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HomeMy WebLinkAboutAgenda 08-14-2001 - 8l ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: August 14, 2001 Action Agenda Item No. SUBJECT: HOME Program — Community Revitalization Loan Fund DEPARTMENT: Housing/Comm. Development PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: FY 2000 —2001 HOME Program Design Tara L. Fikes, ext 2490 Development Agreement TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To approve a Development Agreement with Habitat for Humanity of Orange County, NC, Inc. for HOME funding available under the Community Revitalization Loan Fund. BACKGROUND: A Community Revitalization Loan Fund was created in the 1997-98 Orange County HOME Consortium program design to provide funds to assist low/moderate income families purchase existing housing. Funds can be used for acquiring property, rehabilitating the property, and/or second mortgage assistance. A total of$60,000 was allocated for this program in the 1997-98 year and $210,000 was allocated for this program in the 1998-99 fiscal year. A total of $100,000 has been allocated for this purpose in the 2000-2001 HOME Program budget. A copy of the resolution for the FY 2000 HOME Program as amended by the BOCC on May 1, 2001 is attached for more information. Under this program, local non-profit housing agencies will acquire, rehabilitate, if necessary, and resell houses located in Orange County to eligible first-time homebuyers. In some cases, houses will not need to be repaired, thus, the non-profit organization will serve as an sponsor for prospective homebuyers who need second mortgage assistance. This mortgage assistance enables the first time homebuyer to obtain a first mortgage for a lesser amount, thereby increasing the availability of first-time homeownership opportunities. The non-profit organization would be responsible for certifying the eligibility of the prospective homebuyer, as well as ensuring that the subject property is in standard condition. To date, approximately, 17 low- income, first-time homebuyers have benefited from this program. Recently, Habitat for Humanity of Orange County, NC, Inc. exercised its right of first refusal to buy back a home that the owner decided to sell for health reasons. This home was built in 1989 in the Chestnut Oaks subdivision in the Bingham Township and needs some repair in order to resale the property. Habitat plans to complete repairs and renovations to the home by October 2001 and sell the property to another qualified buyer in the Habitat Program. In accordance with the County's long-term housing affordability policy, the house must remain affordable for a 2 period of 99 years. This requirement is 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. FINANCIAL IMPACT: The Development Agreement governs the expenditure of$100,000 in FY 2000 HOME funding. RECOMMENDATION(S): The Manager recommends that the Board approve the Development Agreement with Habitat for Humanity of Orange County, NC, Inc. for HOME funding available under the Community Revitalization Loan Fund and authorize the Chair to execute the Development Agreement on behalf of the Orange County HOME Consortium. 3 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 nonprofit corporation (hereinafter referred to as "Habitat"). The effective date of this Agreement is August 14, 2001. WITNESSETH WHEREAS, the Orange County HOME Consortium has designated approximately $100,000 in FY 2000 HOME funds for the purpose of supporting the purchase, rehabilitation, and/or new construction of housing in Orange County; and WHEREAS, the County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated July 1, 1999, 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.)fg. =q.) (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, the Orange County Board of County Commissioners approved the Community Revitalization Loan Fund Program Guidelines on April 11, 2000 which is hereby incorporated into this agreement as Exhibit A; and WHEREAS, Habitat for Humanity of Orange County, NC, Inc., is a local non-profit housing corporation interested in serving as the sponsor, developer, and/or advocate for potential first-time homebuyers; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,the parties hereto do agree as follows: 1. a. Habitat agrees to acquire; rehabilitate, if necessary; and resell available property in the form of single family dwellings; condominiums, and/or townhouses located in Orange County to eligible fast-time homebuyers; and/or act as an agent for persons wishing to receive second mortgage assistance under this program. b. Habitat agrees to abide by the Community Revitalization Loan Fund Program Guidelines dated April 2000 in the implementation of this program. C. Upon receipt of a request for HOME funds under this program, the County shall review all submitted documentation within ten (10) working days and provide in writing 4 a preliminary response to the request. If the response is favorable and no further documentation is necessary, the County will notify Habitat in writing of the date funds will be available. If the County requests additional information, the request for information must be satisfied in full before the written notification of funding availability. Any new submission of material will trigger the ten (10) working days response timeframe outlined above. d. Habitat shall sell the newly constructed dwelling units to qualified buyers whose income is up to 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 sale. e. The HOME funding provided by the County will be provided as a deferred second mortgage transferable to the individual families at the time of sale to them. The bond 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 Property, second 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 subordinate its Deed of Trust lien on the Property to a lien securing private construction financing acquired by Habitat in order to complete the project. f. At the time of closing of the sale of a dwelling unit to a homebuyer, Habitat shall repay the County the amount of the HOME Program investment 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 Property 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. The closing attorney will be responsible for providing to the County Attorney an opinion on title indicating the recording information concerning the documents to be recorded and the fact that the Deed of Trust, upon its recording has a priority second only to current Orange County property taxes and the recorded Declaration of Restrictive Covenants. Also, evidence of title insurance must be provided to the County Attorney. Upon receipt of this documentation, the County will release its original Deed of Trust executed by Habitat by Humanity of Orange County, NC, Incorporated by Release Deed which will be delivered to the closing attorney for recordation. Subsequently, the associated Promissory Note will be cancelled at that time. g. 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. 5 h. Habitat is responsible for soliciting buyers for the dwelling units constructed on the Property. Habitat and/or its buyers shall be responsible for securing permanent mortgage financing for the homes acquired under this program. i. Habitat is responsible for verifying the income of the homebuyers, explaining the 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 6.c. of this Agreement. 