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HomeMy WebLinkAbout2018-169-E Housing - Habitat for Humanity written agreementsDocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE NORTH CAROLINA AFFORDABLE HOUSING BOND DEVELOPMENT AGREEMENT ORANGE COUNTY This is an AGREEMENT between Orange County, a local governmental unit of the State of North Carolina, (hereinafter referred to as the "County ") and Habitat for Humanity of Orange County, a North Carolina Non -Profit Corporation (hereinafter referred to as "Owner" or "Habitat "). The effective date of this Agreement is May 10, 2018. WITNESSTH WHEREAS, the County, in the implementation of the 2016 Orange County Affordable Housing Bond Program solicited application for funding for affordable housing projects from interested non - profits organizations; and WHEREAS, Habitat submitted an application for funding to construct 24 affordable owner occupied townhomes in the Waterstone Residential Development, for seniors, age 55 and older; 12 townhomes will be for seniors who earn between 30% and 50% of the area median gross income, 8 townhomes for seniors earning between 51% and 60% of the area median income and 4 townhomes where the seniors earn between 61% to 80% of area median income and which will remain affordable for low and moderate income families as described as described herein and in the application they submitted for FY 2016 Orange County Affordable Housing Bond Program funds on file in the County's Housing and Community Development Office (together hereinafter "the Project "); and WHEREAS, on June 6, 2017 the Orange County Board of Commissioners awarded Habitat $ 915,334 in FY 2016 Orange County Affordable Housing Bond funds and $9,666 in 2017 Capital Improvement Plan Affordable Housing Land Banking Funds for a total amount of $925,000 (together hereafter, "Bond Funds ") to assist in the development of the townhomes located in the Waterstone Residential Development on property more particularly described in Exhibit A, Legal Description, (hereinafter referred to as "the Property ") (All Exhibits attached to this Agreement are hereby made a part of this Agreement and are incorporated into this Agreement, as it now reads or as it may be modified by the parties); and WHEREAS, this Agreement provides to Habitat with $925,000 Bond Funds for the construction by Habitat of infrastructure necessary for the Project which funds will be secured by a Promissory Note with a Deferred Payment Loan in the amount of $925,000 and a Deed of Trust on the Property; and WHEREAS, it is the intent of Habitat and the County that the amount of the Bond Funds, together with any future loan funds provided by the County for the Project, will be credited by Habitat to the homebuyers when the homebuyers purchase the homes and the money credited to the homebuyer will in turn be a debt owed by the homebuyer to the County (the 1 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE amount of money credited to each homebuyer will be, to the extent practicable, an equal amount for each of the 24 dwelling units constructed by Habitat on the Property or will be allocated based on area median income of the buyer; and WHEREAS, the credit for Bond Funds, including the Bond Funds loaned to Habitat as part of this Agreement, totals $38,542 for each of the dwelling units in the Project ($925,000 total Bond Funds divided by 24 dwelling units) if allocated equally; and WHEREAS, 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. 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: I. USE OF BOND FUNDS A. Each of the recitals contained in this Agreement is a covenant, promise representation and contractual obligation according to its terms in this Agreement. B. The Owner shall perform the projects or tasks related to its allocation of Bond funds as provided in Exhibit B, Scope of Services and within the proposed budget outlined in Exhibit C, Budget and as contained herein. 1. Habitat shall construct the necessary infrastructure to build at least twenty -four (24) dwelling units as defined in the Project, obtain all permits and licenses necessary for construction, and comply with applicable building and zoning ordinances and the North Carolina Housing Finance Agency Energy Standards. 2. Habitat shall strive to sell the newly constructed dwelling units to qualified buyers in the following manner: twelve (12) dwelling units to be sold to seniors earning between 30% and 50% of the HUD area median income; eight (8) dwelling units to be sold to seniors earning between 51% and 60% of the HUD area median income, and four (4) dwelling units to seniors earning between 61% and 80% of HUD 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. Regardless of whether Habitat is able to meet the goals in this paragraph I.B.2., Habitat shall sell the dwelling units to qualified buyers earning between 30% and 80% of area median income and under no circumstances shall any sales be to anyone earning more than 80% area median income. C. Said funds shall be disbursed by the County to the Owner for performance of the services described in Exhibit B by check made payable to the Owner. 2 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE II. AMOUNT OF BOND FUNDS /LOAN TERMS A. Amount. The County shall make available to the Owner up to Nine Hundred and Twenty -five Thousand dollars ($925,000) pursuant to this Agreement. Said funds shall be disbursed by the County to the Owner for performance of the services described in Exhibit B. 1. Owner shall sell the newly constructed dwelling units to qualified buyers each whose income is as provided in Section I.B.2. 2. The Bond Funding provided by County will be provided to Owner as a deferred second mortgage transferable 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 Property, second only to the Declaration of Restrictive Covenants, the form of which is attached as Exhibit D and hereby incorporated into this Agreement, and described more particularly in Section VI below (hereafter "Declaration "), with 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. 3. At the time of closing of the sale of each of the dwelling units to a homebuyer, Owner shall repay County, $ 38,542 in the form of a credit to the homebuyer, or the applicable amount if the amounts were disbursed according to area median income of the buyer. The credit to the homebuyer shall be documented by a Promissory Note from the homebuyer to County which note shall be secured by a Deed of Trust on the Property naming County as beneficiary. County agrees to subordinate its Deed of Trust lien to a lien securing private permanent financing acquired by the homebuyer. 4. The Period of Affordability will be 99 -years and will be secured by a Declaration that will incorporate a right of first refusal that may be exercised by Habitat and the County. 5. 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 built on the Property. 6. 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 VIII.B.3 of this Agreement. B. Progress Payments. Habitat may not request disbursement of funds under this Agreement 3 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE until funds are needed for payment of eligible costs in accordance with Exhibit B. 1. County shall make payments when requested by Habitat in order to facilitate the development of the project infrastructure. The amount of the request must be limited to eligible costs as determined by the Orange County Staff. Copies of documentation for actual expenses shall accompany payment requests. 