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HomeMy WebLinkAbout2021-011-E Housing-HOME FY19-20 Development Agreement - Habitat DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B NORTH CAROLINA ORANGE COUNTY DEVELOPMENT AGREEMENT This is an AGREEMENT between ORANGE COUNTY, a local governmental political subdivision of the State of North Carolina, (hereinafter referred to as the "County") and Habitat for Humanity of Orange County, a North Carolina housing organization(hereinafter referred to as "the HOME Awardee"). The effective date of this Agreement is December 21, 2020. WITNESSTH WHEREAS, the Orange County HOME Consortium has designated $181,000 in FY 19- 20 HOME funds to provide funding for second mortgage assistance for at least six (6)homes located in Orange County, specifically in the Fairview Community in Hillsborough and the Northside Neighborhood in Chapel Hill, which are hereinafter designated collectively as "the Property" or"the Properties"; and WHEREAS, Orange County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated July 1, 2011, 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. 3 5 3 5( d.) et. seq.) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, the HOME Awardee is constructing the housing units on the Properties for first-time homebuyers earning between 30% and 80% of HUD area median income described in the HOME Awardee's FY 19-20 Application for Funding, Orange County HOME Program dated, February 2, 2019, which is hereby incorporated into this Agreement as if written herein, and hereafter referred to as "The Project."A copy of the HOME Program Applications are on file in the office of the Orange County Housing and Community Development Department; and WHEREAS, the HOME Awardee intends to assist at least six (6) first-time homebuyers, who earn between 30% and 80% of HUD area median income, to purchase the housing units at the Properties; and WHEREAS, a first-time homebuyer for the purposes of this program is defined as any low income household that has not owned a home within the past three (3) years including households living in manufactured housing not permanently affixed to a foundation, or owner- occupants of homes not feasible for rehabilitation and has lived or worked in Orange County for at least one year prior to the home purchase; WHEREAS, notwithstanding any provision of this Agreement, the County and the HOME Awardee 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 1 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B only upon satisfactory completion of an environmental review and receipt by Orange County of a Release of Funds from the U.S. Department of Housing and Urban Development under 24 CFR Part § 58 if applicable. The parties further agree that the provision of such funds to the project is conditioned on Orange County's determination to proceed with, modify, or cancel the project based on the results of a subsequent environmental review. NOW, THEREFORE, in consideration of the mutual covenants,promises, and representations contained herein, it is agreed between the parties hereto as follows: I. USE OF HOME FUNDS/SUBSIDY TYPE A. The HOME Awardee shall perform the projects or tasks related to its allocation of HOME funds as provided in this Agreement, Exhibit A, Scope of Services, Exhibit B, Proposed Budget and Source of Funds and the Declaration of Restrictive Covenants the form of which is attached as Exhibit C. All Exhibits, attachments and addendums annexed hereto or referred to herein are hereby incorporated into and made a part of this Agreement as if set forth herein, as it now reads or as it may be modified by the Parties. B. The HOME Awardee 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 Orange County staff. C. Said funds shall be disbursed by check payable to the HOME Awardee. D. HOME funds will be a fixed subsidy provided in the form of a deferred loan. II. AMOUNT OF HOME FUNDS/LOAN TERMS A. The County shall make available to the HOME Awardee up to One Hundred Eighty One Thousand Dollars ($181,000) at an interest rate of zero percent (0%)pursuant to this Agreement. I.The funding provided by the County will be provided as a fixed subsidy in the form of a deferred second mortgage to the individual families at the time of sale of the Property to them. The investment will be secured by a forty(40) year Deed of Trust(the form of which is attached as Exhibit D) and Promissory Note (the form of which is attached as Exhibit E) forgivable at the end of forty(40) years. 2.This Deed of Trust and Promissory Note shall constitute a lien on the Properties, subordinate only to the Declaration of Restrictive Covenants described in Section VI, Affordability Requirements of this Agreement, the form of which is provided in Exhibit C and any lien as provided in subsection 3 below. 2 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B 3.At the time of closing of the sale of each of the dwelling units to a homebuyer, the homebuyer shall receive HOME funds as second mortgage assistance which shall be documented by a Promissory Note from the homebuyer to the County, which shall be secured by a Deed of Trust on the Properties naming the County as beneficiary. The County agrees to subordinate its Deed of Trust lien to a lien securing private permanent financing acquired by the homebuyer. B. Said funds shall be disbursed by the County to the HOME Awardee for performance of the services described in Exhibit A. III. LIEN POSITION Orange County hereby acknowledges that the terms and conditions of its (i) HOME Program Development Agreement, (ii) Promissory Note, (iii) Deed of Trust and Security Agreement and(iv)Declaration of Restrictive Covenants, and (v) Homeowner Written Agreement (collectively referred to as "Orange County Loan Documents"), shall not expressly be subordinated to any other documents except those documents described in §§ II.A.2. and II.A.3 above. IV. TIMELINESS The HOME Awardee shall complete the Project by September 9, 2022 and sell all homes by December 31, 2022. However, in the event of any alterations or additions or of circumstances beyond the control of the HOME Awardee, which in the opinion of the Director of the County's Department of Housing 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. A ratified sales contract for the Property or Properties must be executed with an eligible homebuyer(s) within nine (9) months of the date of completion of construction or rehabilitation. V. DURATION OF THE AGREEMENT This Agreement will remain in effect for the HOME Affordability Period as provided in Section VI, Affordability Requirements. VI. AFFORDABILITY REQUIREMENTS A. The HOME Awardee agrees to build and sell the Project dwelling units to at least six (6) low-income families earning between 30% and 80% of the area median income as determined during the initial eligibility period. Families may not earn 3 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B more than 80% of the area median income at the time of sale of the property. 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. Upon determining the amount to be invested in a Project dwelling unit, the HOME Awardee shall record a Declaration of Restrictive Covenants encumbering the Project dwelling unit in accordance with Subsection VI(C), below. C. The Declaration of Restrictive Covenants shall provide that each of the Project dwelling units must remain affordable, according to the requirements of the HOME Program, for the HOME Affordability Period of five (5)to ten (10) years, depending on the amount of HOME funds invested in the individual Project dwelling unit, after which time, each of the Project dwelling units must adhere to the requirements of the County's Long-Term Housing Affordability Policy and continue to remain affordable for a total affordability period of ninety-nine (99) years. The HOME Awardee 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 and repayment of the HOME investment. If the original homebuyer(s) wish to sell or transfer the Property during the HOME Affordability Period, the HOME Resale Provisions of this Agreement pertain. In the event of a sale of the Property, the HOME Awardee assures compliance with affordability requirements of each of the Project dwelling units as provided in the Declaration of Restricted Covenants on the Property. In the event that the original homebuyer(s)violate the HOME principal residence requirement, to include sale or transfer of the Property to a non-qualified buyer during the HOME Affordability Period, the Property will be found noncompliant with HOME requirements and the HOME investment must be repaid to the County. The Declaration of Restricted Covenants shall constitute and remain a lien on the Property during the entire period of affordability. D. The HOME Awardee agrees to retain full responsibility for compliance with the Affordability Requirements provided in this Section IV and the Resale Provisions provided in Section 4A of Exhibit C, Declaration of Restrictive Covenants. VII. HOME AWARDEE'S PERFORMANCE UNDER THIS AGREEMENT A. The HOME Awardee 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. The HOME Awardee 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 HOME Awardee in the Project or payments made pursuant to this Agreement. 