you must provide the information required
by Section 15(D)(5) through (7).
3. _____ The City will check this Sentence #3 if it
does not wish to exercise or assign its
option to purchase the Home between the 16th year of
the Resale Agreement and the end of the
Term. At this point you may proceed to sell your
Home to a third party for a market price.
Upon sale of the Home, you must provide the City
with the information required by Section 17
of the Resale Agreement. You also you must repay
$___________ to the City as required by the
City Promissory Note.
City:
_______________________
Name: _________________
Title: __________________
Date: __________________
Designated Purchaser (if applicable):
_______________________
Name: _________________
Date: __________________
All questions regarding this notice should be
directed to _______________________.
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EXHIBIT E
Form of Owner Acknowledgement of City Response
Notice
Name: ______________________________________________
Address of Property:
______________________________________________
Date: ______________________________________________
I, _______________________ [insert name] hereby
acknowledge that I received the City
Response Notice (as described in Section 10 of the
Resale Agreement on ___________ [insert
date].
By:___________________________________
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EXHIBIT F
Form of Owner Request for City Subordination
to Refinanced First Lender Loan
To: City of Carlsbad ( "City ")
From: _____________________________________ ( "Owner
")
Property Address:
_____________________________________ ( "Property ")
Date: _____________________________________
The Owner hereby requests the City to approve the
Owner's refinance of the existing first
mortgage on the Property. The Owner provides the
following information which it certifies to be
true and correct:
1. Original Affordable Purchase Price of Property:
$________________
2. Original Homebuyer Loan Amount
3. Full Purchase Price of Property (1 plus 2)
$________________
3. Original principal balance of existing First
Lender Loan: $________________
4. Interest rate of existing First Lender Loan:
$________________
5. Outstanding principal balance of existing First
Lender Loan: $________________
6. Monthly payments due on existing First Lender
Loan $________________
7. Principal amount of proposed new First Lender
Loan: $________________
8. Interest rate of Proposed new First Lender Loan:
$________________
9. Monthly payments to be due on new First Lender
Loan: $________________
The Owner hereby certifies the above information is
true and correct and this Owner Request is
executed under penalty of perjury on
___________________ [insert date].
By:____________________________________________
Owner
By:_____________________________________________
Owner
http://www.chworks.org/ - Community HousingWorks:
1st time home buyer program that the City of
Carlsbad also participates in granting qualified
buyers no more than 5% of appraised value or $20,000
towards purchase (which ever is less).
Notice of Intent to Transfer
List
Resale Agreement 2008
Buyer
Disclosure 2008
Underwriter
For more information call:
760-533-2540
Information deemed to be reliable but not
guaranteed |
