25K - NEIGHBORHOOD STABILIZATION PROGRAM

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508. Affordability Documents at Time of Sale. At the closing of escrow for the Homebuyer's purchase of each NSP Assisted Unit, the City will require each income qualified Homebuyer of such Unit to execute the following documents: the Homebuyer Deed of Trust (attached hereto as Exhibit F), Homebuyer Promissory Note (attached hereto as Exhibit G), and such further documents reasonably required by the City in a form provided by the City. Any Units assisted with tax increment money will also have a Notice of Affordability recorded against such Property (attached hereto as Exhibit H). The Promissory Note, and Deed of Trust shall contain aforty-five (45) year term. The principal loan amount of the Promissory Note shall be the amount of NSP Funds to create this homeownership opportunity, which will be determined based on the affordable sales price, the fair market value or the maximum sales price permitted under the NSP Program at the time of sale. In those instances where properties have an appraised Fair Market Value that is greater than the sales price, a silent second will be placed on the Property for that difference. All principal and interest shall be deferred until subsequent sale or transfer of the Property. The Deed of Trust will carry a 3% forgivable interest rate, and will be due and payable in forty-five (45) years. Interest will be forgiven at a rate of 1/45th per year, at each anniversary date of the original sale, with all interest forgiven at the end of the forty-five (45) year affordability period. The covenants and restrictions must be fully explained to each Homebuyer and the entire explanation and execution of said document must be recorded by the Developer. A copy of said audio and visual recording shall be placed on a CD which shall be kept by the Developer and the City. 509. Net Sales Proceeds and Distributions. Net sales proceeds shall be applied as follows: 1. First, to payments required on any acquisition and rehabilitation loan that has been secured with a first trust deed on the property sold; 2. Second, to the repayment of any equity contribution paid by Developer for the subject property; 3. Third, to pay for any Cost Overruns that have been approved in writing by the City in accordance with Section 404, which were unable to be paid with funds from the acquisition and rehabilitation loan; 4. Fourth, to the Developer Fee, as described in Section 601 to the repayment of the City loan, less the amount approved as a project subsidy at the time of the City's approval of the property for acquisition; 5. Fifth, to the repayment of the City Loan, less the amount approved as a project subsidy at the time of the City's approval of the property for acquisition; 6. Thereafter, if any, to the City. 510. Homebuyer Assistance. The Developer agrees to cooperate with the City in any subsidized loan program the City andlor Agency may in its sole discretion make available to Low or Moderate Income Household purchasers of some or all of the NSP Assisted Units. 11 25K-27