4 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B C. The HOME Awardee agrees that to the best of its knowledge, neither the Project nor the funds provided therefore, and the personnel employed in the administration of the program shall be in any way or to any extent engaged in the conduct of political activities in contravention of Chapter 15 of Title 5, United States Code, referred to as the Hatch Act. D. The HOME Awardee shall comply with audit requirements contained in 2 CFR, Subpart F which requires the HOME Awardee to have an annual audit conducted within nine (9) months of the end of their fiscal year, if the HOME Awardee has an aggregate expenditure of more than$750,000 in federal funds in a fiscal year. the HOME Awardee shall submit to the County copy of said audit report. the HOME Awardee 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 Owner relating to its performance under the Agreement. Any deficiencies noted in audit reports must be fully cleared by the HOME Awardee within thirty(30) days after receipt of same. If the HOME Awardee is not required to perform an audit per the 2 CFR, Subpart F requirements, it must have and maintain adequate internal financial/cash management principles and reporting policies. E. County shall provide,upon request, copies of all laws, regulations and orders cited in this Agreement. F. 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. G. The HOME Awardee and County shall at all times observe and comply with Title 24 CFR Part 92 and all applicable laws, ordinances or regulations of the Federal, State, County, and local government,which may in any manner affect the performance of this Agreement, and the HOME Awardee shall perform all acts with responsibility to the County in the same manner as the County is required to perform all acts with responsibility to the Federal government. H. The HOME Awardee hereby assures and certifies that it will comply with the regulations,policies, guidelines and requirements with respect to the acceptance and use of HOME funds in accordance with the policies of the County. Also, the HOME Awardee certifies with respect to the Project that it will be conducted and administered in compliance with: 5 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B I.Title VI of the Civil Rights Act of 1964 (Pub. L. 88- 352, 42 U.S. C.§§ 2000d et seq.) and implementing regulations issued at 24 CFR Part I; 2.Title VIII of the Civil Rights Act of 1968 (Pub. L. 90-208, 42 U.S. C. §§ 2000d at seq.), as amended; and that the HOME Awardee will administer all programs and activities related to housing and community development in a manner to affirmatively further fair housing; 3.Section 109 of the Housing and Community Development Act of 1974, as amended; and the regulations issued pursuant hereto; 4.Section 3 of the Housing and Urban Development Act of 1968, as amended; 5.Executive Order 11246-Equal Opportunity, as amended by Executive Orders 11375 and 12086, and implementing regulations issued at 41 CFR Chapter 60; 6.Executive Order 11063- Equal Opportunity in Housing, as amended by Executive Order 12259, and implementing regulations at 24 CFR Part 107; 7.Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93- 112), as amended, and implementing regulations when published in effect; 8.The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and implementing regulations when published for effect; 9.The Fair Housing Act(42 U.S. C. 3601- 20); 10. Title II of the American Disabilities Act; VIII. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION (CHDO) REQUIREMENTS If the HOME Awardee is a Community Housing Development Organization(CHDO) and is using set-aside funds under 24 CFR 92.300, the requirements in this section apply. The CHDO must transfer title of the Property or Properties and the HOME obligations to the eligible homebuyer(s) within the timeframe of project completion specified in section IV of this Agreement. The CHDO must return any project proceeds to Orange County. IX. ADMINISTRATION AND REPORTING REQUIREMENTS The HOME Awardee 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. 6 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B X. MISCELLANEOUS PROVISIONS A. Uniform Administrative Requirements. The HOME Awardee must comply with the applicable uniform administrative requirements of 24 CFR §92. 505. B. Other Program Requirements. The HOME Awardee must carry out each activity in compliance with all Federal laws and regulations described in 24 CFR, Part 35 subparts A, B, J, K, M, and R, as applicable; 24 CFR, Part 92, subpart F for homeownership projects, including but not limited to the applicable property standards at 92. 251; and 24 CFR, Part 92, subpart H including but not limited to labor requirements prescribed in 92.354 and the lead hazard control requirements at 92.355, except that the HOME Awardee does not assume the responsibilities for environmental review or intergovernmental review. Applicable property standards shall apply throughout the HOME Affordability Period. C. Affirmative Marketing. If HOME funds will be used for housing containing five (5) or more assisted units, the HOME Awardee must prepare and submit an Affirmative Marketing Plan to the County. D. Termination of Agreement. The full benefit of the Project will be realized only after the completion of the affordability periods for all Project dwelling units. It is the County's intention that the full public benefit of the Project shall be completed under the auspices of the HOME Awardee for the assisted units as follows: I.In the event that the HOME Awardee is unable to proceed with any aspect of the Project in a timely manner, and County and the HOME Awardee determine that reasonable extension(s) for completion will not remedy the situation, then the HOME Awardee will retain responsibility for requirements for any dwelling units assisted and County will make no further payments to the HOME Awardee. 2.In the event that the HOME Awardee,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 HOME Awardee shall, upon the County's request, convey to the County the Property assisted with HOME funds. Conveyance shall be at the sole discretion of County and on a Project dwelling unit by Project dwelling unit basis. Conveyance shall be on the terms set forth herein: a. Conveyance shall occur within thirty(30) days of County and the HOME Awardee's agreement of the HOME Awardee's inability to continue as a viable organization. 7 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B b. The HOME Awardee shall convey the Property to the County by general warranty deed, free and clear of all liens and encumbrances of record except those which create a beneficial interest in County (Declaration of Restrictive Covenants and Deed of Trust). E. Default, Remedies. This Agreement may be terminated by a non-defaulting party upon an event of default hereunder, after written notice thereof and thirty(30) days grace period in which the defaulting party may act to cure. As used herein, the term"an event of default" shall mean and refer to a failure or act of omission by either party with respect to any undertaking, obligation, covenant or condition as set forth in this Agreement. With respect to any event of default, the non- defaulting party may exercise any right available to it at law or in equity with respect to such default. Notwithstanding and in addition to the above, in accordance with 24 CFR 85. 43, this Agreement may be suspended or terminated by the County if the HOME Awardee materially fails to comply with any term of the Agreement. Remedies for breach of the provisions of this Agreement include but are not limited to repayment of any funds deemed to be expended in an ineligible manner. Repayment of HOME funds is required if the housing does not meet the affordability requirements for the HOME Affordability Period. F. Books and Records. The HOME Awardee shall maintain records of its grant requirements under this contract for a period of not less than five (5) full fiscal years following the contract completion date. 1.The HOME Awardee shall ensure access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, the HOME Awardee shall submit a copy of its annual audit to the County. 