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HomeMy WebLinkAbout027060 RES - 11/15/2006Pagel of 3 RESOLUTION APPROVING THE EXECUTION OF AN AFFORDABLE HOUSING PROGRAM AGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION, THE CITY OF CORPUS CHRISTI, AND JOHN MIKULENCAK DBA EXTREME HOMES OF TEXAS TO ALLOW THE CORPORATION TO GRANT $160,067 OF AFFORDABLE HOUSING FUNDS TO EXTREME HOMES OF TEXAS FOR NEW CONSTRUCTION HOMEBUYER ASSISTANCE, AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE PROGRAM AGREEMENT ON BEHALF OF THE CITY. WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's Texas Revised Civil Statutes (Development Corporation Act of 1979) empowered local communities with the ability to adopt an optional local sales and use tax as a means of improving the economic health and prosperity of their citizens; WHEREAS, on November 5, 2002, residents of the City of Corpus Christi passed Proposition 2, New and Expanded Business Enterprises, which authorized the adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of one - eighth of one percent to be imposed for 15 years; WHEREAS, in the same election, the residents of the City passed Proposition 2B, Affordable Housing, which authorized the use of a portion of the sales and use tax approved under Proposition 2 for affordable housing, up to $500,000 annually, so long as there are projects for which the amount can reasonably be used; WHEREAS, the 1/8 cent sales tax authorized by passage of Proposition 2 and allocated under Proposition 2B for affordable housing was subsequently enacted by the City's City Council ( "City Council ") and filed with the State Comptroller of Texas, effective April 1, 2003, to be administered by the Corpus Christi Business and Job Development Corporation's Board of Directors ( "Board "); WHEREAS, the Board issued a request for proposals for affordable housing projects as that term is defined in Title 42 of the United States Code, Section 12745, in accordance with the requirement in the Texas Development Corporation Act of 1979; WHEREAS, Extreme Homes of Texas submitted a proposal to the Board to request $250,000 in forgivable loan grant funds for down payment and closing cost assistance; and WHEREAS, the Board has determined that it is in the best interests of the residents of the City of Corpus Christi that Extreme Homes of Texas be awarded affordable housing funds in the amount of $160,067 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: H:\ LEG- DIR1Shared\ GaryS\ agenda12006 \11- 141RES- ExtremeHomes.doc 0 270000 Page'2of3 SECTION 1 That the City Council of the City of Corpus Christi, Texas, approves the execution of an Affordable Housing Program Agreement between the Corpus Christi Business and Job Development Corporation ( "Corporation "), the City of Corpus Christi ( "City "), and John Mikulencak DBA Extreme Homes of Texas to allow the Corporation to grant $160,067 of Affordable Housing Funds to Extreme Homes of Texas for New Construction Homebuyer Assistance. A copy of the Program Agreement in substantial form is attached as Exhibit A. The executed Program Agreement will be filed in the Office of the Secretary SECTION 2. That the City Manager is authorized to execute the Program Agreement on behalf of the City. ATTEST: CITY OF CORPUS CHRISTI Armando Chapa He'hrjr Garre Assistant City Secretary Mayor, City of Corpus Christi Approved as to form: November 8, 2006 Gary . Smith Assistant City Attorney For the City Attorney H \LEG -DIR\ Shared\ GaryS\ agenda12006111- 141RES- ExtremeHomes.doc Page'3 of 3 Corpus Christi, Texas 11-1 44\' of 6VP,vkitoe , 2006 The above resolution was passed by the following vote: Henry Garrett Brent Chesney John E. Marez Melody Cooper Jerry Garcia William Kelly Rex A. Kinnison Jesse Noyola Mark Scott H \LEG -DIR\ Shared \GaryS\agenda12006111- 141RE$ r s.doc AFFORDABLE HOUSING PROGRAM AGREEMENT JOHN MIKULENCAK DBA EXTREME HOMES OF TEXAS FOR A NEW CONSTRUCTION HOMEBUYERS ASSISTANCE PROJECT This Affordable Housing Program Agreement ( "Program Agreement ") is entered into between the Corpus Christi Business and Job Development Corporation ( "Corporation "), the City of Corpus Christi ( "City "), and John Mikulencak dba Extreme Homes of Texas ( "Extreme Homes "). WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's Texas Revised Civil Statutes (Development Corporation Act of 1979) empowered local communities with the ability to adopt an optional local sales and use tax as a means of improving the economic health and prosperity of their citizens; WHEREAS, on November 5, 2002, residents of the City of Corpus Christi passed Proposition 2, New and Expanded Business Enterprises, which authorized the adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of one - eighth of one percent to be imposed for 15 years WHEREAS, in the same election, the residents of the City passed Proposition 2B, Affordable Housing, which authorized the use of a portion of the sales and use tax ap- proved under Proposition 2 for affordable housing, up to $500,000 annually, so long as there are projects for which the amount can reasonably be used; WHEREAS, the 1/8 cent sales