HomeMy WebLinkAbout2004-10-12; City Council; 17832; Mulberry at Bressi Ranch financial assistancen
TITLE:
MULBERRY AT BRESSI RANCH, REQUEST FOR
FINANCIAL ASSISTANCE
CITY OF CARLSBAD - AGENDA BILL
DEPT. HD.
CITY ATTY.
AB# 17,832
MTG. 1011 2/04
DEPT. H/RED
RECOMMENDED ACTION:
That the City Council ADOPT Resolution No. 2004-327 as recommended by the Housing Commission,
APPROVING a request to provide $2,000,000 in financial assistance from the Housing Trust Fund to the
100 low income home buyers within the Mulberry residential development of the Bressi Ranch Master Plan,
and approving and authorizing the City Manager to execute the related loan documents.
ITEM EXPLANATION
On July 23, 2002, the City Council approved the Bressi Ranch Master Plan which allows for the
development of 623 residential units (523 single family homes and 100 for-sale affordable condominiums)
as well as industrial, mixed use, community facilities and open space land uses. The affordable housing
condominiums project will satisfy the inclusionary housing obligation for the Bressi Ranch development and
will be located south of Palomar Airport Road and east of El Camino Real. The project is located in what is
known as Planning Area 15 of the Bressi Ranch Master Plan.
The proposed affordable condominium project consists of 100 units located within 10 residential structures,
including 60 two bedroom and 40 three bedroom units. The units will range in size from approximately 900
to 1140 square feet. All of the 100 units will be affordable to households earning 80% or less of the San
Diego County Area Median Income.
The Developer for the Bressi Ranch Master Plan is Lennar Communities. Lennar has retained Greystone
Homes to construct the affordable housing project. Lennar Communities is self-financing the project and
has requested financial assistance from the City in the total amount of $2,000,000, which amounts to
$20,000 per unit.
On September 9, 2004, the Housing Commission considered the developer’s request and recommended
approval of $2,000,000 in financial assistance for the project. In the past, the City has provided $15,000
per unit. However, the Housing Commission determined that the increase in the per unit subsidy for this
project was warranted for two key reasons. First, the Developer is exceeding the 10% requirement for 3
bedroom units. The Developer will provide 40% of the subject units with 3 bedrooms. Second, in the five
years since the City last assisted a for-sale project, construction and land costs have significantly increased
which has increased the per unit cost for the affordable units.
The request for financial assistance is now being forwarded to the City Council for approval and
authorization to execute the appropriate documents.
FINANCIAL ASSISTANCE FOR THE AFFORDABLE HOUSING PROJECT
In the past, the City’s assistance has been structured in a form which is first used for project construction
and then for deferred financing for the actual homebuyer. Staff and the Housing Commission are
recommending a change in the financial assistance structure for the subject project. If approved by the City
Council, the subject financial assistance will be provided directly to the homebuyer at the time of purchase
(rather than to the Developer). This City subsidy will be in the form of downpayment assistance and is
structured as a loan which is repaid to the City upon resale of the unit to a non-low income household.
AB # 17,832
Page 2
The following restrictions will be placed on the affordable unit:
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The low income buyer must live in the unit as hidher principal place of residence; the unit may not
be rented.
There is a limit to the price at which the unit may be sold during the first fifteen years; it must be
sold to another low income household at the appropriate restricted price.
After year 15, the home may be sold to a non-low income household but the City’s loan must be
repaid. Any real appreciation is shared between the City and the homebuyer based on the
contribution to the initial purchase. There is no “windfall” profit to the subsidized buyer under this
loan structure.
The City has the option to purchase the unit at a restricted price when it is put up for sale.
The City loan is due and payable upon any default under the Promissory Note, Resale Restriction
Agreement, or Deed of Trust, upon transfer of the home and at the end of the 30 year term.
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Proiect Agreements
Each home buyer will be required to execute loan documents for the assistance. Copies of the loan
documents are included as exhibits in the attached Housing Commission Staff Report, dated September 9,
2004. As one of the actions set forth within this report, the City Council is being asked to authorize the City
Manager to execute these documents, in substantially the form presented. The documents include a
Borrower Promissory Note, Borrower Deed of Trust and Security Agreement, Borrower Resale Restriction
Agreement and Option to Purchase, and Borrower Disclosure Statement. These documents are explained
below.
0 Borrower Promissory Note- This document is a “promise to pay“ the City for the total amount of the
loan advanced to borrower. The note is secured by a Deed of Trust. In this agreement, the borrower is
promising to repay the City Loan of $20,000, all developer subsidy, and any contingent interest upon sale or
transfer of the property.
Borrower Deed of Trust and Security Agreement - this document outlines the security for the loan
between the City of Carlsbad and the individual property owner. The security provided for the loan includes:
1) the owner’s interest in the property, 2) all buildings and improvements of every kind and description on
the property, and 3) interest in all personal property or fixtures on the property.
0 Borrower Resale Restriction Agreement, and Option to Purchase - this document outlines the
resale controls on the home and provides the City with an option to purchase the home at a restricted price
when the buyer decides to sell the home.
0 Borrower Disclosure Statement - this document explains the major provisions of the Promissory Note,
Deed of Trust, and Borrower Resale Restriction Agreement to help the borrower better understand the
terms and conditions of said documents.
H 0 US I N G CO M MISS IO N/STAF F R ECOM M EN DATION
At their meeting on September 9, 2004, the Housing Commission reviewed the request to provide financial
assistance to the buyers of the affordable housing project known as Mulberry in the Bressi Ranch Master
Plan Area. The Commission also reviewed the draft loan documents. The Commission recommended by a
vote of 4-0 (Scarpelli - absent), that the City Council approve the financial assistance in the amount of
$2,000,000 from the Housing Trust Fund and related loan and regulatory documents.
AB # 17,832
Page 3
SUBORDINATION OF CITY AGREEMENTS
It is important to note that by approving the subject agreements, the Council is also agreeing to subordinate
the City’s loans and agreements to the lien of deeds of trust securing the financing provided by a private
lender. The lenders will require that the City subordinate its loan and agreements to those of the Bank. As
with similar previous projects, staff will ensure that the Bank provide commitments reasonably designed to
protect the City’s investment in the event of default. These protections include a notice of default to the City
and a right of the City to cure the default.
ENVIRONMENTAL REVIEW
A Statement of Environmental Compliance was adopted by the Planning Commission/City Council in their
approval of the project. No further environmental review is required as part of the approval of the financial
assistance.
FISCAL IMPACT:
The financial assistance will be provided from the City of Carlsbad’s Housing Trust Fund. The Trust Fund
has a current undesignated fund balance of approximately $9.1 million. The $2,000,000 loan will be in the
form of a silent second trust deed loan and will be repaid, along with the Developers subsidy and shared
appreciation, upon sale or transfer of each individual property.
EXHIBITS:
1. City Council Resolution No. 2004-327 approving financial assistance for the Mulberry development within
the Bressi Ranch Master Plan Area, and authorizing City Manager to execute appropriate documents.
2. Housing Commission Staff Report dated September 9, 2004, including developer pro forma as well as the
Borrower Promissory Note, Borrower Deed of Trust and Security Agreement, Borrower Resale Restriction
Agreement and Option to Purchase, and Borrower Disclosure Statement.
3. Housing Commission Minutes dated September 9, 2004.
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CITY COUNCIL RESOLUTION NO. 2004-327
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, APPROVING $2,000,000 IN
DOWNPAYMENT FINANCIAL ASSISTANCE FROM THE
HOUSING TRUST FUND TO THE 100 LOW INCOME HOME
BUYERS WITHIN THE MULBERRY RESIDENTIAL
DEVELOPMENT OF THE BRESSI RANCH MASTER PLAN,
AND APPROVING AND AUTHORIZING THE CITY MANAGER
TO EXECUTE THE RELATED LOAN DOCUMENTS.
APPLICANT: LENNAR COMMUNITIES
WHEREAS, the City of Carlsbad has identified a need to provide housing which is affordable to
low income households in a variety of different forms; and
WHEREAS, a project known as “Mulberry, Bressi Ranch” has been approved for construction
which will provide one hundred (100) for-sale, two and three bedroom, condominium units on property
generally located south of Palomar Airport Road and east of El Camino Real, in Planning Area 15 of the
Bressi Ranch Master Plan Area which will provide housing affordable to low income households; and
WHEREAS, the affordability level and the unit mix of the proposed project are consistent with
the City of Carlsbad’ s Housing Element objectives, Consolidated Plan, and Inclusionary Housing
Ordinance; and
WHEREAS, on September 9, 2004, the City of Carlsbad Housing Commission held a public
meeting and recommended that, based upon the financial analysis of the project, City financial
participation in the project is necessary, appropriate and exceeded by the public benefit received by the
City; and
WHEREAS, the City Council did hold a public meeting to consider a request to approve loan
documents for City financial assistance for the buyers of said one hundred (100) for-sale, two and three
bedroom, condominium housing units affordable to low income households and;
Ill/
Ill/
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Page 2 of CC Resolution No. 2o04-327
WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all
persons desiring to be heard, said Council considered all factors relating to said request:
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. The above recitations are true and correct.
2. The request for City financial assistance for home buyer down payments for the Mulberry
development in the Bressi Ranch Master Plan has been determined to be consistent with
the goals and objectives of the City of Carlsbad’s Housing Element and Consolidated
Plan, the Inclusionary Housing Ordinance, and the Carlsbad General Plan.
3. The request for City financial assistance will assist low income households to purchase a
total of one hundred (100) for-sale, two and three bedroom, condominium housing units in
the Mulberry development of the Bressi Ranch Master Plan. The project, therefore, has
the ability to effectively serve the City’s housing needs and priorities as expressed in the
Housing Element and the Consolidated Plan.
4. That based on the information provided within the City Council Staff Report, the Housing
Commission Staff Report, dated September 9, 2004, and the testimony presented during
the public meeting of the City Council, the City Council hereby APPROVES the
Borrower Promissory Note, Borrower Deed of Trust and Security Agreement, Borrower
Resale Restriction Agreement and Option to Purchase, and Borrower Disclosure
Statement between the City of Carlsbad and the individual home buyer within said project
and APPROVES a total amount of $2,000,000 from the City of Carlsbad’s Housing Trust
Fund to provide down payment assistance to low income buyers of said one hundred (100)
for-sale, two and three bedroom, condominium housing units in the Mulberry
development of the Bressi Ranch Master Plan.
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Page 3 of CC Resolution No. 2004-327
5. That the City Council authorizes the City Manager or his designee to execute all
documents related to provision of the City assistance, including but not limited to a
Borrower Promissory Note, Borrower Deed of Trust and Security Agreement, Borrower
Resale Restriction Agreement and Option to Purchase, and Borrower Disclosure
Statement, in substantially the forin presented to the City Council and subject to review
and final approval by the City Attorney.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of
the City of Carlsbad, California, held on the 12th day of October, 2004 by the following vote, to wit:
AYES: Council Members Lewis, Finnila, Kulchin, Hall, and
NOES : None
Packard
ATTEST:
v Karen R. Kundtz, Assistant City Clerk
(SEAL)
EXHIBIT 2
HOUSING COMMISSION
STAFF REPORT
7
me City of Csrlsbad Housin&& Redevelopment Depsrtment
AREPORT TO THE
H0USII:NG COJMEMISSXON
Gfaff: Cra;igRuiz management Andyet
Item No. 1
DATE: SEPTEMBER 9,2004
SUBJECT: CPO3-03 - BRESSI RANCH HOUSING PROJECT -
RECOMMENDATION OF APPROVAL TO THE CITY COUNCIL TO
PROVIDE $2,000,000 IN FINANCIAL ASSISTANCE AND
APPROVAL OF THE BORROWER LOAN DOCUMENTS FOR
DEVELOPMENT OF ONE HUNDRED AFFORDABLE
CONDOMINIUM UNITS TO SATISFY THE REQUIREMENTS OF
THE INCLUSIONARY HOUSING ORDINANCE FOR THE BRESSI
RANCH MASTER PLAN.
I. RECOMMENDATION
That the Housing Commission ADOPT Resolution No. 2004-002, recommending
APPROVAL to the City Council to provide $2,000,000 in financial assistance from the
Housing Trust Fund in the form of low income home buyer down payment assistance,
and approval of the borrower loan documents for construction of one hundred (100)
affordable for-sale condominium units to satisfy the inclusionary housing ordinance
requirement for the Bressi Ranch Master Plan.
11. PROJECT BACKGROUND
On July 23,2002, the City Council approved the Bressi Ranch Master Plan. The Master
Plan allows for the development of 623 residential units (523 single-family and 100 for-
sale affordable condominiums), as well as industrial, mixed use, community facilities and
open space land uses. The ultimate development will include up to 2.16 million square
feet of industrial buildings, 130,000 square feet of commercial buildings, 138,000 square
feet of community-related services and/or facilities, open space totaling 187 acres and a 3
acre park.
111. PROJECT DESCRIPTION
The affordable housing condominiums will generally be located south of Palomar Airport
Road and east of El Camino Real, in what is known as Planning Area 15 of the Bressi
Ranch Master Plan. More specifically, the project is located south of the future Gateway
Road, east of the fbture Village Green Drive and north of the future Town Garden Road.
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a
Number of Bedrooms
CPO3-03 - BRESSI RANCH AFFORDABLE HOUSING PROJECT
SEPTEMBER 9,2004
PAGE 2
Size of Unit I Number ofunits
Two
Three
901 SQ. FT. 60
1,003 SQ. FT. 20
Three
IV. DEVELOPMENT TEAM
1,139 SQ. FT. 20
Total 100
The Developer for the Bressi Ranch Master Plan is Lennar Communities. Lennar has retained
Greystone Homes to construct the affordable housing project. Greystone Homes is a large
homebuilder, with experience in both single family and multi-family housing developments.
In addition, Greystone Homes is also a wholly owned subsidiary, Lennar Communities. The
architect for the project is William Hezmalhalch Architects of fine.
V. FINANCIAL ASSISTANCE
A. Cost Reasonableness
The developer has provided a detailed development proforma for review b r staff and the
Housing Commission (See Attachment 2). Since development costs are one of the key
variables determining the need for subsidies, it is important that those costs be
reasonable. At approximately $21.5 million, not including the cost of the land, the
average unit cost of $21 5,000 is generally consistent with typical affordable multi-family
development within the City.
B. UndueGain -
It is important that any financial assistance have the effect of making the units more
affordable and not creating undue gain for any party. The Developer, Lennar Homes, is
not receiving a developer fee for the development of this project. In addition, the pro
forma does not include a cost for the land. However, the Builder, Greystone Homes, will
CPO3-03 - BRESSI RANCH AFFORDABLE HOUSING PROJECT
SEPTEMBER 9,2004
PAGE 3
receive a “profit” of $1,579,000, or approximately 7.3% of total project costs. As stated
above, Greystone is a subsidiary Lennar Communities. The profit or builder fee of 7.3%
is within acceptable limits for a project of this size and affordability. Further, the builder
fee is a customary cost of construction.
MAXIMUM PURCHASE
PRICE*
C. Subsidy Analysis
$177,400
With projected costs and a known restricted purchase price based on the maximum
household incomes, it is possible to determine the estimated level of subsidy required to
develop and sell the affordable units. With this subsidy estimate, an amount of City
assistance is recommended which effectively “leverages” the City’s housing funds.
Leveraging is defined as the ratio of City subsidy to subsidy provided from other sources.
The following chart estimates the required subsidy for the affordable project and shows
the recommended level of City assistance and developer subsidy necessary for the project
to be feasible.
SUBSIDY SOURCES
City Assistance
PROFORMA SUBSIDY ANALYSIS
Bressi Carrillo - Per Unit Average
$20,000
1 AVG.COST
Developer Subsidy
(Not Including Land Cost)
CITY LEVERAGE
(Not Including Land Cost)
$21 5,030
$1 7,630
$1 : $1.3
SUBSIDY REQUIREMENT ($37,630)
The Developer is proposing to self-finance the project. Under this scenario, the developer
will provide the financing to construct the project in its entirety. Staff is recommending
the City provide $2,000,000 in financial assistance with the understanding that the Master
Developer will provide $1.763 million in financial assistance, not including the cost of
the land. Under this option, the City’s $2,000,000 million assistance equates to $20,000
per affordable unit.
The $20,000 per unit is larger than what has been previously approved for similar
projects. In 1999, the City provided $15,000 per unit for a similar project (Rancho
Cam110 - Serrano). However, staff believes that the greater amount of assistance is
warranted for two’ reasons. First. the lnclusionarv Housing Ordinance reauires that 10%
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CPO3-03 - BRESSI RANCH AFFORDABLE HOUSING PROJECT
SEPTEMBER 9,2004
PAGE 4
of the project contain three bedroom units. With over 40% the of project containing large
bedroom units, the project far exceeds this requirement. Second, in the five years since
the City last assisted a similar project, construction and land costs have significantly
increased. The higher assistance amount recognizes these increased costs.
D. Form of Assistance
Previously, City assistance was provided in the form of a loan that is first used for
construction and then for deferred financing (no payment for a period of time) for the
actual homebuyer. In this case, staff is proposing that the assistance be provided directly
to the homebuyer at the time of purchase. This City subsidy will be in the form of down
payment assistance and is structured as loan that is repaid to the City upon resale of the
unit. Any real appreciation is shared between the City and the homebuyer based on the
contribution to the initial purchase. No “windfall” comes to the subsidized buyer.
The financial assistance will be provided from the City of Carlsbad’s Housing Trust
Fund. The Fund currently has a balance of approximately $9.1 million.
E. Security
The City takes a security interest in the property for the affordable housing project.
Because the amount of City assistance is only a portion of the total subsidy, the City will
have a significant “cushion” of equity protecting its actual cash loan. In addition, the
individual units will be required to remain affordable for fifteen years after the initial
purchase. If the home owner wishes to sell the unit within the first fifteen years, the
property must be sold to a low income household at a price that is affordable to said
buyer. The requirement to sell the unit at an affordable price is guaranteed through the
execution of a Deed of Trust and a Resale Agreement, which are both recorded against
the property.
F. Risk
The two major types of risk in this for-sale development are construction risk (units do
not get built) and market risk (units do not sell). In addition, it is likely that any City
financial assistance will be subordinated to conventional bank financing. If a problem did
arise, the bank’s interest would come ahead of the City’s. Although the City would be
taking on some of the risk inherent with development, there are several factors that
mitigate these risks. First, the City’s financial involvement would constitute .a very small
portion of the project, meaning that the other lenders and the Developer will be motivated
to insure successful completion. Second, in terms of market risk, the City’s assistance
will be fixed and additional subsidies required to insure sale of all units will be the
obligation of the developer.
