HomeMy WebLinkAboutPULTE HOME CORPORATION - 2015A -2015 -050
RECORDING REQUESTED BY
°a AND WHEN RECORDED MAIL TO:
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City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
Attention: City Clerk
To be recorded without fee. (Space Above This Line For Recorder's Use Only)
(Government Code, §§ $103 and 27383)
INCLUSIONARY HOUSING AGREEMENT
OWNERSHIP PROJECT
THIS INCLUSIONARY HOUSING AGREEMENT is dated as of April 7, 2015, by
and between the CITY OF SANTA ANA, a charter city and municipal corporation
organized and existing under the Constitution and laws of the State of California,
N and Pulte Home Corporation, a Michigan Corporation ( "Developer").
RECITALS
A. The City's Housing Opportunity ( "Ordinance ") was adopted by the City
Council on November 28, 2011 and is codified in Article XVI11.1 Section 41
— 1900 of the City's Municipal Code.
B. The Developer is the fee owner of the Property located at 4226 4302
4306 West 5th Street, Santa Ana, California.
C. The Developer desires to, at the Developer's sole cost and expense,
develop a twenty -eight (28) unit Project on the Property.
D. On April 15, 2014, the City Council approved Specific Development No. 86
(SD -86) through Resolution Number 2014 -14 and Ordinance No. 2859,
which sets forth the City Approvals for the Project.
Inclusionary Housing Agreement -Ownership Project Page 1
City of Santa Ana
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
Attention: City Clerk
MR, I t
Recorded in Official Records, Orange County
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To be recorded without fee. (Space Above This Line For Recorder's Use Only)
(Government Code, §§ 6103 and 27383)
INCLUSIONARY HOUSING AGREEMENT
OWNERSHIP PROJECT
THIS INCLUSIONARY HOUSING AGREEMENT is dated as of April 7, 2015, by
and between the CITY OF SANTA ANA, a charter city and municipal corporation
organized and existing under the Constitution and laws of the State of California,
and Pulte Home Corporation, a Michigan Corporation, ( "Developer ").
RECITALS
A. The City's Housing Opportunity ( "Ordinance ") was adopted by the City
Council on November 28, 201 land is codified in Article XV111.1 Section 41
— 1900 of the City's Municipal Code.
B. The Developer is the fee owner of the Property located at 4226, 4302
4306 West 5th Street, Santa Ana, California.
C. The Developer desires to, at the Developer's sole cost and expense,
develop a twenty -eight (28) unit Project on the Property.
D. On April 15, 2014, the City Council approved Specific Development No. 86
(SD -86) through Resolution Number 2014 -14 and Ordinance No. 2859,
which sets forth the City Approvals for the Project.
Inciuslonary Housing Agreement - Ownership Project Page 1
City of Santa Ana
E. On February 23, 2015, the Program Director, acting on behalf of the City,
approved an Inclusionary Housing Plan that was prepared by the
Developer in accordance with the requirements imposed by the Ordinance
and the Administrative Procedures Manual established by the City Council
to implement the Ordinance requirements.
F. This Inclusionary Housing Agreement, when fully executed by the City and
the Developer and recorded, is intended to satisfy the requirement that the
Developer enter into an Inclusionary Housing Agreement, as set forth in
the Ordinance and the conditions to City Approvals.
NOW, THEREFORE, in consideration of the mutual promises set forth in this
Inclusionary Housing Agreement and other good and valuable consideration, the
receipt and sufficiency of which is acknowledged by the City and the Developer,
the Parties, agree as follows:
DEFINITIONS OF TERMS
The following words, terms and phrases are used in this Inclusionary Housing
Agreement, as follows, unless the particular context of usage of a word, term or
phrase requires another interpretation.
Administrative Procedures means the regulations promulgated by the
Executive Director pursuant to the Ordinance.
Administrative Procedures Manual is the Affordable Ownership Housing
Administrative Procedures Manual — Developer Requirements dated January
2014, which has been prepared by the City for the implementation and
enforcement of the Ordinance. A copy of the Administrative Procedures Manual
shall be maintained on file with the City, and shall be provided to each Developer
of Inclusionary Units.
Affordability Gap is equal to the difference between the Fair Market Value of the
Inclusionary Unit and the Affordable Sales Price for the Inclusionary, Unit at the
time of acquisition by the Homebuyer.
Affordability Period shall be defined for each Inclusionary Unit in the
Inclusionary, Housing Covenants Declaration recorded on legal title to the
Property.
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City of Santa Ana
Affordable Housing Cost means the maximum costs that can be borne by
Moderate Income Household based on the requirements imposed by H &SC
Section 50052.5. The calculation methodology is described in Section VI of the
Administrative Procedures Manual.
Affordable Sales Price means the maximum sales price that can be charged for
an Inclusionary Unit. The Affordable Sales Price is equal to the lesser of:
1. The sum of the Supportable Mortgage plus the Benchmark Down
Payment; or
2. The purchase price prospective buyers are willing to pay in return for
purchasing a home that is subject to restrictive covenants.
The statutorily set Affordable Sales Prices for the initial sale of each Inclusionary
Unit are shown in Exhibit 8 to this Inclusionary Housing Agreement. The
Affordable Sales Prices for Inclusionary Units shall be adjusted quarterly.
Benchmark Down Payment is a component of the Affordable Sales Price
calculations. For the purposes of these Administrative Procedures, the
Benchmark Down Payment is set at 5% of the total Affordable Sales Price.
California Health and Safety Code ( "HSC ") provides definitions of household
income and affordable housing costs that are used in this Inclusionary Housing
Agreement.
City means the City of Santa Ana, California.
City Approvals are defined as the entitlement approvals and the Inclusionary
Housing Plan that must be approved by the Program Director prior to the
issuance of building permits for the Project.
City Council means the City of Santa Ana City Council.
City Deed of Trust means a deed of trust that secures the Owner's obligation to
comply with the obligations imposed by the Inclusionary Housing Covenant
Declaration.
Default means the failure of a Party to perform any action or covenant required
by this Inclusionary Housing Agreement within the time period provided herein
following notice and opportunity to cure, as set forth in Article 3 — Section I of this
Inclusionary Housing Agreement.
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City of Santa Ana
Delivery Date means the date on which an Inclusionary Unit Escrow closes and
the Homebuyer acquires a fee title interest in the completed Inclusionary Unit.
Developer means the developer of the Project.
Effective Date means the date on which this Inclusionary Housing Agreement is
approved and executed by appropriate authorities of the Developer and the City;
and this Inclusionary Housing Agreement is delivered to the Developer.
Eligible Purchaser shall mean a Homebuyer who meets the eligibility criteria set
forth in the Administrative Procedures.
Executive Director is the Executive Director of the Community Development
Agency of the City. The Executive Director, or designee, has the ultimate
authority to evaluate appeals submitted in relation to the Administrative
Procedures.
Exhibits means the exhibits to this Inclusionary Housing Agreement, which are
listed in Article 1 - Section V.
Fair Market Value means the value of the Inclusionary Unit under normal
circumstances in which the seller and the buyer freely negotiate the terms of the
transfer of ownership. The Fair Market Value must be established by a licensed
Real Estate agent based on three comparable properties.
Gross Household Income means all income from whatever source from all
Adult Household members, which is anticipated to be received during the 12-
month period following the date of the determination of Gross Household Income.
The applicable sources of income are defined in California Code of Regulations
Title 25 Housing and Community Development Section 6914. The definition
includes the following specific requirements:
1. Except as provided in subdivision (2), all payments from all sources
received by the head of Household (even if temporarily absent) and each
additional member of the Household who is not a minor shall be included
in the annual income of a Household. Gross Household Income shall
include, but not be limited to:
a. The gross amount, before any payroll deductions, of wages and
salaries, overtime pay, commissions, fees, tips and bonuses;
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City of Santa Ana
b. The net income from operation of a business or profession or from
rental or real or personal property (for this purpose, expenditures
for business expansion or amortization of capital indebtedness shall
not be deducted to determine the net income from a business);
C. Interest and dividends;
d. The full amount of periodic payments received from social security,
annuities, insurance policies, retirement funds, pensions, disability
or death benefits and other similar types of periodic receipts (but
see subdivision (2)(c));
e. Payments in lieu of earnings, such as unemployment and disability
compensation, worker's compensation and severance pay;
f. Public Assistance. If the public assistance payment includes an
amount specifically designated for shelter and utilities which is
subject to adjustment by the public assistance agency in
accordance with the actual cost of shelter and utilities, the amount
of public assistance income to be included as income shall consist
of:
The amount of the allowance or grant exclusive of the
amount specifically designated for shelter and utilities, plus
ii. The maximum amount which the public assistance agency
could in fact allow for the Household for shelter and utilities.
g. Periodic and determinable allowances such as alimony and child
support payments, and regular contributions or gifts received from
persons not residing in the dwelling;
h. All regular pay, special pay and allowances of a member of the
Armed Forces (whether or not living in the dwelling) who is head of
the Household or spouse or domestic partner (but see subdivision
(2)(e));
i. Where a Household has net assets in excess of $5,000, income
shall include the actual amount of income, if any, derived from all of
the net Household assets or 10 percent of the value of all such
assets, whichever is greater. For purposes of this section, net
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City of Santa Ana
Household assets means value of equity in real property other than
the Household's full -time residence, savings, stocks, bonds, and
other forms of capital investment. The value of necessary items
such as furniture and automobiles shall be excluded.
2. The following items shall not be considered as income:
a. Casual, sporadic or irregular gifts;
b. Amounts which are specifically for or in reimbursement of the cost
of medical expenses;
C. Lump -sum additions to Household assets, such as inheritances,
insurance payments (including payments under health and accident
insurance and worker's compensation), capital gains and
settlement for personal or property losses;
d. Amounts of educational scholarships paid directly to the student or
to the educational institution, and amounts paid by the government
to a veteran for use in meeting the costs of tuition, fees, books and
equipment. Any amounts of such scholarships, or payments to
veterans not used for the above purposes of which are available for
subsistence are to be included in income;
e. The special pay to a serviceman head of a Household away from
home and exposed to hostile fire;
f. Relocation payments made pursuant to federal, state, or local
relocation law;
g. Foster child care payments;
h. The value of coupon allotments for the purchase of food pursuant
to the Food Stamp Act of 1964 which is in excess of the amount
actually charged the eligible Household;
Payments received pursuant to participation in the following
volunteer programs under the ACTION Agency:
National Volunteer Antipoverty Programs which include
VISTA, Service Learning Programs and Special Volunteer
Programs.
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City of Santa Ana
ii. National Older American Volunteer Programs for persons
aged 60 and over which include Retired Senior Volunteer
Programs, Foster Grandparent Program, Older American
Community Services Program, and National Volunteer
Program to Assist Small Business Experience, Service
Corps of Retired Executive (SCORE) and Active Corps of
Executives (ACE).
Homebuyer means an Eligible Purchaser that has executed an agreement to
purchase an Inclusionary Unit.
Household means all the persons who will occupy the Inclusionary Unit as their
Primary Residence. A child who is subject to a legally- binding shared - custody
agreement, in which the child resides with the Household at least 50% of the
time, is counted as a member of the Household. Excluded from the definition of
Household are live -in caregivers /caretakers, foster children, unborn children and
children being pursued for legal custody or adoption that are not currently living
with the Household.
Housing Cost means and includes all of the following costs associated with
ownership of an Inclusionary Unit as defined in Title 25 of the California Code of
Regulations Section 6920:
1. Principal and interest on a mortgage loan at the defined interest rate;
2. Property tax and assessments;
3. Fire and casualty insurance covering replacement value of property
improvements;
4. Property maintenance and repairs;
5. A reasonable utility allowance, as determined by the City; and
6. Homeowner Association assessments and dues.
HCD means the California Department of Housing and Community Development.
HUD means the United States Department of Housing and Urban Development.
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City of Santa Ana
Inclusionary Housing Covenants Declaration means the Declaration of
Inclusionary Housing Covenants, Conditions and Restrictions attached hereto as
Exhibit 5.
Inclusionary Housing Fund means a separate fund of the City which is codified
in Article XV111.1 Section 41 -1909 of the City's Municipal Code. The fund was
established for the specific purpose of providing the City with funds to assist in
the development of housing that is affordable to low and moderate income
households. The allowable uses of Inclusionary Housing Funds, and the related
reporting are described in Attachment I of the Administrative Procedures Manual.
Inclusionary Housing Plan means a plan submitted for approval to the Program
Director that details the manner in which the Inclusionary Housing obligations will
be fulfilled by the Project. The Inclusionary Housing Plan form is presented in
Attachment B of the Administrative Procedures Manual, and also attached as
Exhibit 3 to this Inclusionary Housing Agreement.
Inclusionary Unit means a completed affordable owner- occupied housing unit,
including the landscape improvements thereon, if any, that is made available for
sale to an Eligible Purchaser. The location of each Inclusionary Unit in the
Project is shown on Exhibit 3 to this Inclusionary Housing Agreement.
Inclusionary Unit Escrow means the escrow transaction by and between the
Developer and each Homebuyer, through which the Developer shall transfer fee
title in each completed Inclusionary Unit to an Eligible Purchaser.
In -Lieu Fee refers to a fee that may be paid by the Property Owner in specific
circumstances in lieu of providing Inclusionary Units within a Project. These
circumstances are identified in Section II -A of the Administrative Procedures
Manual. The In -Lieu Fee calculation worksheet is updated quarterly. The
current Affordable Housing In -Lieu Fee calculation worksheet schedule is
presented in Attachment J of the Administrative Procedures Manual.
Market Rate Unit means any unit in the Project that is not restricted for
ownership and occupancy by Eligible Purchasers.
Median Income is calculated by HCD using non - aggregated census income data
and applying trending factors for metropolitan statistical areas (MSA) throughout
the country. The MSA for Santa Ana is Orange County. The current household
income information is presented in Attachment I of the Administrative Procedures
Manual.
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City of Santa Ana
Moderate Income refers to Households whose incomes meet the standards
defined by the H &SC Section 50093. Generally, Moderate Income means
household income that does not exceed 120% of the County Median Income, as
adjusted for Household size. The maximum household income amount for
Moderate Income Households shall be set at the amount published by HCD
annually.
Moderate Income Household shall mean individuals or Households who have
an adjusted Gross Income that does not exceed Moderate Income.
Ordinance means the Housing Opportunity Ordinance adopted by the City
Council on November 28, 2011, which is codified in Article XVIII.1 Section 41-
1900 et seq. of the City's Municipal Code.
Owner means the current owner of an Inclusionary Unit.
Party and Parties mean the City and the Developer as parties to this
Inclusionary Housing Agreement.
Program Director has the day -to -day authority for making determinations
related to the Ordinance and Administrative Procedures Manual, The Program
Director will be appointed by the Executive Director.
Project means the owner - occupied housing project proposed to be developed on
the Property at the Developer's sole cost and expense.
Property means the real property, as shown on Exhibit 2 attached to this
Inclusionary Housing Agreement, on which the Project is to be developed, for
which the legal description is provided in Exhibit 1 to this Inclusionary Housing
Agreement.
Supportable Mortgage means the mortgage amount that can be supported by a
Moderate Income Household based on the Affordable Housing Cost calculations.
The mortgage calculation is based on the prevailing market interest rate for a 30-
year fully amortizing mortgage with a fixed interest rate. See Section VI -B of the
Administrative Procedures Manual for an explanation of the calculation
methodology.
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City of Santa Ana
ARTICLE 1
PARTIES; REPRESENTATIONS AND WARRANTIES; EFFECTIVE
DATE; RECITALS; AND EXHIBITS
Parties to this Inclusionary Housing Agreement
-A. City. The City is a charter city and municipal corporation organized and
existing under the Constitution and laws of the State of California. The
address of the City, for the purposes of this Inclusionary Housing
Agreement, is:
City of Santa Ana
Community Development Agency
20 Civic Center Plaza, M -25
Santa Ana, California 92701
Attention: Program Director
Facsimile Number: (714) 647 -6549
1 -13. Developer. The Developer is a Michigan Corporation. The principal office
and address of the Developer, for the purposes of this Inclusionary
Housing Agreement, is:
Pulte Home Corporation
27101 Puerta Real, Suite 300
Mission Vieio, CA 92697
Attention:
Facsimile Number:
II. Developer Representations And Warranties
The representations and warranties of the Developer contained in Article 1 —
Section II shall be based upon the actual knowledge of the Developer as of the
Effective Date, and are true and correct as of the Effective Date. The
Developer's liability for misrepresentation or breach of warranty, representation
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City of Santa Ana
or covenant, wherever contained in this Inclusionary Housing Agreement, shall
survive the execution and delivery of this Inclusionary Housing Agreement.