2. In the event property is acquired for rehabilitation and resale without identifying a prospective homebuyer, Habitat agrees to identify a qualified buyer and complete the sell of the property to the homebuyer within one hundred twenty days (120) days of the date of acquisition of the property by Habitat. Failure to abide by this provision will constitute an Event of Default as defined in Paragraph 6b. of this agreement. 3. The County and Habitat agree to comply with the Act, its regulations and Federal Program Requirements in the purchase and sale of the Property. The County and Habitat further agree to comply with the provisions of the Funding Approval and HOME Partnership Agreement dated August 1, 2000 and hereby incorporated into this Agreement. 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 Property to a non-qualified buyer in which event the Resale Provisions of Section 5 of this Agreement pertain. Habitat shall assure compliance with affordability of assisted units by having recording, at the time it sells a dwelling unit, a "Declaration of Restrictive Covenants" (EXHIBIT B) on the Property. This Declaration shall constitute and remain a first lien on the Property 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 sale of each dwelling unit in the event the homeowner purchasing the property from Habitat is still the owner of the dwelling unit at the time of the re-recording. 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 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 6 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., a low-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 a non-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 50150 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. Termination of Agreement. The obligations of the parties hereunder and the specific obligation of Habitat to acquire; rehabilitate, if necessary; and resell available property in the form of single family dwellings; condominiums, and/or townhouse located in Orange County to eligible Orange County residents shall terminate upon the completion of the sale of the Property to a homebuyer. Continuing obligations of the homebuyer shall be contained in the note and deed of trust to be recorded at the time of closing of the sale of the Property. Notwithstanding the foregoing, the parties hereto may terminate this Agreement at any time by a mutual agreement to that effect in writing. b. Default, Remedies. This Agreement may be terminated by a non-defaulting party upon an event of default hereunder, after written notice thereof is given giving the defaulting party thirty (30) days in which to cure the default. As used herein, the term "an event of default" a 7 shall mean and refer to a breach of any of the terms of this Agreement including a failure to meet the time limitations contained in this Agreement and a failure to act as required by this Agreement by either party with respect to any undertaking, obligation, covenant or condition as set forth in this Agreement which the defaulting party has not cured. 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. C. Books and Records. Each party shall keep and maintain books, records and other documents relating directly to the receipt and disbursement of grant funds and the fulfillment of this Agreement. Each party agrees that any authorized representative of the County, the State, the U.S. Department of Housing and Urban Development and Comptroller General of the United States shall, at all reasonable times, have access to and the right to inspect, copy, audit and examine all of the books, records and other documents relating to the grant and the fulfillment of this Agreement for a period of three (3) years following the completion of the Project. d. Conflict with HOME Agreement. Notwithstanding anything herein to the contrary, the parties hereto acknowledge the due execution of a HOME Program Agreement between the County and the U.S. Department of Housing and Urban Development and agree that any conflict between the provisions, requirements, duties or obligations of this Agreement and the HOME Agreement shall be resolved in favor of the HOME Agreement. e. 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 here in above 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 of Orange County,NC, Inc. P.O. Box 459 Hillsborough,N.C. 27278 ATTN: Executive Director Either the County or Habitat may change the person or address to which any future Notice shall 8 be given as herein provided. f. No Assignment. No transfer or assignment of Habitat's interest in this Agreement shall occur without the prior written consent of the County. g. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. h. Entire Agreement; Modification. This Agreement, with all exhibits and attachments hereto, constitutes the entire agreement between the County and Habitat. No modification or amendment to this Agreement shall be binding upon either party unless made in writing and executed by each party. i. 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. j. 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. k. 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. 1. 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. M. Equal Opportunity. Habitat shall not discriminate against any employee or 9 applicant for employment because of race, color, religion, sex, national origin, political affiliation or belief, age, or handicap. n. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. o. 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. P. 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. q. 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. r. 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. S. 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 on and the same instrument. t. 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. U. 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. 10 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. COUNTY OF ORANGE, NORTH CAROLINA (SEAL) Stephen H. Halkiotis, Chair Orange County Board of Commissioners ATTEST: Beverly A. Blythe Clerk to the Board of Commissioners NORTH CAROLINA ORANGE COUNTY This is to certify that on this day personally came before me Beverly A. Blythe, with whom I am personally acquainted, and being by me duly sworn, says that Stephen H. Halkiotis, is the Chair of the Orange County Board of Commissioners, and that she the said Beverly A. Blythe, is the Clerk to the Board of Commissioners of the County of Orange, the body politic and corporate named within and which executed the foregoing instrument; that she knows the common seal of said County; that the seal affixed to said instrument is said common seal; that the name of Orange County was subscribed thereto by the said Chair of the Orange County Board of Commissioners and that the said Chair of the Orange County Board of Commissioners and said Beverly A. Blythe subscribed their names hereto and said common seal was affixed, all by order of the Board of County Commissioners of Orange County and that said instrument is the act and deed of Orange County. Witness my hand and notarial seal, this the day of 2001. Notary Public My commission expires: 1 11 Habitat for Humanity of Orange County, NC, Inc. (SEAL) President Board of Directors ATTEST: Secretary Board of Directors NORTH CAROLINA ORANGE COUNTY 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 that 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, sealed with its corporate seal and attested to by its Secretary. Witness my hand and notarial seal,this the day of 2001. Notary Public My commission expires: