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HomeMy WebLinkAbout1995 S Housing - Orange County HOME Consortium - Development Agreement 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 ORANGE COMMUNITY HOUSING CORPORATION, a North Carolina nonprofit corporation (hereinafter referred to as "OCHC"). The date of this Agreement is December 19, 1995. WITNESSETH WHEREAS, the Orange County HOME Consortium has designated $162,000 in FY 1995 HOME funds for the purpose of conveying these funds to OCHC to acquire and develop the Can-Court Townhomes, which property is more particularly described in Exhibit A attached hereto and made a part of this Agreement (hereinafter referred to as the "Property"); and WHEREAS, the County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated August 27, 1992, and amended January 26, 1993, and July 28, 1993, 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, OCHC intends to purchase and develop the Property for the purpose of constructing homeownership opportunities for first-time homebuyers. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto do agree as follows: 1. OCHC agrees to purchase the property for a total price of $143,800 using HOME funds from the ounty for this purpose, such funds to be provided prior to the date of the closing of the Purchase of the property. The County also agrees to fund closing costs, including but not limited to attorney fees, title and recording fees, prorated taxes, appraisal and survey fees, and other reasonable costs associated with purchasing the subject property, using HOME funds up to a total of $161,000. OCHC agrees to develop and sell the townhomes at a price not to exceed the current NC Housing Finance Agency maximum existing home sales price in effect at the time of purchase. Any HOME funds not used to complete the purchase of the property may be drawn by OCHC for other eligible project costs, as indicated in the Project Budget attached to and a part of this document with the exception of administrative fees. 2. The purchase of the lots by OCHC with HOME funds shall be secured by a note from OCHC to the County and a deed of trust constituting a first lien on the property purchased which deed of trust shall designate Orange County as the secured party/beneficiary. The note and deed of trust shall be in the form of the documents that are attached to and a part of this document. Orange County agrees to subordinate its mortgage interest on each lot to private construction financing acquired by OCHC in order to complete the project. 3. OCHC agrees to contract with Arne Gray, an interested private developer, to complete improvements on the property. The improvements will consist of converting the eight (8) existing units into six (6) townhome units that can be sold as individual townhomes, and further agrees to coordinate and supervise the distribution of construction loan funds. OCHC and Orange County acknowledge that Mr. Gray was selected through a non-competitive bidding process by the Orange County HOME Consortium as the participating private partner. 4. OCHC agrees to secure financing for the construction of the project, subject to the availability of favorable financing. 5. OCHC agrees to prepare a marketing plan prior to the closing date for the purchase of the property, which will be incorporated into this document upon approval of the Orange County HOME Program Consortium. The Consortium recognizes the difficulty in determining marketing strategy, thus the plan will include activities to be undertaken by other parties. 6. Once potential purchasers are identified through marketing efforts specified in the marketing plan, OCHC will perform all activities necessary to complete the sale, including but not limited to: prequalifying the potential purchasers for a mortgage, obtaining credit information, providing homeownership education, preparing a sales contract and other necessary documents. Orange County agrees to provide legal services for preparation of townhome documents and homeowners association documents necessary to be able to sell the homes prior to the completion of construction. OCHC will fund the cost of all other legal services in the attached Project Budget from other sources, including the HOME funds. 7. In the event the townhomes constructed at Can- Court are not sold at a date 18 months from the date of closing of the purchase of the property, OCHC may elect to (a) continue to market the properties for sale to eligible buyers, or (b) attempt to secure tenants who may qualify for lease-to-purchase programs and be qualified to purchase the property within 2 years form the date of tenancy, converting the construction loans outstanding to permanent mortgages. OCHC must notify Orange County on a date 12 months from the date of the closing of the purchase of the property of its intentions in the event the townhomes are not sold by that date. 2 8. In the event the townhomes constructed at Carr Court are not sold at a date 24 months from the date of closing of the purchase of the property, OCHC may elect to (a) sell the remaining properties to a private investor with no restrictions and repay the HOME funds outstanding; (b) sell the remaining properties to a private investor for use as affordable rental units subject to the restrictions found in the HOME Program, subject to approval of the sale and transfer of the loan obligations to the private investor by Orange County; or (c) retain ownership of the units and maintain them as rental units subject to the restrictions found in the HOME program. OCHC must notify Orange County on a date 20 months from the date of the closing of the purchase of the property of its intentions in the event the townhomes are not sold by that date. 9. OCHC agrees to sell the homes to qualified buyers whose incomes do not exceed 80% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and amended from time to time. At the closing of the sale to a homebuyer of each lot, OCHC shall repay the County, $26,833.33 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 mortgage interest on each lot to a first lien private mortgage acquired by the buyer. The period of affordability for HOME funds in accordance with the Acts, its regulations and State Program Requirements shall be 15 years from the date of execution of this Agreement. The default interest rate shall be 7% per annum. OCHC shall provide to Orange County prior to closing the sale of each home documentation, satisfactory to the County, verifying the income of each buyer. 10. Miscellaneous Provisions. a. Termination of Agreement. The obligations of the parties hereunder and the specific obligation of OCHC to purchase the Property and construct homes thereon shall terminate upon the completion of the sale of the targeted six townhomes to qualified buyers. Continuing obligations of the buyers shall be contained in the note and deed of trust to be recorded at the time of closing of the sale of each home. 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 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. 3 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 Go Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To OCHC: Orange Community Housing Corporation P.O. Box 307 Carrboro, NC 27510-0307 ATTN: Executive Director Either the County or OCHC may change the person or address to which any future Notice shall be given as herein provided. f. No Assignment. No transfer or assignment of OCHC's interest in this Agreement shall occur without the prior written consent of the County. 4 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 OCHC. 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 OCHC each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County or OCHC 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 OCHC 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 OCHC 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. I. 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 OCHC 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 OCHC 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. 5 M. Equal Opportunity. OCHC shall not discriminate against any employee or 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, OCHC 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. OCHC 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 OCHC 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, OCHC 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. 6 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) Moses Carey, Jr., Chairman Orange County Board of C issioners ATTEST: Beverly A lythe 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 Moses Carey, Jr., is the Chairman 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 Chairman of the Orange County Board of Commissioners and that the said Chairman 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 1996 . No ary I i c My commission expires: 1�2 -a a ~98 7 ORANGE COMMUNITY HOUSING CORPORATION (SEAL) eith Cook, Chair Board of Directors ATTEST: Keith Aldrid , Secretary Board of Directors NORTH CAROLINA ORANGE COUNTY Notary Public in and for the above named County and State, do hereby certify that on this day personally appeared before me Keith Aldridge, with whom 1 am personally acquainted, who, being by me duly sworn, says at she is Secretary and that Keith Cook is Chair of the Board of Directors of Orange Community Housing Corporation, 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. 2 k41 �a Witness my hand and notarial seal, this the day{if 199�. o Notary Public My commission expires: 12- 'Z 06y 8 PROJECTED BUDGET CARR COURT PROPOSAL 1/15/96 Unit Count: 6 Uses of Funds 6 Units Cost of Purchase 143,800 Site Improvements/Landscaping/Sign 0 Purchase/Development Loan Interest 0 Planning/Engineering/Surveying 3,000 SUBTOTAL LOT DEVELOPMENT 146,800 Cost of Renovations (6 units) 120,000 Cost of New Construction (4 units) 100,000 Other costs not included in builder price 0 Builder Profit/Overhead (15%) 33,000 Building Permits/Other Fees (will request waiver) 0 Construction Loan Interest 25,000 SUBTOTAL HOUSE CONSTRUCTION 278,000 Project Legal Expenses 6,000 Construction/Permanent Closing Costs 9,000 Taxes During Construction (will request waiver) 0 Sales/Marketing/Advertising Expenses 3,000 Real Estate Commissions 0 OCHC Administrative Fee/Contingency 14,000 Buyer Assumption Fees/Closing Costs 2,000 SUBTOTAL OTHER EXPENSES 34,000 TOTAL PROJECT COSTS 458,800 Average Per Unit Cost 76,467 Number Price Revenue P.S.F. 3-bedroom (1000 s.f.) 4 74,700 298,800 74.70 3-bedroom (1200 s.f.) 2 80,000 160,000 66.67 Total 79,750 458,800 Sources of Permanent Financina 1000 s.f• 00 s. . Total Construction/Permanent Mortgages from CCB 47,367 52,667 294,800 Buyer Contribution/Downpayment 500 500 3,000 Second Mortgages from HOME Consortium 16,833 16,833 101,000 Funds Forgiven by HOME Consortium 10,000 10,000 60,000 Total per unit 74,700 80,000 458,800 HOMEOWNERSHIP AFFORDABILITY ANALYSIS Carr Court Homeownership Project Median Income 41,800 Number in Family JJ Your income is 47.3 % of Median 1 Cost of House 64,700 2 Buyer Contribution/Downpayment 500 plus prepaids 3 Second Mortgage 16,833 5 First Mortgage Needed 47,367 6 Interest Rate 7.50% 7 Term 30 years 8 Mortgage P+I 331 331 9 Plus Taxes/Insurance 120 120 10 Plus Private Mortgage Insurance 0 0 11 Plus Homeowners Assn. Dues 25 25 12 Plus Other Debts 200 0 13 Available for Total Debt 676 476 14 Divided by Debt/income Ratios 0.40 0.33 15 Effective Monthly Income Needed 1,690 1,443 16 Less MCC (44) (44) 17 Actual Monthly Income Needed 1,646 1,399 18 Annual Income Needed F 19,753 16,783 MONTHLY PAYMENT SUMMARY Principal + Interest 331 Taxes 69 Insurance 17 Homeowners Association Dues 25 Private Mortgage Insurance 0 Total Monthly Payment 442 Loan-to-Value Ratio 0.73 HOMEOWNERSHIP AFFORDABILITY ANALYSIS Carr Court Homeownership Project Median Income 41,800 Number in Family 3� Your income is 49.8 % of Median 1 Cost of House 70,000 2 Buyer Contribution/Downpayment 500 plus prepaids 3 Second Mortgage 16,833 5 First Mortgage Needed 52,667 6 Interest Rate 7.50% 7 Term 30 years 8 Mortgage P+I 368 368 9 Plus Taxes/Insurance 120 120 10 Plus Private Mortgage Insurance 0 0 11 Plus Homeowners Assn. Dues 25 25 12 Plus Other Debts 200 0 13 Available for Total Debt 713 513 14 Divided by Debt/income Ratios 0.40 0.33 15 Effective Monthly Income Needed 1,783 1,555 16 Less MCC (49) (49) 17 Actual Monthly Income Needed 1,734 1,506 18 Annual Income Needed 20,80 18,071 MONTHLY PAYMENT SUMMARY Principal + Interest 368 Taxes 74 Insurance 17 Homeowners Association Dues 25 Private Mortgage Insurance 0 Total Monthly Payment 484 Loan-to-Value Ratio 0.75 Prepared by and return to: Tara L. Fikes,Orange County Housing and C.D.,P.O.Box 8181,Hillsborough,NC,27278. PROMISSORY NOTE DEFERRED PAYMENT LOAN STATE OF NORTH CAROLINA COUNTY OF ORANGE DATE: 119 FOR VALUE RECEIVED,the undersigned(the`Borrower")jointly and severally promise(s)to pay to Orange County,North Carolina(the"Lender"),the amount of ONE HUNDRED SIXTY ONE THOUSAND DOLLARS ($161,000.00)(the"Principal Amount"),with interest at the rate of Zero percent (0%)per annum according to the terms herein,at the office of the Lender, 200 S. Cameron Street,Hillsborough,North Carolina,or at such other address designated from time to time in writing by the Lender. 1. Loan. This Note evidences a loan made by Lender to Borrower under the HOME Investment Partnerships Act and is subject to the regulations issued thereunder(Title II, Cranston-Gonzalez National Affordable Housing Act, Public Law 101-625, 104 Stat. 4079(1990),24 CFR Part 92)(the"HOME Program"). The Loan is secured by a Deed of Trust,(the"Deed of Trust")dated the same date as this Note,and which is a second lien on the property described in the Deed of Trust (the"Property"). The Trustee is Geoffrey Gledhill. All terms of the Deed of Trust are incorporated in this Note by reference,and any default under the Deed of Trust is a default under this Note. 2. Amount Due. The amount owed under this Note is the Principal Amount paid on behalf of the Borrower by Lender in accordance with Rule 24 CFR Part 92 and the Lender regulations,together with any interest which accrues pursuant to Paragraph 6 below,as part of a special home ownership program. 3. Assumptions. The Note may be assumed only on the prior written approval of the Lender. Housing purchased with assistance from the Lender must remain affordable to assumers according to the occupancy and any other applicable requirements of the HOME Program and the Lender. All terms and conditions of the Note and the Deed of Trust shall remain in effect for any successor to Borrower and any successor shall assume all duties and obligations of the Borrower. 4. Phi ent. No monthly principal or interest payments are required. All unpaid Principal amount of the loan shall only be due and payable on the earlier of the following dates(the"Due Date"): A. The date of the property is sold or transferred by the Borrower,whether voluntarily or involuntarily or by operation of law,other than to a qualified assumer under Paragraph 3; B. The date a default occurs under the terms of any loan secured by a lien to which the Deed of Trust is subordinated(the"First Loan"); C. The date the Property ceases to be the principal residence of the Borrower;or D. The date the debt evidenced by the First Loan is refinanced; E. In the event none of the above,A through D,occur within 20 years of this date,this obligation shall be deemed paid in full. 5. Right to Repay. The Amount Due under this Note can be prepaid without any prepayment charge. 6. Interest Payment. Once the Principal Amount owed under this Note becomes due and payable pursuant to Paragraph 4,and is unpaid,the Borrower will pay interest on such amount from the Due Date at the rate of ten percent (10%)per annum,until fully paid. 7. Default Remedies. On default,the Lender may employ an attorney and the Borrower agrees to pay to the Lender all reasonable attorney's fees,plus all other reasonable expenses incurred by the Lender in exercising any of the Lender's rights and remedies on default. The rights and remedies of the Lender as provided by law,by this Note,and by the Deed of Trust shall be cumulative and may be perused singly,successively,or together. The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies. 8. Governing Law. This note is to be governed and construed in accordance with the laws of the State of North Carolina. 9. Assignment. The Borrower consents to the assignment of this Note transferring the Lender's right,title and interest. IN TESTIMONY WHEREOF,Borrower has executed this instrument under seal on the date first above written. ORANGE COMMUNITY HOUSING CORPORATION (SEAL) Donna L. Dyer,President ATTEST: Keith E. Aldridge, Secretary Board of Directors Prepared by and return to: Tara Fikes,Orange County Housing and CD,P.O. Box 8181,Hillsborough,NC, 27278 DEED OF TRUST STATE OF NORTH CAROLINA COUNTY OF ORANGE THIS DEED OF TRUST,executed this day of 119 ,by and between ORANGE COMMUNITY HOUSING CORPORATION(the Borrower"); Geoffrey Gledhill(the"Trustee");and Orange County, North Carolina(the"Lender"). WITNES SETH: THAT WHEREAS,the Lender agrees to advance to the Borrower the sum of ONE HUNDRED SIXTY ONE THOUSAND DOLLARS($161,000)under the HOME Investment Partnerships Act,evidenced by the Promissory Note (the"Note")from the Borrower to the Lender dated the same date as this Deed of Trust,which together with any amounts advanced to protect the security of this Deed of Trust shall be the total amount secured; AND WHEREAS,it has been agreed that the Loan will be advanced subject to the terms and conditions for use of the property as set forth in the Note and this Deed of Trust,and which is repayable as provided in the Note. AND WHEREAS,it has been agreed that the Loan shall be secured by the conveyance of the Land described in this Deed of Trust. NOW,THEREFORE, in consideration of the premises and for the purpose aforesaid and for TEN DOLLARS ($10.00)paid by the Trustee,the receipt