VI. FINANCIAL ASSISTANCE DOCUMENTS
Copies of the draft loan documents that will be executed between the home buyer and the
City are provided as exhibits (Exhibit 3) to this report for review by the Housing
CPO3-03 - BRESSI RANCH AFFORDABLE HOUSING PROJECT
SEPTEMBER 9,2004
PAGE 5
Commission. The Commission is being requested to review and recommend approval of
the loan documents in substantially the form presented and subject to approval by the City
Attorney.
MI. SUMMARY AND STAFF RECOMMENDATION
It is the role of the Housing Commission to make financial assistance recommendations
to the City Council based on several considerations with respect to affordable housing
projects. These are:
0 The proposal's effectiveness in serving the City's needs and priorities as expressed
in the Housing Element of the General Plan and the Consolidated Plan.
0 The proposal's consistency with the City's affordable housing policies and
ordinances as expressed in the Housing Element and Inclusionary Housing
Ordinance.
0 The proposal's development and operating feasibility, emphasizing the
development team capacity, financing sources and the role of the City in
providing financial, assistance or incentives.
Staff recognizes that affordable homeownership units of the size and type proposed are
costly in comparison to other affordable housing alternatives. The financial information
contained in the Proforma demonstrates the need for financial assistance to assist in the
development of this project. The project will meet an affordable housing need and is
consistent with City policies and ordinances on affordable housing.
The Affordable Housing Policy Team (stam is recommending that the Housing
Commission approve a recommendation to the City Council to commit a total of
$2,000,000 to the Bressi Ranch Affordable Housing Development for the development of
100 affordable two and three bedroom condominium units within Planning Area 15 of the
Bressi Ranch Mater Plan. The funding will be provided from the City of Carlsbad's
Housing Trust Fund. The Housing Trust Fund has a current undesignated fund balance of
approximately $9.1 million. The Housing Policy Team (stam is also requesting that the
Housing Commission review and recommend approval of the borrower loan documents
in substantially the form submitted subject to final approval by the City Attorney.
VIII. EXHIBITS
1. Housing Commission Resolution No. 2004-002
2. Developer Request for Assistance Proforma
3. Draft Borrower Promissory Note, Deed of Trust, Resale Agreement and Buyer
Disclosure Form.
4. Vicinity Map
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HOUSING COMMISSJON RESOLUTION NO. 2004-002
THAT THE HOUSING COMMISSION RECOMMEND APPROVAL TO THE CITY
COUNCIL TO PROVIDE $2,000,000 IN FINANCIAL ASSISTANCE FROM THE
HOUSING TRUST FUND IN THE FORM OF LOW INCOME HOME BUYER DOWN
PAYMENT ASSISTANCE, AND APPROVAL OF THE BORROWER LOAN
DOCUMENTS FOR CONSTRUCTION OF ONE HUNDRED (1 00) AFFORDABLE
ORDINANCE REQUIREMENT FOR THE BRESSI RANCH MASTER PLAN.
FOR-SALE CONDOMINIUM UNITS TO SATISFY THE INCLUSIONARY HOUSING
’ APPLICANT: LENNAR COMMUNITIES
CASE NO: CP 03-03
WHEREAS, Lennar Communities is the developer of the Bressi Ranch Master Plan; and
WHEREAS, Bressi Ranch intends to construct a total of 623 residential housing units
within the Bressi Ranch Master Plan; and
WHEREAS, pursuant to the City of Carlsbad’s Inclusionary Housing Ordinance, Chapter
21.85 of the Carlsbad Municipal Code, fifteen percent of all residential development within the
Bressi Ranch Master Plan is required to be affordable to low income households; and
WHEREAS, the developer is proposing to construct 100 two and three bedroom, for-sale,
attached condominium units, which will be restricted for sale to low income households as a
means to satisfy the affordable housing obligations for the Ranch Master Plan as permitted by
Carlsbad Municipal Code Section 2 1.85 of the City’s Inclusionary Housing Ordinance; and
WHEREAS, on September 9, 2004, the Housing Commission held a public meeting to
consider the developer’s request for financial assistance to construct said affordable housing
units; and
WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of
all persons desiring to be heard, said Commission considered all factors relating to the request for
financial assistance;
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NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the
City of Carlsbad, California, as follows:
1. The above recitations are true and correct.
2. The project is consistent with the goals and objectives of the City of Carlsbad's
Housing Element, the Consolidated Plan, the Inclusionary Housing Ordinance, and
the Carlsbad General Plan.
3. The project will provide a total of 100, for-sale, two and three bedroom attached
condominium units affordable for purchase to households at 80% or below of the
county median income which meets a "medium priority" affordable housing need as
outlined within the City of Carlsbad's approved 2000-2005 Consolidated Plan. The
project, therefore, has the ability to effectively serve the City's housing needs and
priorities as expressed in the Housing Element and the Consolidated Plan.
4. That based on the information provided within the Housing Commission Staff Report
and testimony presented during the public meeting of the Housing Commission on
September 9,2004, the Housing Commission hereby ADOPTS Resolution No. 2004-
02, recommending APPROVAL to the City Council to provide $2,000,000 in
financial assistance for the development of 100, for sale, affordable two and three
bedroom attached condominium units to satisfy the requirements of the Inclusionary
Housing Ordinance for the Bressi Ranch Master Plan. Funding for the project shall be
provided from the City of Carlsbad's Housing Trust Fund.
5. That the Housing Commission recommends that the City Manager or his
designee, and execute the borrower loan documents in substantially the form
submitted subject to review and approval by the City Attorney.
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HC RESO. NO. 2004-02
PAGE 2
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PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing
Commission of the City of Carlsbad, California, held on the 9th day of September, 2004, by the
following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
EDWARD SCARPELLI, CHAIRPERSON
CARLSBAD HOUSING COMMISSION
DEBORAH K. FOUNTAIN
HOUSING AND REDEVELOPMENT DIRECTOR
HC RESO. NO. 2004-02
PAGE 3
. .
EXHIBIT 2
July 27,2004
City of Carlsbad
Housing and Redevelopment Department
Debbie Fountain
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
SUBJECT: Bressi Ranch Affordable Housing Subsidy
Dear Debbie:
Lennar Communities, the Master Developer of Bressi Ranch, is pleased to present our
formal affordable housing subsidy request to you. Bressi Ranch is a true pedestrian
oriented community, comprised of 523 single family detached homes and 100 for sale
attached affordable condominium homes. These two and three bedroom affordable
condominium homes are located on a 5.6 acre parcel of land in the heart of the mixed use
retail component of Bressi Ranch. Future residents of these homes will be within
walking distance of the Village Green RecreationaliPool area, the Village Square, retail
uses, and employment opportunities in the officehndustrial business park to the north.
In addition to smart pedestrian oriented land planning, the condominium homes have
been architecturally designed to fit within the design guidelines of the Master Plan.
Street facing architecture has been planned to resemble single family residences from the
front, accompanied by exterior decks, patios and planter boxes. Buildings have been
designed with multiple exterior color schemes, exterior window and accessory
treatments, tile roofs, and enhanced garage entries. Special consideration was made to
allow for enhanced landscaped green spaces onsite for both passive and active uses.
Meandering walkways connect throughout the site plan.
Lennar Communities has entered into an agreement with Greystone Homes as the builder
of the 100 affordable homes. Foundations are being poured for five of the affordable
buildings or 50 homes, followed by the vertical steel construction framing. The
remainder of the buildings will commence construction in the third quarter of this year.
Attached is a project proforma reflecting a total subsidy requirement of $3.6 Million.
Project revenues have been estimated based on City guidelines. The proforma costs are
/6
1525 Faradav Avenue, Suite 300, Carlsbad, California 92008-731 9 - (760) 918-7765, Fax (760) 918-8868
I
based on detailed analysis of costs spent to date and detailed projections of future costs.
Please note that no land value has been ascribed to the 5.6 acre site, which is in itself a
considerable additional subsidy. Based upon these development costs, Lennar is
requesting a subsidy in the amount of $20,000 per door for the 100 affordable homes.
The remaining subsidy requirement will be funded by Lennar.
The future residents of Bressi will have the pride of home ownership in a wonderful
garden district master plan. Please feel free to contact me with any questions or
comments that you may have.
Sinaeqely , 4
Encl.
Cc: ShermHarmer
Tom Sakai
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EXHIBIT 3
NOTICE TO BORROWER:
THIS NOTE IS NOT ASSUMABLE
PROMISSORY NOTE
Secured by Deed of Trust
$ Carlsbad, California
Y 200-
FOR VALUE RECEIVED, the undersigned
(the "Borrower") promises to pay to the City of Carlsbad, a
municipal corporation (the "City"), or order, at the Housing and Redevelopment Department,
2965 Roosevelt Street, Suite B, Carlsbad, California 92008-2389, or such other place as the City
may designate in writing, the principal sum of Dollars ($ ),
plus Contingent Interest calculated pursuant to Section 3 below, plus any amounts due the City
as Excess Sales Proceeds pursuant to the Resale Restriction Agreement and Option to Purchase
(the "Resale Agreement") by and between Borrower and City of even date herewith.
1. Purpose of Loan. Borrower is purchasing the Residence located at
in the City of Carlsbad. This Note evidences a loan made by
(the "Seller") to the Borrower, utilizing subsidy
hds provided by the City and the Seller, and assigned by the Seller to the City (the "City/Seller
Loan"). The City/Seller Loan is in the amount determined by the City to be necessary for the
Borrower to afford to purchase the Residence making a reasonable downpayment and using
conventional first mortgage financing for the balance of the purchase price not financed by the
City/Seller Loan. The Seller made the CityISeller Loan to the Borrower and assigned the
City/Seller Loan to the City in fulfillment of certain inclusionaxy housing obligations pursuant to
an Affordable Housing Agreement between LENNAR BRESSI RANCH VENTURE, LLC, a
California limited liability company (Seller's predecessor in interest) and the City dated
the Borrower is required and has agreed to execute a Resale Agreement which during the first
fifteen (15) years of Borrower's Ownership of the Residence, restricts the price of the Property
upon resale and which requires the Borrower to pay any Excess Sales Proceeds (as defined
below) at resale to the City. This Note evidences both (a) the obligation of Borrower to repay
the City/Seller Loan, and (b) the obligation of Borrower to pay any Excess Sales Proceeds to the
City pursuant to the Resale Agreement.
9 , ZOO-. Because the purchase price was set at an affordable price,
2. Definitions. The terms set forth in this section shall have the following meanings
in this Note.
a. "Appreciation Amount" shall mean the amount calculated by subtracting
the total original purchase price of the Residence paid by the Borrower, which was
I
23
12/16/2OO3
,
Dollars ($ ), from one of the following amounts, as
applicable: (i) in the event of a sale of the Residence, the amount received by the Borrower as
the sale price of the Residence, as certified by the Borrower pursuant to Section 15d or Section
17 of the Resale Agreement below; or (ii) in the event of a prepayment of this Note, a Transfer
other than sale of the Residence, or in the event of a default, the Fair Market Value of the
Residence; or (iii) in the event a creditor acquires title to the Residence through a deed in lieu of
foreclosure, a trustee's deed upon sale, or otherwise, the amount paid for the Residence at a
creditor's sale of the Residence; or (iv) in the event of payment at the expiration of the thirty (30)
year tern the Fair Market Value of the Residence.
b. "Contingent Interest" shall mean the percentage of the Appreciation
Amount set out in Section 4.
C. "Excess Sales Proceeds" shall have the meaning set forth in Section 16 of
the Resale Agreement.
d. "Fair Market Value" shall be determined by a real estate appraisal made
by an independent residential appraiser designated by the City. If possible, the appraisal shall be
based upon the sales prices of comparable properties sold in the market area during the preceding
three (3)-month period. The cost of the appraisal shall be paid by the Borrower. Nothing in this
subparagraph shall preclude the Borrower and the City from establishing the Fair Market Value
of the Residence by mutual agreement in lieu of an appraisal.
e. "First Mortgage" shall mean the promissory note and deed of trust
evidencing and securing the first mortgage loan for the Residence.
f "Maximum Restricted Resale Price" shall have the same meaning as set
forth in Section 14 of the Resale Agreement.
g- "Resale Agreement" shall mean the Resale Restriction Agreement and
Option to Purchase executed by the Borrower and the City in connection with the CitylSeller
Loan.
"Residence" shall mean the housing unit and land encumbered by the deed
of trust executed in connection with this Note.
h.
1. "Transfer" shall mean any sale, assignment or transfer, voluntary or
involuntary, of any interest in the Residence, including, but not limited to, a fee simple interest, a
joint tenancy interest, tenancy in common interest, a life estate, a leasehold interest, or an interest
evidenced by a land contract by which possession of the Residence is transferred and the
Borrower retains title. Any Transfer without satisfaction of the provisions of this Note is
prohibited. A transfer: (i) to an existing spouse who is also an obligor under the Note; (ii) by a
Borrower to a spouse where the spouse becomes the co-owner of the Residence; (iii) between
spouses as part of a marriage dissolution proceeding; (iv) to an existing spouse or child of the
BOITOW~~ by devise or inheritance following the death of the Borrower; (v) by the Borrower into
an inter vivos trust in which the Borrower is the beneficiary; (vi) by deed of trust or imposition
of a lien subordinate to the Deed of Trust; or (vii) by refinance of the First Mortgage meeting the
2 12/16/2003 2q
*
requirements of Section 11, shall not be considered a Transfer for the purposes of this Note;
provided, however, that the Borrower shall continue to occupy the Residence as his or her
principal place of residence (except where the transfer occurs pursuant to subsection (iii) or (iv)
above, in which event the transferee shall owner-occupy the Home and afknatively assume
Owner's obligations under this Note and the City Deed of Trust, and the Resale Agreement) and
the Borrower shall provide written notice of such transfer to the City pursuant to Section 8 of the
Resale Agreement.
3. Security. This Note is secured by a second deed of trust dated the same date as
this Note (the "Deed of Trust").
4. Contingent Interest. The Borrower shall pay contingent interest equal to
percent <A) [staff to insert appropriate percentage which shall in no
event exceed (50%)] of the Appreciation Amount (the "contingent Interest"). No interest other
than Contingent Interest shall be due hereunder. The Contingent Interest shall be paid to the City
at the time set forth in Section 6 below. Borrower acknowledges that the Contingent Interest
percentage amount is equal to the City/Seller Loan principal amount as a percentage of the total
purchase price of the Residence paid by the Borrower at the time of purchase, multiplied by
seventy-five one hundredths (.75). Borrower acknowledges that this calculation of the
percentage of the Appreciation Amount due to the City as Contingent Interest includes a twenty-
five percent (25%) discount to Borrower to account for any capital improvements Borrower may
make to the Residence.
5. Term. The Term of this Note shall mean the period commencing on the date of
this Note and expiring on the date thirty (30) years thereafter.
6. Rmapent. The total amount of the principal and any Contingent Interest owed
under this Note (including Excess Sales Proceeds due to the City pursuant to the Resale
Agreement) shall immediately become due and payable (i) in the event of a default by the
Borrower under this Note, the Resale Agreement, the Deed of Trust, or the First Mortgage, (ii)
on the date Transfer is made whether voluntarily, involuntarily, or by operation of law and
whether by deed, contract of sale, gift, devise, bequest or otherwise, (iii) in the event Borrower
ceases to occupy the Residence as his or her principal place of residence; or (iv) at the end of the
Term of this Note as described above in Section 5. Failure to declare such amounts due shall not
constitute a waiver on the part of the City to declare them due in the event of a subsequent
Transfer.
7. Late Payment Fees. If any payment due hereunder is not paid within five (5) days
from the date such becomes due, Borrower shall pay a reasonable late or collection charge equal
to five percent (5%) of the amount so unpaid. The City and Borrower agree that the actual
damages and costs sustained by the City due to the failure to make timely payments would be
extremely difficult to measure and that the charges specified in this paragraph represent a
reasonable estimate by Borrower and the City of a fair average compensation for such damages
and costs. Such charges shall be paid by Borrower without prejudice to the right of the City to
collect any other amounts provided to be paid under this Note, the Resale Agreement or the Deed
of Trust or, with respect to late payments, to declare a default.
3 12/16/2003
25
8. Prepayments. The Borrower may prepay all or part of the balance due under this
Note including principal and Contingent Interest. In the event the entire amount of principal due
under this Note is prepaid, all Contingent Interest, calculated as of the date of prepayment, shall
also be due at the time of prepayment. In the event of partial prepayment, the amount of
Contingent Interest due upon prepayment shall be determined at the time of any partial
prepayment based on the Fair Market Value of the Property. Partial prepayments shall be
allocated between payment of Contingent Interest and payment of principal in the same
proportion as the ratio of each to the total amount due (principal and interest) at the time of
prepayment. Following a prepayment, the percentage of Contingent Interest due the City shall
be recalculated to reflect the paydown in principal owed the City. The recalculated Contingent
Interest shall equal the outstanding principal amount of the Note divided by the original purchase
price of the Property paid by the Borrower. Notwithstanding any prepayment of amounts due
under this Note, the Resale Agreement shall continue in full force and effect for the period of
time set forth in Section 25 of the Resale Agreement.
9. No AssumDtion of Note. The Borrower acknowledges that this Note is given in
connection with the purchase of property (the "Residence") as part of a program of the City to
assist in the purchase of homes by lower income persons. Consequently, this Note is not
assumable by transferees of the Residence, but is due in 111 upon Transfer.
10. Maintenance; Taxes: Insurance. Borrower shall maintain the Residence in good
repair and in a neat, clean and orderly condition. BOKOW~~ shall promptly pay all property taxes
due on the Residence prior to any delinquency and shall comply with the insurance requirements
set forth in the Deed of Trust and Resale Agreement.
11. Refinance of First Mortgage Loan. The outstanding principal and interest on this
Note shall not be due upon prepayment and refinance of the First Mortgage, and the Resale
Agreement and Deed of Trust shall be subordinated to the refinanced loan, provided that (i) such
refinancing is approved by the City, (ii) the amount refinanced does not exceed the outstanding
principal balance of the First Mortgage at the time of refinance plus reasonable costs of
refinance, and (iii) the refinance does not result in higher monthly payments on the First
Mortgage Loan than were due prior to the refinance.
12. Default.
a. The Borrower shall be in default under this Note if he or she is in default
under the First Mortgage following the expiration of First Mortgage cure periods, or if, after the
notice and cure period provided by the City to the Borrower pursuant to the notice and cure
provisions of the Deed of Trust, the Borrower (i) fails to pay any money when due under this
Note; (ii) breaches any representation or covenant made in this Note or Resale Agreement in any
material respect; or (iii) breaches any provision of the Deed of Trust.
b. Upon the Borrower's breach of any covenant or agreement of the
Borrower in this Note, the Resale Agreement or the Deed of Trust, including, but not limited to,
the covenants to pay, when due, any sums secured by the Deed of Trust, the City, prior to
4 121 612003 26
.
acceleration, will send, in the manner set forth in Section 17, notice to the Borrower specifying:
(1) the breach; (2) if the breach is curable, the action required to cure such breach; (3) a date, not
less than thirty (30) days from the date the notice is effective, by which such breach, if curable, is
to be cured and (4) if the breach is curable, that failure to cure such breach on or before the date
specified in the notice may result in acceleration of the sums secured by the Deed of Trust and
foreclosure by the City. The notice will also inform the Borrower of the Borrower's right to
reinstate after acceleration and the right to bring a court action to assert the nonexistence of
default or any other defense of the Borrower to acceleration and sale.
13. Acceleration. Upon the occurrence of a default under this Note, the Resale
Agreement, the Deed of Trust, or the First Mortgage, the City shall have the right to declare the
111 amount of the principal along with any Contingent Interest under this Note immediately due
and payable. Any failure by the City to pursue its legal and equitable remedies upon default
shall not constitute a waiver of the City's right to declare a default and exercise all of its rights
under this Note, the Resale Agreement, and the Deed of Trust. Nor shall acceptance by the City
of any payment provided for herein constitute a waiver of the City's right to require prompt
payment of any remaining principal and interest owed.
14. No Offset. The Borrower hereby waives any rights of offset it now has or may
later have against the City, its successors and assigns, and agrees to make the payments called for
in this Note in accordance with the terms of this Note.
15. Waiver: Attornev Fees and Costs. The Borrower and any endorsers or guarantors
of this Note, for themselves, their heirs, legal representatives, successors and assigns,
respectively, severally waive diligence, presentment, protest, and demand, and notice of protest,
dishonor and non-payment of this Note, and expressly waive any rights to be released by reason
of any extension of time or change in terms of payment, or change, alteration or release of any
security given for the payments hereof, and expressly waive the right to plead any and all statutes
of limitations as a defense to any demand on this Note or agreement to pay the same, and jointly
and severally agree to pay all costs of collection when incurred, including reasonable attorney
fees. If an action is instituted on this Note, the Borrower promises to pay, in addition to the costs
and disbursements allowed by law, such sum as a court may adjudge reasonable as attorneys'
fees in such action.
16. No Waiver bv the City. No waiver of any breach, default or failure of condition
under the terms of this Note shall be implied from any failure of the City to take action with
respect to such breach, default or failure or fiom any previous waiver of any similar or unrelated
breach, default or failure.
17. Notices. All notices required in this Note shall be sent by certified mail, retum
receipt requested, or express delivery service with a delivery receipt, or personally delivered with
a delivery receipt obtained and shall be deemed to be effective as of the date shown on the
delivery receipt as the date of delivery, the date delivery was refbsed, or the date the notice was
returned as undeliverable as follows:
To the Borrower:
5 12/16/2003
27
At the address of the Residence.
To the City:
City of Carlsbad
Housing and Redevelopment Department
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-2389
Attention: Housing and Redevelopment Director
The parties may subsequently change addresses by providing written notice of the change
in address to the other parties in accordance with this section.
18. Joint and Several Obligations. This Note is the joint and several obligation of all
makers, sureties, guarantors and endorsers, and shall be binding upon them and their successors
and assigns.
19. Nonliabilitv for Nenlinence. Loss. or Damage. Borrower acknowledges,
understands and agrees that the relationship between Borrower and the City is solely that of
borrower and lender, and that the City does not undertake or assume any responsibility for or
duty to Borrower to select, review, inspect, supervise, pass judgment on, or inform Borrower of
the quality, adequacy or suitability of the Residence or any other matter. The City owes no duty
of care to protect Borrower against negligent, faulty, inadequate or defective building or
construction or any condition of the Residence and Borrower agrees that neither Borrower, or
Borrower's heirs, successors or assigns shall ever claim, have or assert any right or action against
the City for any loss, damage or other matter arising out of or resulting from any condition of the
Residence and will hold the City harmless from any liability, loss or damage for these things.
20. Indemnity. Borrower agrees to defend, indemniQ, and hold the City harmless
from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys
fees that the City may incur as a direct or indirect consequence of:
a. the making of the loan to Borrower;
b. Borrower's failure to perform any obligations as and when required by the
Note, the Resale Agreement or the Deed of Trust; of
c.
the City to be true and correct.
the failure at any time of any of Borrower's representations to the Seller or
21. Termination of Restrictions. Any legal restrictions on conveyance of the
Residence (as defined in 24 CFR 203.41(a)(3)) included in this Note shall terminate upon
transfer of the Residence by foreclosure, deed in lieu of foreclosure, or assignment to the
Secretary of the United States Department of Housing and Urban Development.
6 12/16/2003 28
.
22. Controllinp Law. This Note shall be construed in accordance with and be
governed by the laws of the State of California.
23. Assignment bv City. The City may assign its right to receive the proceeds under
this Note to any person and upon notice to the Borrower by the City all payments shall be made
to the assignee.
24. Invalid Provisions. If any one or more of the provisions contained in this Note
shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such
provision or provisions shall be deemed severable from the remaining provisions contained in
this Note, and this Note shall be construed as if such invalid, illegal or unenforceable provision
had never been contained in this Note.
25. Entire Am-eement. This Note (along with the Resale Agreement and Deed of
Trust) sets forth the entire understanding and agreement of the City and the Borrower and any
amendment, alteration or interpretation of this Note must be in writing signed by both the City
and the Borrower.
BORROWER
(Print Name)
(Print Name)
7 la1 WOO3 2q
.
PROMISSORY NOTE
CITY OF CARLSBAD
ADMINISTRATIVE COVER SHEET
(Remove Upon Completion)
BLANK LINES: CHECKLIST
Amount of City/Seller Loan, p. 1, upper left
Date of Document, p. 1, upper right
Borrower's Name, p. 1, first paragraph
Amount of City/Seller Loan, p. 1 , first paragraph
Street Address of Residence, p. 1, Section 1
Name of Seller, p. 1, Section 1
Date of Affordable Housing Agreement, p. 1, Section 1
Original Purchase Price of Residence, p. 2, Section 2(a)
Contingent Interest Percent, p. 3, Section 4
Signatures, p. 7
1010\15\172081.3
RECORDING REQUESTED BY:
City of Carlsbad
WHEN RECORDED MAIL TO:
City of Carlsbad
City Clerk's Office
Attn: Cityclerk
1200 Carlsbad Village Drive Carlsbad. California 92008
(Space above for Recorder's Use)
NOTE TO BORROWER:
THIS DEED OF TRUST CONTAMS
PROVISIONS PROHIBITING ASSUMPTIONS
DEED OF TRUST
AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT ("Deed of Trust") made as of
("Trustee"), and
this day of, 200- among
("Borrower") as trustor, and
the City of Carlsbad, a municipal corporation (the "City"), as beneficiary.
The Borrower, in consideration of the promises herein recited and the trust herein
created, irrevocably grants, transfers, conveys and assigns to the Trustee, in trust, with power of
sale, the property located in the City of Carlsbad, State of California, described in the attached
Exhibit A (the "Property").
TOGETHER with all the improvements now or hereafter erected on the property, and all
easements, rights, appurtenances, and all fixtures now or hereafter attached to the property, all of
which, including replacements and additions thereto, shall be deemed to be and remain a part of
the property covered by this Deed of Trust; and
TOGETHER with all articles of personal property or fixtures now or hereafter attached to
or used in and about the building or buildings now erected or hereafter to be erected on the
Property which are necessary to the complete and comfortable use and occupancy of such
building or buildings for the purposes for which they were or are to be erected, including all
other goods and chattels and personal property as are ever used or furnished in operating a
building, or the activities conducted therein, similar to the one herein described and referred to,
and all renewals or replacements thereof or articles in substitution therefore, whether or not the
same are, or shall be attached to said building or buildings in any manner; and all of the
foregoing, together with the Property, is herein referred to as the "Security";
1 12/16/2003 31
.
To have and to hold the Security together with acquittances to the Trustee, its successors
and assigns forever;
TO SECURE to the City the repayment of the sums evidenced by a promissory note in
Dollars ($ ) executed by the Borrower to the City the amount of
as of the date of this Deed of Trust (the "Note");
TO SECURE to the City the payment of all other sums, with interest thereon, advanced
in accordance herewith to protect the security of this Deed of Trust; and the performance of the
covenants and agreements of the Borrower herein contained; and
TO SECURE to the City the performance of the covenants and agreements of Borrower
contained in that certain Resale Restriction Agreement and Option to Purchase executed by and
between the Borrower and the City of even date herewith (the "Resale Agreement") and to secure
the payment of Excess Sales Proceeds (as defined in the Resale Agreement) that may become
due by Borrower to City;
TO SECURE the performance of any obligations of Borrower in any other agreements
with respect to the financing of the Property or the Security the failure of which would adversely
affect Beneficiary, whether or not Beneficiary is a party to such agreements.
BORROWER AND CITY COVENANT AND AGREE AS FOLLOWS:
1. Borrower's Estate. That the Borrower is lawfblly seized of the estate hereby
conveyed and has the right to grant and convey the Secwity, that other than this Deed of Trust,
the Security is encumbered only by: (a) that deed of trust executed by the Borrower in
connection with a loan made to the Borrower by or its successors
and assigns (the "First Lender"), dated , 200-, executed by the Borrower in favor
of First Lender, and recorded in the County of San Diego on , 200-, and
assigned Recorder's Serial No. (the "First Lender Deed of Trust"), securing a
promissory note executed by the Borrower in favor of the First Lender ("First Lender Note"), to
assist in the purchase of the Property; and (b) the Resale Agreement. The Borrower agrees to
warrant and defend generally the title to the Security against all claims and demands, subject to
any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any
title insurance policy insuring the City's interest in the Security. (As used in this Deed of Trust,
the term "First Lender" shall include all successors and assigns of the First Lender.)
2. ReDayment of Loan. The Borrower will promptly repay, when due, the principal,
interest and other sums required by the Note and Resale Agreement, including all principal and
interest on the City/Seller Loan (as defined in the Note) and the Excess Sales Proceeds due under
the Resale Agreement. The Note contains the following provisions concerning repayment of the
loan under certain conditions:
No AssumDtion of Note. The Borrower acknowledges that this Note is
given in connection with the purchase of property (the "Residence") as
part of a program of the City to assist in the purchase of homes by lower
2 12116~003 32
,
income persons. Consequently, this Note is not assumable by transferees
of the Residence, but is due in full upon Transfer.
3. First Lender Loan. The Borrower will observe and perform all of the covenants
and agreements of the First Lender Note, First Lender Deed of Trust, and related First Lender
loan documents.
4. Resale Agreement. The Borrower will observe and perform all of the covenants
and agreements of the Resale Agreement.
5. Charges; Liens. The Borrower will pay all taxes, assessments and other charges,
fines and impositions attributable to the Security which may attain a priority over this Deed of
Trust, by the Borrower making any payment, when due, directly to the payee thereof. The
Borrower will promptly furnish to the City all notices of amounts due under this paragraph, and
in the event the Borrower makes payment directly, the Borrower will promptly discharge any
lien which has priority over this Deed of Trust; provided, that the Borrower will not be required
to discharge the lien of the First Lender Deed of Trust or any other lien described in this
paragraph so long as the Borrower will agree in writing to the payment of the obligation secured
by such lien in a manner acceptable to the City, or will, in good faith, contest such lien by, or
defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement
of the lien or forfeiture of the Security or any part thereof.
6. Insurance. The Borrower will keep the Security insured with a standard fire and
extended coverage insurance policy in at least an amount equal to the replacement cost of the
Security, but in no event less than the amount necessary to prevent the Borrower fi-om becoming
a co-insurer under the terms of the policy.
The insurance carrier providing this insurance shall be licensed to do business in the State
of California and be chosen by the Borrower subject to approval by the City; provided, that such
approval will not be withheld if the insurer is also approved by the First Lender, the Federal
Home Loan Mortgage Corporation, Fannie Mae, Freddie Mac, the United States Department of
Housing and Urban Development, the United States Department of Veterans Affairs, or
successors thereto.
All insurance policies and renewals thereof will be in a form acceptable to the City and
will include a standard mortgagee clause with standard lender's endorsement in favor of the
holder of the First Lender Note and the City as their interests may appear and in a form
acceptable to the City. The City shall have the right to hold, or cause its designated agent to
hold, the policies and renewals thereof, and the Borrower shall promptly fbmish to the City, or
its designated agent, the original insurance policies or certificates of insurance, all renewal
notices and all receipts of paid premiums. In the event of loss, the Borrower will give prompt
notice to the insurance carrier and the City or its designated agent. The City, or its designated
agent, may make proof of loss if not made promptly by the Borrower. The City shall receive
thirty (30) days advance notice of cancellation of any insurance policies required under this
section.
3 1211 612003
33
Unless the City and the Borrower otherwise agree in writing, insurance proceeds, subject
to the rights of the First Lender, will be applied to restoration or repair of the Security damaged,
provided such restoration or repair is economically feasible and the Security of this Deed of
Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the
security of this Deed of Trust would be impaired, the insurance proceeds will be used, subject to
the rights of the First Lender, to repay the Note and all sums secured by this Deed of Trust, with
the excess, if any, paid to the Borrower. If the Security is abandoned by the Borrower, or if the
Borrower fails to respond to the City, or its designated agent, within thirty (30) days fiom the
date notice is mailed by either of them to the Borrower that the insurance carrier offers to settle a
claim for insurance benefits, the City, or its designated agent, is authorized, subject to the rights
of the First Lender, to collect and apply the insurance proceeds at the City's option either to
restoration or repair of the Security or to repay the Note and all sums securd by this Deed of
Trust.
If the Security is acquired by the City, all right, title and interest of the Borrower in and to
any insurance policy and in and to the proceeds thereof resulting from damage to the Security
prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed
of Trust immediately prior to such sale or acquisition subject to the rights of the First Lender.
7. Preservation and Maintenance of Security. The Borrower will keep the Security
in good repair and will not commit waste or permit impairment or deterioration of the Security.
If there arises a condition in contravention of this section, and if the Borrower has not cured such
condition within thirty (30) days after receiving a City notice of such a condition, then in
addition to any other rights available to the City, the City shall have the right (but not the
obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien
or other encumbrance against the Security to recover its cost of curing.
8. Protection of the City's Security. If the Borrower fails to perform the covenants
and agreements contained in this Deed of Trust, the Resale Agreement, the First Lender Note,
the First Lender Deed of Trust, or if any action or proceeding is commenced which materially
affects the City's interest in the Security, including, but not limited to, default under the First
Lender Deed of Trust, the First Lender Note or any other deed of trust encumbering the Property,
eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a
bankrupt or decedent, then the City, at the City's option, upon notice to the Borrower, may make
such appearances, disburse such sums and take such action as it determines necessary to protect
the City's interest, including but not limited to, disbursement of reasonable attorney's fees and
entry upon the Security to make repairs.
Any amounts disbursed by the City pursuant to this paragraph, with interest thereon, will
become an indebtedness of the Borrower secured by this Deed of Trust. Unless the Borrower
and City agree in writing to other terms of payment, such amount will be payable upon notice
fiom the City to the Borrower requesting payment thereof, and will bear interest fkom the date of
disbursement at the lesser of ten percent (10%) or the highest rate permissible under applicable
law. Nothing contained in this paragraph will require the City to incur any expense or take any
action hereunder.
4 12/16/2003 3q
9. Inspection. The City may make or cause to be made reasonable entries upon and
inspections of the Security; provided that the City will give the Borrower reasonable notice of
inspection.
10. Forbearance bv the City Not a Waiver. Any forbearance by the City in exercising
any right or remedy will not be a waiver of the exercise of any such right or remedy, nor shall
acceptance by the City of any payment provided for in the Note constitute a waiver of the City's
right to require prompt payment of any remaining principal and interest owed. The procurement
of insurance or the payment of taxes or other liens or charges by the City will not be a waiver of
the City's right to accelerate the maturity of the indebtedness secured by this Deed of Trust.
11. Hazardous Substances. Borrower shall not cause or permit the presence, use,
disposal, storage, or release of any Hazardous Substances on or in the Property. Borrower shall
not do, nor allow anyone else to do, anything affecting the Property that is in violation of any
Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage
on the Property of small quantities of Hazardous Substances that are generally recognized to be
appropriate to normal residential uses and to maintenance of the Property.
"Hazardous Substances" shall mean those substances defined as toxic or hazardous
substances or hazardous waste under any Environmental Law, and the following substances:
gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides,
volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials.
"Environmental Law" shall mean all federal and state of California laws that relate to
health, safety or environmental protection.
Borrower shall promptly give City written notice of any investigation, claim, demand,
lawsuit or other action by any governmental or regulatory agency or private party involving the
Property and any Hazardous Substance or Environmental Law of which Borrower has actual
knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that
any removal or other remediation of any Hazardous Substance affecting the Property is
necessary, Borrower shall promptly take all necessary remedial actions in accordance with
Environmental Law.
12. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct
and cumulative to any other right or remedy under this Deed of Trust or any other document, or
afforded by law or equity, and may be exercised concurrently, independently or successively.
13. Successors and Assigns Bound. The covenants and agreements herein contained
shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the
City and the Borrower subject to the provisions of this Deed of Trust.
14. Joint and Several Liability. All covenants and agreements of the Borrower shall
be joint and several.
5 35 1211 6/2OO3
.
15. Notice. Except for any notice required under applicable law to be given in
another manner, all notices required in this Deed of Trust shall be sent by certified mail, return
receipt requested or express delivery service with a delivery receipt, or personally delivered with
a delivery receipt obtained, and shall be deemed to be effective as of the date shown on the
delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was
returned as undeliverable as follows:
To the Owner:
At the address of the Residence.
To the City:
City of Carlsbad
Housing and Redevelopment Department
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-23 89
Attn: Housing and Redevelopment Director
The parties may subsequently change addresses by providing written notice of the change
in address to the other parties in accordance with this section.
15 Controlling Law. This Deed of Trust shall be construed in accordance with and
be governed by the laws of the State of California.
16 Invalid Provisions. If any one or more of the provisions contained in this Deed of
Trust, Resale Agreement or the Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions shall be deemed severable from
the remaining provisions, and this Deed of Trust, the Resale Agreement and the Note shall be
construed as if such invalid, illegal or unenforceable provision had never been contained in this
Deed of Trust, Resale Agreement or the Note.
17 Cautions. The captions and headings in this Deed of Trust are for convenience
only and are not to be used to interpret or define the provisions hereof
18 Nonliabilitv for Nedigence, Loss, or Damage. Borrower acknowledges,
understands and agrees that the relationship between Borrower and the City is solely that of an
Borrower and the administrators of City inclusionary housing program, and that the City does
not undertake or assume any responsibility for or duty to Borrower to select, review, inspect,
supervise, pass judgment on, or inform Borrower of the quality, adequacy or suitability of the
Security or any other matter. The City owes no duty of care to protect Borrower against
negligent, faulty, inadequate or defective building or construction or any condition of the
Security and Borrower agrees that neither Borrower, or Borrower's heirs, successors or assigns
shall ever claim, have or assert any right or action against the City for any loss, damage or other
matter arising out of or resulting from any condition of the Security and will hold City harmless
from any liability, loss or damage for these things.
6
19. Indemnity. Borrower agrees to defend, indemnify, and hold the City harmless
fiom all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys
fees that the City may incur as a direct or indirect consequence of:
a. Borrower's failure to perform any obligations as arid when required by the
Note, Resale Restriction Agreement, and this Deed of Trust; or
b. The failure at any time of any of Borrower's representations or warranties
to be true and correct.
20. Default: Remedies. Upon the Borrower's breach of any covenant or agreement of
the Borrower in the Note, Resale Agreement or this Deed of Trust, including, but not limited to,
the covenants to pay, when due, any sums secured by this Deed of Trust, the City, prior to
acceleration, will send, in the manner set forth in Section 14 of this Deed of Trust, notice to the
Borrower specifjmg: (1) the breach; (2) if the breach is curable, the action required to cure such
breach; (3) a date, not less than thirty (30) days from the date the notice is effective as set forth in
Section 14 of this Deed of Trust, by which such breach, if curable, is to be cured; and (4) if the
breach is curable, that failure to cure such breach on or before the date specified in the notice
may result in acceleration of the sums secured by this Deed of Trust and sale of the Security.
Notice shall be effective as of the date shown on the delivery receipt as the date of delivery, the
date delivery was refused or the date the notice was returned as undeliverable. The notice will
also inform the Borrower of the Borrower's right to reinstate after acceleration and the right to
bring a court action to assert the nonexistence of default or any other defense of the Borrower to
acceleration and sale. If the breach is not curable or is not cured on or before the date specified
in the notice, the City, at the City's option, may: (a) declare all of the sums secured by this Deed
of Trust to be immediately due and payable without further demand and may invoke the power
of sale and any other remedies permitted by California law; (b) either in person or by agent, with
or without bringing any action or proceeding, or by a receiver appointed by a court, and without
regard to the adequacy of its security, enter upon the Security and take possession thereof (or any
part thereof) and of any of the Security, in its own name or in the name of the Trustee, and do
any acts which it deems necessary or desirable to preserve the value or marketability of the
Security, or part thereof or interest therein, increase the income therefrom or protect the security
thereof The entering upon and taking possession of the Security shall not cure or waive any
breach hereunder or invalidate any act done in response to such breach and, notwithstanding the
continuance in possession of the Security, the City shall be entitled to exercise every right
provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including
the right to exercise the power of sale; (c) commence an action to foreclose this Deed of Trust as
a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to
the Trustee a written declaration of default and demand for sale, pursuant to the provisions for
notice of sale found at California Civil Code Sections 2924, et seq., as amended from time to
time; or (e) exercise all other rights and remedies provided herein, in the instruments by which
the Borrower acquires title to any Security, or in any other document or agreement now or
hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or
provided by law.
7 37 12/16/2003
The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing
the remedies provided in this paragraph, including, but not limited to, reasonable attorney's fees.
21 Acceleration. Upon the occurrence of a default under the Note, the Resale
Agreement, this Deed of Trust, the First Lender Note, or the First Lender Deed of Trust, the City
shall have the right to declare the full amount of the principal along with any interest under the
Note immediately due and payable. Any failure by the City to pursue its legal and equitable
remedies upon default shall not constitute a waiver of the City's right to declare a default and
exercise all of its rights under the Note, the Resale Agreement, and this Deed of Trust. Nor shall
acceptance by the City of any payment provided for in the Note constitute a waiver of the City's
right to require prompt payment of any remaining principal and interest owed.
22. Borrower's Rirzht to Reinstate. Notwithstanding the City's acceleration of the
sums secured by this Deed of Trust, the Borrower will have the right to have any proceedings
begun by the City to enforce this Deed of Trust discontinued at any time prior to five (5) days
before sale of the Security pursuant to the power of sale contained in this Deed of Trust or at any
time prior to entry of a judgment enforcing this Deed of Trust if: (a) the Borrower pays City all
sums, if any, which would be then due under this Deed of Trust and no acceleration under the
Note has occurred; (b) the Borrower cures all breaches of any other covenants or agreements of
the Borrower contained in the Note, Resale Agreement or this Deed of Trust; (c) the Borrower
pays all reasonable expenses incurred by City and the Trustee in enforcing the covenants and
agreements of the Borrower contained in the Note, Resale Agreement or this Deed of Trust, and
in enforcing the City's and the Trustee's remedies, including, but not limited to, reasonable
attorney's fees; and (d) the Borrower takes such action as City may reasonably require to assure
that the lien of this Deed of Trust, City's interest in the Security and the Borrower's obligation to
pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and
cure by the Borrower, this Deed of Trust and the obligations secured hereby will remain in full
force and effect as if no acceleration had occurred.
23. Reconveyance. Upon payment of all sums secured by this Deed of Trust, the City
will request the Trustee to reconvey the Security and will surrender this Deed of Trust and the
Note to the Trustee. The Trustee will reconvey the Security without warranty and without
charge to the person or persons legally entitled thereto. Such person or persons will pay all costs
of recordation, if any.
24. Substitute Trustee. The City, at the City's option, may fkom time to time remove
the Trustee and appoint a successor trustee to any trustee appointed hereunder. The successor
trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by
applicable law.
25. Subordination to First Lender MortPage. - Notwithstanding any other provision
hereof, the provisions of this Deed of Trust shall be subordinate to the lien of the First Lender
Deed of Trust and shall not impair the rights of the First Lender, or the First Lender's successor
or assign, to exercise its remedies under the First Lender Deed of Trust in the event of default
under the First Lender Deed of Trust by the Borrower. Such remedies under the First Lender
Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of
8
foreclosure. AAer such foreclosure or acceptance of a deed or assignment in lieu of foreclosure,
or upon assignment of the First Lender Deed of Trust to the Secretary of the United States
Department of Housing and Urban Development (the "Secretary"), this Deed of Trust shall be
forever terminated and shall have no further effect as to the Property or any transferee thereafter;
provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property
pursuant to a deed or assignment in lieu of foreclosure, or if the First Lender's Deed of Trust is
assigned to the Secretary, this Deed of Trust shall automatically terminate upon such acquisition
of title or assignment to the Secretary provided that (i) the City has been given written notice of
default under such First Lender Deed of Trust and (ii) the City shall not have cured or
commenced to cure the default within such thirty (30)-day period and given its firm commitment
to complete the cure in the form and substance acceptable to the First Lender. Borrower agrees
to record any necessary documents to effect such termination, if applicable.
26. Attornev's Fees. If any action or proceeding is brought to enforce this Deed of
Trust or any provision of this Deed of Trust or the Note, the prevailing party shall be entitled to
its attorney's fees and the cost of such action or proceeding.
IN WITNESS WHEREOF, the Borrower has executed this Deed Of Trust as of the date
first written above.
Borrower
(Print Name)
Borrower
(Print Name)
9 37 1211 WOO3
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
) ss.
on , 200-, before me, , personally
appeared , personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) islare subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in hishedtheir
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
) ss.
on , 200-, before me, personally
appeared , personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in hishedtheir
authorized capacity(ies), and that by hishedtheir signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
DEED OF TRUST AND SECURITY AGREEMENT
CITY OF CARLSBAD
ADMINISTRATIVE CHECKLIST
(Remove Upon Completion)
BLANK LINES: CHECKLIST
Date of Document, p. 1, first paragraph
Borrower's Name, p. 1 , first paragraph
Trustee's Name, p. 1 , first paragraph
Amount of Promissory Note, p. 2, second 111 paragraph
First Lender's Name, p. 2, Section 1
Date of First Lender's Deed of Trust, p. 2, Section 1
Recording Information for First Lender's Deed of Trust, p. 2, Section 1
Signatures, p. 9
Notary
Include Exhibit A, Property Description
1010\15\172083.3
,
RECORDING REQUESTED PURSUANT
TO GOVERNMENT
CODE SECTION 27383
RECORDING REQUESTED BY
City of Carlsbad
WHEN RECORDED MAIL TO:
City of Carlsbad
City Clerk's Office Attn: Cityclerk
1200 Carlsbad Village Drive CARLSBAD. CALIFORNIA 92008
(Space above for Recorder's Use)
RESALE RESTRICTION AGREEMENT,
AND OPTION TO PURCHASE
CITY OF CARLSBAD
HOMEBUYER PROGRAM - 200-
Owner:
Address of Home:
This Resale Restriction Agreement and Option to Purchase (the "Agreement 'I) is entered
into as of this day of 200-, by and between the City of
Carlsbad (the "City 'I), (the "Developer 'I) and
(the "Owner 'I).
RECITALS
A. The City has developed a second mortgage program designed to assist qualified
lower income households purchase their homes located within the City of Carlsbad (the
"Homebuyer Program It).
B. In connection with the Homebuyer Program and in fulfillment of its inclusionary
obligation pursuant to an Affordable Housing Agreement (the "Affordable Housing Agreement")
between the LENNAR BRESSI RANCH VENTURE, LLC, a California limited liability
company (the "Sponsor 'I) and the City dated A 200-, the Developer made a loan (the
"City/Seller Loan") in the amount of Dollars ($ ) to Owner to purchase
a single-family dwelling located in Carlsbad, California on that certain real property and more
42 1211 612003
particularly described in Exhibit A (the "Home 'I) and then assigned the City/Seller Loan to the
City. In consideration of the City/Seller Loan, the Owner agreed to enter into the Agreement.
As used herein, the term "Home I' includes both the real property and all improvements now or
hereafter erected on the property and all easements, rights, appurtenances, and all fixtures now or
hereafter attached to the property.
C. The purchase price of the Home is D0lltU-S
($ ) (the "Purchase Price 'I).
D. The Owner is receiving a First Lender Loan in the amount of
"First Lender 'I). The First Lender Loan is secured by a deed of trust dated ¶ 20, executed by the Buyer in favor of First Lender and recorded in the County of San Diego
on , 20, and assigned Recorder's Serial No. (the "First
Lender Deed of Trust ").
Dollars ($ ) (the "First Lender Loan 'I) from (the
E. The Loan is evidenced by a promissory note in the amount of the Loan (the "City
Note 'I). This Agreement and the City Note shall be secured by a deed of trust (the "City Deed
of Trust I!) subordinate to the lien of First Lender Deed of Trust.
F. The purpose of this Agreement is to place resale controls on the Home, to provide
the City an option to purchase the Home at a restricted price and to ensure that the Owner
complies with the Homebuyer Program requirements.
G. This Agreement also meets the requirements of Health and Safety Code Sections
33334.2 and 33334.3 and permits the City to meet the affordable housing production
requirements of Health and Safety Code Section 33413(b).
H. This Agreement and the City Note require repayment of the loan plus contingent
interest and, in certain instances, payment of excess proceeds of sale. This Agreement will
remain in full effect as an encumbrance on the Property after any prepayment of the City Note by
the Buyer.
NOW, THEREFORE, in consideration of the benefits received by the Owner and the
City, the Owner and the City agree, as follows:
1. DEFINITIONS AND EXHIBITS
A. The following terms are specifically defined for this Agreement and their
definitions can be found in the Sections indicated below:
(1) "Agreement 'I - first sentence of the Agreement on page 1.
(2) "City - first sentence of the Agreement on page 1.
2 1211 612003
"City Deed of Trust 'I - Recital E.
"City Designated Purchaser I' - Section 12B.
"City/Seller Loan - Recital B.
"City Note 'I - Recital E.
"City Option " - Section 12A.
"City Response Notice I' - Section 10.
"Eligible Purchaser I' Section 15B.
"Extended Term 'I - 1 OC.
"Excess Sales Proceeds - Section 16.
"Fair Market Value I' - Section 14B.
"First Lender - Recital D.
"First Lender Deed of Trust 'I - Recital D
"First Lender Loan 'I - Recital D.
"Home 'I - Recital B.
"HUD - Section 30.
"Initial Term - 10B.
"Market Purchaser I' - Section 1 OC.
"Maximum Restricted Resale Price It - Section 14.
"Median Income I' - Section 1 4A.
"Owner 'I - first sentence of the Agreement on page 1.
"Owner's Notice of Intent to Transfer - Section 8.
"Proposed Purchaser - Section 15A.
"Purchase Price 'I - Recital C.
3 4q 12/16/2003
5. HOMEBUYER EDUCATION CLASS
The Owner shall attend all sessions of a first-time homebuyer education class offered by
6. MAINTENANCE AND INSURANCE PROCEEDS
A. The Owner shall maintain the Home, including landscaping, in good repair and in
a neat, clean and orderly condition and will not commit waste or permit deterioration of the
Home. Failure by the Owner to maintain the Home shall constitute a default under this
Agreement for which the City may exercise the City Option to purchase the Home pursuant to
Section 21 below.
B. The Owner shall maintain a standard fire and extended coverage Home insurance
policy equal to the replacement value of the Home (adjusted every five (5) years by appraisal, if
requested by City), naming the City as an additional insured. Additional insurance requirements
are set forth in Section 6 of the City Deed of Trust.
7. TRANSFER AND SALE RESTRICTIONS
Any Transfer of the Home will be subject to the provisions of this Agreement including,
without limitation, exercise of the City Option pursuant to Section 12 below. "Transfer '' shall
mean any sale, assignment or transfer, voluntary or involuntary, of any interest in the Home,
including, but not limited to, a fee simple interest, a joint tenancy interest, tenancy in common
interest, a life estate, a leasehold interest, an interest evidenced by a land contract by which
possession of the Home is transferred and Owner retains title, or a deed of trust. Any Transfer
without satisfaction of the provisions of this Agreement is prohibited. A Transfer shall not
include a transfer: (i) to an existing spouse who is also an obligor under the City Note; (ii) by the
Owner to a spouse where the spouse becomes the co-owner of the Home; (iii) between spouses
as part of a maniage dissolution proceeding; (iv) to an existing spouse of Owner by devise or
inheritance following the death of Owner; (v) by Owner into an inter vivos trust in which Owner
is the beneficiary; (vi) by deed of trust or imposition of a lien subordinate to the City Deed of
Trust or (vii) refinance of the First Mortgage meeting the requirements of Section 28 of this
Agreement; provided, however, that Owner shall provide written notice of all such transfers to
City pursuant to Section 8 below; and Owner shall continue to OCCUPY the Home as his or her
principal place of residence (except where the transfer occurs pursuant to subsection (iii) or (iv)
above, in which event the transferee shall owner-occupy the Home and affirmatively assume
Owner's obligations under this Agreement, the City Note and the City Deed of Trust).
8. NOTICE OF INTENDED TRANSFER
A. In the event the Owner intends to transfer (including without limitation all
"Transfers 'I as defined in Section 7) or vacate the Property, the Owner shall promptly give the
City written notice of such intent (the "Owner's Notice of Intent to Transfer ") in the form shown
in the attached Exhibit C. The Owner shall give the City the Owner's Notice of Intent to
5 12/16/2003 q5
Transfer prior to notifying real estate brokers or lenders of Owner's intent to Transfer the
Property and prior to listing of the Property on the Multiple Listing Service. The Owner's Notice
of Intent to Transfer shall be sent to the City in the manner and at the address provided in Section
33 of this Agreement. The Owner's Notice of Intent to Transfer shall include the information
necessary for the City to determine the Maximum Restricted Resale Price of the Property,
including the following information:
(1) the address of the Property;
(2)
(3)
the date of purchase of the Property by the Owner;
the purchase price of the Property paid by the Owner at the time of hidher
. '.
purchase;
(4) a copy of the HUD-I Settlement Statement or equivalent document fkom
the close of escrow on the Owner's purchase of the Property;
(5) the date on which Owner intends to vacate Property;
(6) the date the Property will be placed on the market; and
(7) the name and phone number of the person to contact to schedule
inspection of the Property by the City.
9. OWNER PREPARATION OF HOME FOR SALE
A. The Owner may not wish to contract with a real estate broker to sell the
Home until the Owner has received the City Response Notice pursuant to Section 10 below,
as the services of a broker will not be required if the City exercises the City Option to
purchase the Home pursuant to Section 12 below.
B. Following delivery to the City of the Owner's Notice of Intent to Transfer, the
Owner shall prepare the Home for sale, as follows:
(1) within thirty (30) days of delivery of the Owner's Notice of Intent to
Transfer, the Owner shall obtain and deliver to the City a current written report of inspection of
the Home by a licensed structural pest control operator;
(2) within the sooner of (a) sixty (60) days from the date of delivery of the
Owner's Notice of Intent to Transfer, or (b) prior to close of escrow on the Transfer, the Owner
shall repair all damage noted in the pest report including damage caused by infestation or
infection by wood-destroying pests;
(3) within thirty (30) days of the date of the Owner's Notice of Intent to
Transfer, the Owner shall allow the City to inspect the Home to determine its physical condition;
6 46 12/16/2003
I .
(4) if the Home is vacant, the Owner shall maintain utility connections until
the close of escrow on the Transfer;
(5) in the event of purchase of the Property by the City or City Designated
Purchaser, the Owner shall permit a final walk-through of the Property by the City or City
Designated Purchaser, in the final three (3) days prior to close of escrow on the Transfer,
10. CITY RESPONSE TO OWNER'S NOTICE OF INTENDED TRANSFER
City shall respond in writing (the "City Response Notice 'I) to the Owner's Notice of
Intent to Transfer. The City Response Notice shall inform the Owner of the City's election to
proceed under one (1) of the following two (2) alternatives:
A. City Exercise of City Purchase Option. The City Response Notice may notify the
Owner that the City or a City Designated Purchaser elects to exercise the City Option to purchase
the Home. The City Response Notice shall be sent within thirty (30) days of City receipt of
Ownerls Notice of Intent to Transfer and shall include the City's calculation of the (i) Maximum
Restricted Resale Price pursuant to Section 14 below to be paid by the City or a City Designated
Purchaser and (ii) the transaction fee to be paid by the Owner pursuant to Section 12 below.
B. Initial Term: Owner Sale at a Restricted Sales Price to Eligible Purchaser.
Alternatively, the City Response Notice may notify the Owner that the City or a City Designated
Purchaser will not exercise the City Option to purchase the Home. In this case, if the Owner has
sent the Notice of Intent to Transfer within fifteen (15) years of the date of recordation of this
Agreement (the "Initial Term "), the City Response Notice shall tell the Owner that the Owner
may proceed to sell the Home to an Eligible Purchaser at a price not to exceed the Maximum
Restricted Resale Price, as set forth in Section 14 and pursuant to the procedure set forth in
Section 14 below. In this event, the City Response Notice shall include the following
information: (1) the maximum qualifying income for an Eligible Purchaser (which shall be the
same income category as the Owner at the time of the Owner's purchase); (2) the certifications
required of an Eligible Purchaser; (3) the Maximum Restricted Resale Price the Owner may
receive for the Home, calculated by the City pursuant to Section 14 below; (4) whether
Homebuyer Program assistance from the City may be available to an Eligible Purchaser, (5)
Owner's repayment obligation as required by Section 13.
C. Extended Term Owner Sale to Market Purchaser. If the City Response Notice
notifies the Owner that the City or a City Designated Purchaser will not exercise the City Option
to purchase the Home, and the Owner has sent the Notice of Intent to Transfer between the
fifteenth (IS*) and thirty (30) years of the Term, (the "Extended Term "), the City Response
Notice shall inform Owner that Owner may proceed to sell the Home to a third party at any
income level (the "Market Purchaser 'I) for an unrestricted price. The City Response Notice
shall also inform Owner of Owner's repayment obligation as required by Section 13.
7 12/16/2003 47
1 .
(26)
(27)
"Restricted Future Sales Price " - Section 14A.
"Transfer " - Section 7.
B. The following Exhibits are attached to this Agreement:
(1) Exhibit A: Legal Description of Property (Home)
(2) Exhibit B: Form of Owner Occupancy Certification
(3) Exhibit C: Form of Owner's Notice of Intent to Transfer
(4) Exhibit D: Form of Owner Acknowledgement of City Response
Notice
(5) Exhibit E: Form of Owner Request for City Subordination to
Refinanced First Lender Loan
2. OWNER CERTIFICATIONS
The Owner certifies that (i) the financial and other information previously provided in
order to qualify to purchase the Home is true and correct as of the date first written above, (ii) the
Owner is an Eligible Purchaser, and (iii) the Owner shall occupy the Home as the Owner's
principal place of residence.
3. OCCUPANCY AND LEASING OF HOME
A. The Owner shall occupy the Home as the Owner's principal place of residence
within sixty (60) days of close of escrow on the City/Seller Loan. Failure by the Owner to
occupy the Home as the Owner's principal place of residence shall constitute a default under this
Agreement for which the City may exercise its option to purchase pursuant to Section 21 below.
The Owner shall be considered as occupying the Home if the Owner is living in the unit for at
least ten (10) months out of each calendar year. The Owner shall provide an annual written
certification in the form shown in the attached Exhibit B, to the City that the Owner is occupying
the Home as his or her principal place of residence.
4. LEASING OF PROPERTY
The Owner shall not lease the Property to another party. Any lease of the Property in
violation of this Agreement is prohibited, and shall be a default under this Agreement and the
City Deed of Trust. The Owner further agrees that, in the event the Owner leases the Property to
a third party in violation of this section, any rents in excess of the owners monthly housing
payment, which includes the principal mortgage payment and interest, property taxes and
insurance, paid to the Owner by the lessee over the shall be due and payable to the City
immediately upon receipt thereof by the Owner. Such excess rental proceeds shall be considered
a recourse debt of the Owner to the City, as evidenced by the Note, which the City may collect
by legal action against the Owner and/or by foreclosure under the City Deed of Trust.
4 c18 12/16/2003
1 1. OWNER ACKNOWLEDGEMENT OF CITY RESPONSE NOTICE
No later than seven (7) days following the date of the City Response Notice, the Owner
shall acknowledge in writing to the City, in the form shown in the attached Exhibit D, that hdshe
has received the City Response Notice and still intends to Transfer the Home.
12. CITY PURCIiASE OPTION
A. The Owner agrees that if the Owner decides to Transfer the Home, the City shall
have the option to purchase the Home for the Maximum Restricted Resale Price calculated
pursuant to Section 14 of this Agreement (the "City Option 'I). The Owner shall pay the City a
transaction fee equal to six percent (6%) of the Maximum Restricted Resale Price if the City or a
City Designated Purchaser exercises the City Option and purchases the Home. The City Option
may be exercised by the City or by a City Designated Purchaser in the City Response Notice. If
the City Response Notice notifies the Owner that the City or a City Designated Purchaser will
exercise the City Option to purchase the Home, the City or the City Designated Purchaser shall
purchase the Home within ninety (90) days of the date of the City Response Notice.
B. The City may assign the City Option to another public agency, a nonprofit
corporation, or an Eligible Purchaser selected by the City (any of which shall be referred to
herein as a "City Designated Purchaser 'I). If the City assigns the City Option to a City
Designated Purchaser, the City Response Notice shall be executed by the City Designated
Purchaser and shall noti@ the Owner that a City Designated Purchaser is exercising the City
Option in lieu of the City.
C. In the event of exercise of the City Option and purchase of the Home by the City
or a City Designated Purchaser, the Owner shall permit a final walk-through of the Home by the
City or the City Designated Purchaser in the final three (3) days prior to close of escrow on the
Transfer.
13. REPAYMENT OF CITY NOTE
Upon any Transfer of the Property, the outstanding principal and interest due under the
City Note shall be repaid pursuant to the City Note and shall not be credited against the purchase
price; provided, however, that upon City exercises the City Option to purchase the Home, the
outstanding amount of principal and Contingent Interest due under the City Note shall be paid to
the City in the form of a credit against the purchase price to be paid by the City to the Owner.
Repayment of the City Note shall not affect Owner's obligation to comply with this Agreement,
which shall remain in full force and effect following any repayment of the Agency Note.
14. DETERMINATION OF MAXIMUM RESTRICTED RESALE PRICE
The maximum sales price (the "Maximum Restricted Resale Price ") that the Owner
shall receive from the resale of the Home from purchase of the Home by the City or City
Designated Purchaser or from other sale or Transfer by the Owner when the Owner sends the
Notice of Intent to Transfer during the Initial Term shall be the Restricted Future Sales Price or
12/16/2003 4 7 8
, .
the Fair Market Value, whichever is less.
A. Restricted Future SalesPrice.
(1) The Restricted Future Sales Price of the Home means the sales price of the
Home at the time of purchase by the Owner, as set forth in Recital E to this Agreement,
increased by the percentage of increase in the Median Income from the date of the original
purchase of the Home by the Owner to the date of receipt by the City of the Owner's Notice of
Intent to Transfer. "Median Income I' shall refer to the median yearly income, adjusted for a
household size of four, in San Diego County, as published by the California Department of
Housing and Community Development ( "HCD "), or, in the event such income determination is
no longer published by HCD, or has not been updated for a period of at least eighteen (18)
months, the City may use or develop such other reasonable method as it may choose in order to
determine the median yearly income in San Diego County. As of the date of Owner's purchase
of the Property, the Median Income for a household of four persons is
Dollars ($ ).
(2) The Restricted Future Sales Price shall include a downward adjustment,
where applicable, in an amount necessary to repair any violations of applicable building,
plumbing, electric, fire or housing codes or any other provisions of the City of Carlsbad Building
Code, as well as any other repairs needed to put the Home into a "sellable condition ". Items
necessary to put a Home into sellable condition shall be determined by the City, and may include
cleaning, painting and making needed structural, mechanical, electrical, plumbing and fixed
appliance repairs and other deferred maintenance repairs.
B. Fair Market Value. In certain circumstances it may be necessary to determine the
fair market value of the Property without taking account of the resale restrictions imposed by this
Agreement (the "Fair Market Value 'I). These circumstances include: (1) where the parties wish
to determine if the Restricted Future Sales Price exceeds the Fair Market Value in order to
determine the Maximum Restricted Resale Price pursuant to this section; (2) where the parties
wish to determine if the sales price of the Home to a Market Purchaser is comparable to the Fair
Market Value; and (3) to calculate the amount due under the City Note at the end of the term of
the City Note. If it is necessary to determine the Fair Market Value of the Property, it shall be
determined by a certified MA1 or other qualified real estate appraiser approved in advance by the
City. If possible, the appraisal shall be based upon the sales prices of comparable properties sold
in the market area during the preceding three (3)-month period. The cost,of the appraisal shall be
paid by the Owner, unless the appraisal is obtained from a new purchaser. Nothing in this
section shall preclude the Owner and the City from establishing the Fair Market Value of the
Property by mutual agreement in lieu of an appraisal pursuant to this section.
15. SALE BY OWNER DURING INITIAL TERM IF CITY DOES NOT EXERCISE
OPTION TO PURCHASE
In the event the City Response Notice notifies the Owner to proceed to sell the Home to
an Eligible Purchaser at a price not exceeding the Maximum Restricted Resale Price, the Owner
may proceed to sell the Home in compliance with the following requirements:
9 50 12/16/2003
,
A. Marketing. The Owner shall use bona fide good faith efforts to sell the Home to
an Eligible Purchaser in compliance with this section, including listing the Home on the Multiple
Listing Service, keeping the Home in an orderly condition, making the Home available to show
to agents and prospective buyers, and providing buyers with Eligible Purchaser requirements,
including income qualifications and the City's form of disclosure statement summarizing the
terms of the buyer's occupancy and resale restriction agreement with option to purchase. A
proposed purchaser ( "Proposed Purchaser ") who the Owner believes will qualify as an Eligible
Purchaser shall be referred to the City for an eligibility determination. If the Proposed Purchaser
qualifies as an Eligible Purchaser the City will also determine if such Eligible Purchaser is
eligible for City housing-related financial assistance that may be available at the time of resale.
B. Eligible Purchaser. A Proposed Purchaser shall qualify as an "Eligible Purchaser
I' if he or she meets the following requirements, as determined by the City:
(1) Income Eligibility. The combined maximum income for all household
members of the Proposed Purchaser shall not exceed the income level designated by the City in
the City Response Notice.
(2) Intent to Owner OCCUDY. The Proposed Purchaser shall certify that he or
she will occupy the Home as to his or her principal place of residence throughout his or her
ownership. Co-signers are not required to occupy the Home.
(3) Agreement to Sign Resale Restriction Agreement and to Cooperate with
the City. The Proposed Purchaser shall agree to sign a resale restriction agreement restricting
future resale of the Home and shall agree to cooperate fully with the City in promptly providing
all information requested by the City to assist the City in monitoring the Proposed Purchaser's
compliance with the resale restriction agreement.
C. Maximum Restricted Resale Price. The purchase price for the sale of the Home
by the Owner to the Eligible Purchaser shall not exceed the Maximum Restricted Resale Price
calculated by the City pursuant to Section 14 above, as set forth in the City Response Notice.
The closing costs paid by the Eligible Purchaser shall not exceed reasonable customary buyer's
closing costs in the County of San Diego .
D. Disclosure and Submittals. The Owner and the Proposed Purchaser shall provide
the following information and documents to the City:
(1) The name, address and telephone number in writing of the Proposed
Purchaser.
(2) A signed financial statement of the Proposed Purchaser in a form
acceptable to the City and any other supporting documentation requested by the City. The
financial information shall be used by the City to determine the income eligibility of the
Proposed Purchaser.
10 51 12/16/2003
.
(3) The proposed sales contract and all other related documents which shall
set forth all the terms of the sale of the Home. Said documents shall include at least the
following terms: (a) the sales price; and (b) the price to be paid by the Proposed Purchaser for
the Owner's personal Home, if any, for the services of the Owner, if any, and any credits,
allowances or other consideration, if any.
(4) A Written certification, from the Owner and the Proposed Purchaser in a
form acceptable to the City that the sale shall be closed in accordance with the terms of the sales
contract and other documents submitted to and approved by the City. The certification shall also
provide that the Proposed Purchaser or any other party has not paid and will not pay to the
Owner, and the Owner has not received and will not receive from the Proposed Purchaser or any
other party, money or other consideration, including personal property, in addition to what is set
forth in the sales contract and documents submitted to the City. The written certification shall
also include a provision that in the event a Transfer is made in violation of the terms of this
Agreement or false or misleading statements are made in any documents or certification
submitted to the City, the City shall have the right to foreclose on the Home or file an action at
law or in equity as may be appropriate. In any event, any costs, liabilities or obligations incurred
by the Owner and the Proposed Purchaser for the return of any moneys paid or received in
violation of this Agreement or for any of the Owner's and/or the Proposed Purchaser's costs and
legal expenses, shall be borne by the Owner and/or the Proposed Purchaser and they shall hold
the City harmless and reimburse the City's expenses, legal fees and costs for any action they
reasonably take in good faith in enforcing the terms of this Agreement.
(5) An executed buyer's resale agreement and deed of trust to the City from
the Proposed Purchaser in forms provided by the City. If the Proposed Purchaser is receiving
assistance fkom the Homebuyer Program, a promissory note to the City shall also be required.
The recordation of the new deed of trust and buyer's resale agreement shall be a condition of the
City's approval of the proposed sale.
(6) The name of the title company escrow holder for the sale of the Home, the
escrow number, and name, address, and phone number of the escrow officer.
(7) Upon the close of the proposed sale, certified copies of the recorded City
deed of trust and buyer's resale agreement, a copy of the final sales contract, settlement
statement, escrow instructions, and any other documents which the City may reasonably request.
16. PAYMENT TO CITY OF EXCESS SALES PROCEEDS
If the Owner makes a Transfer in violation of this Agreement during the Initial Term or
after providing the City with a the Notice of Intent to Transfer during the Initial Term, the Owner
shall pay the Excess Sales Proceeds to the City. For purposes of this Agreement, "Excess Sales
Proceeds " shall mean ninety-four percent (94%) of the amount by which the gross sales
proceeds received by the Owner from the new purchaser exceed the Maximum Restricted Resale
Price for the Home (in the amount that was stated in the City Response Notice). This amount
shall be a debt of the Owner to the City, further evidenced by the City Note, and secured by the
City Deed of Trust. The Owner acknowledges that the City shall have no obligation to cause
11 3- 12/16/2003
reconveyance of this Agreement or of the City Deed of Trust until the Excess Sales Proceeds are
paid to the City. The City shall utilize the Excess Sales Proceeds for City affordable housing
programs. The Owner and the City acknowledge that the formula for calculation of the amount
of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to
receive the same net sales proceeds (following payment by Owner of a standard broker's
commission) fiom sale of the Home at an unrestricted price to a market purchaser (in violation of
this Agreement) as the Owner would receive from sale of the Home to the City, City Designated
Purchaser or to an Eligible Purchaser at the Maximum Restricted Resale Price.
17. SALE OF PROPERTY BY OWNER DURING EXTENDED TERM
" In the event the City Response Notice notifies the Owner to proceed to sell the Home to a
Market Purchaser at a price greater than or equal to the Fair Market Value of the Home, the
Owner may proceed to sell the Home in compliance with the following requirements:
Upon any sale of the Home, the Owner shall submit to the City at least fifteen (15) days
prior to the close of escrow, a copy of the appraisal, and a copy of the sales contract and a written
declaration, under penalty of perjury, fiom the Owner and the proposed purchaser in a form
acceptable to the City stating the gross sales price of the Home. The certification shall also
provide that the proposed purchaser or any other party has not paid and will not pay to the
Owner, and the Owner has not received and will not receive from the proposed purchaser or any
other party, money or other consideration, including personal property, in addition to what is set
forth in the sales contract. At close of escrow, Owner shall submit to the City a copy of the
HUD-1 Settlement Statement showing the purchase price paid for the Home.
18. DEFAULTS
A. The following events shall constitute a Default by the Owner under this
Agreement:
(1) The City determines that the Owner has made a misrepresentation to
obtain the benefits of purchase of the Home or in connection with its obligations under this
Agreement;
(2) The Owner fails to owner occupy the home, as required pursuant to
Section 3 above, and such failure continues following written notice by the City and sixty (60)
days opportunity to cure following the date of such notice.
(3) The Owner rents the Home in violation of Section 4 above, and such
failure continues following written notice by the City and sixty (60) days opportunity to cure.
(4) The Owner fails to provide information to the City necessary to determine
Owner's compliance with the requirements of this Agreement.
(5) The Owner makes a Transfer in violation of this Agreement;
12 12/16/2003 53
(6) The Owner otherwise fails to comply with the requirements of this
Agreement and such violation is not corrected to the satisfaction of the City within ten (10) days
after the date of written notice by the City to the Owner of such violation; or
(7) A notice of default is issued under First Lender Loan or other financing
secured by the Home.
(8) A lien is recorded against the Home other than the lien of a bona fide
mortgage loan.
(9) Owner places a mortgage on the Home in violation of Section 28 below.
(10) benefit of creditors.
Owner declares bankruptcy or makes an assignment of assets for the
B. Upon a declaration of Default by the City under this Agreement, the City may
exercise any remedies at law or in equity, including without limitation, any or all of the
following:
(1) Declare all Excess Sales Proceeds immediately due and payable without
further demand, accelerate payments due under the City Note and invoke the power of sale under
the City Deed of Trust;
'
(2) Apply to a court of competent jurisdiction for such relief at law or in
equity as may be appropriate;
(3) Declare a Default under the City Note and the City Deed of Trust and
pursue all City remedies under the City Note and the City Deed of Trust; and
(4) Exercise the City Option upon Default as described in Section 21 below.
19. NOTICE AND CURE
Upon Default or a violation of any of the provisions of this Agreement, the City may give
written notice to the Owner specifying the nature of the violation. If the violation is not
corrected to the satisfaction of the City within a reasonable period of time, not longer than thirty
(30) days after the date the notice is mailed, or within such further time as the City determines is
necessary to correct the violation, or if the Owner is in default under any other mortgage loan on
the Home, the City may declare a default under this Agreement.
The City shall notify First Lender at the address provided by the First Lender to the City
in the manner set forth in Section 33 of this Agreement, if the City has declared a default under
this Agreement or under the City Note or City Deed of Trust.
13 12/16/2003 scl
20. NOTICE TO CITY OF DEFAULT
A request for notice of default and any notice of sale under any deed of trust or mortgage
with power of sale encumbering the Home shall be recorded by the City in the Office of the
Recorder of the County of San Diego for the benefit of the City. The City may declare a default
under this Agreement upon receipt of any notice given to the City pursuant to Civil Code Section
2924b, and may exercise its rights as provide in Sections 18 and 21.
In the event of default and foreclosure under the First Lender Loan or any other mortgage
loan on the Home, the City shall have the same right as the Owner to cure defaults and redeem
the Home prior to the foreclosure sale. Nothing herein shall be construed as creating any
obligation of the City to cure any such default, nor shall this right to cure and redeem operate to
extend any time limitations in the default provisions of the underlying deed of trust or mortgage.
If the City failed to file the request for notice of default, the City's right to purchase the
Home shall commence fiom the date a notice of default is given by the City to the Owner.
21. PURCHASE OPTION UPON DEFAULT
A. Purchase @tion. Notwithstanding, and in addition to, the remedies provided the
City in Section 18, and the City Option provided in Section 12, the Owner hereby grants to the
City or the Designee the option to purchase the Home effective upon the declaration of a default
by the City pursuant to Section 18 and Section 19 above, and subject to notice and cure rights set
forth in Section 19. Said option to purchase is given in consideration of the economic benefits
received by the Owner resulting fiom ownership of the Home made possible by the financial
assistance of the City in the purchase of the Home.
B. Exercise of ODtion. The option to purchase may be exercised upon a default
under this Agreement or upon default under any promissory note, deed of trust or any other lien,
including a judgment lien, recorded against the Home. The City shall have thirty (30) days after
a default is declared to notify the Owner and the First Lender of its decision to exercise its option
to purchase. Not later than ninety (90) days after the notice is given by the City to the Owner of
the City's intent to exercise its option, the City shall purchase the Home for the Maximum
Restricted Resale Price set forth in Section 14. The City may assign its rights to purchase the
Home under this section to a City Designated Purchaser.
22. NONLIABJLITY OF THE CITY
A. No Obligation to Exercise Option. The City shall have no obligation to exercise
any option granted it under this Agreement. In no event shall the City become in any way liable
or obligated to the Owner or any successor-in-interest to the Owner by reason of its option to
purchase under Sections 12 and 21 nor shall the City be in any way obligated or liable to the
Owner or any successor-in-interest to the Owner for any failure to exercise its option to
purchase.
14 1211 612003 55
. .
B. Nonliabilitv for Negligence. Loss, or Damage. Owner acknowledges,
understands and agrees that the relationship between Owner and the City is solely that of an
owner and an administrator of a City inclusionary housing program, and that the City does not
undertake or assume any responsibility for or duty to Owner to select, review, inspect, supervise,
pass judgment on, or inform Owner of the quality, adequacy or suitability of the Property or any
other matter. The City owes no duty of care to protect Owner against negligent, faulty,
inadequate or defective building or construction or any condition of the Property and Owner
agrees that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have or assert
any right or action against the City for any loss, damage or other matter arising out of or
resulting fiom any condition of the Property and will hold the City harmless fiom any liability,
loss or damage for these things.
C. Indemnity. Owner agrees to defend, indemnify, and hold the City harmless fiom
all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys fees
that the City may incur as a direct or indirect consequence of (1) Owner's default, performance,
or failure to perform any obligations as and when required by this Agreement or the Deed of
Trust; or (2) the failure at any time of any of Owner's representations to the City to be true and
correct.
23. RESTRICTIONS ON FORECLOSURE PROCEEDS
If a creditor acquires title to the Home through a deed in lieu of foreclosure, a trustee's
deed upon sale, or otherwise, the Owner shall not be entitled to the proceeds of sale to the extent
that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited
to the creditor exceed the Maximum Restricted Resale Price. The Owner shall instruct the holder
of such excess proceeds to pay such proceeds to the City in consideration of the benefits received
by the Owner through purchase of the Home under this Agreement.
24. RESTRICTION ON INSURANCE PROCEEDS
If the Home is damaged or destroyed and the Owner elects not to rebuild or repair the
Home, the Owner shall pay the City the portion of any insurance proceeds received by the
Owner for such destruction or damage which is in excess of the Maximum Restricted Resale
Price calculated pursuant to Section 14 above.
25. TERM OF AGREEMENT
All the provisions of this Agreement, including the benefits and burdens, run with the
land and the Home and this Agreement shall bind, and the benefit hereof shall inure to, the
Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to
the City and its successors until the earlier of (i) thirty (30) years from the date of recordation of
this Agreement or (ii) the date of Transfer of the Property to the City or another purchaser in
compliance with this Agreement (including execution by the purchaser of a new resale restriction
agreement for the benefit of the City).
15 Sb 12/16/2003
26. SUPERIORITY OF AGREEMENT
The Owner covenants that he or she has not, and will not, execute any other agreement
with provisions contradictory to or in opposition to the provisions of this Agreement hereof, and
that, in any event, this Agreement is controlling as to the rights and obligations between and
among the Owner, the City and their respective successors.
27. SUBORDINATION
Notwithstanding any other provision hereof, the provisions of this Agreement shall be
subordinate to the lien of the First Lender Loan and shall not impair the rights of the First
Lender, or the First Lender's successor or assign, to exercise its remedies under the First Lender
Deed of Trust in the event of default under the First Lender Deed of Trust by the Owner. Such
remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a
deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed or
assignment in lieu of foreclosure, this Agreement shall be forever terminated and shall have no
further effect as to the Home or any transferee thereafter; provided, however, if the holder of
such First Lender Deed of Trust acquired title to the Home pursuant to a deed or assignment in
lieu of foreclosure, this Agreement shall automatically terminate upon such acquisition of title,
provided that (i) the City has been given written notice of default under such First Lender Deed
of Trust and (ii) the City shall not have cured or commenced to cure the default within such
thirty (30)-day period and given its firm commitment to complete the cure in the form and
substance acceptable to the First Lender. Owner agrees to record any necessary documents to
effect such termination, if applicable.
28. REFINANCE OF FIRST LENDER LOAN
The outstanding principal on the City Note shall not be due upon prepayment and
refinancing of the First Lender Loan, and this Agreement and the City Deed of Trust shall be
subordinated to the refinanced First Lender Loan, provided that (i) such refinancing is approved
by the City, (ii) the amount refinanced does not exceed the outstanding principal balance of the
First Mortgage at the time of refinance plus reasonable costs of refinance, and (iii) the refinance
does not result in higher monthly payments on the First Lender Loan than were due prior to the
refinance. Mortgage loans or equity lines of credit junior in lien priority to the City deed of trust
are not permitted. The City and the Owner agree that the requirements of this section are
necessary to ensure the continued affordability of the Property to Owner and to minimize the risk
of loss of the Property by Owner through default and foreclosure of mortgage loans. Owner
hrther acknowledges that violation of the provisions of this section shall constitute a Default
under this Agreement. A form for use by the Owner in requesting City subordination to a
refinanced First Lender Loan is attached hereto as Exhibit E.
29. NONDISCRIMINATION
The Owner covenants by and for itself and its successors and assigns that there shall be
no discrimination against or segregation of a person or of a group of persons on account of race,
color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national
51 16 121 1 612003
.
origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Home, nor shall the
Owner or any person claiming under or through the Owner establish or permit any such practice
or practices of discrimination or segregation with reference to the use, occupancy, or transfer of
the Home. The foregoing covenant shall run with the land.
30. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUSTS
This Agreement shall not diminish or affect the rights of the City under the City Note and
the City Deed of Trust.
Notwithstanding any other provision in this Agreement to the contrary, this Agreement
shall not diminish or affect the rights of the California Housing Finance Agency ( "CHFA 'I), the
United States Department of Housing and Urban Development ( "HUD "), the Federal National
Mortgage Association ( "FNMA "), or the Veterans Administration ( "VA ") under the First
Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against
the Home in compliance with Section 28 above.
3 1. HUD FORBEARANCE RELIEF
Notwithstanding other provisions of this Agreement, the Option shall not be exercised by
the City when a deed of trust insured by HUD is secured by the Home, and (i) the Owner is
undergoing consideration by HUD for assignment forbearance relief, or (ii) the Owner is
undergoing consideration for relief under HUD's Temporary Mortgage Assistance Payment
program-
32. INVALID PROVISIONS
If any one or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall
be deemed severable from the remaining provisions contained in this Agreement, and this
Agreement shall be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
33. NOTICES
All notices required herein shall be sent by certified mail, return receipt requested or
express delivery service with a delivery receipt or personally delivered with delivery receipt
obtained and shall be deemed to be effective as of the date shown on he delivery receipt as the
date of delivery, or the date delivery was rehsed as indicated on the return receipt, or the date
Notice was returned as undeliverable as follows:
17 5% 12/16/2003
8
To the Owner:
At the address of the Home.
To the City:
City of Carlsbad
Housing and Redevelopment Department
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-2389
Attn: Homebuyer Program
To the First Lender: . ''
[to be inserted]
The parties may subsequently change addresses by providing written notice of the change in
address to the other parties in accordance with this section.
34. INTERPRETATION OF AGREEMENT
The terms of this Agreement shall be interpreted so as to avoid speculation on the Home
and to insure to the extent possible that the mortgage payments remain affordable to low and
moderate income households.
35. CONTROLLING LAW
The terms of this Agreement shall be interpreted under the laws of the State of California.
*.*.*.*.*
18 59 12/16/2003
.
36. EXHIBITS
Any exhibits refmed to in this Agreement are incorporated in this Agreement by such
reference.
IN WITNESS WHEREOF, the parties have executed this Agreement on or as of the date
first written above.
CITY:
City of Carlsbad, a municipal corporation
a municipal corporation
By:
Name:
OWNER:
Print Name
Signature
Title:
Print Name
Signature
19 12/16/2003 60
,
STATE OF CALIFORNIA
COUNTY OF
) ) ss.
on
personally appeared , personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person(@ whose name@)
idare subscribed to the within instrument, and acknowledged to me that hehhdthey executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature@) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
,2003, before me, the undersigned, a Notary Public,
WITNESS my hand and official seal.
STATE OF CALIFORNIA
COUNTY OF
1
) ss.
1
On
personally appeared , personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person@) whose name@)
idare subscribed to the within instrument, and acknowledged to me that helshdthey executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
,2003, before me, the undersigned, a Notary Public,
WITNESS my hand and official seal.
101 0\15\172084.3
1211 om3
STATE OF CALIFORNIA 1
COUNTY OF 1 ) ss.
on
personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s).whose name(s)
idare subscribed to the within instrument, and acknowledged to me that he/she/they executed the
same'in hishedtheir authorized capacity(ies), and that by hishedtheir signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
,2003, before me, the undersigned, a Notary Public,
WITNESS my hand and official seal.
1010\15\172084.3
i 211 om3
0 ,
EXHIBIT A
Legal Description of Property (Home)
101 0\15\172084.3
12/10/03
A- 1
G3
EXHIBIT B
Form of Owner Occupancy Certification
To:
FrOm:
City of Carlsbad ( "City ")
[name of owner(s)] ( "Owner(s) 'I)
Address of Home: ( "Property 'I)
Date:
By signature below, I
certify to the City under penalty of perjury that I/we occupy the home located at
[insert name or names of Owner] hereby
[insert address] (the "Home 'I) as my/our
principal place of residence and that Vwe have occupied the Home for (.-.I [insert number] months of the calendar year
Attached to this letter is a copy of
my place of residence.
[insert previous calendar year].
[insert utility bill or driver's license] showing
This Owner Occupancy Certification is signed on -, 20-, under penalty of
Pejury.
By:
Owner \type name]
By:
Owner [type name]
Due Date: of each calendar year.
Attach copy of utility bill or driver's license showing address of Home.
1010\15\172084.3
1U10103
B- 1
EXHIBIT C
Form of Owner's Notice of Intent to Transfer
To: City of Carlsbad ( "City ")
From:
Address of Home:
[name of owner(s)] ( "Owner(s) 'I)
( "Property 'I)
Date:
Please be notified pursuant to Section 7 of the Resale Restriction Agreement and Option to
Purchase between Owner and City dated
Property listed above.
, that the Owner intends to transfer the
A.
Agreement:
The following information is provided to the City pursuant to Section 7 of the Resale
1. Address of Property:
2. Date Owner purchased Property:
3. Purchase Price paid by Owner when Property was purchased:
4. Date Owner intends' to vacate Property:
5. Date Property will be placed on market:
6. Name and phone number of person for City to contact to schedule inspection:
and
(name) (phone number)
B.
Statement from Owner's purchase of the property is attached.
As required by Section 8 of the Resale Agreement, the following the HUD-1 Settlement
C.
real estate broker or financial institution. I agree to prepare the Property for sale by:
I have not yet listed the Property for sale with a multiple listing service, or contacted a
1. obtaining a pest control report within thirty (30) days of the date of this notice,
2. repairing all damage noted in the pest report within the sooner of (i) sixty (60)
days from the date of this notice, or (ii) two (2) weeks prior to close of escrow or the transfer of
the Property,
1010\15\172084.3 c- 1
12/1 Om3 65
3. allowing the City or its designee to inspect the Property within tlurty (30) days of
this notice,
4. maintaining utility connections until the Property is transferred,
5. permitting a walk through by the City prior to close of escrow or the transfer.
This Owner's Notice of Intent to Transfer is certified by Owner to be true and correct and
is signed on [insert date] under penalty of pq'ury.
By:
Owner
1010\15\172084.3
12/10/03
c-2
By:
OWner
I
Form of Owner
Name:
Address of Property:
Date:
EXHIBIT D
Acknowledgement of City Response Notice
I, Response Notice (as described in Section 10 of the Resale Agreement on
date].
[insert name] hereby acknowledge that I received the City
[insert
By:
1010\15\172084.3
1 U10103
D- 1
c
EXHIBIT E
Form of Owner Request for City Subordination
to Refinanced First Lender Loan
To: City of Carlsbad ( "City ")
From: ( "Owner 'I)
, "
Property Address: ( "Property ")
Date:
The Owner hereby requests the City to approve the Owner's refinance of the existing first
mortgage on the Property. The Owner provides the following information which it certifies to be
true and correct: ,
1. Original Purchase Price of Property: $
2. Original principal balance of existing First Lender Loan: $
3. Interest rate of existing First Lender Loan: $
4. Outstanding principal balance of existing First
Lender Loan: $
5. Monthly payments due on existing First Lender Loan $
6. Principal amount of proposed new First Lender Loan: $
7. Interest rate of Proposed new First Lender Loan: $
8. Monthly payments to be due on new First Lender Loan: $
The Owner hereby certifies the above information is true and correct and this Owner Request is
executed under penalty of perjury on [insert date].
By:
Owner
By:
Owner
E- 1 1010\15\172084.3
lZ1 OlQ3
5
CITY OF CARLSBAD HOMEBUYER PROGRAM - 200-
RESALE RESTRICTION AGREEMENT
AND OPTION TO PURCHASE
ADMINISTRATIVE COVER SHEET
(Remove Upon Completion)
BLANK LINES: CHECKLIST
Name of Owner, p. 1 , upper right
Address of Home, p. 1, upper right
Date of Document, p. 1, first paragraph
Developer's Name, p. 1 , first paragraph
Owner's Name, p. 1, first paragraph
Date of Affordable Housing Agreement, p. 1, Recital B
Amount of City/Seller Loan, p. 1, Recital B
Purchase Price of Home, p. 2, Recital C
First Lender Amount and Lender, p. 2, Recital D
First Lender Deed of Trust Recordation Information, p.2, Recital D
Median Income for a Household of Four on Date of this Agreement, p. 9, Section
14A(1)
Address of First Lender, p. 19, Section 33
Signatures of City and Owner, p. 19
Attach Legal Description of the Property, p. A-1
Notary
1211 6/2003 (3
Buyer's Disclosure Statement
HOMEBUYER PROGRAM
CITY OF CARLSBAD
(2003
The City of Carlsbad (the "City") is assuming the loan made to you by I
so that you will be able to buy your home in the Bressi Ranch
Condominium Development. The City is providing this financing in order to enable
lower-income households to own their own homes in the City.
In exchange for providing you with second mortgage loan, the City will require
you to sign a Promissory Note, Deed of Trust and a Resale Restriction Agreement and
Option to Purchase (the "Resale Restriction Agreement"). The Deed of Trust and the
Resale Restriction Agreement will be recorded apainst your uropertv. These
documents are enforceable by the City.
In general, the Promissory Note, Deed of Trust and the Resale Restriction
Agreement set forth conditions that you must meet, including but not limited to the
following:
The Resale Restriction Agreement requires you to live in your home as your
principal place of residence, and prohibits you from renting-out your home.
The Resale Restriction Agreement places controls on the sale of your home. In
addition, you must follow certain steps and procedures when you decide to sell
your home.
There is a limit to the price at which you can sell the home during the first fifteen
(1 5) years that you own your home.
You will have to pay the City a share in your home's appreciation upon the sale of
your home.
The City has an option to purchase your home at a restricted price when you put
the home up for sale.
The second mortgage loan (the "City Loan") is due and payable upon any default
under the Promissory Note, Resale Restriction Agreement, or Deed of Trust, upon
any transfer of the home, and at the end of the thirty (30) year term.
The purpose of the Resale Agreement is to ensure that the goal of the City
financing -- to help lower income households own their own homes -- continues to be
met by keeping your house affordable to other lower-income households should you
choose to sell or move. The City has helped you to buy a home; it wants to help others as
well.
1 12/16/2003 10
This Disclosure Statement explains the major provisions of the Promissory Note and
Resale Restriction Agreement so that you will understand their requirements. You
should, of course, read the entire Promissory Note, the Resale Restriction
Agreement, and the Deed of Trust and become completely familiar with them.'
A. REOUIREMENTS IN EFFECT FOR 30-YEAR TERM
The requirements that are in the Resale Restriction Agreement apply until the
earlier of (i) thirty (30) years from the date of the Resale Restriction Agreement, or (ii)
the date you sell or transfer your home in accordance with the Resale Restriction
Agreement and the Deed of Trust. If you own and live in your home for the whole thuty
(30)-year team, all of the requirements of the Resale Restriction Agreement go away.
B. PRIMARY RESIDENCE AND LEASING YOUR HOME
Your house at Bressi Ranch must be your main place of residence. This means
you must live in your home for at least ten (1 0) months out of each calendar year. Each
year during the thirty (30)-year term described in A. above, you must tell the City in
writing that you are meeting this requirement. You are not allowed to lease or rent the
house to anyone. If you violate these requirements you will also be in default under the
Resale Restriction Agreement and the City may require you to sell the home to the City
in the manner described in the Resale Restriction Agreement. You will also be in default
under the City promissory note and the City may require you to repay the City Loan. The
Deed of Trust and Resale Restriction Agreement will remain in effect even if you are
required to repay the City Loan.
C. MAINTAINING YOUR HOME/ PROPERTY INSURANCE
By signing the Resale Restriction Agreement, you agree to keep your home and
landscaping in good repair and in neat, clean, and orderly condition and to prevent
deterioration of the home. You also agree to keep a standard fire and extended coverage
homeowner's insurance policy, with the City named as an additional insured. The
insurance policy shall be in an amount equal to the replacement value of the home.
Every five (5) years (or every year, if provided by the policy), the replacement value will
be reviewed and adjusted as needed.
D. NOTJCE TO CITY OF YOUR INTENT TO SELL YOUR HOME
When you decide to sell your home, you must let the City know in writing before
you contact a real estate broker or lender and before you list the home in the Multiple
Listing Service. This notice is called the "Owner's Notice of Intent to Transfer." The
Owner's Notice of Intent to Transfer (see Exhibit C of the Resale Agreement for a form
of this notice) must be sent in a particular way and must include specific information (for
Numerical examples are included in this Disclosure Statement to help you better understand the concepts,
terms, and provisions of the Buyer's Resale Restriction Agreement and Promissory Note. Please be aware
that these are simply to show how things work and that they are not intended to represent your specific
situation. If you follow along with a calculator, you may not get exactly the same answers. Any differences
are probably due to how your calculator "rounds-off' numbers.
2 12/16/2003 7 \
example, it must include a pest report) as detailed in Section 8 and Exhibit C (Notice of
Intended Transfer: Preparation of Home for Sale) and Section 33 (Notices) of the Resale
Restriction Agreement. If you fail to send the City this notice, you will be in default
under the Resale Restriction Agreement and the sale of your home may be delayed.
E. PREPARATION OF HOME FOR SALE
You are responsible for putting the home in good condition for its sale. Once you
have sent the Owner's Notice of Intent to Transfer, you must take the steps to prepare the
home for sale as described in Section 8 and Exhibit C (Notice of Intended Transfer) and
Section 9 ~ of the Resale Restriction Agreement.
F. CITY HAS OPTION TO PURCHASE
In exchange for the opportunity given to you to buy your home at an affordable,
below-market price, you agree that the City has an option to buy your home at a restricted
price if you sell your home during the term of the Resale Restriction Agreement. In other
words, the City has the first opportunity to buy your house before anyone else. The City
may also give its option to purchase your house to another public agency, a nonprofit
organization, or a person or family meeting income and other requirements.
After you send in the Owner's Notice of Intent to Transfer the City will then let
you know in a notice called the "City Response Notice" whether or not it will use its
option to purchase. See Section 10 (City Response to Owner's Notice of Intended
Transfer) and Section 11 and Exhibit D (Owner Acknowledment of City Response
Notice) of the Resale Restriction Agreement for details on what you must do once you
receive the City Response Notice.
If the City decides to use its option to purchase (or assigns this right) and the City
or a City designee will buy the home at a restricted sales price (which is described in
greater detail in Section G below). The City will let you know that it wants to buy your
home and will inform you of the restricted sales price amount in the City Response
Notice. The purchase by the City shall take place within ninety (90) days of the date the
City Response Notice is sent to you.
When your home is bought by the City or a City designee under the City's option
to purchase, you will pay to the City a transaction fee equal to six percent (6%) of the
sales price. This fee takes the place of the fee for a broker's services. The City will be
performing those services when it purchases the home or assigns its option to another
buyer who will purchase the Home
G. SALES PRICE OF HOME IS RESTRICTED: MAXIMUM SALES PRICE
The City has helped make the cost of buying a home affordable to you. The City
also wants to make sure that others like you get the same chance. Therefore, the Resale
Restriction Agreement limits the sales price of your home if the City exercises its option to
purchase your home or if you send in the Owner's Notice of Intent to Transfer within the
first fifteen (15) years of the Resale Restriction Agreement. The Maximum Restricted
3 72 1UleM003
Resale Price that you can receive is the lower of the result of the Restricted Resale Price
formula in Section G. 1 below and the Fair Market Value as described in Section G.2.
1. RESTRICTED RESALE PRICE
(a) Original Sales Price of Home (price at which you bought it)
(b) increased by the percentage increase of the Area Median Income for
the County of San Diego for a household size of four (4) persons fiom
the date of your original purchase (the recording date of the Grant
Deed for the property) to the date of receipt by the City of the
Owner's Notice of Intent to Transfer
It is also important to understand that if the home has suffered from any damage or
deferred maintenance while you own it, any decrease in value of your house will be
subtracted in the calculation of the Restricted Future Sales Price, as will the amounts
necessary to put the house in a "sellable condition."
Example 1 shows how the Indexed Price formula works.
EXAMPLE 1 You sell your house at the end of eight years. The original sales price of your home
was $289,000. The median income for a family of four in San Diego County when
the home was bought was $61,100. Median income increases by 24% over the eight
years.
(a) Original Price of Home $289,000
(b) Median Income Increases by 24% over
eight years
multiply (a) by 24%, then add
result ($69,360) to (a)
$69,360
$358,360
RESTRICTED RESALE PRICE $358,360
2. FAIR MARKET VALUE
Under the Resale Restriction Agreement, the Fair Market Value can be
determined in one of two ways. First, it can be established by a real estate appraiser
approved in advance by the City. If possible, the appraisal will be based on sales prices
of homes similar to yours that are sold in your market area during the preceding three (3)-
month period. The appraisal will not take into account the fact that the resale price of
your home is restricted by the Resale Restriction Agreement. The value of any damage
or deferred maintenance that occurred while you owned the house that decreased its value
shall be included as a separate value in the appraisal. In this case, the appraisal will state
what the Fair Market Value of the home would be without the damage or deferred
maintenance. The value of the deferred maintenance, if any, will have a direct impact on
the Restricted Future Sales Price.
4 la1 6/2003 13
You must pay the cost of the appraisal used to determine Fair Market Value,
unless a new buyer has obtained an appraisal that you may utilize. The City is not
responsible for paying for any portion of an appraisal used for any purpose under the
Resale Restridon Agreement.
The Resale Restriction Agreement also allows ycr: and the City to set the Fair Market Value of your home by mutual agreement instead of relying on an appraiser.
Both you and the City would have to agree to this particular method (instead of hiring an
appraiser) and to the final Fair Market Value amount. If you and the City fail to agree on
the Fair Market Value, either one can require use of the appraisal method.
Example 2 shows how the Restricted Resale Price and the Fair Market Value of the home
are compared to determine the Maximum Restricted Resale Price at which you can offer
your house for sale.
EXAMPLE 2 The assumptions are the same as in Example 1. You sell your house at the end of
eight years. The original sales price of your home was $289,000. The median
income for a family of four in San Diego County when the home was bought was
$61,000. Median income increases by 24% over the eight years. The Fair Market
Value of your home is determined by appraisal, the cost of which is paid by you.
' The appraisal determines the Fair Market Value at $375,000.
INDEXED is less FAIR MARKET MAXIMUM RESTRICTED
PRICE than VALUE then RESALE PRICE
$358,360 < $375,000 3 $358,360
Since the Fair Market Value of the home is greater than the Indexed Price of the
house, the Maximum Restricted Resale Price which you can receive from the sale of
your home is $358,360.
H. SELLING YOUR HOME WITHIN THE FIRST FImEEN (15) YEARS
Under the terms of the Resale Restriction Agreement, when you go to sell your
home within the first fifteen (1 5) years of the thirty (30) term, there are two (2) different
ways that the sale can take place:
0 The City chooses to use its option to purchase your house at the restricted
sales price or assigns the option to a third party who purchases the house
at the restricted sales price.
You sell the home at a restricted sales price to someone who meets
specific income requirements like you had to meet. This buyer is called an
"Eligible Purchaser" in the Resale Restriction Agreement.
e
.
The City's option to purchase your home is described in Section F above. The sale to the
Eligible Purchaser and what will occur if you sell your home in violation of the Resale
Restriction Agreement during the first fifteen (15) years that you own your home are
described below.
5 12/16/2003 lL/
1. SALE TO AN "ELIGIBLE PURCHASER" AT THE RESTRICTED
SALES PRICE
If you have sent in your Notice of Intent to Transfer during the first fifteen (15)
years that you own your home and the City notifies you in the City Response Notice that
it will not execute its option to purchase your home, you will have to find an Eligible
Purchaser to buy the home at the restricted sales price which the City will provide in the
City Response Notice. An Eligible Purchaser is a household who will live in the home,
and whose income meets the requirements set by the City. The City will provide you
with the current income limits when you sell your home. See Section 10 (City ResDonse
to Owner's Notice of Intended Transfer) and Section 15 (Sale BY Owner if City Does Not
Exercise ODtion To Purchase During Initial Term) of the Resale Restriction Agreement.
Once you find a potential Eligible Purchaser, you will refer the proposed buyer to
the City so that the City or its designee can determine if in fact he or she meets the
requirements of an Eligible Purchaser. You and the proposed buyer must give specific
information and documents to the City as described in Section 15 (Sale of Home BY
Owner If City Does Not Exercise City OD tion to Purchase During Initial Term) of the
Resale Restriction Agreement.
When the sale of your home to the Eligible Purchaser is completed, you must
submit to the City the information and documents listed in Section 15.D(7) of the Resale
Restriction Agreement.
2. SALE IN VIOLATION OF THE RESALE AGREEMENT; PAYMENT OF "EXCESS SALES PROCEEDS" TO CITY
If you sell your home in violation of the Resale Restriction Agreement for more
than the Restricted Sales Price during the first fifteen (1 5) years that you own your home
or after sending in the Owner's Notice of Intent to Transfer during the first fifteen (15)
years that you own your home, you will have to pay to the City the "Excess Sales
Proceeds" as a remedy for your violation.
The term Excess Sales Proceeds is defined in Section 16 of the Resale Restriction
Agreement c) as ninety-four percent (94%) of
the amount by which the gross sales proceeds you receive from the buyer exceed the
Maximum Restricted Resale Price for the home as set out in the First City Response
Notice. Another way to put it is the following:
6
Gross Amount of Money the New Buyer Paid for the House
MINUS
Maximum Restricted Resale Price
(from First City Response Notice)
THE XEMAINDER IilULTIPLIED BY
Ninety-Four Percent (94%)
Equals the Payment to the City of Excess Sales Proceeds
The reason that the City gets "94%" rather than the full (or "100%") amount is so
that the real estate broker that assists in the sale of your home can be paid his or her
commission, even though you will have violated this Resale Restriction Agreement. The
Excess Sales Proceeds formula is intended to ensure that you receive the same net
amount of sales proceeds from an unrestricted sale (in violation of the Resale Restriction
Agreement) that you would have received if the City had purchased your home at the
Maximum Restricted Resale Price. This provision is intended to eliminate any incentive
for homeowners to violate the Resale Restriction Agreement when the home is sold.
The amount of Excess Sales Proceeds that you pay to the City is used by the City
for other affordable housing programs it runs. You were given the chance to buy your
home at a price that was affordable to you. When you pay the Excess Sales Proceeds
because of a sale in violation of the Resale Restriction Agreement, those hds are going
to help other lower income families who, like you, would not be able to obtain affordable
housing without assistance.
Example 3 shows how the Excess Sales Proceeds are calculated.
EXAMPLE 3 You sell your house at the end of eight years. You originally paid $289,000 for your
home. The First City Response Notice sets the Maximum Restricted Resale Price at
$358,360. The house is appraised at $375,000. You sell the home in violation of the
Resale Restriction Agreement to a third party for $375,000. You must pay the City
Excess Sales Proceeds as calculated below:
Total Amount
Paid For House $375,000
Maximum Restricted Resale Price (from
MINUS
First City Response Notice) - $358.360
$1 6,640
MULTIPLIED BY x.94
Ninety-Four Percent (94%)
Amount of Excess Sales
Proceeds You Pay to City
$15,642
(in addition to original loan
amount)
7
I. SELLING YOUR HOME DURING AFTER THE FIRST 15 YEARS THAT
YOU OWN YOUR HOME
If you mail your Owner's Notice of Intent to Transfer to the City after the first
fifteen (15) years that you own your home but within the thirty (30)-year term of the
Resale Restriction Agreement, there are still two (2) ways the sale of your home can take
place:
The City can use its option to purchase your home at a restricted sales
price or assign its option to purchase to a third party.
0 You sell the home at an unrestricted price to a third party.
The City's option to purchase your home is described in Section F above. If the City does
not exercise its option to purchase your home, the City Response Notice will tell you that
you may sell the home on the market for a price that is greater than or equal to your
home's fair market value. Fifteen (1 5) days before you close escrow on the sale of you
home, you will have to send in to the City a copy of the sales contract and a declaration
certifying the sales price of your home to the third party. At the close of escrow of the
sale of you will have to send in additional information verifying the purchase price paid
for your home by the third party.
J. REPAYMENT OF CITY ASSISTANCE
Your loan from the City is a "deferred" loan. This means that you do not have to
pay it back until the end of the thirty (30) year term as long as you own the home and you
do not violate any of the terms of the Promissory Note, Deed of Trust, and the Resale
Restriction Agreement. As soon as you sell the home, though, or if you break the terms
of the loan documents or Resale Agreement, the loan will be due and you will have to
pay it back. The City Loan carries "contingent interest" or "shared equity" which is
described in the next section.
1. CONTINGENT INTEREST
As mentioned earlier, the City wants to help lower income persons and families
who would not be able to buy homes in the City without City funds. City resources,
however, are limited. You benefited from City financial help; it is only fair that you
repay the City in proportion to that benefit. That is why the City has included
"contingent interest" (also known as "shared equity") in your loan repayment. In general,
contingent interest is a percentage of the difference between the original purchase price
of your home and the price at which you sell it. This difference is called the
"appreciation amount."
The contingent interest you pay represents the benefit you received fiom the City
Loan less a 25% credit for any capital improvements that you may have made to your
home. More specifically, the Contingent Interest is 75% of the percentage which is
8 12/16/2003 77
.
figured by dividing the amount of the City Loan by the original purchase price that you
paid for your home. For example, if the City provided 21% of the original purchase price
of your home, when you sell the home, 75% of 21% (or 10%) of the appreciation amount
is owed to the City as contingent interest.
Example 4 sets this out with numbers.
EXAMPLE 4 You sell your home after living in it for 18 years. Your loan hm the City is $60,000.
The original purchase price you paid for the home when you bought it was $289,000.
You sell the home for $375,000.
Contingent Interest: 75% of 2 1% = 75% = 16%
This means that the City will receive 16% of the appreciation on your home, which is the
difference between the original purchase price of your home and the price at which you sell it. If we use
the Fair Market Value fi-om Example 2 as the actual sales price, the following would result:
Resale Price $375,000
Original Purchase Price -$289,000
Total Appreciation Amount $86,000
City Share of Appreciation
(16% of $86,000)
$-13,760
Share of Appreciation That You Keep $72,240
Under these assumptions, if you sell your home in 18 years, the total you would owe the City is
the following:
City Loan Amount
City Share of Appreciation
$60,000 + $13,760
TOTAL AMOUNT YOU OWE CITY $73,760
In cases where you transfer your home to an Eligible Purchaser, the appreciation
is the difference between the original purchase price and the Maximum Restricted Resale
Price. In cases where you transfer your home to a third party by sale, the appreciation
amount is the difference between the original purchase price and the unrestricted price for
which you sell your home. In cases where you transfer your home to a third party is by
means other than sale (with the exception of a creditor taking title), the appreciation is the
difference between the original purchase price and the Fair Market Value of the home at
the time of transfer.
2. PREPAYMENT OF CITY LOAN
You have the right to prepay part or all of the City Loan. If you prepay all of the
loan, contingent interest will be due the City based on the Fair Market Value of your
home at the time of prepayment. Fair Market Value shall be determined by an appraisal
18 9 , 12/16/2003
(conducted as set forth in Section G.2 above entitled Fair Market Value). In the case of
prepayment, you will be responsible for paying the cost of the appraisal. If you prepay
only a part of the City loan, the payment that you make will be applied to both the
amount of principal and the amount of Contingent Interest you owe the City based on the
following calculations:
Amount of Prepayment
Amlied to PrinciDal
Amount of Prepayment
Amlied to Interest
Principal Amount of City Loan
(Total Principal + Interest Due at
Time of Prepayment)
City Contingent Interest
Divided By Divided By
(Total Principal + Interest Due at Time of Prepayment)
In addition, your Contingent Interest percentage will change because you paid off
a portion of the original City Loan amount (the principal).
Example 5 shows how this would work.
EXAMPLE 5 You have a City Loan in the amount of $60,000 (the principal). The original purchase
price of your home was $289,000. Contingent Interest is 16%. You decide to prepay
$10,000 of the loan 20 years after you have purchased the home. At the time of
prepayment, the fair market value of the home is $375,000.
Fair Market Value $375,000
Original Purchase Price -$289.000
Total Appreciation Amount
(established by new appraisal)
$86,000
City Share of Appreciation (Contingent
Interest = 16%)
$13,760
Your $10,000 prepayment is applied to principal and Contingent Interest in the following manner:
Amount of Prepayment
ADDlied to PrinciDal
Amount of Prepayment
ADDlied to Interest
$60,000 + ($60,000 + $13,760) $13,760 + ($60,000 + $13,760)
60,000 + 73,760 13,760 f 73,760
.81 or81%oftheprepayment
of $10,000 is applied to principal
.19 or 19% of the prepayment of $10,000 is
applied to interest
or or
10 12/16/2003 lq
. .
$8,100 $1,900
Principal Amount Left Owing: $60,000 - $8,100 = $5 1,900
New Contingent Interest:
(for fbture loan repayment)
75% of New Principal + Original Purchase Price
Amount
75% of $5 1,900 + $289,000
New Contingent Interest = 75% of 18% =13.5%
(for future loan repayment)
K. DEFAULT PROVISIONS
When you accept the City Loan, you agree to meet all of the conditions of all of
the City documents, including the Promissory Note, Resale Restriction Agreement, and
Deed of Trust. If you violate any provisions of the documents, you are considered to be
in default under your City Loan. Also, if you default under any other loan on the home,
such as the first mortgage, you would also be considered to be in default under the City
Loan. If you do not correct the violation, the City could require you to repay the City
Loan and/or exercise its option and buy your home. The City and could also go to court
and get a court order to enforce the provisions of the City documents, which may result in
a foreclosure on your home.
L. REFINANCE OF YOUR FIRST MORTGAGE
The Resale Restriction Agreement allows you to refinance your First Lender Loan
but places restrictions on the amount received by you from the refinancing. As a
requirement of refinancing, First Lenders usually require that the City subordinate its
documents to them. The City will only subordinate the Resale Restriction Agreement
and City Deed of Trust if the loan amount of such refinancing does not exceed the then
outstanding balance of principal and interest (plus refinancing and closing costs) of the
existing First Lender Loan and if the refinance does not result in higher monthly
payments on the first mortgage than were do prior to the refinancing. If you refinance
your First Lender Loan for an amount that is greater than the outstanding principal and
interest plus refinancing and closing costs, you will be in default under the Resale
Restriction Agreement and the Deed of Trust.
................................
12/16/2003 $30
Please sign this Buyer's Disclosure Statement in the space provided below, and
keep a signed copy for your records, and return the original to the City at the following
address:
City of Carlsbad
Housing and Community Development Dept.
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-2389
Attn: Homebuyer Program
I have read and understand the above Buyer's Disclosure Statement. , .'
By:
Signature of Buyer
Dated:
Print Name of Buyer
By:
Signature of Buyer
Dated:
Print Name of Buyer
12 la1 612003
EXHIBIT 4
SITE
Bressi Ranch Affordable
Housing Project
EXHIBIT 3
HOUSING COMMISSION
DRAFT MINUTES
SEPTEMBER 9,2004
83
DRAFT
Minutes of: HOUSING COMMISSION
Time of Meeting: 6:OO P.M.
Date of Meeting:
Place of Meeting:
September 9, 2004
HOUSING AND REDEVELOPMENT OFFICE
CALL TO ORDER
Vice Chairperson Huston called the Meeting to order at 6:OO p.m
PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was waived because there wasn’t a flag at the Housing and Redevelopment Office.
ROLL CALL
Present: Commissioners: Renee Huston
Dons fitchie
Margaret Schraml
Bobbie Smith
Absent: Edward Scarpelli
Staff Present: Housing and Redevelopment Director: Debbie Fountain
Management Analyst: Craig Ruiz
APPROVAL OF MINUTES
Minutes of March 1 1,2004, were approved as written.
VOTE: 4-0
AYES: 4-0
NOES: None
COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA
There was no audience in attendance, who wished to speak at this time.
NEW BUSINESS
Vice Chairperson Huston stated we would be reviewing CP 03-03, Bressi Ranch Financial Assistance. A
recommendation of approval to the City Council to provide $2,000,000 in financial assistance and approval of the
borrower loan documents for development of one hundred affordable condominium units to satisfy the requirements
of the inclusionary housing ordinance for the Bressi Ranch Master Plan.
Craig Ruiz gave a verbal presentation. Bressi Ranch is a Master Plan Community on the comer of Palomar Airport
Road and El Camino Real. There will be a total of 623 residential units. As part of that, 523 of those units will be
single-family homes, which will be market rate units. There will also be a condominium project of 100 for-sale units
that will be available to low-income households. That will satisfy their inclusionary housing requirement. Out of the
100 units, they will be two and three bedrooms, ranging from 900 to a little over 1,100 square feet. In exchange for
that., they are asking for $2,000,000 in financial assistance. The Staff Report breaks down the subsidy analysis on
page 3. The average cost of the units are about $215,000. The units will sell for about $177,000. That average cost
is just the cost of construction. It will not include the cost of the land.
The total revenues for the project would be about $17,700,000 if all the units sold. The project cost will be about
$21,500,000 so that leaves a shortfall. That gap doesn’t include the land so the proposal is to fill that 3.7 million
dollars contribution from the developer of $1,700,00 and the City’s contribution would be $2,000,000. In the past,
the assistance has been given to the builder during construction, which is a construction loan, and then the obligation
to repay the loan is transferred to the buyer of those units.
HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 2 of 8
Instead of providing the money during construction, we are going to give the money to the buyer of the affordable
unit as part of the escrow process. It will be more of a first-time homebuyer program in that no real money will be
coming to the buyer. It will be delivered into escrow; part of the sales transaction. That assistance as well as the
developer’s assistance is recorded as a second deed of trust. The buyer must’stay there for fifteen years. If they do
sell within the fifteen years, they have to sell it to another affordable household. If they sell it after year fifteen, they
can sell it at a market price, but the subsidy and the builder’s subsidy is recaptured, plus there is a share in the equity.
In addition to recommending approval of the money, there is also the loan documents the borrower will actually use
which is a typical promissory note, the deed of trust and a resale agreement. Also a disclosure statement that
explains in plain English explain the process to each of the buyers.
Roughly a third of someone’s monthly income who is low income can go toward the total of their household cost.
Household cost consists of paying the loan, the principal and interest, but it is also the property taxes, HOA fees.
Usually the HOA fees pick up the insurance requirement, but if there is a separate insurance requirement, then it goes
into the housing cost.
The recommendation is the $2,000,000 in financial assistance as a homebuyer assistance program and then
recommending approval of all related documents.
Vice Chairperson Huston said she had a little dificulty understanding the documents and asked for clarification. Is
the recommendation of $2,000,000 in fmancial assistance from the Housing Trust Fund in the form of low-income
buyer down payment assistance?
Craig Ruiz said that is correct.
Vice Chairperson Huston continued, of the $2,000,000, you have down payment money and approval of the
borrower loan document for construction of 100 affordable condominiums.
Craig Ruiz said he understands and it is a little misleading. He said the loan documents that are attached are separate
from the money. All 100 households that buy those units are going to use these loan documents. Then the money
plus the documents, are all to allow for the building of those 100 affordable units.
Vice Chairperson Huston said she noticed it also said the developer of Lennar Homes is not receiving a developer
fee for the development of this project. How much would the developer fee be?
Craig Ruiz answered that some developer fees for past projects, primarily on rental projects, have brought anywhere
from 7% to 15% of the hard construction cost.
Vice Chairperson Huston asked what the reason was that they didn’t get a developer fee.
Craig Ruiz replied that on one hand, there is Lennar and then affiliated with Lennar is Greystone Homes, another
subsidiary. Greystone will be building the units, and there is a profit that Greystone will earn when building them.
There is some money that is being earned there. It is not in addition to the developer fee. If you hired a general
contractor, there would be the cost of construction plus their profit. It would be reasonable to charge a developer
fee, but it just adds to the cost and there is only so much money we will fill. Basically we just add to the subsidy
amount needed to the project.
Vice Chairperson Huston asked if the developer fee was waived then?
HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 3 of 8
Craig Ruiz said in a sense, yes. There is only so much money you can make on the sale, and if 10% is added, that
would just widen the gap between the revenues and cost. There is no other subsidy sources out there for these types
of for-sale projects.
Vice Chairperson Huston asked the Commissioners if there were any questions.
Commissioner Ritchie asked where the $2,000,000 comes from
Craig Ruiz replied that the City has an Affordable Housing Trust Fund that when builders build small projects, they
pay in-lieu fees. Also, money from other affordable housing loans have been paid back with interest; that money
goes into the Housing Trust Fund. Also, with the Villa Loma Project, there are all the extra units there. It was built
with 183 extra units and we sell credits in those to smaller developments so people pay us that way. The fund has a
total value of $14,000,000 when you add in all the loans. There is over $8,000,000 in money available to lend to
projects.
Commissioner Ritchie asked about the cost per square foot. How does that compare with what we have dealt with
previously?
Craig Ruiz said it is hard to compare. The last for-sale project that we saw was in 1999 and the costs are so
dramatically different we didn't really go into that.
Tom Sakai, Principal for Springbrook Realty Advisors, said fiom the developer's perspective, these costs are the
equivalent of what are seen for other market rate projects, not affordable projects, in Orange and San Diego County.
This reflects the high quality of this project.
Commissioner Smith asked if the two bedroom, one bathroom units are one bath or half a bath?
Tom Sakai answered it is one bathroom in the two bedroom floor plan. For a three bedroom affordable unit, two
bathrooms are provided. It is hard to serve all people on a limited construction budget.
Vice Chairperson Huston stated that the fund currently has a balance of 9.1 million dollars. If we take $2,000,000
out, that leaves it at 7.1 million dollars. With all the projects that are out there, is that an adequate remaining balance
to do what is needed?
Craig Ruiz replied that yes it is. We look at what projects are out there and what they can possibly request. It is hard
to judge since a lot of the loans that have been done are called residual receipts. That is the profit left over after
paying expenses and paying the other loans that are ahead of us. It is an estimate so it is a revolving fund. There
should be enough money for all of the projects. There could be some timing issues or there may never be an issue.
Vice Chairperson Huston said she understood, we are in the safety zone.
Craig Ruiz said yes, definitely.
Tom Sakai and Keith Reinhawn showed a drawing of the plans. Keith Reinhawn is fiom Greystone Homes. He said
they are building ten, ten-plex units. They are two and three bedroom. Each building is identical. It has been
incorporated into the Master Plan for Bressi Ranch and will have access to amenities throughout the community.
There is a recreation center and a pool and other amenities.
Vice Chairperson Huston asked where the parlung units are?
Mr. Reinhawn said they have garages. There will be additional parking for guests throughout the community.
HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 4 of 8
Commissioner Ritchie commented that Mr. Reinhawn said a pool. Commissioner Ritchie understood there wouldn’t
be a pool in Bressi Ranch.
Mr. Reinhawn said there is a pool being built at Bressi Ranch. The buildings will have a Spanish-type architecture.
It blends in nicely with the community. It is being built with hgh speculation levels. For an affordable community,
it is something that the City of Carlsbad can be proud of. The neighborhood of Bressi Ranch is a high end, upscale
community that will fit in this neighborhood very nicely.
Commissioner Ritchie asked where it is located.
Mr. Relnhawn pointed it out on the plans. It will be in the center of the community up on the hll and has some
ocean views. The recreation building and the pool is within walking distance.
Commissioner Ritchie asked where the Boys and Girls Club will be located.
Mr. Reinhawn pointed out where the Boys and Girls Club will be, which is close to the affordable housing units. He
shared the different elevation drawings of the project.
Vice Chairperson Huston said she noticed the vegetation shows full grown trees. She asked if they will be planting
full-grown trees?
Mr. Reinhawn said no, probably not.
John Slatton, Director of Operations at Lennar Homes, commented further on the vegetation and said there will also
be planters. On the original Bressi Ranch, there were several mature trees saved and boxed and have already been
replanted. This is a high-end affordable community. The exterior elevations are typical of any condominium
project.
Commissioner Schraml asked if there has been any discussion about the buildings being in the flight path of the
airport? Any foreseen problems?
Craig Ruiz said that was addressed when the master plan was approved through the planning process. There is a
flight path adjacent to it. This is why you see the commercial and industrial along the major roads and the residential
is further in.
Commissioner Schraml asked if the future buyers will be aware that they are on a flight path?
Craig Ruiz said yes, when a project is approved anywhere in the City, that is one of the things thdy have to disclose.
Then there is something they have to sign as well stating they are aware of it.
Commissioner Smith commented that when Bressi Ranch was submitted to the San Diego Awards Committee, she
happened to have been on it. She said it is a beautiful project and an honor to have them in Carlsbad.
Vice Chairperson Huston asked if there were any other questions or comments.
Vice Chairperson Huston asked for a recommendation of approval to the City Council to provide $2,000,000 in
financial assistance and approval of the borrower loan documents for development of one hundred affordable
condominium units to satisfy the requirements of the Inclusionary Housing Ordinance for the Bressi Ranch Master
Plan. Commissioner Ritchie moved and Commissioner Smith seconded the approval.
VOTE: 4-0-0
HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 5 of 8
AYES:
NOES: None
ABSTAIN: None
Huston, Ritchie, Schraml, and Smith
Vice Chairperson Huston continued with the second item, CT 98-14, ThompsodTabata request to purchase
affordable housing credits. It is a recommendation of approval to the City Council to approve the request to
purchase sixteen affordable housing credits in the Villa Loma Affordable Housing Development to satisfy a portion
of the requirement of the Inclusionary Housing Ordinance for the ThompsordTobata Residential Development.
Craig Ruiz said the ThompsodTabata Project was approved in 2002 by the City Council and it allows for 238
single-family homes and 24-unit for-sale condominium development. The single-family homes, llke the last project,
will be market rate units, and the condominiums are to satisfy a portion of their affordable housing requirement.
This project is unique in that they are going to build some affordable units and then they are seeking to purchase
credit. The requirement would be a total of forty units; 24 units would be built and 16 credits would be purchased.
The site is unique in that it is more of an infill development. Around it are existing homes and existing communities.
Thls project will have streets that will be going into these existing communities. Because this project is unique, we
have come to this proposal and to be more compatible with the existing neighborhood. The condominiums have
already been approved. All the units will be three and four bedroom units, which is another reason we have
supported this unique project. We don’t have a lot of large family units; that is one of our largest needs. Large for-
sale units are unique to any project that we have seen.
The reason this project is before you for the credit is because anytime a project is seeking to purchase ten or more
credits, it has to come before the Housing Commission for a recommendation to the City Council. As part of the
Staff Report, it is unique because it is wih an existing community; more of an infill project. Staff is supportive of
this proposal because it is compatible with the community.
Vice Chairperson Huston asked what the reason is if they are building 24 units, then why do they need to put the
other sixteen somewhere else.
Craig Ruiz answered it was a combination of a negotiation between the City and the builder. It is also based on a lot
of community input about where to put the affordable units.
Vice Chairperson Huston asked if he was saying that the community didn’t want it. Was that it?
Debbie Fountain, Director of Housing and Redevelopment, said they have a unique situation in that they have
property on both sides of Poinsettia so when we were trying to find the location for the affordable housing, it was
difficult to figure out where the best location was. It was constrained on how many total units can be produced there.
Because they said they would do larger bedroom sizes, we agreed they could do a portion of.the units on site and
portion of the units off site. Originally they wanted to do for-sale town homes and second dwelling units, but at the
time all of that was going on, the second dwelling units were getting a lot of criticism because people felt like they
really didn’t meet the affordable housing need. At that time, they wanted to do a split; some credits, some second
dwelling units and some town homes. We agreed if they did the larger town homes, we didn’t really want to get the
second dwelling units at that point so we agreed that we would just let the rest of them be the credits. They were
going to originally do the 24 units and then incorporate the second dwelling units in the homes, but we said we
would rather them buy into Villa Loma rather then give us a second dwelling unit. Because all of that was designed
and it worked well and they were giving us the larger units, we agreed that we could accept that as a deal.
Vice Chairperson Huston asked if Villa Loma has sixteen units to spare?
Debbie Fountain said yes.
Vice Chairperson Huston asked how many units are available there.
. HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 6 of 8
Craig Ruiz said there is over 60 credits still available.
Vice Chairperson Huston said then by credits, you mean units?
Craig Ruiz said yes.
Vice Chairperson Huston commented that this would bring them to 44.
Debbie Fountain we have determined to make sure that we have an adequate number and we have always included
this number in that.
Vice Chairperson Huston continued that by the time we get to the City’s build out and add all the affordable units in,
will that 44 be enough?
Debbie Fountain answered that staff hnks so. Staff also has another project that they are lookmg at across the street
from Villa Lorna that will give us additional credits. They are looking at doing a 56 unit affordable housing project
that is not being done as an inclusionary housing project. We will be able to have some extra credits in there if we
needed to.
Craig Ruiz stated that is a project we will see before the end of this year.
Debbie Fountain agreed and said they would be coming back for fmcial assistance.
Joanne Watanabe, Standard Pacific Homes, stated they are currently building at Poinsettia. The affordable units and
the single family homes will all belong to one homeowner’s association and they will all share the common
amenities. Whether the amenities are near the affordable site or intermixed within the single-family homes, they are
all equally shared by every resident.
Commissioner Ritchie asked if they are on both sides of the road?
Joanne Watanabe said most of the amenities are on the south side of the road where the affordable units are. The
north side is constrained because it is not a big site. The majority of the amenities are on the south side.
Vice Chairperson Huston asked for a recommendation of approval to the City Council to approve the request to
purchase sixteen affordable housing credits in the Villa Loma Affordable Housing Development to satisfy a portion
of the requirement of the Inclusionary Housing Ordinance for the ThompsodTobata Residential Development.
Commissioner Ritche moved and Commissioner Schraml seconded the approval.
VOTE: .4-0-0
AYES:
NOES: None
ABSTAIN: None
Huston, Ritchie, Schraml, and Smith
CHAIRPERSON’S REPORT
No reports.
HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 7 of 8
DIRECTOR REPORT:
At the October 14, 2004 meeting, we are going to start having some workshops to get some community input on
what the needs in Carlsbad are. The decision has been made that a good place to have those workshops is with the
Housing Commission. This will be the first workshop and housing applicants will be invited to attend the meeting,
the Planning Department will make a presentation and attain some feedback. We have hired a consultant to do the
housing element where in the past the staff has always done the housing element, but we’ve decided this time to hire
a consultant, Bridges. Veronica Kemp, the lead, will be at that meeting getting input fiom the Housing Commission.
If you want to think about any thoughts you might have about affordable housing and what the needs are wih the
community, we’ll be hearing fiom the advocate as well. There will probably be some more workshops to follow up
that because there will be a lot of interest we believe. This time around it will be for housing for the disabled,
moderate-income housing, and the ongoing demands for housing for low-income groups. Senior housing will be
another topic. Our housing element needs to address all of the different types of special needs groups. It is a fairly
lengthy process.
As mentioned previously, we have a 56-unit apartment project that has already been approved by the City Council,
but we need to present the financial assistance for that project to the Housing Commission. It is unique because it is
the first project being built that is not being built as a result of the inclusionary housing. It is an affordable housing
developer that identified a piece of property and wants to come in and build a project. Though the structure of the
deal is going to be a little different. It will not only be financial assistance, but we are going to look at other ways to
assist the project. That project will probably not be October, more like November or December.
We also have a project on Roosevelt Street that has been mentioned before. It is an eleven-unit apartment project
and that financial assistance will need to come to the Housing Commission.
Vice Chairperson Huston asked if they are only building eleven units, are they subject to inclusionary housing?
Debbie Fountain answered that it is going to be a hundred percent affordable project. This is the property the
Redevelopment Agency purchased so we are actually initiating the project. We partnered with Wakeland Housing
who will actually be developing and owning and operating the apartment project. We are doing it for two fold
reasons. One, the Redevelopment Agency itself has requirements to build affordable housing and most of the time
we are going to include the inclusionary end with that project. There have been projects that have been prior to the
inclusionary housing being implemented but the Redevelopment Plan was in effect so we have some need to provide
some units.
Commissioner Ritchie asked where that development is located.
Debbie Fountain answered it is down toward the end of Laguna, next to Brittany Court office building. The property
used to be used for storage and there was an abandoned house that was boarded up. We have cleaned up the site and
we are working on the permit to get that project built.
Everyone received invitations for the Mariposa Grand Opening. It would be a good idea to go up to the site as it is
beautiful. Some of the units have ocean views. Villages of La Costa is under construction and doing their affordable
housing. Their project overlooks the golf course. Bressi Ranch is moving forward. ThompsodTabata project is
moving forward. The Summit, which is a mixed income project, across from El Camino Real, and it is under
construction.
Commissioner Ritchie asked about the property being built on Cannon Road and Faraday; do we have anythmg in
there?
Debbie Fountain answered that it is called Pacific View and yes there are 1 1 1 affordable units in there.
Vice Chairperson Huston asked how many units there were total?
.
HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 8 of 8
Craig Ruiz said there are 450 total units.
Debbie Fountain continued that they have luxury units and the affordable units. They are very nice.
Commissioner Smith asked if that also has a home development?
Debbie Fountain said yes.
Vice Chairperson Huston asked if there was going to be another grocery store on that commercial property? On the
east side of El Camino Real?
Debbie Fountain was not aware of that. She did say Sunny Creek or Robertson Ranch is supposed to have a grocery
store in it.
Commissioner Smith asked if Bressi Ranch was supposed to have a movie theatre and a shopping area?
Debbie Fountain did say they are supposed to have a shopping area, a commercial area, but I don’t know what has
been proposed. They are still working on it, but I don’t think it is supposed to have a theater though I may be wrong.
Commissioner Smith also said they are supposed to have a school.
Debbie Fountain did say there is a shopping area next to the affordable project along with the Boys and Girls Club.
In addition, Craig Ruiz, Management Analyst, will be leaving the City of Carlsbad.
ADJOURNMENT
By proper motion, the meeting of September 9,2004 was adjourned at 6:45 p.m.
Respectfully submitted,
Debbie Fountain
Housing and Redevelopment Director
PATRICIA CRESCENT1
Minutes Clerk
MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MWTES ARE APPROVED.