tax authorized by passage of Proposition 2 and allocated under Proposition 2B for affordable housing was subsequently enacted by the City's City Council ( "City Council ") and filed with the State Comptroller of Texas, effective April 1, 2003, to be administered by the Corporation's Board of Directors ( "Board "); WHEREAS, the Board issued a request for proposals for affordable housing projects; WHEREAS, Extreme Homes submitted a proposal to the Board to request funds to provide homebuyer assistance of down payment and closing costs toward the purchase of new construction homes; WHEREAS, the Board has determined that it is in the best interests of the residents of the City of Corpus Christi that affordable housing funds be awarded, by execution of this Program Agreement, to accomplish the affordable housing project described in this agreement and in Extreme Homes' proposal. Affordable Housing - ExtremeHomesof Texas2006.doc Page 1 of 18 Exhibit A WHEREAS, Section 21 of the Texas Development Corporation Act of 1979, Article 5190.6, Vernon's Texas Revised Civil Statutes, requires the City Council to approve all programs and expenditures of the Corporation; WHEREAS, the City Council approved the Corporation's affordable housing program and selection of Extreme Homes as a recipient of affordable housing funds on November 14, 2006; and In consideration of the covenants, promises, and conditions stated in this Program Agreement, the Corporation, Extreme Homes and the City agree as follows: 1. Program Agreement to Homebuyer Assistance for New Construction Affordable Housing Project. This Program Agreement between the Corporation, the City, and Extreme Homes is executed to implement the promotion and development of an affordable housing project proposed by Extreme Homes in response to the Board's request for proposals ( "Project Response "). The Project Response submitted by Extreme Homes, entitled "Homebuyer Assistance Project" ( "Project ") is attached to this Program Agreement as Exhibit A and is incorporated in this Program Agreement by reference. 2. Effective Date. The effective date of this Program Agreement is the date on which the City Council grants approval to the Corporation for this Project, so long as all parties have executed this Program Agreement. 3. Term. The term of this Program Agreement extends twelve (12) months from the date the last party executes this document. ( "Effective Date ") 4. Services to be Provided by City. a. The City, through the City's City Manager or his designee ( "City Manager "), shall administer funding and perform contract administration responsibilities, as outlined in this Program Agreement, for the Corporation. 5. Services to be Provided by Extreme Homes. a. Extreme Homes shall complete construction of sixteen (16) new single - family, owner occupied homes in Corpus Christi, Texas and offer said homes for sale as affordable housing, as the term is defined in Title 42 of the United States Code, Section 12745, in accordance with the requirement in the Texas Development Corporation Act of 1979. Each home shall comply with the Corporation's Affordable Housing Request for Proposals. Each home shall contain three bedrooms, two baths, one -car garage, with a minimum of 1147 square feet, and sell for $85,000, inclusive of all closing costs, and including cost of lot. Extreme Homes shall provide market appraisal of each home. b. Eligible homeowner ( "Homeowner ") shall receive a forgivable loan of $10,000 of the funds provided under this Program Agreement to assist with the down payment and closing costs of a home described in this section. The loan Affordable Housing - ExtremeHomesof Texas2006.doc Page 2 of 18 will be forgiven after 5 years of ownership and if the buyer moves out prior to the 5 years there will be a 20% penalty per year until the loan is repaid. c. Extreme Homes will coordinate the homebuyer assistance through the City of Corpus Christi, Neighborhood Services Department, Housing Assistance Program Division for eligibility according to established Federal Housing Income Guidelines for Affordable Housing Programs. d. Prior to the distribution of funds provided under this Program Agreement, Extreme Homes must coordinate with the Director of the City's Neighborhood Services Department or the Director's designee ( "Director ") to review the anticipated purchase transaction as it pertains to eligibility, location and amount. e. Extreme Homes shall recruit potential homebuyers for housing ownership to be constructed as affordable housing pursuant to this Program Agreement. Extreme Homes shall ensure that each potential homebuyer's family qualifies as a low -to- moderate income family in accordance with Federal, State and City housing laws, rules, and regulations. 6. Loan of Funds. a. The Corporation authorizes the City to grant, from allocated sales tax revenues, up to $160,067 for homebuyer assistance of down payment and closing costs of new homes for eligible homeowners pursuant to this Program Agreement. Eligible homeowner of homes with total price of $85,000 may qualify for a maximum $10,000 forgivable loan. b. Any payment of funds by the Corporation under the provisions of this Program Agreement are subject to the receipt of sales taxes, by the City, from the Office of the Comptroller of the State of Texas and payment of the sales taxes to the Corporation by the City. c. Payment of the buy -down funds will be made by the City directly to the title company involved in the closing transaction. Supporting documentation, such as closing and settlement forms, must be provided to the City Director by Extreme Homes prior to processing a request for loan. d. Extreme Homes shall secure for the Corporation the recapture of all loans provided to Homeowner under this Program Agreement by having each Homeowner execute a note secured by a deed of trust that represents a second mortgage lien on the property. Recapture shall occur upon the earlier of the following events: i. Sale of home; ii. Homeowner no longer occupies the home as primary residence; or iii. Foreclosure of home. 7. Documentation and Reports. a. Extreme Homes shall maintain all documentation relating to the receipt and expenditure of the funds provided under this Program Agreement for a period of Affordable Housing - ExtremeHornesof Texas2006 doc Page 3 of 18 three years following the expiration of this Program Agreement or for such longer period as may be required by Federal or State law. b. Extreme Homes shall provide access to all records, documents, reports, and audits, regarding the funded activity under this Program Agreement, during regular business hours for the purpose of inspection and copying by the City Manager Furthermore, Extreme Homes shall provide to the City Manager any information pertinent to this Program Agreement, as may be requested during the term of this Program Agreement. c. Extreme Homes shall submit a performance report ( "Report ") to the City and the Corporation at least once each quarter and a final Report within 30 days of the expiration of this Program Agreement. The Report must contain all relevant details pertaining to the lot and home purchases and include any supporting documentation required to substantiate the written narrative contained in the Report. 8. Amendments or Modifications. No amendments or modifications to this Program Agreement may be made, nor any provision waived, unless the amendment or modification is made in writing and signed by persons duly authorized to sign agreements on behalf of all parties. 9. Severability. a. If for any reason, any section, paragraph, subdivision, clause, provision, phrase or word of this Program Agreement or the application of this Program Agreement to any person or circumstance is, to any extent, held illegal, invalid, or unenforceable under present or future law or by a final judgment of a court of competent jurisdiction, then the remainder of this Program Agreement, or the application of the term or provision to persons or circumstances other than those as to which it is held illegal, invalid, or unenforceable, will not be affected by the law or judgment, for it is the definite intent of the parties to this Program Agreement that every section, paragraph, subdivision, clause, provision, phrase, and word of this Program Agreement be given full force and effect for its purpose. b. To the extent that any clause or provision is held illegal, invalid, or unenforceable under present or future law effective during the term of this Program Agreement, then the remainder of this Program Agreement is not affected by the law, and in lieu of any illegal, invalid, or unenforceable clause or provision, a clause or provision, as similar in terms to the illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid, and enforceable, will be added to this Program Agreement automatically. 10. Compliance with Laws. Extreme Homes shall comply with all applicable Federal, State, and local government laws, rules, regulations, and ordinances which may be relevant to Extreme Homes's performance under this Program Agreement. Affordable Housing - ExtremeHomesof Texas2006.doc Page 4 of 18 11. Jurisdiction and Venue. a. This Program Agreement will be governed by and construed in accordance with the laws of the State of Texas. b. All actions brought to enforce compliance with this Program Agreement must be brought in Nueces County. Texas, where this Program Agreement was entered into and must be performed 12. Acknowledgment and Construction of Ambiguities. The parties expressly agree that each has independently read and does understand this Program Agreement. By Extreme Homes' execution of this Program Agreement, Extreme Homes agrees to be bound by the terms, covenants, and conditions contained in this Program Agreement. Any ambiguities in this Program Agreement may not be construed against the drafter. 