Loading...
HomeMy WebLinkAbout2009-106 Housing - Habitat for Humanity Of Orange County - Development Agreement effective 1-8-2010NORTH CAROLINA ORANGE COUNTY DEVELOPMENT AGREEMENT This is an AGREEMENT between ORANGE COUNTY, a general local governmental unit of the State of North Carolina, (hereinafter referred to as the "County") and HABITAT FOR HUMANITY OF ORANGE COUNTY, NC, INC., a North Carolina non-profit housing organi tin (hereinafter referred to as "Habitat"). The effective date of this Agreement is 6 0 WITNESSTH WHEREAS, the Orange County HOME Consortium has designated $60,000 in FY 2009 HOME funds for providing second mortgage funds for three (3) housing units in the Northern Fairview community in Orange County - 488 Harper Road; 451 Harper Road; and 552 Harper Road -which are hereinafter designated as "the Properties" and; WHEREAS, Orange County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated July 1, 2008, and as such is the lead entity in a representative capacity for all members of the Orange HOME Consortium for the purposes of carrying out the HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable Housing Act (Pub. L: 101-625), (42 U.S.C. 3535(d.) et. sec.) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, Habitat is constructing the housing units on the Properties for first-time homebuyers earning up to 60% of HUD area median income as described in their FY 2009 HOME Program Application dated February 26, 2009 which is hereby incorporated into this Agreement, and hereafter referred to as "The Project". A copy of the 2009 HOME Program Application is on file in the office of the Housing and Community Development Department; and WHEREAS, Habitat intends to assist three (3) first-time homebuyers earning up to 60% of HUD area median income purchase the newly constructed housing units; and WHEREAS, afirst-time homebuyer for the purposes of this program is defined as any low income household that has not owned a home within the past three (3) years including households living in manufactured housing not permanently affixed to a foundation, or owner- occupants of homes not feasible for rehabilitation and has lived or worked in Orange County for at least one year prior to the home purchase; WHEREAS, notwithstanding any provision of this Agreement, the County and Habitat hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory 1 ~" s'-.Z~a 5 completion of an environmental review and receipt by Orange County of a Release of Funds from the U.S. Department of Housing and Urban Development under 24 CFR Part §58 if applicable. The parties further agree that the provision of such funds to the project is conditioned on Orange County's determination to proceed with, modify, or cancel the project based on the results of a subsequent environmental review. NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations contained herein, it is agreed between the parties hereto as follows: 1. a. Habitat shall construct at least three (3) dwelling units on the Properties as defined in the Project, obtain all permits and licenses necessary for construction, and comply with applicable building and zoning ordinances and the N.C. Housing Finance Agency Energy Standards. The Project shall be undertaken without residential displacement. b. Habitat shall sell the three (3) newly constructed dwelling units to qualified buyers whose income is up to but not more than 60% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the sale. c. The funding provided by the County will be provided as a deferred second mortgage to the individual families at the time of sale to them. The investment will be secured by a forty (40) year Deed of Trust and Promissory Note, forgivable at the end of 40 years. This Deed of Trust and Promissory Note shall constitute a lien on the Properties, subordinate only to the Declaration of Restrictive Covenants described in paragraph 4 of this Agreement, with the County as the secured party beneficiary. The County agrees to further subordinate its Deed of Trust lien on the Properties to a lien securing private construction financing acquired by Habitat in order to complete the project. d. At the time of closing of the sale of each of the dwelling units to a homebuyer, Habitat shall repay the County $20,000.00 in the form of a credit to the homebuyer. The credit to the homebuyer shall be documented by a Promissory Note from the homebuyer to the County which note shall be secured by a Deed of Trust on the Properties naming the County as beneficiary. The County agrees to subordinate its Deed of Trust lien to a lien securing private permanent financing acquired by the homebuyer. e. The period of affordability will be 99 years and will be secured by a Declaration of Restrictive Covenants that will incorporate a right of first refusal that may be exercised by Habitat and/or Orange County. f. Habitat is responsible for soliciting buyers for the dwelling units constructed on the Properties. Habitat and/or its buyers shall be responsible for securing permanent mortgage financing for the homes built on the Properties. 2 g. Habitat is responsible for verifying the income of the homebuyers, explaining the second mortgage program to potential homebuyers and certifying by written documentation signed by the homebuyer that the program requirements have been fully explained. Habitat shall maintain purchaser files as part of its Books and Records as required and for the period of time required by Section 6f. of this Agreement. 