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HomeMy WebLinkAboutAgenda - 01-18-2001-8kORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 18, 2001 Action Agenda Item No. SUBJECT: HOME Program - Community Revitalization Loan Fund DEPARTMENT: Housing/Comm. Development PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Tara L. Fikes, ext 2490 Development Agreement TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To approve a Development Agreement with EmPOWERment, Inc. for HOME funding available under the Community Revitalization Loan Fund. BACKGROUND: A Community Revitalization Loan Fund was created in the 1997-98 Orange County HOME Consortium program design to provide funds to assist low/moderate income families purchase existing housing. Funds can be used for acquiring property, rehabilitating the ,property, and/or second mortgage assistance. A total of $60,000 was allocated for this program in the 1997-98 year and $210,000 was allocated for this program in the 1998-99 fiscal year. Under this program, local non-profit housing agencies will acquire, rehabilitate, if necessary, and resell houses located in Orange County to eligible first-time homebuyers. In some cases, houses will not need to be repaired, thus, the non-profit organization will serve as an sponsor for prospective homebuyers who need second mortgage assistance. This mortgage assistance enables the first time homebuyer to obtain a first mortgage for a lesser amount, thereby increasing the availability of first-time homeownership opportunities. The non-profit organization would be responsible for certifying the eligibility of the prospective homebuyer, as well as ensuring that the subject property is in standard condition. To date, approximately 17 low-income, first-time homebuyers have benefited from this program. In order to proceed with the FY2000 allocation, a Development Agreement must be executed. FINANCIAL IMPACT: A total of $100,000 has been allocated for this purpose in the 2000-2001 HOME Program budget. The Development Agreement will govern the expenditure of $100,000 in FY 2000 HOME funding. RECOMMENDATION(S): The Manager recommends that the Board recommends approving the Development Agreement with EmPOWERment, Inc. for HOME funding available under the 2 Community Revitalization Loan Fund and authorizing the Chair to execute the Development Agreement on behalf of the Orange County HOME Consortium upon the County Attorney's review and approval. 3 NORTH CAROLINA ORANGE COUNTY DEVELOPMENT AGREEMENT This is an AGREEMENT between ORANGE COUNTY, a general local governmental unit of the State of North Carolina, (hereinafter referred to as the "County") and EmPOWERment, Inc., a North Carolina nonprofit corporation (hereinafter referred to as "EmPOWERment"). The effective date of this Agreement is January 18, 2001. WITNESSETH WHEREAS, the Orange County HOME Consortium has designated approximately $100,000 in FY 2000 HOME funds for the purpose of supporting the purchase, rehabilitation, and/or new construction of housing in Orange County with priority given to activities in the Northside Community in Chapel Hill; and WHEREAS, the County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated July 1, 1999, and as such is the lead entity in a representative capacity for all members of the Orange HOME Consortium for the purposes of carrying out the HOME Program in accordance with the Title II of the Cranston- Gonzalez National Affordable Housing Act (Pub. L. 101-625), (42 U.S.C. 3535(d.) et. s?Mc.) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, the Orange County Board of County Commissioners approved the Community Revitalization Loan Fund Program Guidelines on April 3, 2000 which is hereby incorporated into this agreement as Exhibit A; and WHEREAS, EmPOWERment, Inc., is a local non-profit housing corporation interested in serving as the sponsor, developer, and/or advocate for potential first-time homebuyers; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto do agree as follows: 1. EmPOWERment agrees to acquire; rehabilitate, if necessary; and resell available .Property in the form of single family dwellings; condominiums, and/or townhouses located in Orange County to eligible first-time homebuyers; and/or act as an agent for persons wishing to receive second mortgage assistance under this program. 2. EmPOWERment agrees to abide by the Community Revitalization Loan Fund Program Guidelines dated April 2000 in the implementation of this program. 3. Upon receipt of a request for HOME funds under this program, the County shall review all submitted documentation within ten (10) working days and provide in writing a preliminary response to the request. If the response is favorable and no further documentation is necessary, the County will notify EmPOWERment in 4 writing of the date funds will be available. If the County requests additional information, the request for information must be satisfied in full before the written notification of funding availability. Any new submission of material will trigger the ten (10) working days response timeframe outlined above. 4. HOME funds used for acquisition and rehabilitation of available property shall be secured by a note from EmPOWERment to the County and a deed of trust constituting a first lien on the Property which deed of trust shall designate the 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 Agreement. The County agrees to subordinate its lien -on the. Property to a first mortgage securing private financing obtained by EmPOWERment in order to complete the project. In the event that EmPOWERment is acting as a sponsor of a first-time homebuyer in need of second mortgage funding, HOME funds used for this purpose shall be secured by a note from the homebuyer to the County and a deed of trust constituting a first lien on the Property which deed of trust shall designate the 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 Agreement. The County agrees to subordinate its lien to a first lien securing private permanent financing acquired by the homebuyer. 5. EmPOWERment agrees to sell homes to qualified first-time homebuyers whose income does not exceed 70% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and as amended from time to time. At the closing of the sale to a homebuyer, EmPOWERment shall repay the County the total HOME investment in the form of a credit to the homebuyer. The credit to the homebuyer shall be documented by a promissory note from the homebuyer to the County which note shall be secured by a deed of trust on the Property naming the County as beneficiary. The County agrees to subordinate its lien on each lot to a first lien securing private permanent financing acquired by the homebuyer. The period of affordability for HOME funds in accordance with the Act, its regulations and State Program Requirements shall be 20 years from the date of execution of this Agreement. The default interest rate shall be 7% per annum. EmPOWERment shall provide to the County, prior to closing the sale of the Property to the homebuyer, documentation satisfactory to the County verifying the income of the homebuyer. 6. In the event property is acquired for rehabilitation and resale without identifying a prospective homebuyer, EmPOWERmeht agrees to identify a qualified buyer and complete the sell of the property to the homebuyer within one hundred twenty days (120) days of the date of acquisition of the property by EmPOWERment. Failure to abide by this provision will constitute an Event of Default as defined in Paragraph 8b. of this agreement. 