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Home My WebLink AboutMINUTES - 04101990 - 1.71 1-071 .e• TO: REDEVELOPMENT AGENCY Contra FROM: PHIL BATCHELOR, f EXECUTIVE DIRECTOR / C✓Wl� DATE: April 10, 1990 °oT;A ...... Canty SUBJECT: Agreement for Provision of Mortgage Assistance, Neighborhood House of North Richmond SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Approve the Agreement for provision. of Mortgage Assistance with Neighborhood House of North Richmond and authorize the Executive Director or his designee to execute the agreement. FISCAL IMPACT None BACKGROUND/REASONS FOR RECOMMENDATIONS The Redevelopment Agency' s North Richmond Affordable Housing Project calls for the Agency to attain affordability of the housing units by making available to the purchasers of the units additional funds in the form of a second mortgage. This mortgage would be silent, that is .it would have no monthly payment nor interest attached to it. The Agency obtained Community Development Block Grant Funds with which to attain this affordability. However, because of restrictions on the use of those funds it is necessary to work with a Neighborhood Non-Profit Organization which would be the conduit for this second mortgage. The Agency has negotiated an agreement with Neighborhood House of North Richmond which will allow the Agency to transfer funds to Neighborhood House and then Neighborhood House would buy down a portion of the sales price of the units and secure that financial assistance with a Promissory Note and Deed of Trust. i CONTINUED ON ATTACHMENT: YES SIGNATURE: j 7� RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION O AGENCY COMMITTEE APPROVE OTHER i/ i' SIGNATURE(S) : ACTION OF AGENCY ON April 10, 1990 APPROVED AS RECOMMENDED X OTHER VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE REDEVELOPMENT AGENCY ON THE DATE SHOWN. cc: Redevelopment Director ATTESTED April 10, 1990 CAO PHIL BATCHELOR, . Auditor-Controller AGENCY SECRETARY County Counsel BY A A.W ° , DEPUTY SRA4/2-27-90.ra The Agreement contains specific restrictions with respect to repayment of the loan so that the Agency' s investment in the properties through Neighborhood House is secured. Approval of this Agreement will allow this method of financing to proceed. The Agreement calls for a payment of $1,000 to Neighborhood House as consideration for their participation. This payment would be drawn from the CDBG funds available for this project. « ^ ' ^ ^k . ' � . ~ Agreement for Provision of Mortgage Assistance This Agreement ("Agreement") is made this day of , 1989, by and between the CONTRA COSTA COUNTY REDEVELOPMENT AGENCY (the "Agency") and NEIGHBORHOOD HOUSE OF NORTH RICHMOND INC. , a neighborhood based non-profit organization, ("Contractor") with reference to the following facts: ' 1. The Agency has adopted the North Richmond Redevelopment Plan /the "Rede- velopment Plan") , recorded at Book 13791, Page 466` Official Records of Contra Costa County, in order to provide for the redevelopment of the project area governed by the Redevelopment Plan (thexPro^ect Area") . 2' The Agency acquired certain real property located within the Project Area and described in the attached Exhibit A (the "Property"). Pursuant to the Disposition aMd' Development Agreement ("DDA"), which is incorporated herein by this reference as Exhibit 8, between the Agency and A]AP International , Inc' ("Developer") , providing for the construction of seven (7) single family detached homes, the Agency is to provide funds to Contractor for use by Contractor in providing mortgage assistance in the form of deferred Second Deed of Trust loans to lower income households ("Purchasers") . 3' The Contractor is a neighborhood based non-profit organization as described in Section 570.204 (c) /11 of the federal regulations governing the Commu- nity Development Bloch Grant Program (24 CFR Part 570) ' 4' Contractor desires to participate in the making of said loans in order to provide home ownership opportunities to Purchasers. THEREFORE, the Agency and the Developer agree as follows: ' Section I'1Agency's Responsibility. (a) The Agency shall in good faith pursue the development of seven (7) single-family detached homes ("Housing Units") pursuant to the DDA with Developer' (b) The Agency shall secure Community Development Block Grant funds to be used for deferred Second Deed of Trust loans. These monies shall be held by the Agency until such time as a loan application for purchase of a Housing Unit by a Purchaser has been approved by a designated lender and the Agency. At such time as an escrow is to close on a Housing Unit the Agency shall transfer into the escrow account an amount equal to the second mortgage for that Housing Unit as more fully detailed in the DDA, and in the approximate amount shown on Ex- hibit C attached hereto and made a part hereof. (c) Agency shall , at each time of transfer of funds for a Housing Unit into escrow, prepare the following documents: ' . , ' � ^ 1Promissory Note secured by Deed of Trust jxPurchasmr'g Note") between Contractor and Purchaser, in substantially the form of Exhibit D attached hereto and made part hereof. 2' Deed of Trust securing Purchaser's Note ("Deed of Trust") , in substantially the form of Exhibit E attached hereto and made a part hereof. 3' Grant of Right of First Refusal with Respect to Purchase of ' Property ("Right of.'First Refusal"), in substantially the form of Exhibit F attached hereto and made a part hereof. Section 2'I ~ �� Contractor shall assist Developer with the marketing of the housing ' ' units to lower income households pursuant to the DDA, which DDA has been acknowledged and approved by Contractor. The marketing plan proposedbv Developer shall be reviewed and approved by Contractor. ��\ Contractor shall review, with Agency, all loan applications to ensure _ ' ' that Purchasers are eligible, lower income households as defined in Section 4.4(b) of the DDA. If appropriate, Contractor shall oversee a program whereby Purchasers are selected from a group of eligible ap- plicants ("Selection Process"). A Selection Procems.wjll be initiated if eligible, applicants exceed the number of housing units available' (c) Contractor shall at the time funds aro transferred by Agency into es- crow pursuant to Section l.l. /b\ of this Agreement, cause the Pur- chaser to execute the Purchaser's Note, Deed of Trust and Right of First Refusal and to record the Deed of Trust and Right of First Re- fusal . Following execution of the Note, Deed of Trust and Right of First Refusal by Purchaser, and recordation of Deed of Trust and Right of First Refusal , Contractor shall cause the release from escrow for disbursement to Developer that portion of the amount of Purchaser's Note which represents the Supplementary Acquisition Subsidy as defined in the DDA' Section 3'I ' (a) Following close of escrow for the purchase of the last Housing Unit Agency shall pay to Contractor the total sum of one thousand and no/ 100 dollars ($l,DOO'DO) which is to be consideration for Contractor' s performance pursuant to this Agreement. ' (b) Agency shall pursuant to the DDA and in cooperation with Contractor" annually review the occupancy status of each property to insure that Purchasers are not in Violation of the Purchaser's Note' If it has been determined that a Purchaser is in violation of the terms of the Purchaser's/� o eN t , Agency will ill a dVise Contractor of this condition and urc assist Contractor in enforcing the terms of the Purchaser's Note. Section 4'1 ' -2- ' ^ C' 1 (a) Contractor shall , pursuant to the DDA and in cooperation with Agency, annually review the occupancy status of each property to insure that Purchasers are not in violation of the Purchaser's Note. If it has been determined that a Purchaser is in violation of the terms of the Purchaser's Note, Contractor will advise Agency of condition and assist Agency in enforcing the terms of the Purchaser's Note. (b) Contractor shall notify Agency if the non-profit, community-based status of Neighborhood House of North Richmond has changed or will change in any material way. (c) Contractor shall , promptly upon receipt of any funds in repayment of a Purchaser's Note by a Purchaser, pay such funds to the Agency pursuant to the Promissory Notes executed by Contractor and attached hereto as Exhibit D and made a part hereof. Agency may provide Contractor with specific instructions for disbursement of the funds which will be complied with by Contractor. Section 5.1 Transfer of Purchaser's Notes and Deeds of Trust in Event of Demise of Contractor. (a) In the event the Contractor dissolves its corporate existence or ceases to do business in the North Richmond area, Contractor agrees to transfer its interest in each Purchaser's Note and Deed of Trust to the Agency or the Agency's designee and to execute any documents re- quired by the Agency to affect said transfer. AGENCY: CONTRACTOR: CONTRA COSTA COUNTY NEIGHBORHOOD HOUSE OF REDEVELOPMENT AGENCY NORTH RICHMOND By: By: Its: Its: cjrl/nbrhsenr.dda -3-