2. Progress Payments. The County shall make payments when requested by Habitat in order to facilitate the purchase of project dwelling units by eligible first-time homebuyers. Copies of documentation for actual expenses shall accompany payment requests. 3. Time for Commencement and Completion. The Project completion date is the closing date of the purchase by a qualified buyer of the last of the three units to be constructed. In the event that Habitat is unable to proceed with any aspect of The Project in a timely manner, and County and Habitat determine that reasonable extension(s) for completion will not remedy the situation, then the Termination of Agreement provisions of this Agreement (Section 6.d) shall pertain. Habitat may, at its option, submit a written request for a delay of completion for County approval. The County may, at its option, approve any delay in The Project completion date or declare Habitat in default. Habitat shall monitor the constructed units for affordability for the period of affordability - ninety-nine (99) years. Final contract completion date shall be the latest end- date of all assisted unit affordability periods. In addition, Habitat agrees to furnish to the County a copy of its annual audit, performed by a certified public accountant within 90 days of the end of the fiscal year of expenditure of the HOME Program Funding. 4. Affordability Requirement. Each unit must remain affordable for a period of ninety- nine years. Habitat retains full responsibility for compliance with the affordability requirement for assisted units, unless affordability restrictions are terminated due to the sale of the Properties to anon-qualified buyer in which event the Resale Provisions of Section 5 of this Agreement pertain. Habitat shall assure compliance with affordability of each of the assisted units at the time it sells each of the three (3) dwelling units, pursuant to the "Declaration of Restrictive Covenants" (EXHIBIT A) on the Properties. This Declaration shall constitute and remain a first lien on the Properties during the period of affordability. It is further the responsibility of Habitat to rerecord the Declaration of Restrictive Covenants no later than one day before the expiration of 30 years of the date of its sale of each of the three (3) dwelling units in the event the homeowner purchasing the property from Habitat is still the owner of the dwelling unit at the time of the rerecording and no later than one day before the expiration of 30 years of the sale of the three (3) dwelling units. County retains the right to periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants on the Properties to register, with the Register of Deeds of Orange County, a notice of preservation of the Restrictive Covenants on the Properties as provided in North Carolina General Statute § 47B-4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section of this Agreement that the 99 year affordability requirement contained herein be accomplished and that Habitat and the County will do what is necessary to ensure that the same is not extinguished by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real property. Both Habitat and County agree to do what each must do to accomplish the 99-year affordability requirement. 5. Resale Provisions. Habitat shall assure compliance with affordability of assisted units through the Declaration of Restrictive Covenants. The Declaration of Restrictive Covenants shall include at least the following elements in their resale provisions for the Improvements: 5.1 If the buyer no longer uses the Property as a principal residence or is unable to continue ownership, then the buyer must sell, transfer, or otherwise dispose of their interest in the Property only to a qualified homebuyer, i.e., aloes-income household, one whose combined income does not exceed 80% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer, to use as their principal residence. 5.2 However, if the property is sold during the term of affordability to anon-qualified homebuyer, the Right of First Refusal provision of the New and Existing First- Time Homebuyer Program portion of the County's Long-Term Housing Affordability Policy must be followed and the net sales proceeds (sales price less: (1) selling cost, (2) the unpaid principal amount of the original first mortgage and (3) the unpaid principal amount of the initial County contribution and any other initial government contribution secured by a deferred payment promissory note and deed of trust) or "equity" will be divided 50/50 by the seller of the Property and the County. 5.3 The resale provision shall remain in effect for the full affordability period - 99 years. 6. Miscellaneous Provisions. a. Uniform Administrative Requirements. Habitat must comply with the applicable uniform administrative requirements of 24 CFR §92.505. b. Other Program Requirements. Habitat must carry out each activity in compliance with all Federal laws and regulations described in 24 CFR, Part 92, subpart H except that the subrecipient does not assume the responsibilities for environmental review or intergovernmental review. 