13. Indemnity. Extreme Homes must fully indemnify and hold harmless the City of Corpus Christi, the Corpus Christi Business and Job Development Corporation, and their officers, employees, and agents (hereinafter, collectively "Indemnitees ") from and against any and all liability, damage, loss, claims, demands, expenses, suits, and causes of action of any nature whatsoever on account of injury or damage to person (including, without limitation on the foregoing, premises defects, workers' compensation, and death claims) or property loss or damage of any kind whatsoever which arise out of or are in any manner connected with, or are claimed to arise out of or be in any way connected with, either proximately or remotely, wholly or in part, any activities by Extreme Homes, its officers, employees, agents, members, invitees, or independent contractors with respect to this Program Agreement or the Project that is the subject of this Program Agreement, regardless of whether such injuries, death, or damages are caused, or are claimed to be caused, by the contributory negligence of any of the Indemnitees, but not if caused by the sole negligence of the Indemnitees unmixed with the fault of any other person or entity. Extreme Homes covenants and agrees that if Indemnitees, or any of them, are made a party to any litigation against Extreme Homes or in any litigation commenced by any party other than Extreme Homes relating to this Program Agreement or Project, Extreme Homes shall, upon receipt of reasonable notice regarding commencement of litigation, at its own expense, investigate all claims and demands, attend to their settlement or other disposition, defend Indemnitees in all actions based thereon with legal counsel Affordable Housing - ExtremeHcmesof Texas2006 doc Page 5 of 18 satisfactory to lndemnitees, and pay all charges of attorneys and all other costs and expenses of any kind arising from any said liability, damage, loss, demand, claim, or action. 14. Warranties. Extreme Homes warrants and represents to Corporation the following: a Extreme Homes is a duly organized, validly existing, and in good standing under the laws of the State of Texas, has all authority to carry on its business as presently conducted in Corpus Christi, Texas. b. Extreme Homes has the authority to enter into and perform, and will perform, the terms of this Program Agreement. c. Extreme Homes has timely filed and will timely file all local, State, and Federal tax reports and returns required by law to be filed and all taxes, assessments, fees, and other governmental charges, including applicable ad valorem taxes, have been timely paid, and will be timely paid, during the term of this Program Agreement. d. Extreme Homes has received a copy of the Texas Development Corporation Act of 1979, Art. 5190.6, Vernon's Texas Revised Civil Statutes, and acknowledges that the funds granted in this Program Agreement must be utilized solely for purposes authorized under State law and by the terms of this Program Agreement. e If an audit determines that the funds were not used for authorized purposes, Extreme Homes agrees to reimburse Corporation for the sums of money spent for purposes not authorized by law within 30 days written notice requesting reimbursement. f. The parties executing this Program Agreement on behalf of Extreme Homes are duly authorized to execute this Program Agreement on behalf of Extreme Homes. 15. Events of Default. The following events constitute a default of this Agreement: a. Failure of Extreme Homes to timely, fully, and completely comply with any one or more of the requirements, obligations, duties, terms, conditions, or warranties of this Program Agreement; b. The Corporation or City determines that any representation or warranty on behalf of Extreme Homes contained in this Program Agreement or in any financial statement, certificate, report, proposal, or opinion submitted to the Corporation in connection with this Program Agreement was incorrect or misleading in any material respect when made; Affordable Housing - ExtremeHomesof Texas2006 doc Page 6 of 18 c. Any judgment is assessed against Extreme Homes or any attachment or other levy against the property of Extreme Homes with respect to a claim remains unpaid, undischarged, or not dismissed for a period of 30 days. d Extreme Homes makes an assignment for the benefit of creditors. e Extreme Homes files a petition in bankruptcy, or is adjudicated insolvent or bankrupt. f If taxes on property owed by Extreme Homes become delinquent, and Extreme Homes fails to timely and properly follow the legal procedures for protest or contest, g. Extreme Homes changes the general character of its business as conducted on or following the date this Agreement is approved by the Corporation. 16. Notice of Default. Should the Corporation or City determine that Extreme Homes is in default according to the terms of this Agreement, the Corporation or City shall notify Extreme Homes in writing of the event of default and provide 60 days from the date of the notice ( "Cure Period ") for Extreme Homes to cure the event of default. 17. Results of Uncured Default. After exhausting good faith attempts to address any default during the Cure Period, and taking into account any extenuating circumstances that might have occurred through no fault of Extreme Homes, as determined by the Board of Directors of the Corporation, the following actions must be taken for any default that remains uncured after the Cure Period: a. Extreme Homes shall immediately repay to Corporation, with interest at the interest rate paid by the City on its most recently issued general obligation bonds from date of expiration of Cure Period until fully paid, all funds not used in accordance with this Program Agreement. b. Extreme Homes shall pay Corporation reasonable attorney fees and costs of court to collect amounts due to Corporation. c. The Corporation shall have no further obligations to Extreme Homes under this Program Agreement and this Program Agreement shall terminate. d. Neither the City nor the Corporation may be held liable for any consequential damages. e. The Corporation may pursue all remedies available under law. 18. No Waiver. a. No waiver of any covenant or condition, or the breach of any covenant or condition of this Program Agreement, constitutes a waiver of any subsequent breach of the covenant or condition of the Program Agreement. Affordable Housing - ExtremeHomesof Texas2006 doc Page 7 of 18 b No waiver of any covenant or condition, or the breach of any covenant or condition of this Program Agreement, justifies or authorizes the nonobservance on any other occasion of the covenant or condition or any other covenant or condition of this Program Agreement. c. Any waiver or indulgence of Extreme Homes default may not be considered an estoppel against the Corporation. d. It is expressly understood that if at any time Extreme Homes is in default in any of its conditions or covenants of this Program Agreement, the failure on the part of the Corporation to promptly avail itself of the rights and remedies that the Corporation may have, will not be considered a waiver on the part of the Corporation, but Corporation may at any time avail itself of the rights or remedies or elect to terminate this Program Agreement on account of the default. 19. Notices. a. Any required written notices shall be sent, certified mail, return receipt requested, addressed as follows: If to Extreme Homes: John Mikulencak dba Extreme Homes of Texas 3826 Apollo Corpus Christi, Texas 78413 If to Corporation: City of Corpus Christi Business and Job Development Corporation Attn: Executive Director 1201 Leopard Street Corpus Christi, Texas 78401 b A copy of all notices and correspondence must be sent to the City at the following address: City of Corpus Christi Attn.: City Manager P .0. Box 9277 Corpus Christi, Texas 78469 -9277 c Notice is effective upon deposit in the United States mail in the manner provided above. Affordable Housing - ExtremeHomesof Texas2006.doc Page 8 of 18 20. Incorporation of other documents. The Corpus Christi Business & Job Development Corporation 4A Board Affordable Housing Request for Proposals issued January 9, 2006 is incorporated into this Program Agreement. 21. Relationship of Parties. In performing this Agreement, the Corporation, Extreme Homes and the City shall act in an individual capacity, and not as agents, representatives, employees, employers, partners, joint- venturers, or associates of one another. The employees or agents of either party may not be, nor be construed to be, the employees or agents of the other party for any purpose. 22. Nonassignment. Extreme Homes may not assign, mortgage, pledge, or transfer this Program Agreement or any interest contained in this Program Agreement without the prior written consent of the other parties to this Program Agreement. 23. Non- discrimination. Extreme Homes may not discriminate nor permit discrimination against any person or group of persons on the grounds of race, gender, disability, religion, age, or national origin in any manner prohibited by the laws of the United States or the State of Texas. The City Manager retains the right to take any action the United States or the State of Texas may direct to enforce this non- discrimination covenant 24. Captions. The captions in this Program Agreement are for convenience only and are not a part of this Program Agreement. The captions do not in any way limit or amplify the terms and provisions of this Program Agreement. 25. Entire Agreement. This Program Agreement and the referenced and incorporated documents constitute the entire agreement between the Corporation, the City, and Extreme Homes for the purpose stated. All other agreements, promises, representations, and understandings, oral or otherwise, with reference to the subject matter of this Program Agreement, unless contained in this Program Agreement, are expressly revoked, as the parties intended to provide for a complete understanding, within the provisions of this Program Agreement and its referenced and incorporated documents, of the terms, conditions, promises, and covenants relating to each party's required performance under this Program Agreement. ATTEST: CORPUS CHRISTI BUSINESS & JOB DEVELOPMENT CORPORATION Armando Chapa City Secretary Affordable Housing - ExtremeHomesof Texas2006.doc Gail Hoffman, Chairperson Date: Page 9 of 18 ACKNOWLEDGMENT STATE OF TEXAS § § KNOW ALL BY THESE PRESENTS: COUNTY OF NUECES § This instrument was acknowledged before me on , 2006, by GAIL HOFFMAN as the Chairperson of the Corpus Christi Business and Job Development Corporation, a Texas nonprofit corporation, on behalf of the corporation. NOTARY PUBLIC, State of Texas ATTEST: Armando Chapa City Secretary Date: CITY OF CORPUS CHRISTI George K. Noe City Manager Date: APPROVED AS TO FORM: /1lc remi�r q Aim, Gary . Smith Assistant City Attorney for the City Attorney JOHN MIKULENCAK DBA EXTREME HOMES John Mikulencak Title Date: Affordable Housing - ExtremeHomesof Texas2006 doc Page 10 of 18 STATE OF TEXAS COUNTY OF NUECES ACKNOWLEDGMENT KNOW ALL BY THESE PRESENTS: This instrument was acknowledged before me on 2006, by John Mikulencak dba Extreme Homes. Affordable Housing - ExtremeHomesof Texas2006.doc NOTARY PUBLIC, State of Texas Page 11 of 18 EXHIBIT A REAL ESTATE NOTE Date: Maker Maker's Address: Payee: CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION c/o City of Corpus Christi, Economic Development Office, P. O. Box 9277, Corpus Christi, Nueces County, Texas, 78469 Principal Amount: Annual Interest Rate on unpaid principal from date of funding: Zero percent (0 %) Terms of payment: This Real Estate Note shall be due and payable upon and shall bear interest at the rate of % per annum from and after the earliest of the following events: Within five (5) years from the date of this Note, sale or transfer of the property described in this Note; Maker ceases to occupy the property as principal residence; or foreclosure of home. The term "principal residence" means a dwelling which, depending on all of the facts and circumstances, including the good faith intent of the occupant, is occupied primarily for residential purposes by the owner Payments shall be credited first to accrued interest, balance to principal. Security for Payment: Deed of Trust between Maker and Payee covering the following property: Maker promises to pay to the order of Payee at the place for payment and according to the terms of payment the principal amount plus interest at the rates stated above. On default in the payment of any part of the principal, when due, or failure to comply with any or the agreements and conditions in any and all instruments given to secure this note including, without limitation any default under the terms and provisions of the Real Estate Note, this Note shall at the option of the holder hereof, at once mature the whole of this note, without notice at the election of Payee. Maker and each surety, endorser, and guarantor waive all demands for Affordable Housing - ExtremeHomesof Texas200E doc Page 12 of 18 payment, presentations for payment, notices of intention to accelerate maturity, protests, and notices of protest. In the event this note is placed into the hands of an attorney for collection, or if collected through Probate or Bankruptcy proceedings, then an additional ten percent (10 %) on the amount of principal and interest then owing hereon, shall be added to the same as reasonable and necessary attorney's fees in addition to court costs. Each Maker is responsible for the entire amount of this note. The makers and all endorsers, sureties and guarantors of this note hereby severally waive presentment for payment, notice of non - payment, notice of intent to accelerate, notice of acceleration, protest and diligence in bringing suit, against any party hereto, and consent that the time of payment of this note, or any part thereof, may be extended without notice. Affordable Housing - ExtremeHomesof Texas2006.doc MAKERS Page 13 of 18 EXHIBIT B DEED OF TRUST Date: Grantor: Grantor's Mailing Address (including county): Corpus Christi, Nueces County, Texas 784 Trustee: Mary Kay Fischer, City Attorney, 1201 Leopard Street, Corpus Christi, Texas 78401 Beneficiary: Corpus Christi Business and Job Development Corporation Beneficiary's Mailing Address (including county): P.O. Box 9277 Corpus Christi, Nueces County, TX 78469 Note(s): That note of even date herewith executed by Maker payable to the order of Beneficiary and described as follows: Date: Amount: Maker: Payee: Corpus Christi Business and Job Development Corporation Final Maturity Date: Due upon earliest of following events: (1) sale or transfer of property, or (2) Grantor(s) cease to occupy property as principal residence. Terms of Payment: As therein provided Property (including any improvements): Prior Lien {s)(including recording information): For value received and to secure payment of the note, Grantor conveys the property to Trustee in trust. Grantor warrants and agrees to defend the title to the property. If Grantor performs all the covenants and pays the note according to its terms, this deed of trust shall have no further effect, and Beneficiary shall release it at Grantor's expense. GRANTOR'S OBLIGATIONS Affordable Housing - ExtremeHomesof Texas2006.doc Page 14 of 18 Grantor agrees to: 1, keep the property in good repair and condition; 2. pay all taxes and assessments on the property when due; 3. preserve the lien's priority as it is established in this deed of trust; 4. maintain, in a form acceptable to Beneficiary, an insurance policy that; a. covers all improvements for their full insurable value as determined when the policy is issued and renewed, unless Beneficiary approves a small amount in writing.; b. contains an 80% coinsurance clause; c. provides fire and extended coverage, including windstorm coverage; d. protects Beneficiary with a standard mortgage clause; e. provides flood insurance at any time the property is in a flood hazard area; and f. contains such other coverage as Beneficiary may reasonably require; 5. comply at all times with the requirements of the 80% coinsurance clause; 6. deliver the insurance policy to Beneficiary and deliver renewals to Beneficiary at least ten days before expiration; 7. keep any buildings occupied as required by the insurance policy; and 8. if this is not a first lien, pay all prior lien notes that Grantor is personally liable to pay and abide by all prior lien instruments. 