The Developer hereby makes the following representations, covenants and
warranties, and Developer acknowledges that the execution of this Inclusionary
Housing Agreement by the City has been made in material reliance by the City
on such covenants, representations and warranties:
II -A. The Developer is a Michigan Corporation, lawfully entitled to do business
in the State of California and the City. The Developer has the legal right,
power and authority to enter into this Inclusionary Housing Agreement and
the instruments and documents referenced herein and to consummate the
transaction contemplated hereby. The persons executing this Inclusionary
Housing Agreement and the instruments referenced herein on behalf of
the Developer hereby represent and warrant that such persons have the
power, right and authority to bind the Developer.
II -B. The Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Inclusionary Housing
Agreement and the instruments and documents referenced herein and the
consummation of the transactions contemplated hereby, and no consent
of any other party is required for the Developer's authorization to enter into
this Inclusionary Housing Agreement.
II -C. Neither the execution of this Inclusionary Housing Agreement nor the
consummation of the transactions contemplated hereby shall result in a
breach of or constitute a default under any other agreement, document,
instrument, or other obligation to which the Developer is a party or by
which the Developer may be bound, or to the best of the Developer's
knowledge, under any law, statute, ordinance, governmental regulation or
any writ, injunction, order or decree of any court or governmental body
applicable to the Developer or to the Property.
II -D. This Inclusionary Housing Agreement is, and all agreements, instruments
and documents to be executed by the Developer pursuant to this
Inclusionary Housing Agreement shall be duly executed by, and to the
best of the Developer's knowledge, are or shall be valid and legally
binding upon the Developer and enforceable in accordance with their
respective terms.
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City of Santa Ana
III. Effective Date
This Inclusionary Housing Agreement is dated April 7, 2015 for reference
purposes only. This Inclusionary Housing Agreement shall not go into effect
before the Effective Date.
IV. Recitals
The Recitals set forth above are true and correct. The Recitals are incorporated
into this Inclusionary Housing Agreement in their entirety by this reference.
V. Exhibit List
The following is a list of the exhibits attached to this Inclusionary Housing
Agreement. Each of the exhibits is incorporated by reference into the text of this
Inclusionary Housing Agreement.
Exhibit 1 Legal Description of Property
Exhibit 2 Site Map Depicting Property and Zoning Designations
Exhibit 3 Inclusionary Housing Plan
Exhibit 4 Schedule of Performance for Construction of Inclusionary Units
Exhibit 5 Inclusionary Housing Covenants Declaration
Exhibit 6 City Deed of Trust
Exhibit 7 Calculations of Affordable Sales Prices
Exhibit 8 Developer's Phasing Map
Exhibit 9 Legal Description of Inclusionary Units
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City of Santa Ana
ARTICLE 2
INCLUSIONARY HOUSING COVENANTS
I. Developer Compliance with the Ordinance
The Developer acknowledges that the City has provided the Developer with
copies of the Ordinance and the Administrative Procedures Manual. The
Developer is familiar with the requirements of all the foregoing documents and
shall ensure that the Project complies in all material respects with this
Inclusionary Housing Agreement and the requirements set forth in all the
foregoing documents.
II. Inclusionary Housing Covenants
The Developer covenants and agrees that five (5) of the units to be developed on
the Property shall be Inclusionary Units reserved for sale at the Affordable Sales
Price and occupancy by Homebuyers whose Gross Household Income at the
time of occupancy of each Inclusionary Unit does not exceed the household
income qualification limits of a Moderate Income Household. This covenant and
agreement shall be binding on the successors and assigns of Developer, as set
forth herein and in the Inclusionary Housing Covenants Declaration (Exhibit 5)
and the City Deed of Trust (Exhibit 6).
II -A. The Inclusionary Units to be developed on the Property shall be
reasonably dispersed throughout the market rate project as depicted on
Exhibit 3. The Developer may change the location of any Inclusionary
Unit to another area within the Project upon approval of the Program
Director. Changes in the location of Inclusionary Units as approved on the
Tentative Subdivision Map in which the Project is included shall be made
consistent with all requirements of the Ordinance and the Administrative
Procedures Manual, and shall be subject to the approval of the Program
Director, such approval not to be unreasonably withheld.
II -B. The Inclusionary Units to be developed on the Property shall be
proportional in the number of bedrooms to the market rate units in the
Project; they shall be comparable to the market rate units in terms of
design, materials, finished quality and appearance; and be permitted the
same access to the Project amenities and recreation facilities as the
market rate units.
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City of Santa Ana
II -C. The Inclusionary Units to be developed on the Property shall be
constructed concurrently with, or prior to, the Market Rate Units in the
Project. If the Project is phased, the Inclusionary Units shall be
constructed in accordance with the phasing plan included as Exhibit 8 to
this Inclusionary Housing Agreement. If the Developer wishes to change
the timing and /or phasing of the Project's construction, the City agrees to
amend said schedule in a manner consistent with such change so long as
the revised schedule continues to ensure that the Inclusionary Units will
be constructed concurrently with, or prior to, the Market Rate Units.
II -D. The Developer shall affirmatively market the Inclusionary Units to
Moderate Income Households in accordance with the Administrative
Procedures Manual.
III. Sale of Inclusionary Units
Each of the Inclusionary Units shall be sold to a Moderate Income Household as
set forth in the Inclusionary Housing Plan. The purchaser of each Inclusionary
Unit shall qualify as an Eligible Purchaser, as defined in the Administrative
Procedures Manual.
IV. Selection of Eligible Purchaser
The Developer shall, at its sole cost and expense, conduct all procedures and
comply with all requirements as set forth in the Ordinance and the Administrative
Procedures Manual in selecting qualified Eligible Purchasers for each of the
Inclusionary Units. Specific procedures are set forth in Attachment D in the
Administrative Procedures Manual.
If a prospective Homebuyer qualifies as an Eligible Purchaser, as defined herein,
the Homebuyer shall be required to execute the Developer's standard purchase
agreement for the purchase and sale of an Inclusionary Unit. The Developer
shall seek and obtain all approvals required from the City pursuant to the
Ordinance and the Administrative Procedures Manual, and shall provide the City
with all documentation required pursuant to the Administrative Procedures
Manual.
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City of Santa Ana
V. Execution of Inclusionary Housing Covenants Declaration and City
Deed of Trust
The Developer shall not sell an Inclusionary Unit unless and until the City has
reviewed and approved the Homebuyer as an Eligible Purchaser for the
purchase of the Inclusionary Housing Unit, and the Homebuyer has executed
and submitted to the Program Director, in recordable form, the Inclusionary
Housing Covenants Declaration and the City Deed of Trust. The forms to be
used are found in Exhibits 5 and 6, respectively, to this Inclusionary Housing
Agreement.
VI. Enforcement of Inclusionary Housing Covenants Declaration
The Developer irrevocably stipulates and agrees that breach of the Inclusionary
Housing Covenants set forth above in Article 2 — Section II will result in great and
irreparable damage to the City, and will result in damages to the City that are
either impracticable or extremely difficult to quantify. Accordingly, upon the
breach of the Inclusionary Housing Covenants Declaration set forth above in
Article 2 — Section II, the City may institute an action for injunctive relief and /or
specific performance for the remedy of such breach.
VII. Recordation of Inclusionary Housing Covenants Declaration and City
Deed of Trust
Prior to the close of each Inclusionary Unit Escrow, each Homebuyer shall sign,
and the City shall cause to be recorded, the City Deed of Trust and the
Inclusionary Housing Covenants Declaration.
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City of Santa Ana
ARTICLE 3
DEFAULTS AND REMEDIES
I. Default
If either Party defaults with regard to any provision of this Inclusionary Housing
Agreement, the non - defaulting Party shall serve written notice of such default
upon the defaulting Party. If, after the service of written notice of such default,
the defaulting Party does not cure such default within thirty (30) calendar days
after service of the notice of default (or, if such cure reasonably takes longer than
thirty (30) days, if such cure has not been commenced within the thirty (30) day
period or is not diligently completed within a reasonable time, not to exceed an
additional sixty (60) calendar days), the defaulting Party shall be in Default of the
terms of this Inclusionary Housing Agreement, and shall be liable to the other
Party for damages caused by such Default. Alternatively, the non - defaulting
Party, at its option, may institute an action for specific performance of the terms
of this Inclusionary Housing Agreement.
II. Legal Actions
In the event of a breach or potential breach of program requirements, in addition
to any other rights or remedies, either Party may institute legal action to cure,
correct or remedy any Default, to recover damages for any Default, or to obtain
any other remedy consistent with the purposes of this Inclusionary Housing
Agreement.
II -A. The City's actions may include, but are not limited to, the following:
1. The following legal actions:
a. Actions to enforce compliance with the program requirements and
to enjoin any actions by the Developer that violate program
requirements;
b. Actions to disapprove, revoke or suspend any permit, including a
Building Permit, Certificate of Occupancy or other discretionary
approval;
C. Injunctive relief and damages; and
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City of Santa Ana
d. Civil citations with monetary penalties for violations of the
Inclusionary Housing Agreement.
2. If the Developer rents any of the Inclusionary Units in violation of this
Inclusionary Housing Agreement, as restitution to the City, the Developer
shall forfeit all monetary amounts obtained through the rental of the
Inclusionary Units.
3. If the Developer sells any of the Inclusionary Units in violation of this
Inclusionary Housing Agreement, as restitution to the City, the Developer
shall forfeit all monetary amounts obtained from the sale of the
Inclusionary Units that are in excess of the Affordable Sales Price
permitted by this Inclusionary Housing Agreement for such Inclusionary
Units.
4. All such restitution shall be made to the City. Any funds received by the
City under this provision of this Inclusionary Housing Agreement shall be
placed in the City's Inclusionary Housing Fund,
II -B. The laws of the State of California shall govern the interpretation and
enforcement of this Inclusionary Housing Agreement.
11 -C. In the event that any legal action is commenced by the Developer against
the City, service of process on the City shall be made by personal service
upon the Clerk of the City Council, or in such other manner as may be
provided by law.
II -D. In the event that any legal action is commenced by the City against the
Developer, service of process shall be made by personal service on the
Developer's designated agent at such address as may be specified in
written notice to the City, or in such other manner as may be provided by
law, and shall be valid whether made within or without the State of
California.
III. Rights and Remedies are Cumulative
The rights and remedies of the Parties are cumulative and the exercise by either
Party of one or more of such rights or remedies shall not preclude the exercise
by it, at the same or different times, of any other rights or remedies for the same
Default or any other Default by the other Party.
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City of Santa Ana
ARTICLE 4
GENERAL PROVISIONS
Notices, Demands and Communications Between the Parties
Any and all notices, demands or communications submitted by any Party to
another Party pursuant to, or required by, this Inclusionary Housing Agreement
shall be proper if in writing and dispatched by messenger for immediate personal
delivery, or by registered or certified United States mail, postage prepaid, return
receipt requested, to the address of the City and Developer, as applicable, as
designated in Article 1 — Section I of this Inclusionary Housing Agreement. Such
written notices, demands and communications may be sent in the same manner
to such other addresses as either Party may from time -to -time designate as
provided in this Section.
Any notice, demand or communication shall be deemed to be received by the
addressee, on the day that it is personally delivered, if dispatched by messenger,
or two (2) calendar days after it is placed in the United States mail. In addition to
the submission of notices, demands or communications to the Parties via United
States mail, copies of all notices shall also be delivered by facsimile to the
facsimile numbers designated in Article 1 — Section I.
II. Conflict of Interest
No council member, official, contractor, consultant, attorney or employee of the
City having any conflict of interest, direct or indirect, related to this Inclusionary
Housing Agreement, or in the development of the Property, shall participate in
any decision relating to this Inclusionary Housing Agreement. The Parties
represent and warrant that they do not have knowledge of any such conflict of
interest.
III. Non - liability of City or City Officials and Employees
No council member, official, contractor, consultant, attorney or employee of the
City shall be personally liable to the Developer, any voluntary or involuntary
successors and assignees, or any lender or other party holding any interest in
the Property, in the event of any default or breach by the City, or for any amount
which may become due to the Developer or to its successors or assignees, or on
any obligations arising under this Inclusionary Housing Agreement.
Inclusionary Housing Agreement - Ownership Project Page 18
City of Santa Ana
IV. Indemnification
The Developer agrees to indemnify and hold the City, and its officers, employees
and agents, harmless from and against all damages, judgments, costs, expenses
and fees arising from or related to any negligent or wrongful act or omission of
the Developer in performing its obligations hereunder. The City agrees to
indemnify and hold the Developer and its officers, employees and agents,
harmless from and against all damages, judgments, costs expenses and fees
arising from or related to any negligent or wrongful act or omission of the City in
performing its obligations hereunder.
V. No Waiver
Failure to insist upon strict compliance with any of the terms, covenants,
conditions and restrictions hereof on any one occasion shall not be deemed a
waiver of such term, covenant, condition or restriction. Any waiver or
relinquishment of rights or powers hereunder at any one time or more times shall
not be deemed a waiver or relinquishment of such other rights or powers at any
other time or times.
VI. Attorneys' Fees and Costs
If either Party hereto files any action, or brings any action or proceeding against
the other arising out this Inclusionary Housing Agreement, the prevailing Party
shall be entitled to recover its reasonable attorneys' fees and costs. The
recovery shall be treated as an element of its costs of the suit, and not as
damages. The amount of the recovery shall be fixed by the court in such action
or proceeding, or in a separate action or proceeding brought to recover such
attorneys' fees and costs.
VII. Jurisdiction and Venue
Any legal action or proceeding concerning this Inclusionary Housing Agreement
shall be filed and prosecuted in the appropriate State of California court in
Orange County, California. Each Party hereto irrevocably consents to the
personal jurisdiction of that court. The City and the Developer each hereby
expressly waive the benefit of any provision of federal or state law or judicial
decision providing for the filing, removal, or change of venue to any other court or
jurisdiction, including without implied limitation, federal district court due to any of
the following:
Inclusionary Housing Agreement - Ownership Project Page 19
City of Santa Ana
1. Any diversity of citizenship between the City and the Developer; or
2. The fact that the City is a party to such action or proceeding; or
3. That a federal question or federal right is involved or alleged to be
involved.
Without limiting the generality of the foregoing, the Developer and the City
specifically waive any rights provided to it pursuant to California Code of Civil
Procedure 394. The Developer acknowledges that the provisions of this Article 3
— Section VII are material consideration to the City for its entry into this
Inclusionary Housing Agreement, in that the City will avoid the potential cost,
expense and inconvenience of litigating in a distant forum.
VIII. Inspection of Books and Records
To enforce its rights under this Inclusionary Housing Agreement, the City shall
have the right at all reasonable times and upon reasonable advance notice, at
the City's cost and expense, to inspect the books and records of the Developer
that are not privileged, confidential, trade secrets or otherwise protected from
disclosure and that pertain to the sale of the Inclusionary Units at the Property.
Matters discovered by the City shall not be disclosed to third parties unless
required by law, or unless otherwise resulting from or related to the pursuit of any
remedies or the assertion of any rights of the City hereunder subject to, however,
any right of the Developer to seek a protective order to prevent the disclosure of
any confidential or privileged information.
IX. Successors and Assigns
This Inclusionary Housing Agreement shall be binding upon, and inure to the
benefit of, the Parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns.
X. No Third Party Beneficiaries
The performance of the City's and the Developer's respective obligations under
this Inclusionary Housing Agreement are not intended to benefit any party other
than the City or the Developer, except as expressly provided otherwise herein.
No person or entity not a signatory to this Inclusionary Housing Agreement shall
have any rights or causes of action against any Party to this Inclusionary Housing
Agreement as a result of that Party's performance or non - performance under this
Inclusionary Housing Agreement - Ownership Project Page 20
City of Santa Ana
Inclusionary Housing Agreement, or for the enforcement of any provisions of this
Agreement, except as expressly provided otherwise herein.
XI. Entire Agreement
This Inclusionary Housing Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto. This Inclusionary Housing Agreement
supersedes all negotiations or previous agreement between the Parties with
respect to all or any portion of the Property and the Project thereof.
XII. Recordation
The Developer and the City agree to permit recordation of this Inclusionary
Housing Agreement, against the Inclusionary Units in the Office of the County
Recorder of Orange County, California. The legal description for the Inclusionary
Units is provided in Exhibit 10 to this Inclusionary Housing Agreement.
XIII. Termination
Except as set forth elsewhere, this Inclusionary Housing Agreement shall be
effective until all of the following have been completed:
1. All of the Inclusionary Units have been constructed and sold by the
Developer to Eligible Purchasers;
2. The Inclusionary Housing Covenants Declaration (Exhibit 5) has been
recorded against each Inclusionary Unit;
3. The City Deed of Trust (Exhibit 6) has been recorded against each
Inclusionary Unit.