of which is hereby acknowledged,the Borrower has bargained and sold and by these presents does bargain,sell and convey unto said Trustee,the Trustee's heirs,successors and assigns,the premises in Hillsborough Township,Orange County,North Carolina,described as follows: (See Exhibit "A"attached hereto and incorporated herein by reference) together with all heating,plumbing and lighting fixtures and equipment now or hereafter attached to or used in connection with the premises(the"Property"). TO HAVE AND TO HOLD the Property,with all privileges and appurtenances thereunto belonging,to the Trustee,the Trustee's heirs,successors and assigns forever,upon the trust,terms and conditions and for the uses set forth in this Deed of Trust. If there shall be an default in any of the terms covenants or conditions of the Note,the terms of which are made a part of this Deed of Trust and incorporated by reference,or any failure or neglect to comply to the satisfaction of the Lender with the covenants,terms or conditions in this Deed of Trust,and if the default is not made good within the time period set out to cure such default,or if none is set out within thirty(30)days,the Note shall,at the option of and upon demand of the Lender,to sell the Property at public auction for cash,after having first given such notice of hearings as to commencement of foreclosure proceedings and obtain findings or leave of court as may be then required by law and giving notice and advertising the time and place of sale in the manner as may be then provided by law,and upon sale and any resales and upon compliance with the law the relating to foreclosure proceedings to convey title to the purchaser in fee simple. The proceeds of the sale,after the Trustee retains his commission,shall be applied to the cost of sale,the amount due on the Loan and otherwise as required by the then existing law relating to foreclosures. The Trustee's commission shall be five percent(5%)of the gross proceeds of the sale. The said Borrower does hereby covenant and agree with the Trustee and Lender as follows: 1. PAYMENT AND PERFORMANCE. Borrower shall pay the Note and perform all other requirements at the times and in the manner provided in the Note and herein. 2. RESALE PROVISIONS . In the event Borrower proposes(the"Proposal")to transfer(the"Sale")the Property(other than pursuant to an approved Assumption,as defined in the Note),at a price that will not generate a sum (the"Net Proceeds"),after payment of the First Loan(as defined in the Note)and all costs of the Sale,which is sufficient to pay the Note in full,Lender shall have a Right of First Refusal to purchase the Property at the price contained in the Proposal exercisable prior to the expiration of forty-five(45)days after Lender receives a copy of the Proposal. In the event Lender fails to exercise his right,and Borrower transfers the Property pursuant to the Proposal,Lender agrees to accept the Net Proceeds in full satisfaction of the Note. Notwithstanding the foregoing,if the price set out in the Proposal does not reflect the fair market value of the Property,Lender shall have the right to demand that the Note be paid in full. 3. INSURANCE. Borrower shall keep the property and all improvements,now and hereafter erected, constantly insured for the benefit of the Lender against loss by fire,windstorm and such other casualties and contingencies,in the manner and with companies as may be satisfactory to the Lender. The amount of the insurance required by this provision shall be the lesser of either the amount of the loan secured by this Deed of Trust or 100%of the insurable value of the improvements on the Property. Borrower shall purchase such insurance and pay all premiums in a timely manner. In the event that Borrower fails to pay any premium when it is due,then the Lender,at its option, may purchase such insurance. Such amounts paid by the Lender shall be added to the Note secured by this Deed of Trust and shall be due and payable by Borrower upon demand of the Lender. 4. TAXES, ASSESSMENTS,CHARGES. Borrower shall pay all taxes,assessments and charges as may be lawfully levied against the Property before the same shall become past due. In the event that Borrower fails to pay all taxes,assessments and charges as required,then the Lender at its option may pay them and the amount paid shall be added to the Note secured by this Deed of Trust and shall be due and payable by Borrower upon demand of the Lender. 5, WASTE. The Borrower covenants that Borrower will keep the Property in as good order, repair and condition,reasonable wear and tear excepted,and that Borrower will not commit or permit any waste on the Property. 6. WARRANTIES. Borrower covenants with Trustee and Lender that Borrower is seized of the Property in fee simple,has the right convey the same in fee simple,that title is marketable and free and clear of all encumbrances, ad that Borrower will warrant and defend the title against the lawful claims of all persons whomever,except that title to the Property is subject to the following exceptions: (See Exhibit"B"attached hereto and incorporated herein by reference) 7. SUBSTITUTION OF TRUSTEE. Borrower and Trustee covenant and agree that in case the Trustee,or any successor trustee,shall die,become incapable of acting,renounce this trust,or for other similar or dissimilar reason become unacceptable to the Lender,or if the Lender desire to replace the Trustee,then the Lender may appoint,in writing,a trustee to take the place of the Trustee;and upon the probate and registration of the writing,the trustee thus appointed shall succeed to all the rights powers and duties of the Trustee. 8. CIVIL ACTIONS. In the event that the Trustee is names as a party in any civil action as trustee in this Deed of Trust,the Trustee shall be entitled to employ an attorney at law,including himself if he is a licensed attorney,to represent him in said action and the reasonable attorney's fees of the Trustee in such action may be paid by the Lender and added to the Note secured by this Deed of Trust,and shall be due and payable by Borrower upon demand of the Lender. 9. PRIOR LIENS. Default under the terms of any instrument secured by a lien to which this Deed of Trust is subordinated shall constitute default under this Deed of Trust. 10. SUBORDINATION. Any subordination of this lien to additional liens or encumbrances shall be only upon the written consent of the Lender. In addition to the Loan,the Borrower has obtained a loan(the"First Deed of Trust Loan")from Central Carolina Bank(the"Senior Lien Holder")in an original principal amount of $ ,which loan is secured by a first lien on the Property (the`First Deed of Trust"). The documents evidencing or securing the First Deed of Trust Loan are collectively referred to herein as the First Deed of Trust Loan Documents. The Beneficiary agrees that this Deed of Trust is subordinate to the First Deed of Trust,recorded in the Orange County Registry. 11. RIGHT TO INSPECT. To assure and protect its right in this Deed of Trust and the Property,the Lender shall have right of access and inspection of the Property at reasonable times and with reasonable notice to the Borrower. 12. CONDEMNATION_ If the Property,or any part of the Property,be condemned under any power of eminent domain,or acquired for public use,the damages,proceeds and the consideration for such acquisition,to the extent of the full amount of indebtedness upon this Deed of Trust and the Note remaining unpaid,are hereby assigned by the Borrower to the Lender and shall be paid to the Lender to be applied by the Lender on account of the indebtedness. 13. WAIVER OF DEFAULT. No sale of the Property and no forbearance on the part of the Lender and no extension of the time for the repayment of the debt secured hereby given by the Lender shall operate to release,discharge, modify,change,or affect the original liability of the Borrower either in whole or in part. The lender can,in its complete discretion,waive any default,and can waive by written instrument,in advance,any individual actions which might constitute a default. 14. TRANSFER OF PROPERTY. Beneficiary shall require immediate payment in full of all sums secured by this Deed of Trust if: all or part of the Property or an interest therein is sold or transferred by Borrower without Beneficiary's prior written consent;or the Property is not occupied by Borrower as his or her principal residence. 15. NOTICES. Any notice to Borrower provided for in this Deed of Trust shall be given by delivering it or mailing it by first class mail. The notice shall be directed to the Property Address or any other address Borrower designates by notice to Beneficiary. Any notice to Beneficiary shall be given by first class mail to Beneficiary's address stated herein or any address Beneficiary designates by notice to borrower. Any notice provided for in this Deed of Trust shall be deemed to have been given to Borrower or Beneficiary when given as provided in this section. 16. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower shall voluntarily file a petition under the Federal Bankruptcy Act,or under any Federal statute relating to bankruptcy,insolvency,arrangements or reorganizations,or under any state bankruptcy or insolvency act or otherwise admits insolvency or is adjudged insolvent or a receiver is appointed for Borrower or the Property,then Beneficiary may,at Beneficiary's option,declare all of the sums secured by this instrument to be immediately due and payable without prior notice to Borrower. Any attorney's fees and other expenses incurred by Beneficiary in connection with Borrower's bankruptcy shall be an additional indebtedness of Borrower secured by this Deed of Trust. 2 17. HAZARDOUS MATERIALS. Borrower warrants that: (i) the Property shall be kept free of Hazardous Materials. (ii) Borrower shall not permit the installation,generation,transportation,or release of Hazardous Materials in or on the Property. (iii) Borrower shall at all times comply with all applicable Environmental Laws affecting the Property and shall keep the Property free and clear of all liens imposed pursuant to any Environmental Laws. (iv) Borrower shall immediately give Beneficiary oral and written notice in the event that Borrower knows of a violations of these warrants or receives any notice from any governmental agency or other party with regard to Hazardous Materials affecting the Property. Borrower hereby agrees to indemnify Beneficiary and hold Beneficiary harmless from any losses, liabilities, damages, injuries(including but not limited to attorney's fees)and claims incurred or suffered by or asserted against Beneficiary,as a direct or indirect result of any warranty or representation made by Borrower in this paragraph (Hazardous Materials)being false or untrue in any material respect. For purposes of this Deed of Trust,"Hazardous Material"means petroleum products,any flammable explosives, radioactive materials,asbestos or any material containing asbestos,and/or any hazardous,toxic or dangerous waste, defined as such in the Environmental Laws. For purposes of this Deed of Trust,"Environmental Laws"means the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act,the Resource Conservation and Recovery Act,any"Superfund"or"Superlien"law,or any other federal,state or local law relating to standards of conduct concerning any petroleum products,any flammable explosives,radioactive materials,asbestos or any material containing asbestos,and/or hazardous,toxic or dangerous waste. 18. GOVERNING LAW. This Deed of Trust is to be governed and construed in accordance with the laws of the State of North Carolina. 19. SUCCESSORS AND ASSIGNS. The covenants herein contained shall bind,and the benefits and advantages shall insure to the legal representatives,successors and assigns of the parties hereto. IN TESTIMONY WHEREOF,Borrower(s)has executed this instrument under seal on the date first above written. ORANGE COMMUNITY HOUSING CORPORATION (SEAL) Donna L.Dyer,President ATTEST: Keith E. Aldridge, Secretary Board of Directors NORTH CAROLINA ORANGE COUNTY 1, ,Notary Public in and for the above named County and State,do hereby certify that on this day personally appeared before me Keith E. Aldridge,with whom I am personally acquainted,who, being by me duly sworn,says at he is Secretary and that Donna L. Dyer is President of Orange Community Housing Corporation,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 1993. Notary Public My commission expires: 3 Prepared by and return to: Tara L. Fikes,Orange County Housing and CD,P.O.Box 8181,Hillsborough,NC,27278 PROMISSORY NOTE DEFERRED PAYMENT LOAN STATE OF NORTH CAROLINA COUNTY OF ORANGE DATE: 119 FOR VALUE RECEIVED,the undersigned(the`Borrower")jointly and severally promise(s)to pay to Orange County,North Carolina(the"Lender"),the amount of SIXTEEN THOUSAND EIGHT HUNDRED THIRTY THREE DOLLARS AND THIRTY THREE CENTS($16,833.33)(the"Principal Amount"),with interest at the rate of Zero percent (0%)per annum according to the terms herein,at the office of the Lender,200 S. Cameron Street,Hillsborough, North Carolina,or at such other address designated from time to time in writing by the Lender. 1. Loan. This Note evidences a loan made by Lender to Borrower under the HOME Investment Partnerships Act and is subject to the regulations issued thereunder(Title II,Cranston-Gonzalez National Affordable Housing Act, Public Law 101-625, 104 Stat. 4079(1990),24 CFR Part 92)(the"HOME Program"). The Loan is secured by a Deed of Trust,(the"Deed of Trust")dated the same date as this Note,and which is a second lien on the property described in the Deed of Trust (the"Property"). The Trustee is Geoffrey Gledhill. All terms of the Deed of Trust are incorporated in this Note by reference,and any default under the Deed of Trust is a default under this Note. 2. Amount Due. The amount owed under this Note is the Principal Amount paid on behalf of the Borrower by Lender in accordance with Rule 24 CFR Part 92 and the Lender regulations,together with any interest which accrues pursuant to Paragraph 6 below,as part of a special home ownership program. 3. Assumptions. The Note may be assumed only on the prior written approval of the Lender. Housing purchased with assistance from the Lender must remain affordable to assumers according to the occupancy and any other applicable requirements of the HOME Program and the Lender. All terms and conditions of the Note and the Deed of Trust shall remain in effect for any successor to Borrower and any successor shall assume all duties and obligations of the Borrower. 4. Payment. No monthly principal or interest payments are required. All unpaid Principal amount of the loan shall only be due and payable on the earlier of the following dates(the"Due Date"): A. The date of the property is sold or transferred by the Borrower,whether voluntarily or involuntarily or by operation of law,other than to a qualified assumer under Paragraph 3; B. The date a default occurs under the terms of any loan secured by a lien to which the Deed of Trust is subordinated(the"First Loan"); C. The date the Property ceases to be the principal residence of the Borrower;or D. The date the debt evidenced by the First Loan is refinanced; E. In the event none of the above,A through D,occur within 20 years of this date,this obligation shall be deemed paid in full. 5. Right to Repay. The Amount Due under this Note can be prepaid without any prepayment charge. 6. Interest Payment. Once the Principal Amount owed under this Note becomes due and payable pursuant to Paragraph 4,and is unpaid,the Borrower will pay interest on such amount from the Due Date at the rate of ten percent (10%)per annum,until fully paid. 7. Default Remedies. On default,the Lender may employ an attorney and the Borrower agrees to pay to the Lender all reasonable attorney's fees,plus all other reasonable expenses incurred by the Lender in exercising any of the Lender's rights and remedies on default. The rights and remedies of the Lender as provided by law,by this Note,and by the Deed of Trust shall be cumulative and may be perused singly,successively,or together. The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies. 8. Governing Law. This note is to be governed and construed in accordance with the laws of the State of North Carolina. 9. Assignment. The Borrower consents to the assignment of this Note transferring the Lender's right,title and interest. IN TESTIMONY WHEREOF,Borrower has executed this instrument under seal on the date first above written. BORROWER(S): (Seal) (Seal) (Typed Name) (Typed Name) Prepared by and return to: Tara Fikes,Orange County Housing and CD,P.O. Box 8181,Hillsborough,NC,27278 DEED OF TRUST STATE OF NORTH CAROLINA COUNTY OF ORANGE THIS DEED OF TRUST,executed this day of 119 ,by and between (the Borrower"); Geoffrey Gledhill(the"Trustee");and Orange County,North Carolina(the"Lender"). WITNESSETH: THAT WHEREAS,the Lender agrees to advance to the Borrower the sum of SIXTEEN THOUSAND EIGHT HUNDRED THIRTY THREE DOLLARS AND THIRTY THREE CENTS($16,833.33)under the HOME Investment Partnerships Act,evidenced by the Promissory Note(the"Note")from the Borrower to the Lender dated the same date as this Deed of Trust,which together with any amounts advanced to protect the security of this Deed of Trust shall be the total amount secured; AND WHEREAS,it has been agreed that the Loan will be advanced subject to the terms and conditions for use of the property as set forth in the Note and this Deed of Trust,and which is repayable as provided in the Note. AND WHEREAS,it has been agreed that the Loan shall be secured by the conveyance of the Land described in this Deed of Trust. NOW,THEREFORE,in consideration of the premises and for the purpose aforesaid and for TEN DOLLARS ($10.00)paid by the Trustee,the receipt of which is hereby acknowledged,the Borrower has bargained and sold and by these presents does bargain,sell and convey unto said Trustee,the Trustee's heirs, successors and assigns,the premises in Carrboro Township,Orange County,North Carolina,described as follows: (See Exhibit "A"attached hereto and incorporated herein by reference) together with all heating,plumbing and lighting fixtures and equipment now or hereafter attached to or used in connection with the premises(the"Property'. TO HAVE AND TO HOLD the Property,with all privileges and appurtenances thereunto belonging,to the Trustee,the Trustee's heirs,successors and assigns forever,upon the trust,terms and conditions and for the uses set forth in this Deed of Trust. If there shall be an default in any of the terms covenants or conditions of the Note,the terms of which are made a part of this Deed of Trust and incorporated by reference,or any failure or neglect to comply to the satisfaction of the Lender with the covenants,terms or conditions in this Deed of Trust,and if the default is not made good within the time period set out to cure such default,or if none is set out within thirty(30)days,the Note shall,at the option of and upon demand of the Lender,to sell the Property at public auction for cash,after having first given such notice of hearings as to commencement of foreclosure proceedings and obtain findings or leave of court as may be then required by law and giving notice and advertising the time and place of sale in the manner as may be then provided by law,and upon sale and any resales and upon compliance with the law the relating to foreclosure proceedings to convey title to the purchaser in fee simple. The proceeds of the sale,after the Trustee retains his commission,shall be applied to the cost of sale,the amount due on the Loan and otherwise as required by the then existing law relating to foreclosures. The Trustee's commission shall be five percent(5%)of the gross proceeds of the sale. The said Borrower does hereby covenant and agree with the Trustee and Lender as follows: 1. PAYMENT AND PERFORMANCE. Borrower shall pay the Note and perform all other requirements at the times and in the manner provided in the Note and herein. 2. RESALE PROVISIONS . In the event Borrower proposes(the"Proposal")to transfer(the"Sale")the Property(other than pursuant to an approved Assumption,as defined in the Note),at a price that will not generate a sum (the"Net Proceeds"),after payment of the First Loan(as defined in the Note)and all costs of the Sale,which is sufficient to pay the Note in full,Lender shall have a Right of First Refusal to purchase the Property at the price contained in the Proposal exercisable prior to the expiration of forty-five(45)days after Lender receives a copy of the Proposal. In the event Lender fails to exercise his right,and Borrower transfers the Property pursuant to the Proposal,Lender agrees to accept the Net Proceeds in full satisfaction of the Note. Notwithstanding the foregoing, if the price set out in the Proposal does not reflect the fair market value of the Property,Lender shall have the right to demand that the Note be paid in full. 3. INSURANCE. Borrower shall keep the property and all improvements,now and hereafter erected, constantly insured for the benefit of the Lender against loss by fire,windstorm and such other casualties and contingencies,in the manner and with companies as may be satisfactory to the Lender. The amount of the insurance required by this provision shall be the lesser of either the amount of the loan secured by this Deed of Trust or 100%of the insurable value of the improvements on the Property. Borrower shall purchase such insurance and pay all premiums in a timely manner. In the event that Borrower fails to pay any premium when it is due,then the Lender,at its option,may purchase such insurance. Such amounts paid by the Lender shall be added to the Note secured by this Deed of Trust and shall be due and payable by Borrower upon demand of the Lender. 4. TAXES,ASSESSMENTS, CHARGES. Borrower shall pay all taxes,assessments and charges as may be lawfully levied against the Property before the same shall become past due. In the event that Borrower fails to pay all taxes,assessments and charges as required,then the Lender at its option may pay them and the amount paid shall be added to the Note secured by this Deed of Trust and shall be due and payable by Borrower upon demand of the Lender. 5. WASTE. The Borrower covenants that Borrower will keep the Property in as good order, repair and condition,reasonable wear and tear excepted,and that Borrower will not commit or permit any waste on the Property. 6. WARRANTIES. Borrower covenants with Trustee and Lender that Borrower is seized of the Property in fee simple,has the right convey the same in fee simple,that title is marketable and free and clear of all encumbrances, ad that Borrower will warrant and defend the title against the lawful claims of all persons whomever,except that title to the Property is subject to the following exceptions: (See Exhibit`B"attached hereto and incorporated herein by reference) 7. SUBSTITUTION OF TRUSTEE. Borrower and Trustee covenant and agree that in case the Trustee,or any successor trustee,shall die,become incapable of acting,renounce this trust,or for other similar or dissimilar reason become unacceptable to the Lender,or if the Lender desire to replace the Trustee,then the Lender may appoint,in writing,a trustee to take the place of the Trustee;and upon the probate and registration of the writing,the trustee thus appointed shall succeed to all the rights powers and duties of the Trustee. 8. CIVIL,ACTIONS. In the event that the Trustee is names as a party in any civil action as trustee in this Deed of Trust,the Trustee shall be entitled to employ an attorney at law,including himself if he is a licensed attorney,to represent him in said action and the reasonable attorney's fees of the Trustee in such action may be paid by the Lender and added to the Note secured by this Deed of Trust,and shall be due and payable by Borrower upon demand of the Lender. 9. PRIOR LIENS. Default under the terms of any instrument secured by a lien to which this Deed of Trust is subordinated shall constitute default under this Deed of Trust. 