2.Upon reasonable advance notice, County or its authorized representatives may from time to time inspect, audit, and make copies of any of the HOME Awardee's records that relate to this contract. If any audit by County discloses that payments to the HOME Awardee were in excess of the amount to which the HOME Awardee was entitled under this contract, the HOME Awardee shall promptly pay to County the amount of such excess. If the excess is greater than 1% of the contract amount, the HOME Awardee shall also reimburse County its reasonable costs incurred in performing the audit. 3.The HOME Awardee 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. 8 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B 4.The HOME Awardee shall maintain records verifying the affordability of the dwelling units. G. Notices. Any Notice shall be in writing and shall be given by depositing the same in the United States mail, post-paid and registered or certified, and addressed to the party to be notified, with return-receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner 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: 1.To the County: Orange County c/o Housing and Community Development Dept. P.O. Box 8181 Hillsborough,NC 27278 ATTN: Director 2.To HOME Awardee: Habitat for Humanity of Orange County 8 Vilcom Center Dr, Suite 110 Chapel Hill,NC 27514 ATTN: Executive Director Either the County or the HOME Awardee may change the person or address to which any future Notice shall be given as herein provided. H. No Assignment.No transfer or assignment of the interest of the HOME Awardee in this Agreement shall occur without the prior written consent of the County; neither may the HOME Awardee assign this Agreement without the prior written consent of County. I. Conflict of Interest. The HOME Awardee agrees to abide by the provisions of 24 CFR 92. 356(f) and 24 CFR 570.611, as applicable, with respect to conflicts of interest, and covenants that it presently has no financial interest and shall acquire any financial interest, direct or indirect, that would conflict in any manner or degree with the performance of services required under this Agreement. The HOME Awardee further covenants that in performance of this Agreement no person having such a financial interest shall be employed or retained by the HOME Awardee hereunder. These conflicts of interest provisions apply to any person who is an employee, agent, consultant, or elected official or appointed official of the County, or any designated public agencies or subrecipients that are receiving funds under the Orange County HOME Investment Partnership Program. J. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 9 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B K. Indemnification. To the extent legally possible, the HOME Awardee 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 HOME Awardee, its employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, HOME Awardee shall,upon County's tender, defend the same at the HOME Awardee's sole cost and expense,promptly satisfy any judgment adverse to County or to County and the HOME Awardee jointly, and reimburse the County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by the County. L. Subcontracting. The HOME Awardee shall not subcontract work under this Agreement, in whole or in part, without the County's prior written approval. The HOME Awardee 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 HOME Awardee specified in this contract. Notwithstanding County's approval of a subcontractor, the HOME Awardee shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor. The HOME Awardee shall indemnify, defend, and hold County harmless from all claims of its contractors. By executing this Agreement the HOME Awardee affirms that they and any subcontractors of the HOME Awardee are and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. The HOME Awardee also certifies that they have not been identified, and have not utilized the services of any agent or subcontractor, on the list created by the State Treasurer pursuant to G.S. § 147- 86.58. M. No Joint Venture or Agency. The County and the HOME Awardee each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County and the HOME Awardee under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. N. Effect of Waiver or Forbearance.No failure by the County to insist upon the strict performance of any term or condition of this Agreement, or to exercise any right or remedy upon the breach by the HOME Awardee 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 the HOME Awardee be a waiver by the County of its rights and remedies with respect to that or any other breach. O. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of North Carolina. Any litigation arising out of 10 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B this Agreement shall be brought in courts sitting in North Carolina, with venue in Orange County. P. Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by the fact that for any reason any other provision may be invalid or unenforceable in whole or in part. If any provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be or become invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. The County and the HOME Awardee 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 HOME Awardee cannot agree, they shall apply to a court of competent jurisdiction to substitute such provision as the court deems reasonable and judicially valid, legal and enforceable. Such provision determined by the court shall automatically be deemed part of this Agreement ab initio. Q. Equal Opportunity. The HOME Awardee shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, political affiliation or belief, age, handicap, or familial status in the implementation of the Project. R. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. S. Gender; Singular and Plural. As used herein, the neuter gender includes the feminine and masculine. The masculine includes the feminine and neuter, and the feminine includes the masculine and neuter and each includes a corporation, partnership or other legal entity when the context so requires. The singular number includes the plural and vice versa, whenever the context so requires. T. Recording. The parties hereto agree that upon notice to the other and at its own cost and expense, a party may record this Agreement in the Office of Register of Deeds for Orange County. U. Compliance with Laws. To the extent applicable, each party hereto agrees to comply with all laws, ordinances and regulations affecting the Property from and after the date hereof. Without limiting the generality of the foregoing, the HOME Awardee 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. 11 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B V. Publicity; Signage. The HOME Awardee agrees to provide such publicity with respect to the County's participation in the development of the Property as the County shall reasonably require. Any signage at the Property shall acknowledge the County's role and contribution. W. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute on and the same instrument. X. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County or the HOME Awardee 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 HOME Awardee or any of their respective officers, agents or employees by any third party. Y. Performance of Government Functions.Notwithstanding anything in this Agreement which may be to the contrary, nothing contained in this Agreement shall in any way stop, limit or impair the County from exercising or performing any regulatory,policing or governmental powers or functions with respect to the Property including, without limitation, inspection of the Property in the performance of such functions. Z. Duration of Agreement. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. AA. Training. The HOME Awardee agrees to attend training and/or technical assistance workshops provided by the County related to the administration of this Agreement and that the Department of Housing and Community Development deems mandatory. BB. Entire Agreement and Signatures: The parties have read this Agreement and agree to be bound by all of its terms, and further agree that it constitutes the complete and exclusive statement of the Agreement between the parties unless and until modified in writing and signed by the parties. Modifications may be evidenced by telefacsimile signature. This Agreement together with any amendments or modifications may be executed electronically. All electronic signatures affixed hereto evidence the consent of the Parties to utilize electronic signatures and the intent of the parties to comply with Article I IA and Article 40 of North Carolina General Statute Chapter 66. [SIGNATURES ON FOLLOWING PAGE] 12 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B 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, NC, INC. DocuSigned by: 7ennifer Player.� pw EEF221ABHF74543y: (Print Name), President ORANGE COUNTY, NORTH CAROLINA DocuSigned by: -mHwmmersley, County Manager This document has been pre- audited in accordance with the N.C. Local Government and Fiscal Control Act. DocuSigned by: rq 0., B"%If gon, Finance Director Approved as to form and legality DocuSigned by: QWAL Attu, 1�)S(b �Afiqiv,AMatiewTosco, Staff Attorney 13 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B EXHIBIT A SCOPE OF SERVICES HOME funds will be used for second mortgage funding for at least six(6)homes within Orange County in the Fairview Community in Hillsborough and Northside Neighborhood in Chapel Hill using FY 2019-20 funds. All homes will be sold to qualified first-time homebuyers earning between 30% and 80% of HUD area median income. 14 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B EXHIBIT B PROPOSED BUDGET Proposed Uses of Funds Down Payment Assistance 2019-20 (at least six second mortgages) $ 181,392 Total Uses of Funds $ 181,392 Sources of Funds Orange County HOME funds $ 181,392 Total Sources of Funds $ 181,392 Habitat 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"). 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 actions which do not result in a change in the Project 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 being added, there is no increase to the Total Renovation Cost specified in the above budget, and there are only minor changes to the Plans and Specifications. 15 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B EXHIBIT C Prepared by and return to: Anne Marie Tosco, 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 HOME Investment Partnership Program funds. RECITALS: WHEREAS, the Orange County HOME Consortium has designated $181,000 in FY 19- 20 HOME funds to provide funding for second mortgage assistance for at least six (6)homes located in Orange County, specifically in the Fairview Community in Hillsborough and the Northside Neighborhood in Chapel Hill, which are hereinafter designated collectively as "the Property" or"the Properties"; and WHEREAS, Orange County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated July 1, 2011, 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. 3 5 3 5( d.) et. seq.) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, the HOME Awardee is constructing the housing units on the Properties for first-time homebuyers earning between 30% and 80% of HUD area median income described in the HOME Awardee's FY 19-20 Application for Funding, Orange County HOME Program dated, February 2, 2019, which is hereby incorporated into this Agreement as if written herein, and hereafter referred to as "The Project."A copy of the HOME Program Applications are on file in the office of the Orange County Housing and Community Development Department; and 16 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B WHEREAS, the HOME Awardee intends to assist at least six (6) first-time homebuyers, who earn between 30% and 80% of HUD area median income, to purchase the housing units at the Properties; and WHEREAS, a first-time homebuyer for the purposes of this program is defined as any low income household that has not owned a home within the past three (3) years including households living in manufactured housing not permanently affixed to a foundation, or owner- occupants of homes not feasible for rehabilitation and has lived or worked in Orange County for at least one year prior to the home purchase; WHEREAS, notwithstanding any provision of this Agreement, the County and the HOME Awardee hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory completion of an environmental review and receipt by Orange County of a Release of Funds from the U.S. Department of Housing and Urban Development under 24 CFR Part § 58 if applicable. The parties further agree that the provision of such funds to the project is conditioned on Orange County's determination to proceed with, modify, or cancel the project based on the results of a subsequent environmental review. WHEREAS,Orange County requires and Owner agrees to the requirement, as a condition precedent to the awarding of Orange County HOME Investment Partnership 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 Orange County HOME Investment Partnership Program and the County's Long-Term Affordability Policy. 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: 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 constructed and the last of the dwelling units is occupied by a low-income family), for owner-occupied housing to families earning between 30% and 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: 17 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B 1. During the HOME Affordability Period of years, and subject to the requirements of the DEVELOPMENT AGREEMENT between Habitat and County dated , which is hereby incorporated by reference and made a part of this Declaration, and the HOME Investment Partnership Program and this Declaration, Owner may sell, transfer, or exchange the Property to a qualified low-income buyer; 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 and the HOME INVESTEMENT PARTNERSHIP PROGRAM. 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 and the HOME INVESTMENT PARTNERSHIP PROGRAM. A copy of the DEVELOPMENT AGREEMENT is on file with the Office of the Clerk to the Orange County Board of County Commissioners.Upon expiration of the HOME Affordability Period and prior to expiration of the ninety-nine (99) years from Project Completion, Owner may sell, transfer, or exchange the Property to a Qualified Buyer as defined in the County's Long-Term Affordability Policy or 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 County's Long-Term Affordability Policy. 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 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 HOME 18 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B Investment Partnership Program affordability restrictions or Orange County Long-Term Affordability Policy 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 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. 19 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS A. The following provisions apply throughout the duration of the HOME Affordability Period, which is years. I. Owner shall ensure all buyers occupy the Property as their principal residence throughout the HOME Affordability Period. In the event the original homebuyer no longer occupies the unit as their principal residence (i.e., the unit is rented or vacant) during the HOME Affordability Period, the homeowner will be in violation of the terms of the HOME assistance, and the County may enforce the terms of the DEVELOPMENT AGREEMENT and/or the Homeowner Written Agreement between Owner and a buyer to require repayment of any outstanding HOME funds invested in the Project dwelling unit. The amount subject to repayment is the total amount of HOME funds invested in the Project dwelling unit (i.e., any HOME development subsidy to the developer plus any HOME direct assistance provided to the homebuyer)minus any HOME funds already repaid(i.e.,payment of principal on a HOME loan). Noncompliance with principal residency requirements by a homebuyer is not considered a transfer and is not subject to resale provisions. 2. Resale Provisions During HOME Affordability Period. If a buyer sells, transfers, or otherwise disposes of their interest in the Property during the HOME Affordability Period, they must contact the County or its designated representative in writing at least thirty(30) days prior to selling, transferring, or disposing of their interest in the Property. Subsequent purchasers of the Property must be a low-income household, i.e., 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 sale or transfer, and use the Property as their principal residence. The County shall ensure a fair return on investment for the original homebuyer and that the sale prices of the Property be Affordable to the subsequent purchaser; for purposes of this subsection, "Affordable" is defined as limiting the Principal, Interest, Taxes and Insurance (PITI) amount to no more than 30% of the new purchaser's monthly income. The County shall calculate the fair return on investment by: (1) determining the amount of market appreciation, if any, realized over the ownership term by calculating the difference between the initial appraised value of the Property at purchase and the current appraised value of the Property at resale, which figure shall serve as the basis for calculating the fair return on investment, and(2) multiplying the basis by the Federal Housing Finance Agency's Housing Price Index (HPI) to determine the fair return to the homeowner, which HPI is available at https://www.fhfa.gov/DataTools/Tools/Pages/HPI-Calculator.aspx. The County shall calculate the resale price to the next homebuyer,by adding the fair return on investment to the homeowner to the original affordable price of the home at purchase by the original buyer. In the event the resale price required to provide a fair return exceeds the affordability to a range of low-income buyers, additional HOME funding will be provided to the subsequent buyer based on the level of funds required to make the unit Affordable. 20 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B B. Following expiration of the HOME Affordability Period and prior to expiration of ninety (99) years from the date of Project Completion, the following provisions shall apply: 1. Rights of Refusal a. 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. b. Right of First Refusal. If Owner contemplates a Transfer to any entity other than an agency with similar interest in affordable housing serving families with incomes not exceeding 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, which non-profit fund, foundation, or corporation of like purposes must have established its tax-exempt status under Section 501(c)(3)of the Internal Revenue Code, then the Owner shall send to Orange County, at the address noted in the Notice section of this Declaration, not less than 90 days prior to the contemplated closing date of the Transfer, a"Notice of Intent to Sell ("Notice")." This Notice 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 elects to exercise its said right of refusal, it shall notify the Owner 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." i. Sales After Failure to Exercise Rights of Refusal. If Orange County does not advise Owner in a timely fashion of its intent to purchase the Property, then owner shall be free to transfer the property in accordance with the provisions in this Section. ii. Assignability. Orange County may assign its right of first refusal without Owner's consent. 3. Resale and Recapture Provisions a. 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. b. However, if the property is sold during the term of affordability, the Right of First Refusal provision of the New and Existing First-Time Homebuyer Program portion of 21 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B the County's Long-Term Housing Affordability Policy must be followed and the Net Sales Proceeds (sales price less: (1) selling cost, (2)the unpaid principal amount of the original first mortgage and (3) the unpaid principal amount of the initial County contribution and any other initial government contribution secured by a deferred payment promissory note and deed of trust) or"equity"will be divided 50150 between the Seller of the Property and the County. c. In the event that Net Sales Proceeds are insufficient to repay the County Funds, including principal plus interest, the amount to be recaptured shall be any funds remaining after payment of all senior non-County debt and closing costs. In no event shall the borrower be required to use funds other than net proceeds to repay the County Funds. d. The recapture provisions shall remain in effect following the expiration of the HOME Affordability period until the expiration of 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 or of the HOME Investment Partnership Program. 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 the HOME Investment Partnership Program, AND BY REASON THEREOF, OWNER, IN CONSIDERATION FOR RECEIVING HOME INVESTMENT PARTNERSHIP 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. SECTION 6 MISCELLANEOUS A. Severability. The invalidity of any clause, part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. 22 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B 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. (Print Name) (Title) ATTEST: Secretary NORTH CAROLINA 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 23 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B is 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 . Notary Public My commission expires: 24 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B Attachment A Legal Description 25 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B EXHIBIT D Prepared By and after recording return to: Anne Marie Tosco, Orange County Attorney's Office, P.O. Box 8181, Hillsborough,NC 27278 NORTH CAROLINA ORANGE COUNTY DEED OF TRUST AND SECURITY AGREEMENT THIS DEED OF TRUST, AND SECURITY AGREEMENT ('Deed of Trust") is made as of this day of , 20 by and among whose address is ("Borrower"), John L. Roberts whose address is P.O. Box 8181, Hillsborough North Carolina, 27278 ("Trustee"), and Orange County whose street address is 200 S. Cameron Street, Hillsborough,North Carolina 28278 ("Lender"). WHEREAS,Borrower owes Lender for money advanced or to be advanced in the principal sum of (the "Loan") as evidenced by a promissory note of even date herewith(the "Note"),the final payment of which is due,together with interest thereon, as provided in the Note; and WHEREAS, it has been agreed that the Loan will be made subject to the terms and Conditions and in reliance upon the covenants contained in the Note, this Deed of Trust, and, the following documents: (Check those which apply) (Hereinafter referred to either singularly or collectively, as the 'Loan Documents') X_ Development Agreement between Habitat For Humanity Of Orange County, NC, Inc and Lender dated 26 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B X_ Declarations of Restrictive Covenants between Habitat For Humanity Of Orange County, NC, Inc and Lender dated X Promissory Note from Borrower to the Lender dated the same date as this Deed of Trust and Security Document. X Homeowner Written Agreement from Borrower to Habitat for Humanity of Orange County,NC Inc dated This Deed of Trust secures to Lender: (a)The repayment of the debt evidenced by the Note, with interest as provided in the Note, and all renewals, extensions and modifications of the Note; (b) the payment of all other sums with interest as provided in the Note, advanced to protect the security of this Deed of Trust; and(c)performance of Borrower's covenants and agreements under the Loan Documents. NOW, THEREFORE, in consideration of the Loan, and other valuable consideration, the receipt of which is hereby acknowledged. Borrower hereby grants and conveys to Trustee his successors and assigns all buildings, improvements, the equipment and all other real and personal property, of every kind and nature now or hereafter attached to or used in connection with the premises situated on real property located in Orange County, North Carolina, said real property being more particularly described in Attachment "A", attached hereto and made a part hereof by this reference, including by way of example and not limitation, all plumbing,heating, lighting and air conditioning fixtures,refrigerators,ranges,hot water heaters,draperies and carpets(hereinafter collectively referred to as the "Premises"). TO HAVE AND TO HOLD said Premises with all privileges and appurtenances thereunto belonging to Trustee, his successors and assigns,upon the trusts, terms and conditions and for the purposes hereinafter set out. Borrower covenants with Trustee that Borrower is seized of and has the right to convey the Premises, in fee simple; that the Premises are free and clear of all encumbrances, except as described on Attachment "B" attached hereto and made a part hereof by this reference; and that Borrower will warrant and defend title to the Premises against the lawful claims of all persons whomsoever. Upon payment in full of all sums secured by this Deed of Trust, Lender shall cancel this Deed of Trust, of record at the request and cost of Borrower. If,however,there shall be a default in any of the terms,covenants or conditions of the Loan Documents or any advance secured hereby, and such default is not made good within any cure period specifically granted in the Loan Documents, if any, all sums owing to Lender under the Loan Documents shall immediately become due and payable, without notice, at the option of Lender; and, on request of Lender, Trustee shall foreclose this Deed of Trust by judicial proceedings or, at Lender's election, Trustee shall sell (and is hereby empowered to sell) the Premises at public sale to the last and highest bidder for cash (free of any equity of redemption, homestead, dower, curtesy or other exemption, all of which are expressly waived by Borrower) after compliance with applicable North Carolina laws relating to foreclosure sales under power of sale and shall execute a conveyance in fee simple to the successful purchaser at said sale. The proceeds of any such sale shall be applied in the manner and in the order prescribed by applicable North Carolina laws. The Trustee's commission shall be five percent(5%) of the gross sales price 27 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B for completed sale for all services performed by him hereunder. Lender may bid and become the purchaser at any sale under this Deed of Trust.At any such sale, Trustee may at its election require the successful bidder to immediately deposit with Trustee cash or certified check in an amount equal to all or any part of the successful bid and notice of such requirement need not be included in the advertisement of the notice of such sale. Borrower covenants with Trustee and Lender(and their respective heirs, successors and assigns) as follows: 1. Taxes. Borrower shall pay all taxes, charges and assessments,which may become a lien upon the Premises before any penalty or interest accrues thereon and shall promptly deliver to Lender official receipts evidencing payment thereof. 2. Insurance. Borrower shall continually maintain insurance against loss by fire, hazards included within the term "extended coverage", and such other hazards, as Lender may require, including flood, rent loss and business interruption, in such manner and in such companies as Lender may from time to time require on the improvements now or hereafter located on the Premises and in such amounts satisfactory to Lender, but at no time less than the outstanding indebtedness secured by this Deed of Trust and any other lien against the Premises,plus an amount sufficient to prevent any co-insurance liability of the Borrower or Lender,Borrower shall promptly pay all premiums when due and deliver official receipts to Lender evidencing such payment. All insurance policies and renewals thereof shall be held by Lender and have attached thereto a loss payable clause in favor of and in form acceptable to Lender and provide that no such policy can be canceled without ten (10) days prior notice to Lender or materially amended (including any reduction in the scope or limits of coverage) without Lender's prior written approval. All policies of insurance shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act of negligence of Borrower which might otherwise result in forfeiture of such insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim or deductions against the Borrower. In the event of loss, Borrower shall give immediate notice by mail to Lender who may make proof of loss if not made promptly by Borrower. Each insurance company is hereby directed to make payment for such loss directly to Lender (instead of to Borrower and Lender jointly). Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied, at Lender's option, to the debt secured by this Deed of Trust or to the repair or restoration of the Premises. If the insurance proceeds are applied to the debt, it may be applied upon the portion last falling due or in such other manner as Lender may desire. In the event of foreclosure of this Deed of Trust or other transfer of title to or assignment of the Premises in extinguishment of the indebtedness secured hereby, all right, title and interest of Lender in any such insurance policies then in force shall pass to the grantee of the Premises. 28 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B 3. Condemnation Award. Any award for the taking of or damages to all or any part of the premises or any' interest therein upon the lawful exercise of power of eminent domain shall be payable to Lender who may apply the sums so received to the portion of the debt hereby secured last falling due or in such other manner as Lender may desire, subject to applicable law. 4. Repairs. Borrower will keep the Premises in good order and repair(reasonable wear and tear excepted) and will not commit or permit any waste or other loss whereby the value of the Premises might be impaired. 5. Compliance with Laws. Borrower shall promptly comply with any applicable legal requirements of the State of North Carolina or other governmental entity,agency or instrumentality relating to the use or condition of the Premises. 6. Advancements by Lender. If Borrower shall be in default in the timely payment or performance of any obligation under the Loan Documents,Lender, at its option,may pay the sums for which Borrower is obligated. Further, Lender, at its option, may advance, pay or expend such sums as may be proper and necessary for the protection of the Premises and the maintenance of this trust, including but not limited to sums to satisfy taxes or other levies, and assessments and/or liens, to maintain insurance (including title insurance) and to make repairs. Any amounts so advanced, paid or expended shall be deemed principal advances secured by this Deed of Trust (even though when added to other advances the sum thereof may exceed the face amount of the Note), shall bear interest from the time advanced, paid or expended at the rate of ten percent per year or such higher rate as may be prescribed in the Note, and be secured by this Deed of Trust and its payment enforced as if it were a part of the original debt. Any sum expended, paid or advanced under this paragraph shall be at Lender's sole option,shall be due and payable on demand and shall not constitute a waiver of any default or right arising from the breach by. Borrower or any covenant or agreement contained in the Loan Documents. 7. Attorney's Fees. If Borrower shall default in its obligations under the Loan Documents and in the opinion of Lender it becomes necessary or proper to employ an attorney to assist in the enforcement or collection of the indebtedness owed by Borrower to Lender, or to enforce compliance by Borrower with any of the provisions of the Loan Documents,or in the event Lender or Trustee voluntarily or otherwise shall become a party or parties to any suit or legal proceeding(including a proceeding conducted under the Bankruptcy Act), then in order to protect the Premises herein conveyed,to protect the lien of this Deed of Trust,to enforce collection of the indebtedness owed by. Borrower to Lender, or to enforce compliance by Borrower with any of the provisions of the Loan Documents, Borrower agrees to pay reasonable attorney's fees and all the costs that may reasonably be incurred, and such fees and costs, shall be secured by this Deed of Trust and its payment enforced as if it were a part of the original debt, Borrower shall be liable for such reasonable attorney's fees and costs whether or not any suit or proceeding is commenced. Reasonable attorney's fees shall be limited to fees for expenses actually incurred and time actually spent at standard hourly rates. 8. Substitute Trustees. Lender shall have the unqualified right to remove Trustee and to appoint one or more substitute or successor trustees by instruments filed for registration in the Office of the Register of Deeds where this Deed of Trust is recorded. Any such removal or 29 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B appointment may be made at any time without notice, without specifying any reason therefore, and without any court approval.Any such appointee shall become vested with title to the Premises and with all rights, powers and duties conferred upon the Trustee herein in the same manner and to the same effect as though he were named herein as the original Trustee. 9. Anti-Marshalling Provision. The right is hereby given by Borrower to Trustee and Lender to make partial release or releases of security hereunder (whether or not such releases are required by agreement among the parties)agreeable to Trustee and Lender without notice to or the consent,approval or agreement of other names and interest,including junior lienors and purchasers subject to this which partial release or releases shall not impair in any manner the validity of or priority of this Deed of Trust on the Premises remaining hereunder, nor release Borrower from liability for the indebtedness hereby secured. Notwithstanding the existence of any other security interests in the Premises held by Lender or by any other party, Lender shall have the right to determine the order in which any or all of the Premises shall be subjected to the remedies provided herein. Lender shall have the right to determine the order in which any or all portions of the indebtedness secured hereby are satisfied from the proceeds realized upon the exercise of the remedies provided herein. Borrower and any party who consents to this who has actual or constructive notice hereof hereby waives any and all right to require the marshaling of assets in connection with the exercise of any of the remedies permitted by applicable law or provided herein. 10. Additional Financing Prohibited. Borrower may not pledge or encumber the Premises herein conveyed without first obtaining Lender's written consent. 11. Uniform Commercial Code Security Agreement. This Deed of Trust is intended to be a security agreement with respect to items referred to herein which may be subject to a security, interest pursuant to the Uniform Commercial Code, and Borrower hereby grants Lender a security interest in said items. Borrower agrees that Lender may file this Deed of Trust as a financing statement, and at Lender's request agrees to execute such financing statements, extensions or amendments as Lender may require to perfect a security interest with respect to said items. In the event of default, Lender shall have, in addition to its other remedies, all rights and remedies provided for in the Uniform Commercial Code as enacted in North Carolina. 12. Events of Default. Any of the following shall constitute an "Event of Default" hereunder: a. The failure to make when due any payment, whether of principal or interest under the Note; b. The failure to make any other payment to Lender required by the Loan Documents within ten(10) days after notice from Lender directing Borrower to make the payment, but in any event before the same is past due; c. Any covenant, representation, warranty made by Borrower or material Information supplied to the Lender proves to be materially false or misleading when made or given; the transfer of all or part of the Premises (including a beneficial interest) without Lender's prior written consent; 30 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B d. The death, dissolution, merger, consolidation or termination of existence of Borrower or any guarantor hereof or the transfer of any beneficial interest in Borrower without Lender's prior written consent(if Borrower is a married couple, the death of Borrower means the death of the survivor of the married couple); e. The application for the appointment of a receiver for Borrower or any guarantor; or the filing of a petition under any provisions of the Bankruptcy Code or Act by Borrower or any guarantor; or the filing of a petition under any provisions of the Bankruptcy Code or Act against Borrower or guarantor which is not dismissed within 30 days; or the filing of an answer in an involuntary proceeding admitting insolvency or inability to pay debts; or any assignment for the benefit of creditors by or against Borrower or any guarantor; or the attachment, execution or other judicial seizure of any portion of Borrower's or any guarantor's assets which is not discharged within ten(10) days; or f. The failure of any Borrower to perform any other non-monetary obligation or condition of the Loan Documents within 30 days after notice from Lender; provided that if such default cannot reasonably be cured within 30 days, it shall not constitute an Event of Default as long as Borrower is diligently pursuing such cure unless it is not cured within 180 days after the original notice of default from Lender. Upon any Event of Default, the entire principal sum evidenced by the Note and accrued but unpaid interest hereon may, at the sole option of Lender, be declared at once due and payable, time being of the essence of this obligation. Failure of Lender to exercise this option in the event of any Event of Default shall not constitute a waiver of the right of Lender to exercise the same in the event of a subsequent Event of Default. 13. Use of Premises. Unless required by applicable law or unless Lender has otherwise agreed in writing, Borrower shall not allow changes in the use for which all or any part of the Premises was intended at the time this Deed of Trust was executed. Borrower shall not initiate or acquiesce in a change in the zoning classification of the Premises without Lender's prior written consent. 14. Inspection. To assure and protect its rights under this Deed of Trust, Lender shall have the fight to access and inspection of the Premises at reasonable times and upon reasonable notice to Borrower. 15. Application of Payments. All payments and other sums of money received by Lender shall be applied by Lender first to amounts due Lender for Advancements or Attorney's Fees pursuant to this Deed of Trust, then to interest payable of the Note, then to the principal of the Note, then to other payments due under the Loan Documents including equity payments provided for in the Development Agreement and the Declaration of Restrictive Covenants. 16. Environmental Issues. a. Borrower warrants that, (i) to the best of Borrower's knowledge, the Premises and the 31 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B land described in Attachment A attached hereto (the "Land") are free of Hazardous Materials, (ii) neither Borrower, nor to the best of Borrower's knowledge, anyone else connected with the Premises or the Land has received any notice from any governmental agency, entity or other person with regard to Hazardous Materials, from or affecting the Premises or the Land, and (iii) to the best of Borrower's knowledge, there is not now pending or threatened any action, suit, investigation or proceeding against Borrower relating to the Premises or the Lender (or against any other party relating to the Premises or the Land) seeking to enforce any right or remedy under any of the Environmental Laws. b. Borrower covenants and agrees that (i) the Premises shall be kept free of Hazardous Materials, (ii) Borrower shall not cause nor permit the presence, use, disposal, installation, generation, manufacture, transportation, storage, release or treatment of Hazardous Materials in or on the Premises of the land and (iii) Borrower shall at all times comply with and ensure compliance by all other parties with all applicable Environmental Laws relating to or affecting the Premises and the Land and shall keep the Premises and the Land free and clear of any liens imposed pursuant to any applicable Environmental Laws. The preceding sentence shall not apply to the presence, use or storage on the Premises of small quantities of Hazardous Materials that are generally recognized to be appropriate to normal residential use and to maintenance of the Premises. c. Borrower shall immediately give Lender written notice of any investigation, claim, demand, lawsuit or other action by any party involving the Premises or the Land and any Hazardous Materials of Environmental Law of which Borrower has actual knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Materials affecting the Premises or the Land is necessary, Borrower shall promptly take all necessary remedial actions in accordance with all applicable Environmental Laws. d. Borrower hereby agrees to indemnify Lender and hold Lender harmless from and against any and all losses, liabilities, damages and claims of any and every kind whatsoever paid, incurred or suffered by or asserted against Lender for, with respect to, or as a direct or indirect result of (i)the presence on or release from the Premises or the Land prior to the cancellation of this Deed of Trust of any Hazardous Material, regardless of whether or not caused by or within the control of Borrower, (ii) the violation of any Environmental Laws prior to the cancellation of this Deed Of Trust relating to or affecting the Premises or the Land,whether or not caused by or within the control of Borrower, (iii) the failure of Borrower to comply fully with the terms and provisions of this section, or 32 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B (iv) any warranty or representation made by Borrower in this section being false or untrue in any material respect. e. For purposes of this Deed of Trust: (i) "Hazardous Material" means petroleum products, any flammable explosives, radioactive materials, asbestos or any material containing asbestos, and/or any hazardous, toxic or dangerous material defined as such in or for the purpose of the Environmental Laws. (ii) "Environmental Laws" means the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, any "Superfund" or "Superlien" law, or any other federal state or local law, regulation or decree regulating relating to or imposing liability standards of conduct concerning any petroleum products, any flammable explosives, radioactive materials, asbestos or ally material containing asbestos, and/or hazardous,toxic or dangerous material, as may now or at any time hereafter be in effect. f. The obligations and liabilities of Borrower under this section shall survive the foreclosure of the Deed of Trust, the delivery of a deed in lieu of foreclosure, the cancellation of the Note, or the sale or alienation of any part of the Premises or the Land. 17. Statute Inapplicable. The provisions of § 45-45.1 of the North Catalina General Statutes, or any similar statute hereafter enacted in replacement or substitution thereof shall be inapplicable to this Deed of Trust. 18.Definition.As used herein,the terms`Borrower,""Trustee","Lender"other terms shall refer to the singular,plural,neuter, masculine and feminine as the context may require and shall include,be binding upon, and inure to the benefit of their respective heirs, successors, legal representatives, and assigns. 19. Future Advances(Check if applicable). If this paragraph is checked,this Deed of Trust is given wholly or partially to secure future obligations which may be incurred hereunder pursuant to the provisions of Sections 45-67, et seq., of the North Carolina General Statutes; the amount of present obligations secured hereunder is and /100 Dollars ($ ); the maximum amount (including present as well as future advances) to be advanced hereunder shall not exceed the face amount of the Note, provided such future obligations are incurred not later than ( ) years after the date of the Note; and no execution of a written instrument or notation shall be necessary to evidence or secure any future advances made hereunder. [SIGNATURE PAGE TO FOLLOW] 33 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B IN WITNESS WHEREOF,Borrower has caused this instrument to be duly signed, sealed and delivered the day and year first above written. BORROWER COUNTY OF STATE OF NORTH CAROLINA I, a Notary Public, do hereby certify that personally appeared before me this day and acknowledged the due execution of this Deed of Trust. WITNESS my hand and official stamp or seal, this day of , My Commission expires: Notary Public (Seal/Stamp) 34 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B Attachment A Property Description 35 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B Attachment B Permitted Encumbrances 36 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B EXHIBIT E PROMISSORY NOTE DEFERRED PAYMENT LOAN Date: Amount: ($ ) 1. Loan. This Note evidences a loan made by Lender to Borrower under a Development Agreement between Habitat For Humanity Of Orange County,NC, Inc. and Orange County, North Carolina, pursuant to the Orange County HOME Investment Partnership Program and the Orange County Long-Term Housing Affordability Policy. The loan is secured by a Deed of Trust, (the "Deed of Trust")dated the same date as this Note,and which is a lien on the property described in the Deed of Trust(the "Property"). The Trustee is John Roberts.All terms of the Deed of Trust are incorporated in this Note by reference, and any default under the Deed of Trust is a default under this Note. 2. Borrower's Promise to Pay. In return for a loan received (the "Loan"), ("Borrower") promises to pay DOLLARS and CENTS(U.S. $ )or so much of the loan as may have been disbursed and remain unpaid, with interest, if any,until paid, to Orange County,North Carolina("Lender"). Amounts advanced by Lender to protect its interest in the Property securing this Note, if any, shall be added to the principal amount owing under this Note, shall accrue Interest at the Default Rate from the date of advance until paid and shall be due and payable on demand. 3. Interest Rate. Interest shall accrue on the unpaid principal balance at a rate of zero percent (0%)per year. 4. Payments. No monthly principal or interest payments are required. All unpaid principal amount of the loan shall be due and payable on the day of the earlier of the following dates (the "Due Date"): a. The date the Property is sold or transferred by the Borrower,whether voluntarily or involuntarily or by operation of law, other than to a qualified assumer under Paragraph 5; b. The date a default occurs under the terms of any loan secured by a lien to which the Deed of Trust is subordinated; C. Any date within 40 years after the date of recording of the last deeds of trust securing the Lender's investment in the dwelling units that are the Project described in the Development Agreement, if on or prior to that date, the Property ceases to provide affordable housing, as defined in the Development Agreement. 37 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B 5. Assumptions. The Note may be assumed only on the prior written approval of the Lender. All terms and conditions of the Declaration of Restrictive Covenants, this Promissory Note and the Deed of Trust shall remain in effect for any successor to Borrower and any Successor shall assume all duties and obligations to the Borrower. 6. Place of Payments. Borrower shall make payments to Lender at Orange County Housing and Community Development, Post Office Box 8181, Hillsborough, NC 27278, or 200 S. Cameron Street,Hillsborough,NC 27278 or such other address as Lender may notify Borrower. 7. Prepayments.Borrower may make payments of principal, either in whole or in part, at any time before they are due. 8. Late Charges. If this Note is paid in installments, and Lender has not received the full amount of any installment within 15 days after it is due, Borrower shall pay a late charge of 4% of the amount overdue. 9. Default. a. If Borrower dues not pay the full amount of principal and interest due under this Note within ten (10) days from the due date, this Note will be in default. If, after the applicable cure period provided, if any, there exists an Event of Default under any other document entered into in connection with the Loan; this Note will be in default. b. If this Note is in default, Lender, without further notice to Borrower, may require Borrower to immediately pay the full amount of the principal which has not been paid, any accrued interest and other sums due under this Note. Even if, at a time the Note is in default, Lender does not require Borrower to pay immediately in full, Lender will still have the right to do so at a later time if the default is continuing or if the Note is in default at a later time. If this Note is in default,Lender may employ an attorney to enforce Lender's rights and remedies,Borrower agrees to pay Lender for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law.Thos7e expenses include,for example,reasonable attorneys'fees based on time and expenses actually expended at normal hourly rates. c. If this Note is in default the sums due under this Note shall bear interest at ten percent (10%)per year(the "Default Rate"). 10. Waiver by Lender. Lender's rights and remedies as provided in this Note or any other document executed in connection with the Loan shall be cumulative and may be pursued singly, successively,or together. The failure to exercise any right or remedy will not be a waiver or release of such right or remedy or the right to exercise any of them at another time. 11. Joint and Several Liability. If more than one person or entity signs this Note, each person or entity is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person or entity who is a guarantor, surety 38 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B or endorser of this Note is also obligated to do these things. Any person or entity who takes over these obligations, including the obligations of a guarantor, surely or endorser of this Note, is also obligated to keep all of the promises made in this Note. The Lender may enforce its rights under this Note against each person or entity individually or against all such persons or entities together. 12. Waivers. Borrower and any other Person or entity who has obligations under this Note waives the rights of protest, presentment, notice of dishonor and notice of acceleration of maturity. "Presentment" means the right to require Holder to demand payment of amounts due. "Notice of dishonor"means the right to require Holder to give notice to other persons that amounts due have not been paid. Borrower and any other person or entity who has obligations under this Note agree that their obligations shall continue even if Lender has agreed to the release, modification or substitution of any security for this Note or to any extensions of time for the payment of principal and interest under this Note. 13. Related Documents. The following documents have also been executed in connection with the Loan (Check those which apply): X Development Agreements between Habitat For Humanity Of Orange County,NC,Inc. and Lender dated X Declarations of Restrictive Covenants between Habitat For Humanity Of Orange County, NC, Inc., and Lender dated X Deed of Trust from Borrower to John L. Roberts, Trustee for Lender beneficiary, dated the same date as this Note. X Homeowner Written Agreement from Borrower to Habitat for Humanity of Orange County,NC Inc dated The terms of those documents listed above are incorporated in this Note. Default under any of the terms of the documents listed above shall be a default under this Note. 14. Governing Law. This note shall be governed and construed by the laws of the State of North Carolina. 15. Assignment. The Borrower consents to the assignment of this Note transferring the Lender's right, title and interest. IN WITNESS WHEREOF, Borrower has caused this instrument to be duly signed, sealed and delivered the day and year first above written. BORROWER 39 DocuSign Envelope ID:837C993F-4D81-4CE1-8185-B2C0610EDD8B COUNTY OF STATE OF NORTH CAROLINA I, a Notary Public, do hereby certify that ,personally appeared before me this day and acknowledged the due execution of this Promissory Note. WITNESS my hand and official stamp or seal, this day of , My Commission expires: Notary Public (Seal/Stamp) 40