2. Said funds shall be disbursed by check payable to the Owner. III. LIEN POSITION A. Habitat acknowledges that the terms and conditions of the County's (i) Affordable Housing Bond Development Agreement, (ii) Promissory Note, (iii) Deed of Trust and Security Agreement and (iv) Declaration of Restrictive Covenants (collectively referred to as "Orange County Loan Documents ") shall upon closing not be subordinate to any existing loan. The Declaration of Restrictive Covenants ( "Exhibit D ") described in Paragraph VI of this Agreement should be recorded prior to the Deed of Trust. B. County agrees to subordinate its Deed of Trust lien to a lien securing private permanent financing acquired by the homebuyer. IV. TIME FOR COMMENCEMENT AND COMPLETION A. The Owner shall complete the infrastructure on the Project within twelve (12) months from the date of this Agreement, and the complete all construction of the homes by December 31, 2020. B. The Project completion date is the closing date of the purchase by a qualified buyer of the last of the 24 units to be constructed. C. 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 VIII.B.1.) shall pertain. D. However, in the event of any alterations or additions or of circumstances beyond the control of the Owner, which in the opinion of the Director of the County's Department of Housing, Human Rights and Community Development will require additional time for completion of the Project, then in that case, the time of completion shall be extended by the County Manager in writing for a period of time not to exceed six (6) months. Any further extensions will require the approval of the Orange County Board of County Commissioners. E. Upon completion, or upon demand of the County, of the Project and expenditure of the Bond funds, Habitat agrees to furnish to County a copy of its annual audit, performed by a certified public accountant within 90 days of the end of the fiscal year. 4 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE V. DURATION OF THE AGREEMENT This Agreement will remain in effect during the "Period of Affordability ", the term of which is ninety- nine (99) years from acquisition of the Property and proper recording the Orange County Loan Documents in the Orange County Registry. The ninety -nine (99) year Period of Affordability requirement will be secured by a Deed of Trust, Promissory Note, and Declaration of Restrictive Covenants that will incorporate a right of first refusal that may be exercised by the County. VI. AFFORDABILITY REQUIREMENTS A. Habitat agrees to sell to qualified buyers as provided in paragraph I.B.2. Area Median Income by family size is determined by the U.S. Department of Housing and Urban Development and amended from time to time. B. Each of the Project dwelling units must remain affordable during the "Period of Affordability" starting from the date of recording of the Declaration and continuing for a period of ninety -nine years thereafter. The Owner shall retain full responsibility for compliance with the affordability requirement for each of the Project dwelling 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 this Section of this Agreement shall apply. The Owner shall assure compliance with affordability of each of the Project dwelling units as provided in the Declaration on the Property, recorded at Book , Page in the Orange County, North Carolina Registry. The Declaration shall constitute and remain a lien on the Property during the Period of Affordability. C. Habitat shall monitor the constructed units for affordability during the Period of Affordability. D. Owner agrees to the Affordability Requirements as provided herein and the Resale Provisions provided in the Exhibit D, Declaration of Restrictive Covenants, Section 4B. E. It is further the responsibility of the Owner to rerecord the Declaration of Restrictive Covenants periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to, periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants on the Property to register, with the Register of Deeds of Orange County, a notice of preservation of the Restrictive Covenants on the Property as provided in North Carolina General Statute § 47B -4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Agreement that the 99 -year duration of this Declaration of Restrictive Covenants be accomplished and that any future owner of the Property, Owner, and Orange County will do what is necessary to ensure that the same is not extinguished by N.C. Gen. Stat. § 41 -29 or any comparable law purporting to extinguish, by the passage 5 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real property. Any future owner, Owner and Orange County agree to do what each must do to accomplish the 99 -year duration of this Declaration of Restrictive Covenants. F. Resale Provisions. The Declaration of Restrictive Covenants shall include at least the following elements in their resale provisions for the Improvements: 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. 2. If the Property is sold, transferred, or otherwise disposed of during the Period of Affordability to a non - qualified homebuyer or to other than an agency with similar interest in affordable housing, the Right of First Refusal provision of the then current 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. If the initial County contribution does not have to be repaid because the sale occurs more than forty years after the County contribution is made, then the seller of the Property and the County will divide the entire equity realized from the sale. 3. The resale provision shall remain in effect for the full affordability period — 99 years. 4. Any proceeds from the recapture of funds under this provision will be used to facilitate the acquisition, construction, and rehabilitation of housing for the purposes of promoting affordable housing. VII. OWNER PERFORMANCE UNDER THIS AGREEMENT A. Owner agrees and authorizes the County to conduct on -site reviews, examine client and contractor records, client applications and to conduct any other procedures or practices to assure compliance with these provisions. B. Owner agrees to not violate any State or Federal laws, rules or regulations regarding a direct or indirect illegal interest on the part of any employee or elected official of the Owner in the Project or payments made pursuant to this Agreement. 