4 c. Affirmative Marketing. If HOME funds will be used for housing containing three (3) or more assisted units, Habitat must prepare and submit an Affirmative Marketing Plan to the County. d. Termination of Agreement. The full benefit of the Project will be realized only after the completion of the affordability periods for all Project dwelling units. It is the County's intention that the full public benefit of the Project shall be completed under the auspices of Habitat for the assisted units as follows: i. In the event that Habitat is unable to proceed with any aspect of the Project in a timely manner, and County and Habitat determine that reasonable extension(s) for completion will not remedy the situation, then Habitat will retain responsibility for requirements for any dwelling units assisted and County will make no further payments to Habitat. ii. In the event that Habitat, prior to the contract completion date, is unable to continue to function due to, but, not limited to, dissolution or insolvency of the organization, its filing a petition for bankruptcy or similar proceedings, or is adjudged bankrupt or fails to comply or perform with provisions of this agreement, then Habitat shall, upon the County's request, convey to the County the Property assisted with HOME funds. Conveyance shall be at the sole discretion of County and on a Project dwelling unit by Project dwelling unit basis. Conveyance shall be on the terms set forth herein: Conveyance shall occur within thirty (30) days of County and Habitat's agreement of Habitat inability to continue as a viable organization. Habitat shall convey the Property to the County by general warranty deed, free and clear of all liens and encumbrances of record except those which create a beneficial interest in County (Declaration of Restrictive Covenants and Deed of Trust). e. Default, Remedies. This Agreement may be terminated by anon-defaulting party upon an event of default hereunder, after written notice thereof and thirty (30) days grace period in which the defaulting party may act to cure. As used herein, the term "an event of default" shall mean and refer to a failure or act of omission by either party with respect to any undertaking, obligation, covenant or condition as set forth in this Agreement. With respect to any event of default, the non-defaulting party may exercise any right available to it at law or in equity with respect to such default. f. Books and Records. Habitat shall maintain records of its grant requirements under this contract for a period of not less than three (3) full fiscal years following the contract completion date. i. Habitat shall ensure access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, Habitat shall submit a copy of its annual audit to the County. Upon reasonable advance notice, County or its authorized representatives may from time to time inspect, audit, and make copies of any of Habitat records that relate to this contract. If any audit by County discloses that payments to Habitat were in excess of the amount to which Habitat was entitled under this contract, Habitat shall promptly pay to County the amount of such excess. If the excess is greater than 1 % of the contract amount, Habitat shall also reimburse County its reasonable costs incurred in performing the audit. ii. Habitat shall maintain files of all tenants, regardless of length of occupancy, residing in assisted units. Documentation shall verify eligibility for federal assisted housing at the point of initial tenancy and every subsequent year thereafter for the period of affordability. Information maintained shall include: tenant income level; name of family members; ethnic data; family type - e.g. female head of household; disability status; and monthly rent. iii. Habitat shall maintain records verifying the affordability of the dwelling units. g. Notices. Any Notice shall be in writing and shall be given by depositing the same in the United States mail, post-paid and registered or certified, and addressed to the party to be notified, with return-receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner hereinabove described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided, be as follows: i. To the County: Orange County c/o Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To Habitat: Habitat for Humanity 1829 E. Franklin Street # 1200B Chapel Hill, NC 27514 ATTN: Executive Director Either the County or Habitat may change the person or address to which any future Notice shall be given as herein provided. h. No Assignment. No transfer or assignment of the interest of Habitat in this Agreement shall occur without the prior written consent of the County; neither may Habitat assign this Agreement without the prior written consent of County. i. Conflict of Interest. Habitat agrees to abide by the provisions of 24 CFR 570.611 with respect to conflicts of interest, and covenants that it presently has no financial interest and shall not acquire any financial interest, direct or indirect, that would conflict in any manner or degree with the performance of services required under this Agreement. Habitat 6 further covenants that in performance of this Agreement no person having such a financial interest shall be employed or retained by Habitat hereunder. These conflicts of interest provisions apply to any person who is an employee, agent, consultant, or elected official or appointed official of the County, or any designated public agencies or subrecipients that are receiving funds under the County HOME Investment Partnership Program. j. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. k. Indemnification. To the extent legally possible, Habitat shall indemnify and hold County, its officers, agents, and employees, harmless from and against any and all claims, actions, liabilities, costs, including attorney fees and other costs of defense, arising out of or in any way related to any act or failure to act by Habitat, its employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, Habitat shall, upon County's tender, defend the same at Habitat' sole cost and expense, promptly satisfy any judgment adverse to County or to County and Habitat jointly, and reimburse County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by County. 1. Subcontracting. Habitat shall not subcontract work under this Agreement, in whole or in part, without the County's prior written approval. Habitat shall require any approved subcontractor to agree, as to the portion subcontracted, to comply with all applicable federal, state, and local laws, rules, ordinances, and regulations at all times and in the performance of the work and to comply with all applicable obligations of Habitat specified in this contract. Notwithstanding County's approval of a subcontractor, Habitat shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor Habitat shall indemnify, defend, and hold County harmless from all claims of its contractors. m. No Joint Venture or Agency. The County and Habitat each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County or Habitat under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. n. Effect of Waiver or Forbearance. No failure by the County to insist upon the strict performance of any term or condition of this Agreement, or to exercise any right or remedy upon the breach by Habitat of any of its obligations, agreements, or covenants hereunder, shall be a waiver of such affected term or condition or of such breach; nor shall any forbearance by the County to seek a remedy for any breach by Habitat be a waiver by the County of its rights and remedies with respect to that or any other breach. o. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of North Carolina. Any litigation arising out of this Agreement shall be brought in courts sitting in North Carolina, with venue in Orange County. p. Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by the fact that for any reason any other provision may be invalid or unenforceable in whole or in part. 7 If any provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be or become invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. The County and Habitat agree to substitute for such provision of this Agreement or the application thereof determined to be invalid or unenforceable, such other provision as most closely approximates, in a lawful manner, such invalid, illegal or unenforceable provision. If the County and Habitat cannot agree, they shall apply to a court of competent jurisdiction to substitute such provision as the court deems reasonable and judicially valid, legal and enforceable. Such provision determined by the court shall automatically be deemed part of this Agreement ab initio. q. Equal Opportunity. Habitat shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, political affiliation or belief, age, handicap, or familial status in the implementation of the Project. r. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. s. Gender; Singular and Plural. As used herein, the neuter gender includes the feminine and masculine. The masculine includes the feminine and neuter, and the feminine includes the masculine and neuter and each includes a corporation, partnership or other legal entity when the context so requires. The singular number includes the plural and vice versa, whenever the context so requires. t. Recording. The parties hereto agree that upon notice to the other and at its own cost and expense, a party may record this Agreement in the Office of Register of Deeds for Orange County. u. Compliance with Laws. To the extent applicable, each party hereto agrees to comply with all laws, ordinances and regulations affecting the Property from and after the date hereof. Without limiting the generality of the foregoing, Habitat shall comply with all federal, state and local laws, regulations and ordinances applicable to the expenditure of funds provided by the County, to purchase and develop the Property. v. Publicity; Signage. Habitat agrees to provide such publicity with respect to the County's participation in the development of the Property as the County shall reasonably require. Any Signage at the Property shall acknowledge the County's role and contribution. w. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. x. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County or Habitat shall be deemed or construed by the parties or any third party to create any relationship of third party beneficiary, including third 8 party principal or agent, or to create any right, claim or cause of action against the County, Habitat or any of their respective officers, agents or employees by any third party. y. Performance of Government Functions. Notwithstanding anything in this Agreement which may be to the contrary, nothing contained in this Agreement shall in any way stop, limit or impair the County from exercising or performing any regulatory, policing or governmental powers or functions with respect to the Property including, without limitation, inspection of the Property in the performance of such functions. z. Duration of Agreement. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. 9 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands and seals on the day and year first above written. fNTY OF ORANGE, NORTH CAROLINA c W. Clio , Jr., County Manager Ap r ved form and legality A ette re, Sta Attorney This document has been preaudited in accordance with the N.C. Local Government and Fiscal CA~t o~ 1 Act. (;C~,~, r°-~-. u~,-~nhrP~,~ Finance Director , ~ ~~r~--T-, Habitat for Humanity of Orange County, NC, Inc. (SEAL) N ATTEST: ~, Chi N~ lit' l.C'~N~D ~f_l ti D m ~, Secretary 10 Clerk to the Board of Commissioners EXHIBIT A Prepared by and return to: Annette Moore, Orange County Attorney's Office: P.O. Box 8181; Hillsborough, NC 27278 DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTNE COVENANTS (Declaration), dated by Habitat for Humanity of Orange County, NC, Inc. for itself and its successors and assigns (Owner), is given as a condition precedent to the award of Orange County HOME Investment Partnership Program funds. RECITALS: WHEREAS, the Orange County HOME Consortium has designated $60,000 in FY 2009 HOME funds for providing second mortgage funds for three (3) housing units in the Northern Fairview community in Orange County - 451 Harper Road; 488 Harper Road; and 552 Harper Road -which are hereinafter designated as "the Properties" and; WHEREAS, Orange County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated July 1, 2008, and as such is the lead entity in a representative capacity for all members of the Orange HOME Consortium for the purposes of carrying out the HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable Housing Act (Pub. L. 101-625), (42 U.S.C. 3535(d.) et. se .) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, Habitat is constructing the housing units on the Properties for first-time homebuyers earning up to 60% of HUD area median income as described in their FY 2009 HOME Program Application dated February 26, 2009 which is hereby incorporated into this Agreement, and hereafter referred to as "The Project". A copy of the 2009 HOME Program Application is on file in the office of the Housing and Community Development Department; and WHEREAS, Habitat intends to assist three (3) first-time homebuyers earning up to 60% of HUD area median income purchase the newly constructed housing units; and WHEREAS, afirst-time homebuyer for the purposes of this program is defined as any low income household that has not owned a home within the past three (3) years including households living in manufactured housing not permanently affixed to a foundation, or owner- occupants of homes not feasible for rehabilitation and has lived or worked in Orange County for at least one year prior to the home purchase; WHEREAS, notwithstanding any provision of this Agreement, the County and Habitat hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory completion of an environmental review and receipt by Orange County of a Release of Funds from the U.S. Department of Housing and Urban Development under 24 CFR Part §58 if applicable. The parties further agree that the provision of such funds to the project is conditioned on Orange County's determination to proceed with, modify, or cancel the project based on the results of a subsequent environmental review. WHEREAS, Orange County requires and Owner agrees to the requirement, as a condition precedent to the awarding of Orange County HOME Investment Partnership Program funds, that Owner execute, deliver and record this Declaration in the Office of the Register of Deeds of Orange County in order to create certain covenants pertaining to the Property and running with the land for the purpose of enforcement of the affordability requirements of the Orange County HOME Investment Partnership Program. NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Owner intends, declares, and covenants that the regulatory and restrictive covenants set forth herein governing the use, occupancy, and transfer of the Property shall be and are covenants pertaining to the Property and running with the land for the term stated herein and are binding upon all subsequent owners of the Property and for such term, except as specifically provided herein, and are not merely personal covenants of Owner. SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER Owner hereby represents, covenants and warrants as follows: a. It is contemplated that the Property and the Project will be used, during the ninety-nine years after Project Completion (defined as the last of the following events: the Property is acquired, rehabilitated, if necessary, and the last of the three dwelling units is occupied by aloes-income family), for owner-occupied housing to families earning up to 60% of HUD area median income. In the event Owner sells, transfers or exchanges the Property or any portion of the Property, the following shall pertain: 1. Subject to the requirements of the DEVELOPMENT AGREEMENT (Exhibit B hereto), the HOME Investment Partnership Program and this Declaration, Owner may sell, transfer, or exchange the Property to anon-profit fund, foundation, or 13 corporation of like purpose which is organized and operated exclusively for charitable and educational purposes and which has established its tax exempt status under Section 501 (c)(3) of the Internal Revenue Code, or to Orange County; provided, however, Owner shall obtain the written agreement, in form satisfactory to Orange County, of any buyer or successor or other person acquiring the Property or any interest therein, that such acquisition is subject to the requirements of this Declaration and to the requirements of the DEVELOPMENT AGREEMENT and the HOME INVESTEMENT PARTNERSHIP PROGRAM. Owner agrees that County may void any sale, transfer, or exchange of the Property or any portion of this Property if the buyer or successor or other person fails to assume in writing the requirements of this Declaration and the requirements of the DEVELOPMENT AGREEMENT and the HOME INVESTMENT PARTNERSHIP PROGRAM. 2. Any assignment, sale, transfer, conveyance or other disposition of the Property or any part of the Property other than as described in subparagraph 1 above, whether voluntary or involuntary or by operation of law shall be subject to the provisions of SECTION 4 of this Declaration. b. Owner will, at the time of execution, delivery and recording of this Declaration, have good and marketable title to the Property, free and clear of any lien or encumbrance (except encumbrances created pursuant to this Declaration or other permitted encumbrances). c. Owner warrants that it has not and will not execute any other declaration with provisions contradictory to, or in opposition to, the provisions hereof, and that in any event, the requirements of this Declaration are paramount and controlling as to the rights and obligations herein set forth and supersede any other requirements in conflict herewith. SECTION 2 TERM OF DECLARATION a. This Declaration, and the Terms of Affordability specified herein, apply to the Property immediately upon recordation, and Owner shall comply with all restrictive covenants herein. This declaration shall terminate ninety-nine years after Project Completion, unless Orange HOME Investment Partnership Program affordability restrictions are terminated due to the sale of the Property to anon-qualified buyer as provided herein. SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND a. Upon execution of this Declaration by Owner, Owner shall cause this declaration and all amendments hereto to be recorded and filed in the Office of the Register of Deeds of Orange County. b. Owner intends, declares and covenants, on behalf of itself and all future Owners of the Project during the term of this Declaration, that this Declaration and the covenants and restrictions set forth in this Declaration regulating and restricting the use, occupancy and transfer of the Property (1) shall be and are covenants running with the land, encumbering the Property for the term of this declaration, binding upon Owner's successors in title and all subsequent Owners of the Property; (2) are not merely personal covenants of Owner; and (3) shall bind Owner (and the benefits shall inure to Orange County and any past, present or prospective owner of the Property) and its respective successors and assigns during the term of this Declaration. 14 Owner hereby agrees that any and all requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the Property. For the term of this Declaration, each and every contract, deed or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, the covenants contairied herein shall survive and be effective regardless of whether such contracts, deed, or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. It is further the responsibility of Owner to rerecord the Declaration of Restrictive Covenants periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to, periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants on the Property to register, with the Register of Deeds of Orange County, a notice. of preservation of the Restrictive Covenants on the Property as provided in North Carolina General Statute § 47B-4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section that the 99 year duration of this Declaration of Restrictive Covenants be accomplished and that any future owner of the Property, Habitat, and Orange County will do what is necessary to ensure that the same is not extinguished by N.C. Gen. Stat. § 41-29 or any comparable law purporting to extinguish, by the passage of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real property. Any future owner, Habitat and Orange County agree to do what each must do to accomplish the 99-year duration of this Declaration of Restrictive Covenants. SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS A. Rights of Refusal a. Grant and Effect. Orange County is granted a right of first refusal to purchase the Property as described in this Section. Any assignment, sale, transfer, conveyance, or other disposition of the Property or any part thereof whether voluntarily or involuntarily or by operation of law ("Transfer") shall not be effective unless and until the below- described procedure is followed. b. Right of First Refusal. If Owner contemplates a Transfer to other than an agency with similar interest in affordable housing serving families with incomes not exceeding 80% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer, the non-profit fund, foundation, or corporation of like purposes must have established its tax- exempt status under Section 501 (c)(3) of the Internal Revenue Code. Owner shall send to Orange County, at the address noted in the Notice section of this Declaration, not less than 90 days prior to the contemplated closing date of the Transfer, a "Notice of Intent to Sell." This Notice of Intent to Sell shall be accompanied by a copy of a completed, fully executed bona fide offer to purchase the Property on the then current North Carolina Bar Association "Offer to Purchase and Contract" form. If Orange County elects to exercise its said right of refusal, it shall notify the Owner of its election to purchase within 30 days 15 of its receipt of the Notice and shall purchase the Property or portion thereof within 90 days of the receipt of the "Notice of Intent to Sell." c. Sales After Failure to Exercise Rights of Refusal. If Orange County does not advise Owner in a timely fashion of an intent to purchase the Property, then Owner shall be free to transfer the property in accordance with this Section. d. Assignability. Orange County may assign its right of first refusal without Owner's consent. B. Resale Provisions a. If the buyer no longer uses the Property as a principal residence or is unable to continue ownership, then the buyer must sell, transfer, or otherwise dispose of their interest in the Property only to a qualified homebuyer, i.e., glow-income household, one whose combined income does not exceed 80% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer, to use as their principal residence. b. However, if the property is sold during the term of affordability to anon-qualified homebuyer, the Right of First Refusal provision of the New and Existing First- Time Homebuyer Program portion of the County's Long-Term Housing Affordability Policy must be followed and the net sales proceeds (sales price less: (1) selling cost, (2) the unpaid principal amount of the original first mortgage and (3) the unpaid principal amount of the initial County contribution and any other initial government contribution secured by a deferred payment promissory note and deed of trust) or "equity" will be divided 50/50 by the seller of the Property and the County. c. The resale provisions shall remain in effect for the full affordability period - 99 years. C. Owner covenants that it will not knowingly take or permit any action that would result in a violation of the affordability requirements of Orange County or of the HOME Investment Partnership Program. Orange County, together with Owner, may execute and record any amendment or modification of this Declaration and such amendment or modification shall be binding on third parties granted rights under this Declaration. D. Owner acknowledges that the primary purpose for requiring compliance by Owner with restrictions provided in this Declaration is to assure compliance with the affordability requirements of Orange County and the HOME Investment Partnership Program, AND BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS FOR THE PROPERTY HEREBY AGREES AND CONSENTS THAT ORANGE COUNTY SHALL BE ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREIN, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE BY SPECIFIC PERFORMANCE OWNER'S OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE COUNTY. Owner 16 hereby further specifically acknowledges that the beneficiaries of Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder. E. This Declaration may be enforced by Orange County or its designee in the event Owner fails to satisfy any of the requirements of this Declaration by proceedings at law or in equity against any person or persons violating or attempting to violate any covenant. If legal costs are incurred by Orange County, such legal costs, including attorney fees and court costs (including costs of appeal), are the responsibility of, and may be recovered from the Owner. SECTION 6 MISCELLANEOUS a. Severability. The invalidity of any clause, part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. b. Notices. Any Notice shall be in writing and shall be given by depositing the same in the United States mail, post-paid and registered or certified, and addressed to the party to be notified, with return-receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner hereinabove described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided, be as follows: To the County: Orange County c/o Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To Habitat: Habitat for Humanity of Orange County, NC, Inc. P.O Box 459 Hillsborough, NC 27278 ATTN: Executive Director c. Governing Law. This Declaration shall be governed by the laws of the State of North Carolina and, where applicable, the laws of the United States of America. IN WITNESS WHEREOF, the Owner has caused this Declaration to be signed by its duly authorized representative, on the day and year first above written. Habitat for Humanity of Orange County, NC, Inc. President ATTEST: NORTH CAROLINA ORANGE COUNTY Secretary I, ,Notary Public in and for the above named County and State, do hereby certify that on this day personally appeared before me with whom I am personally acquainted, who, being by me duly sworn, says at he is Secretary and that is President of Habitat for Humanity of Orange County, NC, Inc., a North Carolina corporation, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President and attested to by its Secretary. Witness my hand and notarial seal, this the day of 2010. My commission expires: Notary Public