10. SUBORDINATION. Any subordination of this lien to additional liens or encumbrances shall be only upon the written consent of the Lender. In addition to the Loan,the Borrower has obtained a loan(the"First Deed of Trust Loan")from (the"Senior Lien Holder")in an original principal amount of $ which loan is secured by a first lien on the Property (the"First Deed of Trust"). The documents evidencing or securing the First Deed of Trust Loan are collectively referred to herein as the First Deed of Trust Loan Documents. The Beneficiary agrees that this Deed of Trust is subordinate to the First Deed of Trust,recorded in the Orange County Registry. 11. RIGHT TO INSPECT. To assure and protect its right in this Deed of Trust and the Property,the Lender shall have right of access and inspection of the Property at reasonable times and with reasonable notice to the Borrower. 12. CONDEMNATION. If the Property,or any part of the Property,be condemned under any power of eminent domain,or acquired for public use,the damages,proceeds and the consideration for such acquisition,to the extent of the full amount of indebtedness upon this Deed of Trust and the Note remaining unpaid,are hereby assigned by the Borrower to the Lender and shall be paid to the Lender to be applied by the Lender on account of the indebtedness. 13. WAIVER OF DEFAULT. No sale of the Property and no forbearance on the part of the Lender and no extension of the time for the repayment of the debt secured hereby given by the Lender shall operate to release,discharge, modify,change,or affect the original liability of the Borrower either in whole or in part. The lender can, in its complete discretion,waive any default,and can waive by written instrument, in advance,any individual actions which might constitute a default. 14. TRANSFER OF PROPERTY. Beneficiary shall require immediate payment in full of all sums secured by this Deed of Trust if all or part of the Property or an interest therein is sold or transferred by Borrower without Beneficiary's prior written consent;or the Property is not occupied by Borrower as his or her principal residence. 15. NOTICES. Any notice to Borrower provided for in this Deed of Trust shall be given by delivering it or mailing it by first class mail. The notice shall be directed to the Property Address or any other address Borrower designates by notice to Beneficiary. Any notice to Beneficiary shall be given by first class mail to Beneficiary's address 2 stated herein or any address Beneficiary designates by notice to borrower. Any notice provided for in this Deed of Trust shall be deemed to have been given to Borrower or Beneficiary when given as provided in this section. 16. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower shall voluntarily file a petition under the Federal Bankruptcy Act,or under any Federal statute relating to bankruptcy, insolvency,arrangements or reorganizations,or under any state bankruptcy or insolvency act or otherwise admits insolvency or is adjudged insolvent or a receiver is appointed for Borrower or the Property,then Beneficiary may,at Beneficiary's option,declare all of the sums secured by this instrument to be immediately due and payable without prior notice to Borrower. Any attorney's fees and other expenses incurred by Beneficiary in connection with Borrower's bankruptcy shall be an additional indebtedness of Borrower secured by this Deed of Trust. 17. HAZARDOUS MATERIALS. Borrower warrants that: (i) the Property shall be kept free of Hazardous Materials. (ii) Borrower shall not permit the installation,generation,transportation,or release of Hazardous Materials in or on the Property. (iii) Borrower shall at all times comply with all applicable Environmental Laws affecting the Property and shall keep the Property free and clear of all liens imposed pursuant to any Environmental Laws. (iv) Borrower shall immediately give Beneficiary oral and written notice in the event that Borrower knows of a violations of these warrants or receives any notice from any governmental agency or other party with regard to Hazardous Materials affecting the Property. Borrower hereby agrees to indemnify Beneficiary and hold Beneficiary harmless from any losses,liabilities, damages, injuries(including but not limited to attorney's fees)and claims incurred or suffered by or asserted against Beneficiary,as a direct or indirect result of any warranty or representation made by Borrower in this paragraph (Hazardous Materials)being false or untrue in any material respect. For purposes of this Deed of Trust,"Hazardous Material"means petroleum products,any flammable explosives, radioactive materials,asbestos or any material containing asbestos,and/or any hazardous,toxic or dangerous waste, defined as such in the Environmental Laws. For purposes of this Deed of Trust,"Environmental Laws"means the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act,the Resource Conservation and Recovery Act,any"Superfund"or"Superlien"law,or any other federal,state or local law relating to standards of conduct concerning any petroleum products,any flammable explosives,radioactive materials,asbestos or any material containing asbestos,and/or hazardous,toxic or dangerous waste. 18. GOVERNING LAW. This Deed of Trust is to be governed and construed in accordance with the laws of the State of North Carolina. 19. SUCCESSORS AND ASSIGNS. The covenants herein contained shall bind,and the benefits and advantages shall insure to the legal representatives,successors and assigns of the parties hereto. IN TESTIMONY WHEREOF,Borrower(s)has executed this instrument under seal on the date first above written. BORROWER(S): (Seal) (Seal) (Typed Name) (Typed Name) NORTH CAROLINA COUNTY 1, ,a Notary Public of said County and State do hereby certify that personally appeared before me this day and acknowledged the due execution of the foregoing instrument. Witness my hand and notarial seal,this the day of , 19 Notary Public My Commission Expires: 3