6 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE C. Owner shall adopt the audit requirements of the Office of Management and Budget (hereinafter "OMB ") Circular A -110, "Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations," and Circular A -122, "Cost Principles for Nonprofit Organizations," and OMB Circular A -133, "Audits of Institutions of Higher Education and Other Non - Profit Institutions." Owner shall submit to the County copy of said audit report. Owner shall permit the authorized representatives of the County, HUD and the Comptroller General of the United States to inspect and audit all data and reports of the Owner relating to its performance under the Agreement. D. County shall provide, upon request, copies of all laws, regulations and orders cited in this Agreement. E. Owner certifies by executing this Agreement that Owner has not been identified, and has not utilized the services of any agent or subcontractor identified, on the list created by the State Treasurer pursuant to G.S. 147 - 86.58. By executing this Agreement Provider certifies that Provider has not been identified, and has not utilized the services of any agent or subcontractor identified, on the list created by the State Treasurer pursuant to G.S. 147 - 86.81. By executing this Agreement Provider affirms Provider is and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. F. Owner hereby assures and certifies that it will comply with the regulations, policies, guidelines and requirements with respect to the acceptance and use of BOND funds in accordance with the policies of the County. Also, Owner certifies with respect to the Project that the Project will be conducted and administered in compliance with: 1. Title VIII of the Civil Rights Act of 1968 (Pub. L. 90 -208, 42 U.S.C. Sec 2000d at seq.), as amended; and that the Owner will administer all programs and activities related to housing and community development in a manner to affirmatively further fair housing; 2. Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93 -112), as amended, and implementing regulations when published in effect; 3. The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and implementing regulations when published for effect; 4. The Fair Housing Act (42 U.S.C. 3601 -20); 5. Lead Based Requirements at 24 CFR Part 35 VIII. ADMINISTRATION AND REPORTING REQUIREMENTS A. Owner shall submit to the County a quarterly Progress Report no later than the fifth day of the months of January, April; July; October until the activity has been reported completed. 7 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE B. Miscellaneous Provisions 1. 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 the Owner for the assisted units as follows: a. In the event that the Owner is unable to proceed with any aspect of the Project in a timely manner, and County and the Owner determine that reasonable extension(s) for completion will not remedy the situation, then the Owner will retain responsibility for requirements for any dwelling units assisted and County will make no further payments to the Owner. b. In the event that the Owner, 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 the Owner shall, upon the County's request, convey to the County the Property assisted with Bond funds. Conveyance shall be at the sole discretion of County and on a Project dwelling unit by Project dwelling unit basis as set forth below: i. Conveyance shall occur within thirty (30) days of County and the Owner's agreement of the Owner's inability to continue as a viable organization. ii. Owner 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). 2. 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 parry may exercise any right available to it at law or in equity with respect to such default. 3. Books and Records. The Owner shall maintain records of its loan requirements under this contract for a period of not less than the completion of the affordability periods for all Project dwelling units. a. The Owner shall ensure the County access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, the Owner shall submit a copy of its annual audit to the County. DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE b. 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. c. Habitat shall maintain files of all homebuyers, regardless of length of occupancy, residing in assisted units. Documentation shall verify eligibility for federal assisted housing at the point of initial purchase. 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. d. Habitat shall maintain records verifying the affordability of the dwelling units. 4. 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: a. To the County: Orange County c/o Housing, Human Rights and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director b. To the Owner: Habitat for Humanity 88 Vilcom Center Drive, Suite L 10 Chapel Hill, NC 27514 ATTN: Executive Director Either the County or the Owner may change the person or address to which any future Notice shall be given as herein provided. 5. No Assignment. No transfer or assignment of the interest of the Owner in this Agreement shall occur without the prior written consent of the County; neither may the Owner assign this Agreement without the prior written consent of County. 6. Conflict of Interest. The Owner shall be aware of and observe the requirements of the Orange County Affordable Housing Bond Program which provides that no DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE member of the Orange County Board of Commissioners shall be admitted to any share or part of this Agreement or to any benefit to arise from the same. The Owner shall also be aware of and observe the requirements which states that no member, officer, or employee of Orange County or its designees or agents, no member of the governing body of the locality who exercised any functions or responsibilities with respect to the program during his/her tenure or for one year thereafter, shall have any private interest, direct or indirect, in this contract or any subcontract, or the proceeds thereof, for work to be performed in connection with the program assisted under the agreement. 7. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 8. Indemnification. To the extent legally possible, the Owner 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 the Owner, its employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, the Owner shall, upon County's tender, defend the same at the Owner's sole cost and expense, promptly satisfy any judgment adverse to County or to County and the Owner jointly, and reimburse County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by County. 9. Subcontracting. The Owner shall not subcontract work under this Agreement, in whole or in part, without the County's prior written approval. The Owner 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 the Owner specified in this contract. Notwithstanding County's approval of a subcontractor, the Owner shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor the Owner shall indemnify, defend, and hold County harmless from all claims of its contractors. 10. No Joint Venture or Agency. The County and the Owner each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County or the Owner under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. 11. 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 the Owner 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 10 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE the Owner be a waiver by the County of its rights and remedies with respect to that or any other breach. 12. 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. 13. 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 The Owner 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 the Owner 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. 14. Equal Opportunity. The Owner 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. 15. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. 16. 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. 17. 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. 18. 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, the Owner 11 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE 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. 19. Publicity; Signage. The Owner 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. 20. 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. 21. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County or the Owner 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, the Owner or any of their respective officers, agents or employees by any third party. 22. 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. 23. 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 recorded Declaration of Restrictive Covenants. 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. HABITAT FOR HUMANITY OF ORANGE COUNTY Do((cu Signed .by:: , 1 �C�W�j By' V ORANGE COUNTY, NORTH CAROLINA DocuSigned by: �bin,l�ut, (�iAaMw,t,V'S�,Gt1 By: onnie ammersley, County Manager 12 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE ATTEST: Clerk/Deputy Clerk to the Board of Commissioners This document has been preaudited in accordance with the N.C. Local Government and Fiscal Control Act. DocuSigned by: rl-,�a 0 fin Ga'ruy 15a a son, Finance Director A B dos 9ed �s to form and legality 6L r6bv� Annette Moore, Staff Attorney 13 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE EXHIBIT A Legal Description Tract 1: Being all New Tract 3B as shown on that certain plat appearing of record in Plat Book 111, Page 112 Orange County, North Carolina Registry to which reference is made for a more particular description. Tract 2: Being all that certain tract or parcel of land designated as New Lot 3, containing 1.15 acres (50,240 square feet), Waterstone as shown on plat of survey recorded in Plat Book 104, Page 169, Orange County Registry, which plat is referenced for a more particular description (the "Property "). 14 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE EXHIBIT B Scope of Services Services to be provided are in accordance with the Orange County RFP 2016 Affordable Housing Bond Funds Application as amended dated March 27, 2017 from Habitat for Humanity of Orange County. Affordable Housing Bond funds will be used to provide land and infrastructure development for construction of 24 affordable town houses for low to moderate income persons 55 and older earning 30% to 80% of area median income. All construction will be completed in compliance with applicable state and local building codes and ordinances. 15 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE EXHIBIT C Project Budget Site Demolition $ 13,780 Erosion Control $ 26,800 Site Prep and Hardscape $ 318,700 Storm Drainage $ 121,970 Utilities $ 138,300 Landscaping $ 24,500 Site Miscellaneous $ 22,000 Soft Costs $ 247,560 Total $ 913,610 Owner may not request disbursement of funds under this Agreement until the funds are needed for payment of eligible costs. The amount of each request must be limited to eligible costs as determined by the County's Housing and Community Development Department ( "HCD "). No funds may be shifted between projects without the prior approval of the County. Funds may be shifted between line items of the Project without prior approval of the County only to the extent of "Minor Adjustments," defined as action which do not result in a change in the Projects and so long as such Minor Adjustments do not exceed ten percent (10 %) of the line item total from which the funds are being removed or to which the funds are bring added, there is no increase to the Total Renovation Cost specified in the above budget, and there are only minor change to the Plans and Specifications. 16 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE F.YHIRTT P Prepared by and return to: Annette Moore, Orange County Attorney's Office: P.O. Box 8181; Hillsborough, NC 27278 DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration), dated by Habitat for Humanity of Orange County, NC, Inc. for itself and its successors and assigns ( "Owner "), is given as a condition precedent to the award of Orange County 2016 Affordable Housing Bond Program funds. RECITALS: WHEREAS, the County, in the implementation of the 2016 Orange County Affordable Housing Bond Program solicited application for funding for affordable housing projects from interested non - profits organizations; and WHEREAS, Habitat submitted an application for funding to construct 24 dwelling units for seniors, age 55 and older, earning less than 80% of the HUD area median income as described herein and in the application they submitted for FY 2016 Orange County Affordable Housing Bond Program funds on file in the County's Housing and Community Development Office (hereinafter "the Project "); and WHEREAS, on June 6, 2017 the Orange County Board of Commissioners awarded Habitat $ 935,000 in FY 2016 Orange County Affordable Housing Bond funds (hereafter "Bond Funds ") to assist in the development of the townhomes located in the Waterstone Residential Development on property more particularly described in Exhibit A, Legal Description, (hereinafter referred to as "the Property ") (All Exhibits attached to this Agreement are hereby made a part of this Agreement and are incorporated into this Agreement, as it now reads or as it may be modified by the parties); and WHEREAS, Habitat will strive to construct 24 affordable owner occupied townhomes in the Waterstone Residential Development, for seniors, age 55 and older; 12 townhomes will be for seniors who earn between 30% and 50% of the area median gross income, 8 townhomes for seniors earning between 51% and 60% of the area median income and 4 townhomes where the 17 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE seniors earn between 61% to 80% of area median income and which will remain affordable for low and moderate income families as described in the Project; and WHEREAS, this Agreement provides to Habitat with $925,000 Bond Funds for the construction by Habitat of infrastructure necessary for the Project which funds will be secured by a Promissory Note /Deferred Payment Loan of in the amount of $925,000 and a Deed of Trust on the Property; and WHEREAS, the Bond funds together with any future loan funds provided by the County for the Project will be credited by Habitat to the homebuyers when the homebuyers purchase homes and the homebuyers will in turn owe the County the amount of the credit; and WHEREAS, it is the intent of Habitat and the County that the amount of each homebuyer credit from Habitat and homebuyer debt to the County will be, to the extent practicable, equal in amount for each of the 24 dwelling units constructed by Habitat on the Property or will be allocated based on area median income of the buyer; and WHEREAS, this credit for Bond funds, including the Bond funds loaned to Habitat as part of this Agreement, totals $ 38,542 for each of the dwelling units in the Project ($925,000 total Bond funds divided by 24 dwelling units) if allocated equally; and WHEREAS, this Agreement, notwithstanding anything to the contrary contained in the other agreements, provides funds for the development of the land for the construction of 24 single family dwelling units for the sale of 24 single family dwelling units with a goal as follows: 12 dwelling units to be sold to seniors earning between 30% and 50% of the HUD area median income and 8 dwelling units to be sold to seniors earning between 51% and 60% of the HUD area median income, 4 dwelling units to seniors earning between 61% and 80% of HUD area median income. Regardless of whether the goal is met no units subject to this agreement shall be sold to any party earning in excess of 80% of area median income; and 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. 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; and WHEREAS, Orange County requires and Owner agrees to the requirement, as a condition precedent to the awarding of FY 2016 Orange County Affordable Housing Bond Program funds, that Owner execute, deliver and record this Declaration in the Office of the Register of Deeds of Orange County in order to create certain covenants pertaining to the Property and running with the land for the purpose of enforcement of the affordability requirements of the FY 2016 Orange County Affordable Housing Bond Fund Program. NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby 18 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE acknowledged, Owner intends, declares, and covenants that the regulatory and restrictive covenants set forth herein governing the use, occupancy, and transfer of the Property shall be and are covenants pertaining to the Property and running with the land for the term stated herein and are binding upon all subsequent owners of the Property and for such term, except as specifically provided herein, and are not merely personal covenants of Owner. SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER Owner hereby represents, covenants and warrants as follows: A. It is contemplated that the Property and the Project will be used, during the ninety -nine (99) years after Project Completion (defined as the last of the following events: the Property is acquired, rehabilitated, if necessary, and the last of the nine dwelling units is occupied by a low- income family), for owner - occupied housing to families earning up to 80% of HUD area median income. In the event Owner sells, transfers or exchanges the Property or any portion of the Property, the following shall pertain: 1. Subject to the requirements of the DEVELOPMENT AGREEMENT (Exhibit B hereto) and this Declaration, Owner may sell, transfer, or exchange the Property to a non - profit fund, foundation, or corporation of like purpose which is organized and operated exclusively for charitable and educational purposes and which has established its tax exempt status under Section 501 (c)(3) of the Internal Revenue Code, or to Orange County; provided, however, Owner shall obtain the written agreement, in form satisfactory to Orange County, of any buyer or successor or other person acquiring the Property or any interest therein, that such acquisition is subject to the requirements of this Declaration and to the requirements of the DEVELOPMENT AGREEMENT. Owner agrees that County may void any sale, transfer, or exchange of the Property or any portion of this Property if the buyer or successor or other person fails to assume in writing the requirements of this Declaration and the requirements of the DEVELOPMENT AGREEMENT. 2. Any assignment, sale, transfer, conveyance or other disposition of the Property or any part of the Property other than as described in subparagraph 1 above, whether voluntary or involuntary or by operation of law shall be subject to the provisions of SECTION 4 of this Declaration. B. Owner will, at the time of execution, delivery and recording of this Declaration, have good and marketable title to the Property, free and clear of any lien or encumbrance (except encumbrances created pursuant to this Declaration or other permitted encumbrances). C. Owner warrants that it has not and will not execute any other declaration with provisions contradictory to, or in opposition to, the provisions hereof, and that in any event, the requirements of this Declaration are paramount and controlling as to the rights and obligations herein set forth and supersede any other requirements in conflict herewith. SECTION 2 TERM OF DECLARATION 19 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE This Declaration and the Terms of Affordability, specified herein, apply to the Property immediately upon recordation and Owner shall comply with all restrictive covenants herein. This declaration shall terminate ninety -nine (99) years after Project Completion, unless Orange Long Term Housing Affordability Policy affordability restrictions are terminated due to the sale of the Property to a non - qualified buyer as provided herein and Orange County agrees to the termination of the Declaration. SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND A. Upon execution of this Declaration by Owner, Owner shall cause this declaration and all amendments hereto to be recorded and filed in the Office of the Register of Deeds of Orange County. B. Owner intends, declares and covenants, on behalf of itself and all future Owners of the Project during the term of this Declaration, that this Declaration and the covenants and restrictions set forth in this Declaration regulating and restricting the use, occupancy and transfer of the Property (1) shall be and are covenants running with the land, encumbering the Property for the term of this declaration, binding upon Owner's successors in title and all subsequent Owners of the Property; (2) are not merely personal covenants of Owner; and (3) shall bind Owner (and the benefits shall inure to Orange County and any past, present or prospective owner of the Property) and its respective successors and assigns during the term of this Declaration. Owner hereby agrees that any and all requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the Property. For the term of this Declaration, each and every contract, deed or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, the covenants contained herein shall survive and be effective regardless of whether such contracts, deed, or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. It is further the responsibility of Owner to rerecord the Declaration of Restrictive Covenants periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to, periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants on the Property to register, with the Register of Deeds of Orange County, a notice of preservation of the Restrictive Covenants on the Property as provided in North Carolina General Statute § 47134 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section that the ninety -nine (99) year duration of this Declaration of Restrictive Covenants be accomplished and that any future owner of the Property, Habitat, and Orange County will do what is necessary to ensure that the same is not extinguished by N.C. Gen. Stat. § 41- 29 or any comparable law purporting to extinguish, by the passage of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable 20 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE law purporting to extinguish, by the passage of time, non - possessory interests in real property. Any future owner, Habitat and Orange County agree to do what each must do to accomplish the ninety -nine (99) year duration of this Declaration of Restrictive Covenants. SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS A. Rights of Refusal 1. Grant and Effect. Orange County is granted a right of first refusal to purchase the Property as described in this Section. Any assignment, sale, transfer, conveyance, or other disposition of the Property or any part thereof whether voluntarily or involuntarily or by operation of law ( "Transfer ") shall not be effective unless and until the below- described procedure is followed. 2. Right of First Refusal. If the original homebuyer or any subsequent qualified homebuyer ('Buyer ") contemplates a Transfer to an unqualified buyer, Buyer shall send to Orange County and /or the sponsoring non - profit organization, not less than 90 days prior to the contemplated closing date of the Transfer, a 'Notice of Intent to Sell." This Notice of Intent to Sell shall be accompanied by a copy of a completed, fully executed bona fide offer to purchase the Property on the then current North Carolina Bar Association "Offer to Purchase and Contract" form. If Orange County and /or Habitat elects to exercise its said right of refusal, it shall notify the Buyer of its election to purchase within 30 days of its receipt of the Notice and shall purchase the Property or portion thereof within 90 days of the receipt of the 'Notice of Intent to Sell." As between the County and the sponsoring non -profit organization, if both wish to and have the means to exercise the right of first refusal, the sponsoring non - profit organization shall have priority. 3. Sales After Failure to Exercise Rights of Refusal. If neither Orange County nor Habitat advises the Buyer in a timely fashion of its intent to purchase the Property, then the Buyer shall be free to transfer the property in accordance with the Equity Sharing subsection of this policy. 4. Assignability. Orange County may assign its right of first refusal without Owner's consent. B. Resale Provisions I. 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. 21 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE 2. However, if the property is sold during the term of affordability to a non - qualified homebuyer to be used as their principal residence, 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. If the initial County contribution does not have to be repaid because the sale occurs more than forty years after the County contribution is made, then the seller of the Property and the County will divide the entire equity realized from the sale. 3. In the event that Net Sales Proceeds are insufficient to repay the HOME Funds, including principal plus interest, the amount to be recaptured shall be any funds remaining after payment of all senior non -HOME debt and closing costs. In no event shall the borrower be required to use funds other than net proceeds to repay the HOME Funds. 4. The recapture provisions shall remain in effect for the full affordability period — 99 years. C. Owner covenants that it will not knowingly take or permit any action that would result in a violation of the affordability requirements of Orange County. Orange County, together with Owner, may execute and record any amendment or modification of this Declaration and such amendment or modification shall be binding on third parties granted rights under this Declaration. D. Owner acknowledges that the primary purpose for requiring compliance by Owner with restrictions provided in this Declaration is to assure compliance with the affordability requirements of Orange County, AND BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING AFFORDABLE HOUSING BOND PROGRAM FUNDS FOR THE PROPERTY HEREBY AGREES AND CONSENTS THAT ORANGE COUNTY SHALL BE ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREIN, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE BY SPECIFIC PERFORMANCE OWNER'S OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE COUNTY. Owner hereby further specifically acknowledges that the beneficiaries of Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder. E. This Declaration may be enforced by Orange County or its designee in the event Owner fails to satisfy any of the requirements of this Declaration by proceedings at law or in equity against any person or persons violating or attempting to violate any covenant. If legal costs are incurred by Orange County, such legal costs, including attorney fees and court costs (including costs of appeal), are the responsibility of, and may be recovered from the Owner. 22 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE SECTION 5 MISCELLANEOUS A. Severability_ The invalidity of any clause, part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. B. Notices. Any Notice shall be in writing and shall be given by depositing the same in the United States mail, post -paid and registered or certified, and addressed to the party to be notified, with return- receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner hereinabove described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided, be as follows: 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. 88 Vilcom Center Drive, Suite L110 Chapel Hill, NC 27514 ATTN: Executive Director C. Governing Law. This Declaration shall be governed by the laws of the State of North Carolina and, where applicable, the laws of the United States of America. IN WITNESS WHEREOF, the Owner has caused this Declaration to be signed by its duly authorized representative, on the day and year first above written. Habitat for Humanity of Orange County, NC, Inc. President 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 23 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE Carolina corporation, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President and attested to by its Secretary. Witness my hand and notarial seal, this the day of My commission expires: Notary Public 24 20_ DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE Exhibit A Legal Description Tract 1: Being all of New Tract 3B as shown on that certain plat appearing of record in Plat Book, 111, Page 112 Orange County, North Carolina Registry to which reference is made for a more particular description. Tract 2: Being all that certain tract or parcel of land designated as New Lot 3, containing 1.15 acres (50,240 square feet), Waterstone as shown on plat of survey recorded in Plat Book 104, Page 169, Orange County Registry, which plat is referenced for a more particular description (the "Property "). 25 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE Prepared by and return to: Annette Moore, Orange County Attorney's Office: P.O. Box 8181; Hillsborough, NC 27278 DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration), dated , by Habitat for Humanity of Orange County, NC, Inc. for itself and its successors and assigns ( "Owner "), is given as a condition precedent to the award of Orange County 2016 Orange County Affordable Housing Bond Program funds. RECITALS: WHEREAS, on June 6, 2017 the Orange County Board of Commissioners awarded Habitat $ 915,334 in FY 2016 Orange County Affordable Housing Bond funds and $9,666 in 2017 Capital Improvement Plan Affordable Housing Land Banking Funds for a total amount of $ 925,000 (together hereafter, "Bond Funds ") to assist in the development of the townhomes located in the Waterstone Residential Development on property more particularly described in Exhibit A, Legal Description, (hereinafter referred to as "the Property ") (All Exhibits attached to this Agreement are hereby made a part of this Agreement and are incorporated into this Agreement, as it now reads or as it may be modified by the parties); and WHEREAS, Habitat intends to construct the infrastructure necessary to construct 24 affordable owner occupied townhomes in the Waterstone Residential Development, for seniors, age 55 and older; 12 townhomes will be for seniors who earn between 30% and 50% of the area median gross income, 8 townhomes for seniors earning between 51% and 60% of the area median income and 4 townhomes where the seniors earn between 61% to 80% of area median income and which will remain affordable for low and moderate income families as described herein and in the application Habitat submitted for FY 2016 Orange County Affordable Housing Bond Program funds on file in the County's Housing and Community Development Office which is hereby incorporated into this Agreement as if written herein (together hereinafter "the Project "); and WHEREAS, this Agreement, notwithstanding anything to the contrary contained in the other agreements, provides funds for the development of the land for the construction of 24 single family dwelling units for the sale of 24 single family dwelling units with a goal as follows: 12 dwelling units to be sold to seniors earning between 30% and 50% of the HUD area median income and 8 dwelling units to be sold to seniors earning between 51% and 60% of the HUD area median income, 4 dwelling units to seniors earning between 61% and 80% of HUD area median income. Regardless of whether the goal is met no units subject to this agreement shall be sold to any party earning in excess of 80% of area median income; and 26 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE WHEREAS, the Affordable Housing Bond Funds Development Agreement entered into by the County and Habitat, provides Habitat with $925,000 in Bond Funds for the construction by Habitat of infrastructure necessary for the Project, which funds will be secured by a Promissory Note with a Deferred Payment Loan of in the amount of $925,000 and a Deed of Trust on the Property; and 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. 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; and WHEREAS, Orange County requires and Owner agrees to the requirement, as a condition precedent to the awarding of FY 2016 Orange County Affordable Housing Bond Program funds, that Owner execute, deliver and record this Declaration in the Office of the Register of Deeds of Orange County in order to create certain covenants pertaining to the Property and running with the land for the purpose of enforcement of the affordability requirements of the FY 2016 Orange County Affordable Housing Bond Fund Program. NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Owner intends, declares, and covenants that the regulatory and restrictive covenants set forth herein governing the use, occupancy, and transfer of the Property shall be and are covenants pertaining to the Property and running with the land for the term stated herein and are binding upon all subsequent owners of the Property and for such term, except as specifically provided herein, and are not merely personal covenants of Owner. SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER Owner hereby represents, covenants and warrants as follows: D. It is contemplated that the Property and the Project will be used, during the ninety -nine (99) years after Project Completion (defined as the last of the following events: the Property is acquired, rehabilitated, if necessary, and the last of the nine dwelling units is occupied by a low- income family), for owner - occupied housing to families earning up to 80% of HUD area median income. In the event Owner sells, transfers or exchanges the Property or any portion of the Property, the following shall pertain: 3. Subject to the requirements of the DEVELOPMENT AGREEMENT (Exhibit B hereto) and this Declaration, Owner may sell, transfer, or exchange the Property to a non - profit fund, foundation, or corporation of like purpose which is organized and operated exclusively for charitable and educational purposes and which has established its tax exempt status under Section 501 (c)(3) of the Internal Revenue Code, or to Orange County; provided, however, Owner shall obtain the written agreement, in form satisfactory to Orange County, of any buyer or successor or other 27 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE person acquiring the Property or any interest therein, that such acquisition is subject to the requirements of this Declaration and to the requirements of the DEVELOPMENT AGREEMENT. Owner agrees that County may void any sale, transfer, or exchange of the Property or any portion of this Property if the buyer or successor or other person fails to assume in writing the requirements of this Declaration and the requirements of the DEVELOPMENT AGREEMENT. 4. Any assignment, sale, transfer, conveyance or other disposition of the Property or any part of the Property other than as described in subparagraph 1 above, whether voluntary or involuntary or by operation of law shall be subject to the provisions of SECTION 4 of this Declaration. E. Owner will, at the time of execution, delivery and recording of this Declaration, have good and marketable title to the Property, free and clear of any lien or encumbrance (except encumbrances created pursuant to this Declaration or other permitted encumbrances). F. Owner warrants that it has not and will not execute any other declaration with provisions contradictory to, or in opposition to, the provisions hereof, and that in any event, the requirements of this Declaration are paramount and controlling as to the rights and obligations herein set forth and supersede any other requirements in conflict herewith. SECTION 2 TERM OF DECLARATION This Declaration and the Terms of Affordability, specified herein, apply to the Property immediately upon recordation and Owner shall comply with all restrictive covenants herein. This declaration shall terminate ninety -nine (99) years after Project Completion, unless Orange Long Term Housing Affordability Policy affordability restrictions are terminated due to the sale of the Property to a non - qualified buyer as provided herein and Orange County agrees to the termination of the Declaration. SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND C. Upon execution of this Declaration by Owner, Owner shall cause this declaration and all amendments hereto to be recorded and filed in the Office of the Register of Deeds of Orange County. D. Owner intends, declares and covenants, on behalf of itself and all future Owners of the Project during the term of this Declaration, that this Declaration and the covenants and restrictions set forth in this Declaration regulating and restricting the use, occupancy and transfer of the Property (1) shall be and are covenants running with the land, encumbering the Property for the term of this declaration, binding upon Owner's successors in title and all subsequent Owners of the Property; (2) are not merely personal covenants of Owner; and (3) shall bind Owner (and the benefits shall inure to Orange County and any past, present or prospective owner of the Property) and its respective successors and assigns during the term of this Declaration. Owner hereby agrees that any 28 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE and all requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the Property. For the term of this Declaration, each and every contract, deed or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, the covenants contained herein shall survive and be effective regardless of whether such contracts, deed, or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. It is further the responsibility of Owner to rerecord the Declaration of Restrictive Covenants periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to, periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants on the Property to register, with the Register of Deeds of Orange County, a notice of preservation of the Restrictive Covenants on the Property as provided in North Carolina General Statute § 47134 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section that the ninety -nine (99) year duration of this Declaration of Restrictive Covenants be accomplished and that any future owner of the Property, Habitat, and Orange County will do what is necessary to ensure that the same is not extinguished by N.C. Gen. Stat. § 41- 29 or any comparable law purporting to extinguish, by the passage of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non - possessory interests in real property. Any future owner, Habitat and Orange County agree to do what each must do to accomplish the ninety -nine (99) year duration of this Declaration of Restrictive Covenants. SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS A. Rights of Refusal 5. Grant and Effect. Orange County is granted a right of first refusal to purchase the Property as described in this Section. Any assignment, sale, transfer, conveyance, or other disposition of the Property or any part thereof whether voluntarily or involuntarily or by operation of law ( "Transfer ") shall not be effective unless and until the below- described procedure is followed. 6. Right of First Refusal. If the original homebuyer or any subsequent qualified homebuyer ('Buyer ") contemplates a Transfer to an unqualified buyer, Buyer shall send to Orange County and/or the sponsoring non - profit organization, not less than 90 days prior to the contemplated closing date of the Transfer, a 'Notice of Intent to Sell." This Notice of Intent to Sell shall be accompanied by a copy of a completed, fully executed bona fide offer to purchase the Property on the then current North Carolina Bar Association "Offer to Purchase and Contract" form. If Orange County and /or Habitat elects to exercise its said right of refusal, it shall notify the Buyer of its election to purchase within 30 days of its receipt of the Notice and shall 29 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE purchase the Property or portion thereof within 90 days of the receipt of the 'Notice of Intent to Sell." As between the County and the sponsoring non - profit organization, if both wish to and have the means to exercise the right of first refusal, the sponsoring non - profit organization shall have priority. 7. Sales After Failure to Exercise Rights of Refusal. If neither Orange County nor Habitat advises the Buyer in a timely fashion of its intent to purchase the Property, then the Buyer shall be free to transfer the property in accordance with the Equity Sharing subsection of this policy. 8. Assi _nay. Orange County may assign its right of first refusal without Owner's consent. C. Resale Provisions 5. 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. 6. However, if the property is sold during the term of affordability to a non - qualified homebuyer to be used as their principal residence, 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. If the initial County contribution does not have to be repaid because the sale occurs more than forty years after the County contribution is made, then the seller of the Property and the County will divide the entire equity realized from the sale. 7. In the event that Net Sales Proceeds are insufficient to repay the HOME Funds, including principal plus interest, the amount to be recaptured shall be any funds remaining after payment of all senior non -HOME debt and closing costs. In no event shall the borrower be required to use funds other than net proceeds to repay the HOME Funds. 8. The recapture provisions shall remain in effect for the full affordability period — 99 years. D. Owner covenants that it will not knowingly take or permit any action that would result in a violation of the affordability requirements of Orange County. Orange County, together with Owner, may execute and record any amendment or modification of this Declaration and such amendment or modification shall be binding on third parties granted rights under this Declaration. 30 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE F. Owner acknowledges that the primary purpose for requiring compliance by Owner with restrictions provided in this Declaration is to assure compliance with the affordability requirements of Orange County, AND BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING AFFORDABLE HOUSING BOND PROGRAM FUNDS FOR THE PROPERTY HEREBY AGREES AND CONSENTS THAT ORANGE COUNTY SHALL BE ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREIN, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE BY SPECIFIC PERFORMANCE OWNER'S OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE COUNTY. Owner hereby further specifically acknowledges that the beneficiaries of Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder. G. This Declaration may be enforced by Orange County or its designee in the event Owner fails to satisfy any of the requirements of this Declaration by proceedings at law or in equity against any person or persons violating or attempting to violate any covenant. If legal costs are incurred by Orange County, such legal costs, including attorney fees and court costs (including costs of appeal), are the responsibility of, and may be recovered from the Owner. SECTION 6 MISCELLANEOUS D. Severability. The invalidity of any clause, part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. 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 hereinabove described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided, be as follows: To the County: Orange County c/o Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To Habitat: Habitat for Humanity of Orange County, NC, Inc. 88 Vilcom Center Drive, Suite L110 Chapel Hill, NC 27514 ATTN: Executive Director F. Governing Law. This Declaration shall be governed by the laws of the State of North Carolina and, where applicable, the laws of the United States of America. 31 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE IN WITNESS WHEREOF, the Owner has caused this Declaration to be signed by its duly authorized representative, on the day and year first above written. Habitat for Humanity of Orange County, NC, Inc. , President 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 and attested to by its Secretary. Witness my hand and notarial seal, this the day of 20 My commission expires: Notary Public 32 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE Exhibit A Legal Description Tract 1: Being all of New Tract 3B as shown on that certain plat appearing of record in Plat Book, 111, Page 112 Orange County, North Carolina Registry to which reference is made for a more particular description. Tract 2: Being all that certain tract or parcel of land designated as New Lot 3, containing 1.15 acres (50,240 square feet), Waterstone as shown on plat of survey recorded in Plat Book 104, Page 169, Orange County Registry, which plat is referenced for a more particular description (the "Property "). 33 DocuSign Envelope ID: C3173F25- 6C4C- 4A24- 903D- 06978EB7C4AE Exhibit B Development Agreement 34