Upon satisfaction of the above - referenced items, this Inclusionary Housing
Agreement shall automatically and immediately terminate and shall have no
further force and effect. Upon the termination of this Inclusionary Housing
Agreement, the Developer shall have no further obligations or liability hereunder,
or any responsibility with respect to the Inclusionary Units. The City and the
Developer agree to promptly execute, acknowledge and deliver for recordation
any documents that may be necessary to remove this Inclusionary Housing
Agreement as encumbrance against title to any portion of the Property.
IN WITNESS WHEREOF, the Parties hereto have duly executed this
Inclusionary Housing Agreement as of the dates set forth below.
Inclusionary Housing Agreement - Ownership Project Page 21
City of Santa Ana
[Signatures on Following Pages]
Inclusionary Housing Agreement - Ownership Project Page 22
City of Santa Ana
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date set forth at the beginning of this Agreement.
ATTEST:
M, -
aria D. Huizar
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO, City Attorney
Lisa Storck,
Assistant City Attorney
DEVELOPER:---
Pulte Hom�'Corpor tion
a Michigan Cow x n
By;
Sohail Bokhari, Director of Land
CIT /Y OF SANTA ANA
David Cavazos
City Manager
RECOMMEND APPROVAL:
b � /I & 9A 4( "
Ike ly L. Apej rs, Ea cuti e Director
Commutt� Develop Agency
CALIFORNIA ALL - PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only t he identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California)
County of Orange)
On June 1, 2015 before me, Rose Ann Trujillo, Notary Public personally appeared
David Cavazos, City Manager , who proved to me on the basis of satisfactory evidence to be
the person whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person 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.
803E N-N ----
Commission i 1976966
Notary Public - California
Orange County
My Comm. Expires May 3 2016
CAPACITY CLAIMED BY SIGNER:
❑
Individual(s)
❑
Corporate _
❑
Officers
Title(s)
❑
Partner(s)
❑
General Partner of a Limited
❑
Partnership
❑
Attorney -in -Fact
❑
Trustee (s)
❑
Subscribing Witness
❑
Guardian /Conservator
❑
Other:
WITNESS my hand and official seal.
Signature' Q L"A+" °P6
(Seal)
SIGNER IS REPRESENTING:
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED TO THE
BELOW: INCLUSIONARY HOUSING AGREEMENT OWNERSHIP PROJECT WITH PULTE
HOME CORPORATION, A MICHIGAN CORPORATION -FOR PROPERY AT 4226,4302,4306
W. 5T" ST., SANTA ANA, CA
NUMBER OF PAGES: DATE OF DOCUMENT: APRIL 7, 2015
SIGNER (S) OTHER THAN NAMED ABOVE:
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Orange )
On May 21st, 2015 before me, Claudia M. Fernandez -Shaw, Notary Public
(insert name and title of the officer)
personally appeared Kelly L. Reenders
who proved to me on the basis of satisfactory evidence to be the person whose name ai°e-
subscribed to the within instrument and acknowledged to me that la ecuted the same in
4eir- authorized capacity0esj -, and that byN Aheir-signature on the instrument the
persoriv, or the entity upon behalf of which the personX acted, exec ted 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.
r I
(Seal)
„ . CLAUDIA, A Mme, FER N ND�SHA
Commission # 2053995
`z rp Notary Public • California
z "� "' °' • Orange County
M Comm. Ea ires Jan 25, 20 t P
ZALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of Californi r�
County
On �/ / `� before me,
Date a
personally appeared
Insert Name and Title of the
v ✓/ ".
Names) of Signer(s)
who proved to me on the basis of satisfactory evidence to be the persons) whose name(* is /are
subscribed to the within instrument and acknowledged to me that he /shehtl -iey executed the same in
his /herAhelr authorized capacity(lea , and that by his /har<thalnslgnature(,s� on the instrument the person(a),
or the entity upon behalf of which the persons) acted, executed the instrument.
HOLLY SSAAND Eli
Commis slon # 1984814 9
Z ,;P, Notary Public - California z
Orange County
my Comm. Expires Jul 12, 2016
Place Notary Seal Above
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph
is true and correct.
OPTIONAL
Though this section is optional, completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
r. -- , ,,;.0 �
Title or Type of Document:
Number of Pages:
Document Date:
Signer(s) Other Than Named Above:
Capyacity(les) Claimed by Signer(s)
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner — ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer is Representing:
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner — ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
02014 National Notary Association • www.NationalNotary.org � 1- 800 -US NOTARY (1- 800 -876 -6827) Item #5907
EXHIBIT 1
LEGAL DESCRIPTION OF PROPERTY
Inclusionary Housing Agreement — Ownership Project
City of Santa Ana January 2015
LEGAL DESCRIPTION
A PORTION OF LOT 1 OF TRACT NO. 17546, IN CITY OF SANTA ANA, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 933,
PAGES 13 THROUGH 15 OF MISCELLANEOUS MAPS, IN THE COUNTY
RECORDER OF SAID COUNTY.
EXHIBIT 2
SITE MAP DEPICTING PROPERTY AND ZONING DESIGNATIONS
I nclusionary Housing Agreement — Ownership Project
City of Santa Ana January 2015
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EXHIBIT 3
INCLUSIONARY HOUSING PLAN
nclusionary Housing Agreement — Ownership Project
City of Santa Ana January 2015
Planning and Building Agency
Planning Division
20 Civic Center Plaza
P.O. Box 1988 (M -20)
I I I Santa Ana, CA 92702
(714)647.5804
www.santa - ana.org
OWNER/APPLICANT INFORMATION
Legal Owner Pulte Home Corporation. a Michigan Corporation (949) 330 -8537
Full name of Person, Firm or Corporation
Area Code Phone Number
27101 Puerta Real, Suite 300, Mission Vieio, CA 92691
L�
Mailing Address
Area Code Fax Number
Applicant C &V Consulting Inc.
949 916 -3800
Full name of Person, Firm or Corporation
Area Cade Phone Number
27156 Burbank, Foothill Ranch, CA 92610
(949) 916 -3805
Mailing Address
Area Code Fax Number
Contact Person Doan Tran -C &V Consulting, Inc
dtranocvc- inc.net
Full name of Person, Firm or Corporation
Email address
27156 Burbank Foothill Ranch CA 92610
Mailing Address
9( 49) 916- 3800
LE91 916 -3805
Area Code Phone Number Area Cade Mobile Phone Number
Area Code Fax Number
PROJECT DESCRIPTION
Project Address: 4226 4302 4306W. 5th Street Santa Ana CA
Assessor Parcel Number(s): 198 - 061 -01 (Parcel 1). 198 - 061 -02 (parcel 2),
and 198 - 061 -03 Parcel3
Total number of units proposed: 28
Number of Rental Units: Number of For Sale units: 28
Number of 15% Inclusionary obligation: 5
Identify the gross livable area of the proposed project (including private balconies,
decks and patios). 50,100 square feet
Will the project be constructed in phases? x Yes No
Is a density bonus being requested? Yes x No
Page 1 of
5:PlanningkGledca4Countar FormMH00applicatlon
1115
HOUSING ALTERNATIVES
Select the applicable alternatives to indicate how the project will comply with the
inclusionary housing requirement:
x On -site construction of inclusionary units
In -lieu fee payment for entire obligations
In -lieu fee payment for fractional unit
Land dedication
Note: For development projects with more than 20 units requesting in -lieu fee payment
to fulfill their inclusionary obligation, "substantial evidence" that the cost of providing
inclusionary units on site would substantially exceed the amount of the applicable in -lieu
fee is to be provided with this application.
Please complete the following table(s) as it applies to your project proposal:
Proposed Rental Housing Projects:
Number of
Bedrooms
Unit Size
(Square
Feet)
Number of
Market Rate
Units
Number of
Low Income
Units
Number of
Very-Low
Income
Units
Total
Number of
Units
Studio
1
2
3
4
5
Total
1 If the calculation of the number of required inclusionary housing units results in a fraction, the developer has the option to
(a) provide an additional inclusionary housing unit or (b) pay an In -Lieu Fee equal to the percentage represented by the fractional
inclusionary housing unit multiplied by the applicable In -Lieu Fee
Page 2 of 4
&Planning0arical- Counter Forms\H00application
1115
Proposed Ownership Housing Projects:
Number of
Bedrooms
Unit Size
(Square
Feet )
Number of
Market Rate
Units
Number of
Moderate
Income Unit
Total
Number of
Units
Studio
1
2
3
1541
5
5
10
4
1830 -2124
18
18
5
Total
1541 -2124
13
5
28
Required Exhibits to the Inclusionary Housing Plan
A. ® Narrative description of the entire project;
B. ® Site plan that depicts the entire project (minimum 11" x 17);
C. ® Depiction of the location of the inclusionary housing units; and
D. ❑ If applicable, a phasing plan that provides for the proportionate number of the
total inclusionary housing unit requirement to be built within each phase of the
project.
Page 3 of 4
&Planning \Clerical -Counter corms \HOOapplicaUon
1115
Property OWNER'S AFFIDAVIT
I hereby certify that I am the legally authorized owner of all property involved in this
application or have been empowered to sign as the property owner on behalf of a
corporation, partnership, business, etc., as evidenced by separate instrument attached
herewith. I hereby grant to the applicant submitting this form full power to sign all
documents related to this application, including any conditions or litigation measures as
may be deemed necessary.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on (Date) 1a 1,015 at 915y od 4iM California
Property Owner's Signature c✓
Property Owner's Printed Na Sohalll Bokhad /
Director of Land
APPLICANT'S AFFIDAVIT
I hereby certify that the statements furnished above and in the attached exhibits
represent the data and information required for this initial evaluation and that the facts,
statements and information presented are true and correct to the best of my knowledge
and belief. Further, should the stated information be found false or insufficient, I agree
to the return of this form for appropriate revisions, understanding the City of Santa Ana
cannot process this form until all applicable information is corrected or provided by the
applicant. I hereby certify that I have been legally authorized by the property owner to
present this application and to sign on behalf of all documents related to this application,
including any conditions or litigation measures as may be deemed necessary.
Note: When the applicant is a corporation, partnership, business, etc., a separate
document verifying the authorization to sign for such applicant is required,
I declare under penalty of perjury that the foregoing is true and correct.
Executed on (Date) at , California
Applicant's Signature
Applicant's Printed Name
Page 4 of 4
S:p1ann1nglC1erica6,Counler Forms \HOOapplication
1/15
EXHIBIT A
TRACT 17546
4226, 4302, 4306 WEST FIFTH STREET, SANTA ANA, CALIFORNIA
PROJECT NARRATIVE
The proposed development will consist of twenty -eight (28) two -story, detached
condominium units on 1 Lot of land that consists of 2.67 gross acres, with single
gated access on West Fifth Street. There will be three plan types with three to four
bedrooms and total square footage ranging from 1541 - 2124 square feet.
The project will provide a private park with patio /BBQ area. Each dwelling will be
accompanied with a two car garage and will be individually serviced with water and
sewer. Two trash enclosures will be provided and serviced by the City of Santa Ana.
There are small landscape areas throughout the site. The development will also
provide fifteen (15) guest parking stalls. These areas will be maintained by the
appointed Homeowners Association.
EXHIBIT 4
SCHEDULE OF PERFORMANCE FOR CONSTRUCTION OF
INCLUSIONARY UNITS
Inclusionary Housing Agreement— Ownership Project
City of Santa Ana January 2015
EXHIBIT 5
INCLUSIONARY HOUSING COVENANTS DECLARATION
Inclusionary Housing Agreement— Ownership Project
City of Santa Ana January 2015
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
Attention: City Clerk
To be recorded without fee. (Space Above This Line For Recorder's Use Only)
(Government Code, §§ 6103 and 27383)
DECLARATION OF INCLUSIONARY HOUSING COVENANTS,
RESALE RESTRICTIONS AND CITY'S OPTION TO PURCHASE
faCr1 Z1 =1 :MMki1 i
AT (PROPERTY ADDRESS)
This DECLARATION OF INCLUSIONARY HOUSING COVENANTS, RESALE
RESTRICTIONS AND CITY'S OPTION TO PURCHASE AGREEMENT
( "Inclusionary Housing Covenants Declaration "), dated as of , is
made by and between ( "Homebuyer") and the
CITY OF SANTA ANA ( "City "), a charter city and municipal corporation organized
and existing under the Constitution and laws of the State of California.
RECITALS
A. The Homebuyer is acquiring title to an Inclusionary Unit, which is more
particularly described in Exhibit 1. The Inclusionary Unit was originally
constructed as part of a development that was approved by the City
subject to the requirement that one or more of the units be designated and
maintained as affordable to Moderate Income Households.
B. The Homebuyer is a Moderate Income Household as defined in this
Inclusionary Housing Covenant Declaration, and meets the eligibility
requirements necessary to acquire the Inclusionary Unit as set forth in
Section IV of the Administrative Procedures Manual.
Inclusionary Housing Covenants Declaration Page 1
City of Santa Ana January 2015
C. The Homebuyer is acquiring the Inclusionary Unit at the Affordable Sales
Price, which is less than the Fair Market Value for the Inclusionary Unit.
The Inclusionary Unit is being sold for a reduced price as a direct result of
the requirements imposed pursuant to the City's Housing Opportunity
Ordinance ("Ordinance "). In consideration for the right to acquire the
Inclusionary Unit at a reduced price, the Homebuyer, its successors and
assigns agree to enter into, and be bound by, the terms and conditions of
this Inclusionary Housing Covenants Declaration,
D. The purpose of this Inclusionary Housing Covenants Declaration is to
ensure that the Inclusionary Unit is only purchased and occupied by a
Moderate Income Household. This Inclusionary Housing Covenants
Declaration accomplishes this purpose by, among other things, imposing
conditions on the Owner's future resale of the Inclusionary Unit, and
requiring that the Owner maintain the Inclusionary Unit as the Owner's
Primary Residence. The Homebuyer is required to execute this
Inclusionary Housing Covenants Declaration as a condition of purchasing
the Inclusionary Unit. This Inclusionary Housing Covenants Declaration is
secured by the City Deed of Trust executed by the Homebuyer.
Now, therefore, in consideration of the mutual promises set forth in this
Inclusionary Housing Covenants Declaration, the receipt and sufficiency of which
is acknowledged by the City and the Homebuyer, the Parties agree as follows:
Inclusionary Housing Covenants Declaration Page 2
City of Santa Ana January 2015
DEFINITION OF TERMS
As used in this Inclusionary Housing Covenants Declaration, the terms set forth
below shall have the following meanings:
Adjusted Household Size Appropriate for the Unit is based on the H &SC
Section 50052.5 definition, and is only used in the Affordable Housing Cost
calculations. For Affordable Housing Cost calculation purposes, the household
size is set at one person in the case of a studio unit, two persons in the case of a
one - bedroom unit, three persons in the case of a two- bedroom unit, four persons
in the case of a three - bedroom unit, and five persons in the case of a four -
bedroom unit. This household size standard is used in the Affordable Housing
Cost calculations; it is not an occupancy limit.
Administrative Procedures means the Affordable Ownership Housing
Administrative Procedures promulgated by the Executive Director pursuant to the
Ordinance.
Administrative Procedures Manual is the Affordable Ownership Housing
Administrative Procedures Manual — Owner Requirements dated January 2015,
which has been prepared by the City for the implementation and enforcement of
the Ordinance. A copy of the Administrative Procedures Manual shall be
maintained on file with the City, and shall be provided to each Homebuyer of an
Inclusionary Unit.
Affordable Housing Cost means the maximum costs that can be borne by
Moderate Income Household based on the requirements imposed by H &SC
Section 50052.5. The calculation methodology is described in Section VI of the
Administrative Procedures Manual.
Affordability Period shall be set at 45 years in the Inclusionary Housing
Covenant Declaration recorded on legal title to the Inclusionary Unit. The
covenant period is set at 45 years following the date of the first sale of the
Inclusionary Unit.
Affordable Sales Price means the maximum price that can be charged for an
Inclusionary Unit. The Affordable Sales Price is equal to the lesser of:
1. The sum of the Supportable Mortgage plus the Benchmark Down
Payment; or
Inclusionary Housing Covenants Declaration Page 3
City of Santa Ana January 2015
2. The purchase price prospective buyers are willing to pay in return for
purchasing a home that is subject to restrictive covenants.
The statutorily set Affordable Sales Prices for the initial sale of each Inclusionary
Unit are shown in Exhibit 6 to the Inclusionary Housing Agreement. The
Affordable Sales Prices for Inclusionary Units shall be adjusted quarterly.