7. The County and EmPOWERment agree to comply with the Act, its regulations 5 and Federal Program Requirements in the purchase and sale of the Property. The County and EmPOWERment further agree to comply with the provisions of the funding agreement, dated August 1, 2001, attached hereto and made a part of this Agreement (Exhibit B). 8. Miscellaneous Provisions. a. Termination of Agreement. The obligations of the parties hereunder and the specific obligation of EmPOWERment to acquire; rehabilitate, if necessary; and resell available property in the form of single family dwellings; condominiums, and/or townhouse located in Orange County to eligible Orange County residents shall terminate upon the completion of the sale of the Property to a homebuyer. Continuing obligations of the homebuyer shall be contained in the note and deed of trust to be recorded at the time of closing of the sale of the Property. Notwithstanding the foregoing, the parties hereto may terminate this Agreement at any time by a mutual agreement to that effect in writing. b. Default, Remedies. This Agreement may be terminated by a non- defaulting party upon an event of default hereunder, after written notice thereof is given giving the defaulting party thirty (30) days in which to cure the default. As used herein, the term "an event of default" shall mean and refer to a breach of any of the terms of this Agreement including a failure to meet the time limitations contained in -this Agreement and a failure to act as required by this Agreement by either party with respect to any undertaking, obligation, covenant or condition as set forth in this Agreement which the defaulting party has not cured. With respect to any event of default, the non-defaulting party may exercise any right available to it at law or inequity with respect to such default. c. Books and Records. Each party shall keep and maintain books, records and other documents relating directly to the receipt and disbursement of grant funds and the fulfillment of this Agreement. Each party agrees that any authorized representative. of the County, the State, the U.S. Department of Housing and Urban Development and Comptroller General of the United States shall, at all reasonable times, have access to and the right to inspect, copy, audit and examine all of the books, records and other documents relating to the grant and the fulfillment of this Agreement for a period of three (3) years following the completion of the Project. d. Conflict with HOME Agreement. Notwithstanding anything herein to the contrary, the parties hereto acknowledge the due execution of a HOME Program Agreement between the County and the U.S. Department of Housing and Urban Development and agree that any conflict between the provisions, requirements, duties or obligations of this Agreement and the HOME Agreement shall be resolved in favor of the HOME Agreement. e. Notices. Any Notice shall be in writing and shall be given by depositing 5 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: L To the County: Orange County c/o Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To EmPOWERment: EmPOWERment, Inc. 705-A Rosemary St. Carrboro, N.C. 27510 ATTN: Director Either the County or EmPOWERment 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 EmPOWERment's interest in this Agreement shall occur without the prior written consent of the County. g. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. h. Entire Agreement; Modification. This Agreement, with all exhibits and attachments hereto, constitutes the entire agreement between the County and EmPOWERment. No modification or amendment to this Agreement shall be binding upon either party unless made in writing and executed by each party. L No Joint Venture or Agency. The County and EmPOWERment each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County or EmPOWERment 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 EmPOWERment 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 EmPOWERment be a waiver by the County of its rights and remedies with respect to that or any other breach. 7 k. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of North Carolina. Any litigation arising out of this Agreement shall be brought in courts sitting in North Carolina, with venue in Orange County. 1. Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by the fact that for any reason any other provision may be invalid or unenforceable in whole or in part. If any provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be or become invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. The County and EmPOWERment 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 EmPOWERment cannot agree, they shall apply to a court of competent jurisdiction to substitute such provision as the court deems reasonable and judicially valid, legal and enforceable. Such provision determined by the court shall automatically be deemed part of this Agreement ab initio. M. Equal Opportunity. EmPOWERment 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. .0. 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, EmPOWERment 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. 8 r. Publicity; Signage. EmPOWERment 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 EmPQWERment 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, EmPOWERment 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. 9 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands and seals on the day and year first above written. COUNTY OF ORANGE, NORTH CAROLINA (SEAL) Stephen H. Halkiotis, Chair Orange County Board of Commissioners ATTEST: Beverly A. Blythe Clerk to the Board of Commissioners NORTH CAROLINA ORANGE COUNTY . This is to certify that on this day personally came before me Beverly A. Blythe, with whom I am personally acquainted, and being by me duly sworn, says that Stephen H. Halkiotis, is the Chair of the Orange County Board of Commissioners, and that she the said Beverly A. Blythe, is the Clerk to the Board of Commissioners of the County of Orange, the body politic and corporate named within and which executed the foregoing instrument; that she knows the common seal of said County; that the seal affixed to said instrument is said common seal; that the name of Orange County was subscribed thereto by the said Chair of the Orange County Board of Commissioners and that the said Chair of the Orange County Board of Commissioners and said Beverly A. Blythe. subscribed their names hereto and said common seal was affixed, all by order of the Board of County Commissioners of Orange County and that said instrument is the act and deed of Orange County. . Witness my hand and notarial seal, this the day of 2001. Notary Public My commission expires: 10 EmPOWERment, Inc. (SEAL) , President Board of Directors ATTEST: , Secretary Board of Directors NORTH CAROLINA ORANGE COUNTY I, , Notary Public in and for the above named County and State, do hereby certify that on this' day personally appeared before' me , with whom I am personally acquainted, who, being by me duly sworn, says that he is Secretary and that is President of EmPOWERment, Inc., a North Carolina corporation, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President, sealed with its corporate seal and attested to by its Secretary. Witness my hand and notarial seal, this the day of 2001. Notary Public My commission expires: