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HomeMy WebLinkAbout2011-075 Orange County - Habitat for Humanity of Orange County Home Consortium $150,000#~~ NORTH 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 organiz tion (hereinafter referred to as "Habitat"). The effective date of this Agreement is ~~ o I I WITNESSTH WHEREAS, the Orange County HOME Consortium has designated $150,000 in FY 2010 HOME funds for providing second mortgage funds for eight (8) housing units in the Phoenix Place subdivision in Orange County 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. seq.) (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 65% of HUD area median income as described in their FY 2010 HOME Program Application dated February 26, 2010 as amended by letter dated September 14, 2010 which is hereby incorporated into this Agreement, and hereafter referred to as "The Project". A copy of the 2010 HOME Program Application and the September 14, 2010 letter is on file in the office of the Housing and Community Development Department; and WHEREAS, Habitat intends to assist eight (8)first-time homebuyers earning up to 65% 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 five (5) 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. 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 eight (8) 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 eight (8) newly constructed dwelling units to qualified buyers whose income is up to but not more than 65% 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 fixed subsidy in the form of 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. At the time of closing of the sale of each of the dwelling units to a homebuyer, the homebuyer shall receive $18,750.00 in HOME funds as second mortgage assistance which 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. d. 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 maybe exercised by Habitat and/or Orange County. e. 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. £ ,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 eight 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 eight (8) dwelling units, pursuant to the "Declaration of Restrictive Covenants" on the Property recorded in the Orange County Registry at Book 3710, Page 314, Book 3936, Page 434 and at Book 3936, Page 465 on the Properties. These 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 eight (8) 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 eight (8) 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. 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: 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 maybe 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 88 Vilcom Center Drive, Suite Ll 10 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 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. 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 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. 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. (S ~o,, ~e COUNTY OF ORANGE, NORTH CAROLINA Frank W. Clifto , Jr., County Manager -,,~- ATTEST: Do a ake Clerk to the Board of Commissioners Ap r ved to form and legality tte Mo e, Staff ttorney This document has been preaudited in accordance with the N.C. Local Government and Fiscal ~-- Clarence G. Grier, Financial Services Director Habitat for Humanity of Orange County, NC, Inc. (SEAL) ~~y%'~`,'w' President ATTEST: Secretary