Assumption Agreement means the Disclosure, Acknowledgement and
Assumption Agreement in the form attached as Exhibit 4 to this Inclusionary
Housing Covenants Declaration that shall be entered into between the City and a
transferee as a condition of an Exempt Transfer.
Benchmark Household Income is used in the Affordable Housing Cost
calculations, and is based on the requirements imposed by H &SC Section
50052.5. For a Moderate Income Household, the Benchmark Household Income
is based on 110% of the County Median Income for an Adjusted Household Size
Appropriate for the Unit. -
City means the City of Santa Ana, California.
City Deed of Trust means a deed of trust, that secures the Owner's obligation to
comply with the obligations imposed by the Inclusionary Housing Covenant
Declaration.
City Manager means the City Manager of the City of Santa Ana.
City's Purchase Option means the irrevocable option that the Owner must offer
to the City under the circumstances defined in Article 3 - Section II of this
Inclusionary Housing Covenants Declaration.
City's Share of Excess Proceeds means 50% of the Excess Proceeds
generated under an Extraordinary Sale. The City's Share of Excess Proceeds, if
received, shall be deposited in the City's Inclusionary Housing Fund.
County means the County of Orange.
County Median Income shall mean the Median Income adjusted by actual
household size as published annually by HCD for the County.
Default means the failure of an Owner to perform any action or covenant
required by this Inclusionary Housing Covenants Declaration within the time
Inclusionary Housing Covenants Declaration Page 4
City of Santa Ana January 2015
period provided herein following notice and opportunity to cure, as set forth in
Article 5 - Section III of this Inclusionary Housing Covenants Declaration.
Eligible Purchaser shall mean a Homebuyer who meets the eligibility criteria set
forth in these Administrative Procedures.
Excess Proceeds means the difference between the Extraordinary Sales Price
and the Affordable Sales Price the Inclusionary Unit at the time of the
Extraordinary Sale.
Executive Director is the Executive Director of the Community Development
Agency of the City. The Executive Director, or designee, has the ultimate
authority to evaluate appeals submitted in relation to the Administrative
Procedures.
Exempt Transfer means the following:
A transfer resulting from the death of the Owner;
A transfer by the Owner where the spouse or domestic partner becomes a
co -owner of the Inclusionary Unit;
A transfer of title to a spouse or domestic partner as part of divorce or
dissolution proceedings; and
4. A transfer by the Owner into a trust in which the Owner or Owners are
beneficiaries, provided that the Owner or Owners continue to maintain the
Inclusionary Unit as their Primary Residence.
5. A transfer by the Owner of a non - possessory interest in the Property, such
as an easement or license for utilities or other like purposes; the granting
of ingress or egress rights over or across the Property or a portion thereof;
or a modification to the non - exclusive common area rights of any Owner
located in a common interest subdivision development.
6. A condemnation, or conveyance in lieu of condemnation, that does not
preclude the Owner's continued use and occupancy of the Inclusionary
Unit, such as a street widening or other incidental taking that does not
preclude continued occupancy of the Inclusionary Unit, or a taking of an
interest in a portion of the common area appurtenant to any Inclusionary
Unit located in a common interest development.
Inclusionary Housing Covenants Declaration Page 5
City of Santa Ana January 2015
Exhibits The following exhibits are attached to this Inclusionary Housing
Covenants Declaration and incorporated - herein by this reference:
Exhibit 1: Property Description
2. Exhibit 2: Occupancy Recertification Form
3. Exhibit 3: Notice of Intent to Transfer
4. Exhibit 4: Assumption Agreement
5� Exhibit 5: Notice of Intent to Sell
6. Exhibit 6: Notice of Extraordinary Sale
Extraordinary Sale means a sale of the Inclusionary Unit to a buyer who is not
an Eligible Purchaser, when an Eligible Purchaser has not been secured within
the timeframes required by this Inclusionary Housing Covenants Declaration, and
the City has opted not to exercise the City's Purchase Option within the
timeframes allowed pursuant to this Inclusionary Housing Covenants Declaration.
Extraordinary Sales Price means the gross sales proceeds generated by an
Extraordinary Sales executed under the terms included in Article 3 - Section III of
this Inclusionary Housing Covenants Declaration.
Fair Market Value means the value of the Inclusionary Unit under normal
circumstances in which the seller and the buyer freely negotiate the terms of the
transfer of ownership. The Fair Market Value must be established by a licensed
Real Estate agent based on three comparable properties.
Gross Household Income means all income from whatever source from all
Adult Household members, which is anticipated to be received during the 12-
month period following the date of the determination of Gross Income. The
applicable sources of income are defined in California Code of Regulations Title
25 Housing and Community Development Section 6914. The definition includes
the following specific requirements:
Except as provided in subdivision (2), all payments from all sources
received by the head of Household (even if temporarily absent) and each
additional member of the Household who is not a minor shall be included
in the annual income of a Household. Gross Income shall include, but not
be limited to:
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City of Santa Ana January 2015
a. The gross amount, before any payroll deductions, of wages and
salaries, overtime pay, commissions, fees, tips and bonuses;
b. The net income from operation of a business or profession or from
rental or real or personal property (for this purpose, expenditures
for business expansion or amortization of capital indebtedness shall
not be deducted to determine the net income from a business);
C. Interest and dividends;
d. The full amount of periodic payments received from social security,
annuities, insurance policies, retirement funds, pensions, disability
or death benefits and other similar types of periodic receipts (but
see subdivision (2)(c));
e. Payments in lieu of earnings, such as unemployment and disability
compensation, worker's compensation and severance pay;
f. Public Assistance. If the public assistance payment includes an
amount specifically designated for shelter and utilities which is
subject to adjustment by the public assistance agency in
accordance with the actual cost of shelter and utilities, the amount
of public assistance income to be included as income shall consist
of:
i. The amount of the allowance or grant exclusive of the
amount specifically designated for shelter and utilities, plus
ii. The maximum amount which the public assistance agency
could in fact allow for the Household for shelter and utilities.
g. Periodic and determinable allowances such as alimony and child
support payments, and regular contributions or gifts received from
persons not residing in the dwelling;
h. All regular pay, special pay and allowances of a member of the
Armed Forces (whether or not living in the dwelling) who is head of
the Household or spouse or domestic partner (but see subdivision
(2)(e));
i. Where a Household has net assets in excess of $5,000, income
shall include the actual amount of income, if any, derived from all of
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City of Santa Ana January 2015
the net Household assets or 10 percent of the value of all such
assets, whichever is greater. For purposes of this section, net
Household assets means value of equity in real property other than
the Household's full -time residence, savings, stocks, bonds, and
other forms of capital investment. The value of necessary items
such as furniture and automobiles shall be excluded.
2. The following items shall not be considered as income:
a. Casual, sporadic or irregular gifts;
b. Amounts which are specifically for or in reimbursement of the cost
of medical expenses;
C. Lump -sum additions to Household assets, such as inheritances,
insurance payments (including payments under health and accident
insurance and worker's compensation), capital gains and
settlement for personal or property losses;
d. Amounts of educational scholarships paid directly to the student or
to the educational institution, and amounts paid by the government
to a veteran for use in meeting the costs of tuition, fees, books and
equipment. Any amounts of such scholarships, or payments to
veterans not used for the above purposes of which are available for
subsistence are to be included in income;
e. The special pay to a serviceman head of a Household away from
home and exposed to hostile fire;
f. Relocation payments made pursuant to federal, state, or local
relocation law;
g. Foster child care payments;
h. The value of coupon allotments for the purchase of food pursuant
to the Food Stamp Act of 1964 which is in excess of the amount
actually charged the eligible Household;
i. Payments received pursuant to participation in the following
volunteer programs under the ACTION Agency:
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City of Santa Ana January 2016
i. National Volunteer Antipoverty Programs which include
VISTA, Service Learning Programs and Special Volunteer
Programs.
ii. National Older American Volunteer Programs for persons
aged 60 and over which include Retired Senior Volunteer
Programs, Foster Grandparent Program, Older American
Community Services Program, and National Volunteer
Program to Assist Small Business Experience, Service
Corps of Retired Executive (SCORE) and Active Corps of
Executives (ACE).
Homebuyer means an Eligible Purchaser that has executed an agreement to
purchase an Inclusionary Unit.
Homebuyer Purchase Price means the means the original price paid by the
Homebuyer to purchase the Inclusionary Unit, exclusive of any closing or
transaction costs. The Homebuyer Purchase Price shall not exceed the
Affordable Sales Price.
HCD means the California Housing and Community Development Department.
H &SC shall mean the California Health and Safety Code.
Household means all the persons who will occupy the Inclusionary Unit as their
Primary Residence. A child who is subject to a legally- binding shared - custody
agreement, in which the child resides with the Household at least 50% of the
time, is counted as a member of the Household. Excluded from the definition of
Household are live -in caregivers /caretakers, foster children, unborn children and
children being pursued for legal custody or adoption that are not currently living
with the Household.
Inclusionary Housing Covenants Declaration means this Declaration of
Inclusionary Housing Covenants, Conditions and Restrictions.
Inclusionary Housing Fund means a separate fund of the City which is codified
in Article XVIII.1 Section 41 -1909 of the City's Municipal Code. The fund was
established for the specific purpose of providing the City with funds to assist in
the development of housing that is affordable to low and moderate income
households. The allowable uses of Inclusionary Housing Funds, and the related
reporting are described in Attachment I of the Administrative Procedures Manual,
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City of Santa Ana January 2015
Inclusionary Unit means a home in Santa Ana that is made affordable by an
Inclusionary Housing Covenant Declaration that restricts ownership, occupancy
and the Affordable Sales Price as described in the Administrative Procedures
Manual.
Median Income is calculated by HCD using non - aggregated census income data
and applying trending factors for metropolitan statistical areas (MSA) throughout
the country. The MSA for Santa Ana is Orange County.
Moderate Income refers to Households whose incomes meet the standards
defined by the H &SC Section 50093. Generally, Moderate Income means
household income that does not exceed 120% of the County Median Income, as
adjusted for Household size. The maximum household income amount for
Moderate Income Households shall be set at the amount published by HCD
annually.
Moderate Income Household shall mean individuals or Households who have
an adjusted Gross Income that does not exceed Moderate Income.
Net Resale Proceeds means the Resale Price for the Inclusionary Unit minus
the following amounts and costs in the following priority order:
1. Escrow fees, transfer taxes, recording fees, and any other customary non-
recurring closing costs;
2. Brokerage commissions and similar transaction costs; and
3. Repayment of the outstanding balance of the Senior Loan.
Notice of Extraordinary Sale means the form provided in Exhibit 6 to this
Inclusionary Housing Covenants Declaration.
Notice of Intent to Sell means the form provided in Exhibit 5 to this Inclusionary
Housing Covenants Declaration.
Notice of Intent to Transfer means the form provided in Exhibit 3 to this
Inclusionary Housing Covenants Declaration.
Ordinance means the Housing Opportunity Ordinance adopted by the City
Council on November 28, 2011, which is codified in Article XVIIIA Section 41-
1900 et seq. of the City's Municipal Code.
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City of Santa Ana January 2015
Owner means the current owner of an Inclusionary Unit.
Party and Parties mean the City and the Homebuyer as parties to the
Inclusionary Housing Covenants Declaration.
Permitted Sales are defined as a sale to an Eligible Purchaser or a sale
executed under the City's Purchase Option.
Primary Residence is defined as the only home that may be owned by the
Owner. The Owner must reside in the Inclusionary Unit for not less than 10 out
of every 12 months.
Program Director has the day -to -day authority for making determinations
related to the Ordinance and Administrative Procedures Manual. The Program
Director will be appointed by the Executive Director.
Prohibited Sales and Transfers are defined as any sale or transfer that is not
explicitly allowed by this Inclusionary Housing Covenants Declaration. Prohibited
Transfers specifically include any transfer of a use, rental or leasehold interest in
the Inclusionary Unit.
Project means the owner- occupied housing project proposed to be developed on
the Property at the Developer's sole cost and expense.
Project CC &Rs means the Declaration of Covenants, Conditions and
Restrictions of the Project recorded or to be recorded against the entirety of the
Property and applicable to the Inclusionary Unit and the Homebuyer.
Property means the real property on which the Project is to be developed, for
which the legal description is provided in Exhibit 1 to the Inclusionary Housing
Agreement.
Recordation Date means the date of recording in the Official Records of the
County of Orange, California of the City Deed of Trust and the Inclusionary
Housing Covenants Declaration.
Resale means the resale of the Inclusionary Unit by the Owner. Prior to the
Resale of the Inclusionary Unit, the Owner must submit a Notice of Resale to the
City as set forth in Exhibit 4 to this Inclusionary Housing Covenants Declaration.
Resale Price is defined as the lesser of the Fair Market Value or the Affordable
Sales Price.
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City of Santa Ana January 2015
Seller means the current Owner of the Inclusionary Unit in the context of the sale
of the Inclusionary Unit:
Senior Lender means a bank, savings and loan association, insurance
company, pension fund, publicly traded real estate investment trust,
governmental agency, charitable organization or other governmentally regulated
entity regularly engaged in making residential real estate loans.
Senior Loan means a purchase money loan of funds to be used by the
Homebuyer for financing the acquisition of the Inclusionary Unit, or a refinancing
approved by the City, which loan is in a lien position prior to this Inclusionary
Housing Covenants Declaration,
Supportable Mortgage means the mortgage amount that can be supported by a
Moderate Income Household based on the Affordable Housing Cost calculations.
The mortgage calculation is based on the prevailing market interest rate for a 30-
year fully amortizing mortgage with a fixed interest rate. See Section VI -B of the
Administrative Procedures Manual for an explanation of the calculation
methodology.
Transfer shall mean any sale, transfer, lease, exchange, assignment or
conveyance of an Inclusionary Unit, including any portion or interest in an
Inclusionary Unit or other disposition of any interest in an Inclusionary Unit,
whether voluntary or involuntary.
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City of Santa Ana January 2015
ARTICLE 1
RESTRICTIONS
Owner Acknowledgments and Agreements: Owner hereby acknowledges and
agrees that taking title to the Inclusionary Unit shall constitute Owner's
acknowledgment of and agreement to the following:
I. Occupancy Requirements
I -A. The Owner shall occupy and continually use the Inclusionary Unit as the
Owner's Primary Residence during the Affordability Period. On an annual
basis, the Inclusionary Program Director will send the Owner an
Occupancy Recertification Form to be filled out and returned to the City
within thirty (30) days of receipt. The Owner shall affirm that they are
occupying the Inclusionary Unit as their Primary Residence. The Owner
will be required to submit copies of two current utility bills, or other
evidence of occupancy that is acceptable to the City, as part of the annual
recertification process.
I -B. If an Owner vacates the Inclusionary Unit, or for any reason does not
continue to occupy the Inclusionary Unit as its Primary Residence, the City
may declare the Owner in Default pursuant to Article 1- Section I of this
Inclusionary Housing Covenants Declaration, and exercise any or all of its
rights and remedies hereunder, including without limitation the City's
Purchase Option pursuant to Article 3 - Section II of this Inclusionary
Housing Covenants Declaration.
II. Resale and Transfer Restrictions
II -A. The Inclusionary Unit is being acquired by the Homebuyer at a cost that is
below the Fair Market Value for the Inclusionary Unit, and that such
Inclusionary Unit is subject to resale restrictions and the City's Purchase
Option contained in this Inclusionary Housing Covenants Declaration. Any
resale or transfer of the Inclusionary Unit in violation of this Inclusionary
Housing Covenants Declaration shall be voidable by the City.
II -B. The Owner's right to resell the Inclusionary Unit at the Fair Market Value is
very limited, and in certain instances, the City will have the option to
purchase the Inclusionary Unit from the Owner at the Affordable Sales
Price.
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City of Santa Ana January 2015
II -C. The Inclusionary Unit will not necessarily appreciate in value during the
duration of its ownership, and the Affordable Sales Price may decrease
from the amount the Owner paid to acquire the Inclusionary Unit. Thus,
when the Owner resells the Inclusionary Unit, the sales proceeds received
by the Owner may be less than the amount the Owner paid to acquire the
Inclusionary Unit.
II -D. In the event that the Inclusionary Unit is sold for the Fair Market Value,
either through an Extraordinary Sale or pursuant to a foreclosure sale, the
Owner must pay to the City the City Share of Excess Proceeds, which is
set at fifty percent (50 %) of the difference between the Affordable Sales
Price and the Net Resale Proceeds received from the sale of the
Inclusionary Unit,
III. Refinancing Limits
111 -A. The Owner is not permitted to refinance a Senior Loan for more than the
outstanding principal amount of the Senior Loan, plus the cost of Qualified
Capital Improvements, plus the customary fees and costs associated with
obtaining the new Senior Loan. However, in no event can the refinanced
Senior Loan be set at an amount that exceeds the then current
Supportable Mortgage.
III -B. If an Owner refinances the Senior Loan in violation of the requirements
imposed in the Administrative Procedures Manual and this Inclusionary
Housing Covenants Declaration, the City may declare the Owner in
Default pursuant to Article I - Section III of this Inclusionary Housing
Covenants Declaration, and exercise any or all of its rights and remedies
hereunder.
IV. Project CC &Rs
The Inclusionary Unit is subject to the Project CC &Rs, The Homebuyer
acknowledges and agrees that the Homebuyer is obligated to comply with all of
the terms, conditions, covenants and restrictions set forth in the Project CC &Rs.
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City of Santa Ana January 2015
ARTICLE 2
TRANSFER PROCEDURES
I. Exempt Transfers of the Inclusionary Unit
The following transfer procedures apply to Exempt Transfers:
-A. Transfer by Inheritance:
1. If an Exempt Transfer is made by inheritance or rights of survival, the
trustee, executor or new Owner shall notify the City in writing of the
change in ownership of the Inclusionary Unit within 20 days of such event
giving rise to such Exempt Transfer.
2. Any such transferee shall be bound by and subject to the provisions of this
Inclusionary Housing Covenants Declaration and the City Deed of Trust.
The trustee, executor or new Owner shall execute, acknowledge and
deliver to the City, within such 45 -day period, an Assumption Agreement
whereby the transferee agrees to be bound by such documents.
3. The failure to notify the City in writing and execute an Assumption
Agreement within the timeframes required by this Section shall constitute
a Default; provided that such transferee shall be bound by and subject to
the provisions of this Inclusionary Housing Covenants Declaration and the
City Deed of Trust notwithstanding its failure to deliver such executed and
recordable Assumption Agreement.
I -B. Other Exempt Transfers: If the Owner desires to transfer the Inclusionary
Unit by an Exempt Transfer other than inheritance, the Owner shall
provide the City with a Notice of Intent to Transfer in the form attached as
Exhibit 3 to this Inclusionary Housing Covenants Declaration, together
with any other documentation the City may reasonably request in order to
ensure that the transfer is an Exempt Transfer.
II. Notice of Intent to Transfer — Exempt Transfer
In the case of an Exempt Transfer, this Inclusionary Housing Covenants
Declaration imposes the following noticing obligations on the City and the Owner:
II -A. City Obligations:
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City of Santa Ana January 2015
1. The City shall have 45 days after receipt by the City of a Notice of Intent to
Transfer and-other documentation to deliver written notice to the Owner
that the City either approves the transfer as an Exempt Transfer or
disapproves the transfer.
2. The transfer shall be deemed an Exempt Transfer if the City fails to
disapprove the proposed transfer within such 45 -day period.
II -B. Owner Obligations:
1. The Owner shall complete the Exempt Transfer, including recordation of
all applicable documents, within 60 days after receipt of approval, or
deemed approval, of the transfer.
2. Any such transferee of the fee interest in the Inclusionary Unit shall be
bound by and subject to the provisions of this Inclusionary Housing
Covenants Declaration and the City Deed of Trust as the Owner and, as a
condition to the conveyance of the Inclusionary Unit, shall execute,
acknowledge and deliver to the City an Assumption Agreement.
3. The failure to comply with the requirements of this Section in undertaking
- - any transfer of the Inclusionary Unit shall constitute a Default; provided
that any transferee of the Inclusionary Unit shall be bound by and subject
to the provisions of this Inclusionary Housing Covenants Declaration and
the City Deed of Trust as the Owner notwithstanding its failure to deliver
such executed and recordable Assumption Agreement.
III. Transfer of the Inclusionary Unit without the City's Approval
III -A. If the City determines that a proposed transfer is a Prohibited Transfer, the
Owner shall not transfer the Inclusionary Unit.
III -B. Any transfer of an Inclusionary Unit without the City's approval shall be
voidable. In addition to all other rights and remedies the City may have
under this Inclusionary Housing Covenants Declaration, the City shall
have the right to exercise the City's Purchase Option. This may be
exercised against the transferee or the Owner under such Prohibited
Transfer.
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City of Santa Ana January 2015
ARTICLE 3
RESALE PROCEDURES
Permitted Sale
I -A. Notice of Permitted Sale: If an Owner desires to sell the Inclusionary Unit,
the Owner shall provide City with a Notice of Intent to Sell in the form
attached as Exhibit 5:
1. Within fifteen (15) business days after receipt of such Notice, City shall
provide the Owner with the Affordable Sales Price and the maximum
incomes of Eligible Purchasers.
2. The Owner shall market the Inclusionary Unit to Eligible Purchasers for a
period of not less than ninety (90) days from providing the Notice.
3. If the Owner is unable to locate an Eligible Purchaser who is ready, willing
and able to enter into a purchase agreement for the Inclusionary Unit
within the 90 -day period:
a. The Owner must demonstrate to the Inclusionary Program Director
that all reasonable efforts were made to diligently market the
Inclusionary Unit.
b. If the Inclusionary Program Director determines that adequate
marketing efforts were pursued, the City shall have 30 days from
after the expiration of the period to exercise City's Purchase Option
under Article 3 - Section II.
C. If the City does not exercise the City's Purchase Option, the Owner
may sell the Inclusionary Unit to a buyer is not an Eligible
Purchaser under the Extraordinary Sale terms identified in Article 3
- Section 111.
I -B. Inspection and Repair Costs: Upon receipt of a Notice of Intent to Sell,
the City shall have the right to inspect the Inclusionary Unit to determine
whether any violations of applicable laws or ordinances exist.
1. The City may hire a third party to undertake the inspection.
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City of Santa Ana January 2015
2. The inspection shall take place within fifteen (15) days after receipt of the
Notice of n ent to Sell.
3. The City shall undertake the inspection at a reasonable time, and provide
the Owner with at least 24 advance notice prior to the inspection.
4. In the event any violations are discovered, within thirty (30) days, the City
shall provide the Owner with a written report describing the necessary
repairs.
5. The Owner shall have the option to either:
a. Repair or replace the items on such report at Owner's cost prior to
closing, without extending the closing date; or
b. At closing, cause the escrow holder to pay the repair costs to the
buyer out of Seller's gross proceeds of the sale.
6. If an Owner elects to repair or replace the items on such report, the City
shall have the right to re- inspect the Inclusionary Unit after the repairs
and /or replacements are complete. If City determines that deficiencies still
remain, the Owner shall cause the escrow agent at closing to pay to buyer
from Seller's gross proceeds the repair costs in such amounts as the City
determines are necessary to complete the remaining repairs and /or
replacements. The City's determination shall be final.
-C. Sales Price: The sale of the Inclusionary Unit pursuant to this Section
may only be made to an Eligible Purchaser at a price that does not exceed
the lesser of the Affordable Sales Price or the Fair Market Value of the
Inclusionary Unit.
I -D. At close of escrow, the Eligible Purchaser shall deliver or cause to be
delivered into escrow:
1. A Declaration of Inclusionary Housing Covenants, Resale Restrictions and
City's Option to Purchase Agreement in substantially the form of this
Inclusionary Housing Covenants Declaration, approved by the City, and
executed by the City and the Eligible Purchaser, together with a City Deed
of Trust securing the obligations thereunder.
2. The required down payment and all documents required by the Eligible
Purchaser's Senior Lender.
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City of Santa Ana January 2015
I -E. Proceeds from Permitted Sale: To the extent funds are available, the
gross proceeds from a Permitted Sale shall be distributed in the following
priority:
1. Escrow fees, transfer taxes, recording fees, and any other customary non-
recurring closing costs;
2. Brokerage commissions and similar transaction costs;
3. Repayment of the outstanding balance of the Senior Loan;
4. Reimbursement to the buyer of all repair costs funded by the buyer
pursuant to this Section; and
5. Any remaining amounts shall be paid to the Seller.
I -F. Personal Property: Any sums paid to an Owner by an Eligible Purchaser
for personal property shall not be part of the Affordable Sales Price. Any
consideration, of any nature whatsoever, paid by an Eligible Purchaser to
the Owner must be fully disclosed to and approved by the City in advance.
-G. Closing:
1. At closing, the Owner shall convey fee title to the Eligible Purchaser by
standard title company form grant deed.
2. The Owner shall cause the title company to issue to the Eligible Purchaser
a CLTA standard coverage owner's form of title insurance policy in the
amount of the Affordable Sales Price insuring title to the Inclusionary Unit
is vested in the Eligible Purchaser, subject to the following exclusions from
coverage:
a. Current taxes and assessments not yet due;
b. This Inclusionary Housing Covenants Declaration and all
documents recorded pursuant to this Inclusionary Housing
Covenants Declaration; and
C. Such other matters (other than encumbrances created or suffered
by the Owner) that were exceptions to title on the date of this
Inclusionary Housing Covenants Declaration.
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City of Santa Ana January 2015
3. All other closing costs shall be paid by the Seller or the Eligible Purchaser
pursuant to the custom in Orange County.
II. City's Purchase Option
II -A. Purchase Option: By taking title to the Inclusionary Unit, the Owner
irrevocably grants the City's Purchase Option upon the occurrence of any
of the following:
1. The Owner is unable to identify an Eligible Purchaser pursuant to and
within the times set forth in Article 3 - Section I;
2. Any Prohibited Transfer or Prohibited Sale by the Owner;
3. The Owner is in default of the occupancy requirement set forth in Article 1
— Section 1: and
4. An Event of Default as defined in Article 1:
a. City's Purchase Option shall be in addition to any other remedy
provided in this Inclusionary Housing Covenants Declaration for an
Event of Default.
b. By taking title to the Inclusionary Unit, the Owner agrees that City's
facilitation of the transfers contemplated hereby constitute
adequate consideration for the grant of the City's Purchase Option
in the Event of Default.
II -B. Procedure Upon Exercise of Option:
1. The City shall exercise the City's Purchase Option by delivering written
notice to the Owner (and to transferee, if applicable).
2. Closing of escrow shall occur within 120 days (plus any time delays
caused by the Owner), or such additional time as reasonably determined
by the City is necessary under the circumstances after the date of the
City's written notice exercising the City's Purchase Option.
3. Proceeds from the sale shall be distributed in the manner provided in this
Section.
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City of Santa Ana January 2015
4. Closing shall occur in the manner provided in this Section, with the City
having the rights-and responsibilities of the Eligible Purchaser provided
thereunder.
II -C. Assignment of City's Purchase Option: After the City has exercised the
City's Purchase Option, the City may, without the Owner's or transferee's
consent, assign the City's Purchase Option to an Eligible Purchaser or to
a government or non - profit organization that agrees to be subject to this
Inclusionary Housing Covenants Declaration. Such assignment shall not
extend any time limits contained in this Inclusionary Housing Covenants
Declaration.
II -D. Failure to Close:
1. If the City exercises the City's Purchase Option pursuant to this Section,
and fails to close escrow pursuant to the identified timeframes, the Owner
may conduct an Extraordinary Sale under Article 3 - Section III.
2. If the City exercises the City's Purchase Option pursuant to a Prohibited
Transfer, a Prohibited Sale or an Event of Default, and the City fails to
close escrow pursuant to this Section, then the City shall be deemed to
retain all remedies available under Article 5 - Section IV.
II -E. Power of Attorney: By taking title to the Inclusionary Unit, the Owner
grants to the City an irrevocable power of attorney that authorizes the City
to act on the Owner's behalf to execute, acknowledge and deliver any and
all documents related to the City's Purchase Option.
III. Extraordinary Sale
The purpose of this Section is to permit the sale of the Inclusionary Unit to a
buyer who is not an Eligible Purchaser when an Eligible Purchaser has not been
secured and the City's Purchase Option has not been exercised.
III -A. Notice of Extraordinary Sale: The Owner shall notify the City of the
Owner's intent to make an Extraordinary Sale by delivering a Notice of
Extraordinary Sale in the form attached as Exhibit 6.
1. The Notice of Extraordinary Sale shall identify the Fair Market Value of the
Inclusionary Unit.
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City of Santa Ana January 2015
2. The Owner shall be required to sell the Inclusionary Unit at a price not less
than tine Fair Market Value, unless otherwise approved by the City in
writing.
3. All transfer documents relating to the Extraordinary Sale shall be
submitted to the City for its review and approval as consistent with the
terms of this Inclusionary Housing Covenants Declaration.
III -B. Distribution of Proceeds: The Extraordinary Sales Price shall be
distributed in the following priority to the extent funds are available:
Escrow fees, transfer taxes, recording fees, and any other customary non-
recurring closing costs;
1. Brokerage commissions and similar transaction costs;
2. Repayment of the outstanding balance of the Senior Loan;
3. Payment to the City of the City Share of Excess Sales Proceeds; and
4. Any remaining amounts shall be paid to the Seller.
III -C. Effect of Extraordinary Sale:
1. Upon the close of escrow for an Extraordinary Sale in compliance with the
provisions of this Section, the purchaser shall acquire title to the
Inclusionary Unit free and clear of the provisions of this Inclusionary
Housing Covenants Declaration, including the City's Purchase Option.
2. Pursuant to Article 5 - Section I, and in accordance with this Section, the
City agrees to execute, acknowledge and record a release of the
Inclusionary Unit from the provisions of this Inclusionary Housing
Covenants Declaration.
III -D. Foreclosure Sale: In the event of a foreclosure sale, this Section shall
impose the same obligations on the Owner and the City as in an
Extraordinary Sale. All references to the "close of escrow" shall be
replaced by "foreclosure sale."
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City of Santa Ana January 2015
ARTICLE 4
LENDER PROVISIONS
Senior Loan
Mortgages, deeds of trust, or any other form of conveyance required for any
reasonable method of financing as a Senior Loan are permitted, but only as
follows:
I -A. For the sole purpose of securing a purchase money loan of funds to be
used by an Owner for financing the acquisition of the Inclusionary Unit.
The Senior Loan must comply with the requirements imposed by Section
IV -D of the Administrative Procedures Manual; or
I -B. For the sole purpose of refinancing a Senior Loan that was obtained by
the Owner, and approved by the City, provided that the principal amount
of such refinancing shall be limited to the outstanding principal then owed
on the existing Senior Loan, plus any customary fees and costs
associated with such current refinancing.
II. Subordination
II -A. This Inclusionary Housing Covenants Declaration shall be subordinate to
the Senior Loan, so long as the Senior Lender agrees to the default and
foreclosure provisions set forth in this Inclusionary Housing Covenants
Declaration, or other alternative provisions proposed by the Senior
Lender, and acceptable to the City in its sole discretion.
II -B. In the event the City fails to timely cure a default under such Senior Loan,
and the Senior Lender proceeds with foreclosure, or deed in lieu of
foreclosure, of such Senior Loan, then any provisions herein or in any
other collateral agreement restricting the use of the Inclusionary Unit to
Moderate Income Households or otherwise restricting the Senior Lender's
ability to sell the Inclusionary Unit based upon income qualification of the
purchaser shall terminate and shall have no further force or effect on
subsequent owners or purchasers of the Inclusionary Unit.
II -C. In that event, any person, including the Senior Lender's successors and
assigns, receiving title to the Inclusionary Unit through foreclosure, or
deed in lieu of foreclosure, of such Senior Loan shall receive title to the
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City of Santa Ana January 2015
Property free and clear from such restrictions. The City shall promptly
execute acknowledge and deliver for recordation such subordi� ion
documents or agreements as necessary to confirm the foregoing
subordination.
Ill. Default and Foreclosure
Ill -A. The City shall record a request for notice of default and any notice of sale
under any deed of trust or mortgage with a power of sale encumbering the
Inclusionary Unit pursuant to California Civil Code Section 2924b.
Whether or not a request for a notice of default is recorded, the Owner
shall provide a true and correct copy of any notice of default to the City
within three (3) business days of the Owner's receipt.
111 -13. In the event of default and foreclosure, the City shall have the same rights
as the Owner to cure any defaults and reinstate the Senior Loan prior to
foreclosure sale or the acceptance of a deed in lieu of foreclosure by the
Senior Lender. Such reinstatement shall be subject to the same fees,
charges and penalties that would otherwise be assessed against the
Owner. Nothing herein shall be construed as creating any obligation on
the part of the City to cure any such default, nor shall this right to cure and
reinstate operate to extend any time limitations in the default provisions of
the underlying deed of trust or mortgage.
III -G. If the trustee set forth in Senior Lender's deed of trust sells the
Inclusionary Unit at a foreclosure sale, the proceeds shall be delivered in
the following priority to the extent funds are available:
Payment of all delinquent assessments, if any, to the extent required by
the Project CC &Rs;
2. Payment of all sums due and owing under the Senior Loan, including
without limitation the principal amount, interest, fees and costs of sale;
3. Payment to the City of the City Share of Excess Sales Proceeds;
4. Repayment of all sums due and owing to junior creditors; and
5. Any remaining amounts shall be paid to the Owner.
III -D. By taking a loan from a Senior Lender, the Owner represents that it has
provided the Senior Lender with the necessary consent and authorization
Inclusionary Housing Covenants Declaration Page 24
City of Santa Ana January 2015
to provide a monthly report of the payment status of the Owner and all
o her financial in orma ion concerning the Owner that tKe--City relyy--
requests.
III -E. Except as otherwise expressly provided in a City approved subordination
agreement, by making a loan to the Owner, Senior Lender grants to the
City the option to purchase the Senior Loan from the Senior Lender at any
time after the filing of a notice of default under the Senior Loan, but prior to
consummation of the foreclosure or the giving of a deed -in -lieu of
foreclosure for an amount equal to the entire indebtedness secured by the
Senior Lender Deed of Trust:
The City may exercise this option by giving Senior Lender written notice of
its intent to do so:
a. with respect to a foreclosure, at any time prior to the filing of a
notice of sale under the Senior Loan; and
b. with respect to a deed -in -lieu of foreclosure, within ten (10) days
after receiving written notice from Senior Lender of its intent to
accept a deed -in -lieu of foreclosure with respect to the Inclusionary
Unit.
2. Upon receipt of such written notice from the City, the Senior Lender shall
promptly give the City a written statement setting forth the amount of the
total indebtedness secured by the Senior Lender Deed of Trust, which
shall be the purchase price for the Senior Loan, and a copy of the policy of
title insurance insuring the priority and validity of the Senior Lender Deed
of Trust.
Within ten (10) days after the City gives such written notice, the City shall
establish an escrow at the title company insuring the Senior Lender Deed
of Trust and concurrently therewith give the Senior Lender written notice
thereof, and the City shall deposit the purchase price in such escrow.
Within fifteen (15) days after the Senior Lender's receipt of notice of the
opening of the escrow, the Senior Lender shall deposit in the escrow:
the promissory note evidencing the Senior Loan endorsed in favor
of the City;
Inclusionary Housing Covenants Declaration Page 25
City of Santa Ana January 2015
b. the original of the Senior Lender Deed of Trust;
G. an assignment of the Senior Lender Deed of Trust duly executed by
the Senior Lender and in recordable form; and
d. all other documents, instruments, agreements, certificates and
other items that evidence or secure the Senior Loan.
III -F. The Senior Lender and the City shall execute and deliver escrow
instructions and such other documents as may be reasonably necessary
or appropriate in connection with such escrow and to implement the intent
hereof.
III -G. The escrow holder shall be instructed to close the escrow within two (2)
business days after receipt of all such items and upon such close of
escrow to issue to the City a CLTA Form No. 104.1 endorsement to the
title policy, showing the City as Senior Lender's assignee with respect to
the Senior Lender Deed of Trust.
III -H. The City shall pay the escrow fees (irrespective of whether the escrow
closes), recording fees and the premium for the CLTA Form No. 104.1
endorsement.
Inclusionary Housing Covenants Declaration Page 26
City of Santa Ana January 2015
ARTICLE 5
MISCELLANEOUS
I. Term of the Inclusionary Housing Covenants Declaration
1. This Inclusionary Housing Covenants Declaration shall become effective
upon its execution and delivery.
2. This Inclusionary Housing Covenants Declaration shall terminate as to the
Inclusionary Unit at the earliest of:
a. as provided under the terms and conditions of any subordination
agreement between a Senior Lender and the City; or
b. upon the close of escrow for an Extraordinary Sale; or
C. at the end of the Affordability Period.
3. Upon termination of the Affordability Period, on request of the then record
Owner of the Property, the City shall execute, acknowledge and record a
termination of the Inclusionary Housing Covenants Declaration and the
City Deed of Trust. To the extent permitted by law, any unfulfilled
obligations of any Owner shall survive the termination of the Inclusionary
Housing Covenants Declaration, but it shall no longer affect title to the
Property.
II. Maintenance and Use
1. The Owner shall maintain the interior and exclusive use areas of the
Inclusionary Unit in a clean, well maintained condition consistent with the
neighborhood, as set forth in the Project CC &Rs.
2. The Inclusionary Unit shall be used and occupied by the Owner solely for
residential purposes, and in addition to the residential purpose may also
be used for any accessory uses that comply with the provisions of the
Santa Ana Municipal Code, as it may be amended from time to time.
3. No Owner shall grant use of, rent or lease all or any part of the
Inclusionary Unit, but shall occupy the Inclusionary Unit as its Primary
Residence.
Inclusionary Housing Covenants Declaration Page 27
City of Santa Ana January 2015
4. The Owner shall comply with all of the use and maintenance provisions
and obligations set forth in th>�jectCC &Rs.
III. Default
If the Owner defaults in the performance or observance of any covenant,
condition or restriction of the Owner set forth in this Inclusionary Housing
Covenants Declaration, and if such default remains uncured for a period of thirty
(30) days after written notice has been given by the City (or, if such cure
reasonably takes longer than thirty (30) days, if such cure has not been
commenced within the thirty (30) day period or is not diligently completed within a
reasonable time, not to exceed an additional sixty (60) calendar days), or in the
event the Owner has provided false information or documentation required in
connection with the purchase or resale of an Inclusionary Unit, then the City may
declare an Event of Default has occurred. In that event, the City may exercise
any or all of its rights or remedies under this Inclusionary Housing Covenants
Declaration, including without limitation any or all of the following:
1. by any suit, action or proceeding at law or in equity, require the Owner to
perform its obligations and covenants under this Inclusionary Housing
Covenants Declaration or enjoin any unlawful acts;
2. take such other action at law or in equity as may appear necessary or
desirable to enforce the Owner's obligations, covenants and agreements;
and
3. in addition to the foregoing remedies, in the event that the Owner rents or
resells the Inclusionary Unit in violation of this Inclusionary Housing
Covenants Declaration, as restitution, the Owner shall forfeit, and the City
shall have the right to recover the following monetary amounts:
a. If the Owner rents the Inclusionary Unit in violation of this
Inclusionary Housing Covenants Declaration, the Owner shall forfeit
all monetary amounts obtained through the rental of the
Inclusionary Unit.
b. If the Owner resells the Inclusionary Unit in violation of this
Inclusionary Housing Covenants Declaration, the Seller and the
new Owner shall be jointly and severally liable to the City for an
amount equal to difference between the Fair Market Value and the
Affordable Sales Price for the Inclusionary Unit. However, the
Inclusionary Housing Covenants Declaration Page 28
City of Santa Ana January 2015
Executive Director has the discretion to allow the Seller and the
new Owner to cure a violation of the resale requirements imposed
by this Inclusionary Housing Covenants Declaration.
All such restitution shall be made to the City. Any funds received by the City
under this provision of the Inclusionary Housing Covenants Declaration shall be
placed in the City's Inclusionary Housing Fund.
IV. Default Remedies
In addition to any other rights or remedies set forth in this Inclusionary Housing
Covenants Declaration, or allowed by law or equity, in the event of a default by
an Owner of any of the Owner's obligations under this Inclusionary Housing
Covenants Declaration, that is not cured within the cure period provided below,
the City may apply to a court of competent jurisdiction for specific performance of
this Inclusionary Housing Covenants Declaration, or for an injunction prohibiting
a proposed resale or transfer in violation of this Inclusionary Housing Covenants
Declaration.
V. Distribution of Insurance and Condemnation Proceeds
If the Inclusionary Unit is condemned or the improvements damaged or
destroyed, all proceeds from insurance or condemnation shall be distributed to
the Owner, for purposes of restoring or replacing the Inclusionary Unit, unless the
Senior Lender Deed of Trust, the City Deed of Trust or the Project CC &Rs
provide otherwise. In that case, the Senior Lender Deed of Trust, the City Deed
of Trust and the Project CC &Rs shall control, in that order of priority.
VI. Attorneys' Fees and Costs
If any action is brought to enforce the terms of this Inclusionary Housing
Covenants Declaration, the prevailing party shall be entitled to reasonable
attorneys' fees and costs.
VII. Controlling Agreement
The Owner covenants that it has not knowingly executed, and will not knowingly
execute, without the City's prior written approval, any other agreements with
provisions contradictory to or in opposition to the provisions of this Inclusionary
Housing Covenants Declaration.
Inclusionary Housing Covenants Declaration Page 29
City of Santa Ana January 2015
VIII. Severabifity
If any one or more of the provisions contained in this Inclusionary Housing
Covenants Declaration for any reason shall 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 Inclusionary Housing
Covenants Declaration, and this Inclusionary Housing Covenants Declaration
shall be construed as if such invalid, illegal or unenforceable provisions had
never been contained herein.
IX. Time of the Essence
Time is of the essence for this entire Inclusionary Housing Covenants
Declaration. Whenever the time for performance falls on a day which is not a
business day, such time for performance shall be extended to the next business
day.
X. Covenants Running with the Land
All provisions of this Inclusionary Housing Covenants Declaration, including the
benefits and burdens, are equitable servitudes, run with the land and are binding
- upon the heirs - successors,-assigns and personal representatives -of- the - Owner --
hereto and inure to the benefit of the City and permitted successors and assigns.
The covenants benefit and bind the City, the Inclusionary Unit and the Owner
thereto. Each and every contract, deed or other instrument covering, conveying
or otherwise transferring the Inclusionary Unit or any interest therein shall
conclusively be held to have been executed, delivered and accepted subject to
this Inclusionary Housing Covenants Declaration regardless of whether the other
party or parties have actual knowledge of this Inclusionary Housing Covenants
Declaration.
XI. Construction
The rule of strict construction does not apply to this Inclusionary Housing
Covenants Declaration. This Inclusionary Housing Covenants Declaration shall
be given a reasonable construction to prevent any use of the Inclusionary Unit in
violation of this Inclusionary Housing Covenants Declaration. Whenever the
context and construction so requires, all words used in the singular shall be
deemed to be used in the plural, all masculine pronouns shall include the
feminine and neuter, and vice versa.
Inclusionary Housing Covenants Declaration Page 30
City of Santa Ana January 2015
XII. Indemnification
The Owner agrees to indemnify and hold harmless the City and its respective
officers, directors, employees and agents from and against all liabilities, losses,
claims, damages, judgments, costs and expenses (including, without limitation,
reasonable attorney's fees) incurred by the City arising out of or relating to any
negligent or wrongful action by the Owner with respect to the Inclusionary Unit.
The Owner agrees that if any claims, demands, suits or other legal proceedings
are made or instituted by any person against the City that arise out of any of the
matters relating to this Inclusionary Housing Covenants Declaration, the Owner
shall cooperate fully with the City in the defense or other disposition.
XIII. Entire Inclusionary Housing Covenants Declaration and
Modifications
This Inclusionary Housing Covenants Declaration may be modified only in a
writing duly signed by the Owner and an authorized agent of the City. The
modifications shall become effective when recorded in the official records of
Orange County, California.
Notwithstanding the following, the Owner acknowledges under this Inclusionary
Housing Covenants Declaration that it is expressly prohibited from renting or
leasing the Inclusionary Unit, and is required to occupy the Inclusionary Unit as
its Primary Residence at all times:
1. The Owner covenants by and for itself, its successors, and its assigns that
there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, marital
status, sexual orientation, source of income, age, physical or mental
handicap, medical condition, ancestry or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the
Inclusionary Unit. The foregoing covenants shall run with the land and
shall remain in effect in perpetuity.
2. All deeds and contracts made relative to the Inclusionary Unit shall contain
or be subject to the following non - discrimination or non - segregation
clauses set forth in H &SC Section 33436 in substantially the same form:
Indusionary Housing Covenants Declaration Page 31
City of Santa Ana January 2015
a. In deeds: "The grantee herein covenants by and for himself or
herself, —his or her heirs, execu %rs, administrators, and assigns,
and all persons claiming under or through them, that there shall be
no discrimination against or segregation of any person or group of
persons on any basis listed in subdivision (a) or (d) of Section
12926, 12926.1, subdivision (m) and paragraph (1) of subdivision
(p) of Section 12955, and Section 12955.2 of the Government Code
in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land herein conveyed. The foregoing covenants
shall run with the land."
b. In contracts: "There shall be no discrimination against or
segregation of any person or group of persons on any basis listed
in subdivision (a) or (d) of Section 12926, 12926.1, subdivision (m)
and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the land herein
conveyed. The foregoing covenants shall run with the land."
1 EV�111111111111111111R.i=
1. All notices, demands, requests for approval and other communications
provided for in this Inclusionary Housing Covenants Declaration shall be in
writing and shall be deemed received if sent to the addresses set forth
below:
a. on the date of delivery when personally delivered;
b. one business day after deposit with a reputable overnight courier or
delivery service with all delivery charges paid; or
C. date of receipt by party if deposited in the United States first class
mail, postage prepaid, registered or certified, return receipt
requested.
2. Either party may change its address by notice delivered in the manner
specified above.
Inclusionary Housing Covenants Declaration Page 32
City of Santa Ana January 2015
If to City: City Manager
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
If to Owner: at the Inclusionary Unit address
IN WITNESS WHEREOF, the City and the Homebuyer have duly executed this
Inclusionary Housing Covenants Declaration as of the dates set forth below.
[Signatures on Following Pages]
Inclusionary Housing Covenants Declaration Page 33
City of Santa Ana January 2015
SIGNATURE PAGE
TO
INCLUSIONARY HOUSING COVENANTS DECLARATION
INkICA
CITY OF SANTA ANA
A California Charter City and Municipal
Corporation
M
Name:
Its:
Date:
APPROVED AS TO LEGAL FORM:
al
Name:
City Attorney
City of Santa Ana
Inclusionary Housing Covenants Declaration Page 34
City of Santa Ana January 2015
SIGNATURE PAGE
TO
INCLUSIONARY HOUSING COVENANTS DECLARATION
Homebuyer:
By:
Name:
Date:
By:
Name:
Date:
Inclusionary Housing Covenants Declaration Page 35
City of Santa Ana January 2015
EXHIBIT 1
PROPERTY DESCRIPTION
[To Be Inserted.]
Inclusionary Housing Covenants Declaration
Property Description January 2015
EXHIBIT -2-
OCCUPANCY RECERTIFICATION FORM
Inclusionary Housing Covenants Declaration
Occupancy Recertification Form January 2015
- -- CERTIFICATION -OF- CONTINUED OCCUPANCY
Date:
Owner(s) Name:
Address:
We are the Owners of an Inclusionary Unit that was produced under the
requirements of the City of Santa Ana Inclusionary Housing Ordinance. We
understand and agree that the Inclusionary Unit must be used as our Primary
Residence and for no other purpose.
By this Certification, we declare under penalty of perjury that:
1. We currently occupy the Inclusionary Unit; and
2. We have occupied the Inclusionary Unit for at least 10 out of the past 12
m- onths; and__
3. We have not used the Inclusionary Unit for any other purpose than as our
Primary Residence; and
4. We are not renting or leasing any part of the Inclusionary Unit to another
party.
We have attached true and accurate copies of two utility bills or other
documentation evidencing our continued occupancy of the Inclusionary Unit.
We acknowledge that any intentional or negligent misrepresentation in this
Certification may result in civil liability and /or criminal penalties including, but not
limited to, fine or imprisonment, or both, and liability for monetary damages under
the provisions of Title 18, United States Code, Section 1001, et seq.
[Signatures on the Following Page]
Inclusionary Housing Covenants Declaration Page 1
Occupancy Recertification Form January 2015
SIGNATURE PAGE
TO
OCCUPANCY RECERTIFICATION FORM
Owner:
Signature: Signature:
Print Name:
Date:
Telephone:
Print Name:
Date:
Telephone:
Co: Owner
Inclusionary Housing Covenants Declaration Page 2
Occupancy Recertification Form January 2015
NOTICE OF INTENT TO TRANSFER
Covenants Declaration
Notice of Intent to Transfer
January 2015
Date
To: City Manager
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
The undersigned , Owner of the Inclusionary Unit located
at , Santa Ana, California, hereby notifies you of its intent to transfer in
compliance with Article 2 of the Inclusionary Housing Covenants Declaration.
The reason or circumstances relating to such transfer are as follows:
Any additional information reasonably
required regarding_the_p_roposed transferee shall be_provided to_y_ou immediately __ __
upon request. The undersigned acknowledges that all applicable time periods
under the Inclusionary Housing Covenants Declaration commence only upon the
City's receipt of this notice. The undersigned further acknowledges and agrees
that any such transfer shall be subject to the provisions of the Inclusionary
Housing Covenants Declaration.
Owner
Inclusionary Housing Covenants Declaration Page 1
Notice of Intent to Transfer January 2015
ASSUMPTION AGREEMENT
Inclusionary Housing Covenants Declaration
Assumption Agreement January 2015
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
Attention: City Clerk
To be recorded without fee. (Space Above This Line For Recorder's Use Only)
(Government Code, §§ 6103 and 27383)
DISCLOSURE, ACKNOWLEDGMENT AND ASSUMPTION
AGREEMENT
THIS DISCLOSURE, ACKNOWLEDGMENT AND ASSUMPTION AGREEMENT
(Assumption Agreement) made among ( "Owner "),
( "Transferee ") and the CITY OF SANTA ANA
A. The Owner is the current owner of the real property commonly known as _
, Santa Ana, California, and now
particularly described on Exhibit A, which together with all improvements
located thereon is referred to in this Assumption Agreement as the
"Inclusionary Unit ".
B. The Owner wishes to transfer and convey to the Transferee the
Inclusionary Unit; and
C. The Inclusionary Unit is subject to the restrictions applied by the
Inclusionary Housing Covenants, Resale Restrictions and City's Option to
Purchase Agreement recorded on , 20, as Document
No. , in the Official Records of Orange County, California
(the "Inclusionary Housing Covenants Declaration ") that imposes resale
controls on the Inclusionary Unit; and
Inclusionary Housing Covenants Declaration Page 1
Assumption Agreement January 2015
D. The obligations set forth in the Inclusionary Housing Covenants
------D—ecldfdtib-n are —secured-b—ya Deed ofTrust -recorded api-n-st-the---
Inclusionary Unit on 20_, as Document No.
, in the Official Records of Orange County, California (the
"City Deed of Trust"); and
E. The Transferee is acquiring, the Inclusionary Unit and will assume the
obligations of an Owner under the Inclusionary Housing Covenants
Declaration and as Trustor under the City Deed of Trust.
F. Capitalized terms used herein, and not defined in this Assumption
Agreement, shall have the meanings set forth in the Inclusionary Housing
Covenants Declaration and the City Deed of Trust.
The parties to this Assumption Agreement agree to the following:
The Transferee hereby acknowledges and agrees to the following:
a. The Inclusionary Unit is subject to the Inclusionary Housing
Covenants Declaration that are secured by the City Deed of Trust.
The Transferee acknowledges that it has received a copy of the
—Inclusionary Housing Covenants-Declaration, and-agrees to-be--- -
bound by all the conditions and covenants contained therein.
b. The Transferee shall occupy and continually use the Inclusionary
Unit as the Transferee's Primary Residence during the Affordability
Period as defined in the Inclusionary Housing Covenants
Declaration.
G. The Transferee's right to resell the Inclusionary Unit at the Fair
Market Value is very limited, and in certain instances, the City will
have the option to purchase the Inclusionary Unit from the
Transferee at the Affordable Sales Price:
Under a Permitted Sale, the Inclusionary Unit must be sold
at the Affordable Sales Price. The Inclusionary Unit will not
necessarily appreciate in value during the duration of its
ownership.
ii. In the event that the Inclusionary Unit is sold for the Fair
Market Value, either through an Extraordinary Sale or
Inclusionary Housing Covenants Declaration Page 2
Assumption Agreement January 2016
pursuant to a foreclosure sale, the Transferee must pay to
h—e Ci"the Cityy Sha� Exceess rocee s, which is set at
fifty percent (50 %) of the difference between the Affordable
Sales Price and the Net Resale Proceeds received from the
sale of the Inclusionary Unit.
iii. Any resale or transfer of the Inclusionary Unit in violation of
the Inclusionary Housing Covenants Declaration shall be
voidable by the City.
d. The Transferee is not permitted to refinance a Senior Loan that is
secured by the Property for more than the outstanding principal
amount of that Senior Loan plus the customary fees and costs
associated with obtaining the new Senior Loan.
The Inclusionary Unit is subject to the Project CC &Rs. The
Transferee acknowledges and agrees that it is obligated to comply
with all of the terms, conditions, covenants and restrictions set forth
in the Project CC &Rs.
3. The City hereby consents to the transfer of the Inclusionary Unit to the
--Transferee Transfer as defined in the Inclusionary
Housing Covenants Declaration.
4. All questions with respect to the interpretation of this Assumption
Agreement, and the rights and liabilities of the parties hereto, shall be
governed by the laws of the State of California.
5. This Assumption Agreement shall inure to the benefit of, and shall be
binding upon, the assigns, successors in interest, personal
representatives, estates, heirs and legatees of each of the parties hereto.
6. The Transferee hereby grants to the City an irrevocable power of attorney
coupled with an interest to act on Buyer's behalf to execute, acknowledge
and deliver any and all documents relating to the City's Purchase Option
under Article 3 — Section II of the Inclusionary Housing Covenants
Declaration.
Executed on , 20, at Santa Ana, California.
[Signatures on Following Pages]
Inclusionary Housing Covenants Declaration Page 3
Assumption Agreement January 2015
SIGNATURE PAGE
TO
GF- Y11M1i11[01►I_TC]N421tyi IMP III i
Owner:
By: Date:
Transferee:
By: Date:
City:
By: Date:
Its:
Attest:
By:
Inclusionary Housing Covenants Declaration Page 4
Assumption Agreement January 2015
LEGAL DESCRIPTION
[To Be Inserted.]
Covenants Declaration
Assumption Agreement— Legal Description
Page 1
January 2015
Ik1611i[43= 61AP" -kTk" *1&14jm
y Housing Covenants Declaration
Notice of Intent to Sell January 2015
Date
To: City Manager
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
The undersigned , Owner of the Inclusionary Unit
located at Santa Ana, California, hereby notifies you of its
intent to resell the Inclusionary Unit in compliance with the requirements imposed
by Article 3 of the Inclusionary Housing Covenants Declaration.. The
undersigned acknowledges that all applicable time periods under the Inclusionary
Housing Covenants Declaration commence only upon the City's receipt of this
notice.
Owner
Inclusionary Housing Covenants Declaration Page 1
Notice of Intent to Sell January 2015
NOTICE OF EXTRAORDINARY SALE
Inclusionary Housing Covenants Declaration
Notice of Extraordinary Sale January 2015
The undersigned , is the Owner of the Inclusionary
Unit located a Santa Ana, Californian
20_, Owner provided City with written notice of its intent to sell the Inclusionary
Unit. Owner has failed to identify an Eligible Purchaser in accordance with
Article 3 — Section I of the Inclusionary Housing Covenants Declaration, and the
City has failed to exercise the City's Purchase Option pursuant to Article 3 —
Section Il. Accordingly, Owner hereby notices the City of its intent to make an
Extraordinary Sale of the Inclusionary Unit in accordance with Article 3 — Section
III of the Inclusionary Housing Covenants Declaration.
Attached herewith is the estimate of the Fair Market Value for the Inclusionary
Unit as defined in the Inclusionary Housing Covenants Declaration. Owner
hereby acknowledges that the City shall retain City's Purchase Option until the
time that Owner has accepted in writing an offer to purchase the Inclusionary
Unit from a buyer, and that all applicable time periods for an Extraordinary Sale
under the Agreement commence only upon City's receipt of this Notice.
Owner
Inclusionary Housing Covenants Declaration Page 1
Notice of Extraordinary Sale January 2015
EXHIBIT 6
CITY DEED OF TRUST
Inclusionary Housing Agreement — Ownership Project
City of Santa Ana January 2015
RECORDING REQUESTED BY
ND
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
Attention: City Clerk
To be recorded without fee. (Space Above This Line For Recorder's Use Only)
(Government Code, §§ 6103 and 27383)
DEED OF TRUST AND SECURITY AGREEMENT
APN: [to be insertedl
There are restrictions on the sale of the Property encumbered by this
City Deed of Trust, as contained in that certain Inclusionary Housing
Covenants, Resale Restrictions and City's Option to Purchase
Agreement ( "Inclusionary Housing Covenants Declaration "). Except for
a Transfer to the City of Santa Ana ( "City ") or City's assignee following
the City's exercise of the City' Purchase Option, this Property may only
be sold to an Eligible Purchaser at a price not to exceed the defined
Affordable Sales Price. The Inclusionary Housing Covenants
Declaration also restricts the extent to which this Property may be
encumbered by junior financing and limits the Trustor's rights to
refinance Senior Loans.
THIS DEED OF TRUST AND SECURITY AGREEMENT ( "City Deed of Trust ") is
made this day of , 20__, among finsertname of
Trustor ( "Trustor "), whose address is (insert address of Trustorl, !insert
name of title companvl ( "Trustee "), whose address is fnnsert address of title
companvl, and the City of Santa Ana (referred to variously as "City" or
"Beneficiary"), whose address is 20 Civic Center Plaza, California 92701 as
Beneficiary.
Trustor irrevocably grants, conveys, transfers and assigns to Trustee in trust, with
power of sale and right of entry and possession, all of Trustor's right, title and
interest now owned or hereafter acquired in and to the real property in the City of
Inclusionary Housing Covenants Declaration Page 1
Assumption Agreement January 2015
Santa Ana, Orange County, California, described on Exhibit 1 attached hereto
and- incor�d- herein by this reference, togefher wit -tffe- mprovemen s
constructed thereon and all other property and interests of any kind or character
that may be reasonably necessary or desirable to promote the present and
future beneficial use and enjoyment of such real property and improvements.
V =M III IF-11 11611
A. Trustor is the owner of the Property located at , Santa
Ana, California and more particularly described in the attached Exhibit A.
B. The Trustor's predecessor in interest developed the Property pursuant to
the City's Housing Opportunity Ordinance ( "Ordinance "), which regulations
require developers of ownership housing to construct within their projects
units that are affordable to Moderate Income Households. These
regulations require the Property to be subjected to restrictions on resale
that ensure that the Property remains affordable.
C. In connection with the Ordinance, Beneficiary and Trustor entered into a
Inclusionary Housing Covenants Declaration dated as of
and recorded in the Official Records of Orange County substantially
concurrently herewith (capitalized terms used without definition herein
have the meaning ascribed to such terms in the Inclusionary Housing
Covenants Declaration).
D. Pursuant to the Inclusionary Housing Covenants Declaration, the Trustor
is obligated, among other requirements, to sell the Property only to Eligible
Purchasers at a price not in excess of the Affordable Sales Price.
E. The Inclusionary Housing Covenants Declaration also provides that:
1. Trustor is obligated to notify the Beneficiary of the Trustor's intent to
sell the Property in order to enable Beneficiary to exercise the
City's Purchase Option at the Affordable Sales Price;
2. The Beneficiary may exercise the City's Purchase Option if the
Trustor defaults under the Inclusionary Housing Covenants
Declaration; and
Inclusionary Housing Covenants Declaration Page 2
Assumption Agreement January 2015
3. There are restrictions on Trustor's ability to encumber the Property
and -to refinance the �io�oans secured b�Prope y.
Inclusionary Housing Covenants Declaration Page 3
Assumption Agreement January 2015
DEFINITION OF TERMS
As used in this City Deed of Trust, the terms set forth below shall have the
following meanings:
Administrative Procedures means the Affordable Ownership Housing
Administrative Procedures promulgated by the Executive Director pursuant to the
Ordinance.
Affordable Housing Cost means the maximum price of an Inclusionary Unit, as
calculated under the requirements imposed by H &SC Section 50052.5. The
calculation methodology is described in Section VI of the Affordable Ownership
Housing Administrative Procedures Manual.
Affordability Gap is equal to the difference between the Fair Market Value of the
Inclusionary Unit and the Affordable Sales Price for the Inclusionary Unit at the
time of acquisition by the Homebuyer.
Affordable Sales Price means the maximum price that can be charged for an
Inclusionary Unit. The Affordable Sales Price is equal to the lesser of:
1. The sum of the Supportable Mortgage plus the Benchmark Down
Payment; or
2. The purchase price prospective buyers are willing to pay in return for
purchasing a home that is subject to restrictive covenants.
The statutorily set Affordable Sales Prices for the initial sale of each Inclusionary
Unit are shown in Exhibit 8 to the Inclusionary Housing Agreement. The
Affordable Sales Prices for Inclusionary Units shall be adjusted quarterly.
Benchmark Down Payment is a component of the Affordable Sales Price
calculations. For the purposes of the Administrative Procedures, the Benchmark
Down Payment is set at 5% of the total Affordable Sales Price.
Beneficiary refers to the City as the provider of the City Shared Appreciation
Loan, and otherwise defined as the Subordinate Lender.
Trustor means the person or persons described as the Trustor in the
introductory paragraph of this City Deed of Trust.
Inclusionary Housing Covenants Declaration Page 4
Assumption Agreement January 2015
City means the City of Santa Ana, California.
City Deed of Trust means a deed of trust, that secures the Owner's obligation to
comply with the obligations imposed by the Inclusionary Housing Covenant
Declaration.
City's Purchase Option means the irrevocable option that the Owner must offer
to the City under the circumstances defined in Article 3 — Section II of the
Inclusionary Housing Covenants Declaration.
Eligible Purchaser shall mean a Homebuyer who meets the eligibility criteria set
forth in the Administrative Procedures.
Exempt Transfer means the following:
A transfer resulting from the death of the Owner;
A transfer by the Owner where the spouse or domestic partner becomes a
co -owner of the Inclusionary Unit;
2. A transfer of title to a spouse or domestic partner as part of divorce or
dissolution proceedings; and
3. A transfer by the Owner into a trust in which the Owner or Owners are
beneficiaries, provided that the Owner or Owners continue to maintain the
Inclusionary Unit as their Primary Residence.
A transfer by the Owner of a non - possessory interest in the Property, such
as an easement or license for utilities or other like purposes; the granting
of ingress or egress rights over or across the Property or a portion thereof;
or a modification to the non - exclusive common area rights of any Owner
located in a common interest subdivision development.
A condemnation, or conveyance in lieu of condemnation, that does not
preclude the Owner's continued use and occupancy of the Inclusionary
Unit, such as a street widening or other incidental taking that does not
preclude continued occupancy of the Inclusionary Unit, or a taking of an
interest in a portion of the common area appurtenant to any Inclusionary
Unit located in a common interest development.
Extraordinary Sale means a sale of the Inclusionary Unit to a buyer who is not
an Eligible Purchaser, when an Eligible Purchaser has not been secured within
Inclusionary Housing Covenants Declaration Page 5
Assumption Agreement January 2015
the timeframes required by this Inclusionary Housing Covenants Declaration, and
the City y has opted not to exercise the City's Purchas�tion within-the
timeframes allowed pursuant to this Inclusionary Housing Covenants Declaration.
Fair Market Value means the value of the Inclusionary Unit under normal
circumstances in which the seller and the buyer freely negotiate the terms of the
transfer of ownership. The Fair Market Value must be established by a licensed
Real Estate agent based on three comparable properties.
H &SC shall mean the California Health and Safety Code.
Inclusionary Housing Covenants Declaration means the Declaration of
Inclusionary Housing Covenants, Conditions and Restrictions.
Inclusionary Unit means the completed affordable owner - occupied housing unit,
that is being purchased by the Trustor.
Moderate Income refers to Households whose incomes meet the standards
defined by the H &SC Section 50093. Generally, Moderate Income means
household income that does not exceed 120% of the County Median Income, as
adjusted for Household size. The maximum household income amount for
Moderate Income Households shall be set at the amount published by HCD
annually.
Moderate Income Household shall mean individuals or Households who have
an adjusted Gross Income that does not exceed Moderate Income.
Ordinance means the Housing Opportunity Ordinance adopted by the City
Council on November 28, 2011, which is codified in Article XVIII.1 Section 41-
1900 et seq. of the City's Municipal Code.
Owner means the current owner of the Inclusionary Unit.
Primary Residence is defined as the only home that may be owned by the
Owner. The Owner must reside in the Inclusionary Unit for not less than 10 out
of every 12 months.
Property means the real property on which the Project is to be developed, for
which the legal description is provided in Exhibit 1 to this City Deed of Trust.
Rents means all rents, issues, profits, royalties, revenues, income and other
benefits derived from the Property.
Inclusionary Housing Covenants Declaration Page 6
Assumption Agreement January 2015
Senior Lender means a bank, savings and loan association, insurance
company, pension fund, publicly traded real—e—st—ate—inve� trust,
governmental agency, charitable organization or other governmentally regulated
entity regularly engaged in making residential real estate loans.
Senior Loan means a purchase money loan of funds to be used by the
Homebuyer for financing the acquisition of the Inclusionary Unit, or a refinancing
approved by the City, which loan is in a lien position prior to the Inclusionary
Housing Covenants Declaration.
Supportable Mortgage means the mortgage amount that can be supported by a
Moderate Income Household based on the Affordable Housing Cost calculations.
The mortgage calculation is based on the prevailing market interest rate for a 30-
year fully amortizing mortgage with a fixed interest rate. See Section VI -B of the
Administrative Procedures Manual for an explanation of the calculation
methodology.
Trustee means the title company that insures title for the Inclusionary Unit that is
subject to the City Deed of Trust.
Trustor means the Trustor that enters into the City Deed of Trust that secures
the City Shared Appreciation Loan.
Inclusionary Housing Covenants Declaration Page 7
Assumption Agreement January 2015
ARTICLES
1. Grant in Trust. Trustor, in consideration of the promises herein recited
and the trust herein created, hereby irrevocably and unconditionally grants,
transfers, conveys and assigns to Trustee, in trust for the benefit of Beneficiary,
with power of sale, all estate, right title and interest which Trustor now has or may
later acquire the Property together with all of the following: all improvements now
or hereafter located or constructed on the Property and all replacements and
additions thereto; all easements, rights of way, appurtenances and other rights
used in connection with the Property or as a means of access thereto; all fixtures
now or hereafter attached to or used in and about the Property or the
improvements located thereon or hereafter located or constructed on the
Property, and all renewals or replacements thereof or articles in substitution
therefor, whether or not the same are, or shall be attached to the improvements in
any manner; and all leases, subleases, licenses and other agreements relating to
use or occupancy of the Property, and all rents or other payments that may now
or hereafter accrue or otherwise become payable to or for the benefit of Trustor
(whether or not such Leases and Rents are permitted by the Inclusionary Housing
Covenants Declaration). All of the above - referenced Property, improvements,
appurtenance, fixtures and equipment, leases and rents are herein referred to
collectively as the "Security ".
2. Secured Obligations. Trustor makes the grant, conveyance, transfer and
assignment herein for the purpose of securing payment and performance of the
following: (a) the City Share of Excess Proceeds in the event of an
Extraordinary Sale or a foreclosure sale; and (b) Trustor's obligations under the
term of the Inclusionary Housing Covenants Declaration.
3. Maintenance and Repair. Trustor shall (a) keep the Property in good
condition and repair and not remove or demolish any building; (b) complete or
restore promptly and in good and workmanlike manner any building which may
be constructed, damaged or destroyed; (c) pay when due all claims for labor
performed and materials furnished; (d) comply with all laws affecting the
Property or requiring any alterations or improvements to be made; (e) not
commit or permit waste; and (f) cultivate, irrigate, fertilize, fumigate, prune and
do all other acts which from the character or use of the Property may be
reasonably necessary.
Inclusionary Housing Covenants Declaration Page 8
Assumption Agreement January 2015
4. Insurance. Trustor shall maintain hazard insurance against loss by fire,
hazards included with the term "extended coverage," and any other hazardor
which Beneficiary requires insurance, and liability insurance. The insurance
carrier and the insurance policies and amounts of coverage shall set at the full
replacement value of the Inclusionary Unit based on the then current City Building
Code. The liability policy shall name Beneficiary as an additional insured, and
shall require 30 days' prior notice to Beneficiary before the policy is modified or
terminated.
5. Defense of Security. Trustor shall appear in and defend any action or
proceeding purporting to affect the security or the rights or powers of Beneficiary
or Trustee. Trustor shall pay all costs and expenses, including costs of evidence
of title and attorneys' fees, in any such action or proceeding in which Trustee or
Beneficiary may appear, and in any suit brought by Beneficiary to foreclose this
City Deed of Trust.
6. Payment of Taxes and Liens. Trustor shall pay (a) at least 10 days
before delinquency, all taxes and assessments affecting the Property, including
water stock assessments; (b) when due, all encumbrances, charges and liens,
with interest, on the Property, which are or appear to be prior or superior to this
City Deed of Trust; and (c) upon demand all costs, fees and expenses of this
City Deed of Trust. If Trustor fails to make any payment or to do any act
provided for in this City Deed of Trust, then Beneficiary or Trustee may, without
obligation to do so, and with or without notice to or demand upon Trustor, and
without releasing Trustor from any obligation under this City Deed of Trust: (i)
make or do the same in such manner and to such extent as either may deem
necessary to protect the security, Beneficiary or Trustee being authorized to
enter upon the Property for such purposes; (ii) appear in or commence any
action or proceeding purporting to affect the security, or the rights or powers of
Beneficiary or Trustee; (iii) pay, purchase, contest or settle any encumbrance,
charge or lien which in the judgment of either appears to be senior to this City
Deed of Trust; and (iv) in exercising any such powers, pay allowable expenses,
including attorneys' fees.
7. Reimbursement of Costs. Trustor shall pay upon demand all sums
expended by Beneficiary or Trustee provided for in this City Deed of Trust or
allowed by law, with interest from date of expenditure at the maximum rate
allowed by law.
Inclusionary Housing Covenants Declaration Page 9
Assumption Agreement January 2015
8. No Waiver. By accepting payment of any sum after its due date,
Beefici� does not waive its right either to require prompt payment when dui
all other sums or declare a default for failure to pay.
9. Reconveyance. That upon written request of Beneficiary stating that
the Secured Obligations have been fulfilled, and upon surrender of this City
Deed of Trust, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals of such reconveyance of any matters or facts shall be
conclusive proof of the truthfulness thereof. The grantee in such reconveyance
may be described as "the person or persons legally entitled thereto."
10. Default and Foreclosure. Upon default by Trustor in performance of
any Secured Obligation, Beneficiary may deliver to Trustee a declaration of
default and demand for sale and of a notice of default and a notice of sale, which
notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with
Trustee this City Deed of Trust and all documents evidencing the Secured
Obligations and expenditures, if any, secured by this City Deed of Trust. Upon
default of any obligation secured by this City Deed of Trust and acceleration of all
sums due, if any, Beneficiary may instruct Trustee to proceed with a sale of the
Property under the power of sale granted in this City Deed of Trust, noticed
and held in accordance with California Civil Code Sections 2924, et seq., as
such statutes may be amended from time to time. Trustor waives all rights it
may have to require marshaling of assets or to require sales of assets in any
particular order, including any rights under California Civil Code Sections 2899
and 3433.
11. Substitution of Trustee. Beneficiary, or any successor beneficiary of
the Secured Obligations or of any indebtedness secured hereby, may from
time to time, by instrument in writing, substitute a successor or successors to
any Trustee named herein or acting hereunder, which instrument executed by
the Beneficiary and duly acknowledged and recorded in the office of the
recorder of the county or counties where the Property is situated, shall be
conclusive proof of proper substitution of such successor Trustee or Trustees,
who shall, without conveyance from the Trustee predecessor, succeed to all its
title, estate, rights, powers and duties. Said instrument must contain the name
of the original Trustor, Trustee and Beneficiary hereunder, the book and page
where this City Deed of Trust is recorded and the name and address of the new
Trustee.
Inclusionary Housing Covenants Declaration Page 10
Assumption Agreement January 2015
12. Successors and Assigns. This City Deed of Trust applies to, inures to
he benefit arandi -binds all sa�tfies hereto, thelr`helrs, legatees, devisees,
administrators, executors, successors and assigns. The term 'Beneficiary" shall
mean the holder, including pledgees, of the covenants set forth in the
Inclusionary Housing Covenants Declaration whether or not named as
Beneficiary herein.
13. Trustee Acceptance. Trustee accepts this trust when this City Deed of
Trust, duly executed and acknowledged, is made a public record as provided by
law. Trustee is not obligated to notify any party hereto of pending sale under any
other deed of trust or of any action or proceeding in which Truster, Beneficiary or
Trustee shall be a party unless brought by Trustee.
14. Further Assurances. Truster shall, at its own cost and expense,
do, execute, acknowledge, and deliver all and every such further acts, deeds,
conveyances, mortgages, assignments, notices of assignments, transfers, and
assurances as Trustee or Beneficiary shall from time to time require, for better
assuring, conveying, assigning, transferring, and confirming unto Trustee the
Property and rights hereby conveyed or assigned or Intended now or hereafter
so to be, or which Truster may be or may hereafter become bound to convey or
assign to Trustee, or for carrying out the intention or facilitating the performance
of the terms of this City Deed of Trust, or for filing, registering, or recording this
City Deed of Trust. Truster shall, on demand, execute and deliver, and hereby
authorizes Trustee and Beneficiary, or either of them, to execute in the name of
Truster, to the extent it may lawfully do so, one or more financing statements,
chattel mortgages, or comparable security instruments, to evidence more
effectively the lien hereof. Immediately upon the execution and delivery of this
City Deed of Trust, and thereafter from time to time, Trustor shall cause this
City Deed of Trust, and any security instruments creating a lien or evidencing
the lien hereof upon any personal property and each instrument of further
assurance, to be filed, registered, or recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and fully to protect the lien hereof upon, and the title of Trustee to, the
Property encumbered hereby.
15. Condemnation and Insurance Proceeds. Immediately upon
obtaining knowledge of the institution of any proceedings for the condemnation
or other taking of all or any portion of the Property, or knowledge of any
casualty damage to the Property, or damage in any other manner, Trustor shall
immediately notify Beneficiary thereof. Truster hereby authorizes and
Inclusionary Housing Covenants Declaration Page 11
Assumption Agreement January 2016
empowers Beneficiary as attorney -in -fact for Trustor to make proof of loss, to
adjust and compromise any claim under the insurance policies coveringhe
Property, to appear in and prosecute any action arising from such insurance
policies, to collect and receive insurance proceeds, and to deduct therefrom
Beneficiary's expenses incurred in the collection of such proceeds; provided,
however, that nothing contained in this Section shall require Beneficiary to incur
any expense or take any action hereunder. Trustor hereby authorizes and
empowers Beneficiary, at Beneficiary's option, as attorney -in -fact for Trustor, to
commence, appear in and prosecute, in Beneficiary's or Trustor's name, any
action or proceeding relating to any condemnation or other taking of all or any
part of the Property, whether direct or indirect, and to settle or compromise any
claim in connection with such condemnation or other taking. The proceeds of
any award payment or claim for damages, direct or consequential, in connection
with any condemnation or other taking, whether direct or indirect, of the Property,
or any part thereof, or for conveyances in lieu of the Property, or any part thereof,
shall be paid to Beneficiary. The foregoing powers of attorney are coupled with
an interest and are irrevocable. Trustor hereby authorizes Beneficiary to apply
such awards, payments, proceeds or damages relating to condemnation of the
Property and insurance covering the Property, after the deduction of
Beneficiary's expenses incurred in the collection of such amounts, at
Beneficiary's option, subject to the requirements of applicable law and the
provisions hereof, to restoration or repair of the Property or to payment of the
sums secured by this City Deed of Trust. Beneficiary shall be under no
obligation to question the amount of any compensation, awards, proceeds,
damages, claims, rights of action, and payments relating to condemnation or other
taking of the Property or insured casualty affecting the Property, and may accept
the same in the amount in which the same shall be paid. Trustor shall execute
such further evidence of assignment of any awards, proceeds damages or
claims arising in connection with such condemnation or taking or such insurance
as Beneficiary may require.
16. Severability. If any one or more of the provisions contained in this City
Deed of Trust shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect any
other provisions of this City Deed of Trust, but this City Deed of Trust shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein or therein, but only to the extent of such invalidity.
Inclusionary Housing Covenants Declaration Page 12
Assumption Agreement January 2015
17. Estoppel Certificate. Trustor shall, within ten (10) days of a written
request rf om Beneficiary, furnish Beneficiary with a written statement, —duly
acknowledged, setting forth the sums secured by this City Deed of Trust and any
right of set -off, counterclaim or other defense which exists against such sums
and the obligations of this City Deed of Trust.
18. Due -On -Sale or Encumbrance. Except for Exempt Transfers approved
by the City, if all or any part of the Property, or any interest therein, or any
beneficial interest in Trustor (if Trustor is not a natural person or persons but is a
corporation, partnership, trust, limited liability company or other legal entity), is
sold, transferred, mortgaged, assigned, pledged, or further encumbered, whether
directly or indirectly, whether voluntarily or involuntarily or by operational law,
Beneficiary may, at Beneficiary's option invoke any remedies permitted by this
City Deed of Trust.
19. Subordination. This City Deed of Trust shall be subordinate to the
Senior Loan, so long as the Senior Lender agrees to the default and foreclosure
provisions set forth in the Inclusionary Housing Covenants Declaration, or other
alternative provisions proposed by the Senior Lender, and acceptable to the City
in its sole discretion. In the event the City fails to timely cure a default under such
Senior Loan, and the Senior Lender proceeds with foreclosure, or deed in lieu of
foreclosure, of such Senior Loan, then any provisions herein or in any other
collateral agreement restricting the use of the Inclusionary Unit to Moderate
income households or otherwise restricting the Senior Lender's ability to sell the
Inclusionary Unit based upon income qualification of the purchaser shall terminate
and shall have no further force or effect on subsequent owners or purchasers of
the Inclusionary Unit. In that event, any person, including the Senior Lender's
successors and assigns, receiving title to the Inclusionary Unit through
foreclosure, or deed in lieu of foreclosure, of such Senior Loan shall receive title
to the Property free and clear from such restrictions. The City shall promptly
execute, acknowledge and deliver for recordation such subordination documents
or agreements as necessary to confirm the foregoing subordination.
Inclusionary Housing Covenants Declaration Page 13
Assumption Agreement January 2015
The- undersigned - Truster- requests -that- copy-of-any Notice -of- Default and -of any Notice of Sale hereunder be mailed to Trustor at Trustor's address
hereinbefore set forth.
TRUSTOR:
By:
Name:
By:
Name:
Inclusionary Housing Covenants Declaration Page 14
Assumption Agreement January 2015
EXHIBIT 1
LEGAL D- ESGRIPTION - --
Situated in the State of California, City of Santa Ana, County of Orange, and described
as follows:
[Insert legal description]
Deed of Trust — Legal Description Page 1
City of Santa Ana
lAdd Nota v cknowledp s)
Deed of Trust— Notary Acknowledgements Page 1
City of Santa Ana
EXHIBIT 7
CALCULATIONS OF AFFORDABLE SALES PRICE
Inclusionary Housing Agreement — Ownership Project
City of Santa Ana January 2015
AFFORDABLE SALES PRICE CALCULATIONS
MODERATE INCOME HOUSEHOLDS
SECTION 50052.5 CALCULATIONS: 2014
HOUSING OPPORTUNITIES ORDINANCE
SANTA ANA, CALIFORNIA
Income
Benchmark Household Size
Household Income
%of Income Allocated to Housing
Income Allotted to Housing
Ongoing Expenses
Utilities (Orange County Housing Authority 1/1/2015)
Maintenance & Insurance
Property Taxes @ 1.16% of Affordable Price
Total Expenses
Income Available for Mortgage
Affordable Housing Price
Supportable Mtg @ 3.92% Interest
Home Buyer Down Pymt @ 5% Affordable Price
Maximum Purchase Price
1 -Bdrm
2 -Bdrm
3 -Bdrm
4 -Bdrm
2
3
4
5
$76,725
$86,350
$95,920
$103,620
35%
35%
35%
35%
$26,850
$30,220
$33,570
$36,270
$1,104
$1,248
$1,776
$1,992
2,100
2,400
2,700
3,000
3,968
4,458
4,888
5,256
$7,172
$8,106
$9,364
$10,248
$19,678
$22,114
$24,206
$26,022
$346,800
$389,800
$426,600
$458,600
17,100
19,200
21,100
22,700
$363,900
$409,000
$447,700
$481,300
Prepared by: Keyser Marston Associates, Inc.
File name: HOO Affordable Sale Price Calcuation Template- Updated Jan 2015.xlsx; 20151st Own SA Page 1 of 1
EXHIBIT 8
DEVELOPER'S PHASING MAP
Inclusionary Housing Agreement — Ownership Project
City of Santa Ana January 2015
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EXHIBIT 9
LEGAL DESCRIPTION OF INCLUSIONARY UNITS
Inclusionary Housing Agreement— Ownership Project
City of Santa Ana January 2015
LEGAL DESCRIPTION
A PORTION -OF LOT T 1-OF-TRACT-NO-.l-7546-,IN - CITY -OF -SANTA ANA, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 933,
PAGES 13 THROUGH 15 OF MISCELLANEOUS MAPS, IN THE COUNTY
RECORDER OF SAID COUNTY.