9. Principal residence requirement: Grantor agrees to occupy the property described herein as Grantor's principal residence. As used herein, "principal residence" means a home which, depending upon all of the facts and circumstances (including the good faith of the occupant) is occupied primarily for residential purposes by Grantor. The term does not include a home used as an investment property or a recreational home or a home which is used primarily in a trade or business (as evidenced by the use of more than fifteen percent [15 %] of the total floor space in a trade or business). Grantor agrees to submit annual recertification, in a form prescribed by Beneficiary, to the Beneficiary to evidence Grantor's occupancy in accordance with the provisions hereof. Grantor further agrees to notify Beneficiary immediately if at any time the property ceases to be used as Grantor's principal residence. 10. Due on Sale Requirement. If Grantor conveys or contracts to convey the property, or any interest therein, to a party or parties not appearing in this instrument without the written consent of Beneficiary, then Beneficiary, at its election exercised at any time after such event without notice to Grantor. may declare the entire indebtedness secured hereby at once due and payable. BENEFICIARY'S RIGHTS 1. Beneficiary may appoint in writing a substitute or successor trustee, succeeding to all rights and responsibilities of Trustee. 2. If the proceeds of the note are used to pay any debt secured by prior liens, Beneficiary is subrogated to all of the rights and liens of the holders of any debt so paid. 3. Beneficiary may apply any proceeds received under the insurance policy either to reduce the note or to repair or replace damaged or destroyed improvements covered by the policy. 4. If Grantor fails to perform any of Grantor's obligations, Beneficiary may perform those obligations and be reimbursed by Grantor on demand at the place where the note is payable for any sums so paid, including attorney's fees, plus interest on those sums from the dates of payment at the rate stated in the note for matured, unpaid amounts. The sum to be reimbursed shall be secured by this deed of trust. 5 If Grantor defaults on the note or fails to perform any of Grantor's obligations or if default occurs on a prior lien note or other instrument, Beneficiary may: a declare the unpaid principal balance and earned interest on the note immediately due; Affordable Housing - ExtremeHomesof Texas2006.doc Page 15 of 18 b. request Trustee to foreclose this lien, in which case Beneficiary or Beneficiary's agent shall give notice of the foreclosure sale as provided by the Texas Property Code as then amended; and c. purchase the property at any foreclosure sale by offering the highest bid and then have the bid credited on the note 6. If Grantor conveys or contracts to convey the property covered hereby, or any interest in the property covered hereby, including a leasehold interest, to a party or parties not appearing in this instrument without the written consent thereto of Beneficiary, then Beneficiary, at its election exercised any time after such event and without notice to Grantor, may declare the entire indebtedness secured hereby at once due and payable. Trustee's Duties: If requested by Beneficiary to foreclose this lien, Trustee shall: 1. either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then amended: 2. sell and convey all or part of the property to the highest bidder for cash with a general warranty binding Grantor, subject to prior liens and to other exceptions to conveyance and warranty; and 3. from the proceeds of the sale, pay, in this order: a. expenses of foreclosure, including a commission to Trustee of 5% of the bid; b. to Beneficiary, the full amount of principle, interest, attorney's fees, and other charges due to unpaid; c. any amounts required by law to be paid before payment to Grantor; and d. to Grantor, any balance. General Provisions 1. If any of the property is sold under this deed of trust; Grantor shall immediately surrender possession to the purchaser. If Grantor fails to do so, Grantor shall become a tenant at sufferance of the purchaser, subject to an action for forcible detainer. 2. Recitals in any Trustee's deed conveying the property will be presumed to be true. 3. Proceedings under this deed of trust, filing suit for foreclosure, or pursuing any other remedy will not constitute an election of remedies. 4. This lien shall remain superior to liens later created even if the time of payment of all or part of the note is extended or part of the property is released. 5. If any portion of the note cannot be lawfully secured by this deed of trust, payments shall be applied first to discharge that portion. 6. Grantor assigns to Beneficiary all sums payable to or received by Grantor from condemnation of all or part of the property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or near the property. After deducting any expenses incurred, including attorney's fees, Beneficiary may release any remaining sums to Grantor or apply such sums to reduce the note. Beneficiary shall not be liable for failure to collect or to exercise diligence in collecting any such sums. 7 Grantor assigns to Beneficiary absolutely, not only as collateral, all present and future rent and other income and receipts from the property. Leases are not assigned. Grantor warrants the validity and enforceability of the assignment. Grantor may as Beneficiary's licensee collect rent and other income and receipts as long as Grantor is not in default under the note or this deed of trust. Grantor will apply all rent and other income and receipts to payment of the note and performance of this deed of trust, but if the rent and other income and receipts exceed the amount due under the note and deed of trust, Grantor may retain the excess. If Grantor defaults in payment of the note or performance of this deed of trust, Beneficiary may Affordable Housing - ExtremeHomesof Texas2006.doc Page 16 of 18 terminate Grantor's license to collect and then as Grantor's agent may rent the property if it is vacant and collect all rent and other income and receipts. Beneficiary neither has nor assumes any obligations as lessor or landlord with respect to any occupant of the property. Beneficiary may exercise Beneficiary's rights and remedies under this paragraph without taking possession of the property. Beneficiary shall apply all rent and other income and receipts collected under this paragraph first to expenses incurred in exercising Beneficiary's rights and remedies and then to Grantor's obligations under the note and this deed of trust in the order determined by Beneficiary Beneficiary is not required to act under this paragraph, and acting under this paragraph does not waive any of Beneficiary's other rights or remedies. If Grantor becomes a voluntary or involuntary bankrupt, Beneficiary's filing a proof of claim in bankruptcy will be tantamount to the appointment of a receiver under Texas law. 8. Interest on the debt secured by this deed of trust shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law :: any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides other provisions in this and all other instruments concerning the debt. 9. In the event the property described herein is subject to prior liens in favor of third parties, any default under any prior lien instrument shall be a default hereunder. 10. When the context requires, singular nouns and pronouns include the plural. 11. The term note includes all sums secured by this deed of trust. 12. This deed of trust shall bind, inure to the benefit of, and be exercised by successors in interest of all parties. 13. The note secured hereby evidences funds advanced for a portion of the purchase price of the property described above and is additionally secured by a vendor's lien on same. 14. Upon the sale, rent, or change of ownership of the herein described property for any reasons or by any means or upon the death of the Makers of the Real Estate Note(s) secured hereby, the entire principal and appropriate interest of the Real Estate Note(s) shall immediately become due and payable without notice or presentment of any kind including, without limitations, notice of intent to accelerate and notice of acceleration. The Executive Director of the Corpus Christi Business and Job Development Corporation may waive this requirement upon the written request of the Makers of the Real Estate Note(s) or their heirs, or successors and assigns. Should the property no longer become the primary residence or should there be a change of use, the entire principal and appropriate interest shall immediately become due and payable without notice or presentment of any kind including, without limitations, notice of intent to accelerate and notice of acceleration. Witness our hands this day of , 2006 A.D. Affordable Housing - ExtremeHomesof Texas2006.doc Name: Name: Page 17 of 18 STATE OF TEXAS COUNTY OF NUECES This instrument was acknowledged before me on the STATE OF TEXAS COUNTY OF NUECES day of , 2006, by Notary Public, State of Texas This instrument was acknowledged before me on the day of , 2006, by Notary Public, State of Texas AFTER RECORDING RETURN TO: Corpus Christi Business and Job Development Corporation c/o City of Corpus Christi Economic Development Office P. O. Box 9277 Corpus Christi, Texas 78469 Affordable Housing - ExtremeHomesof Texas2006.doc Page 18 of 18 Corpus Christi Business and Job Development Corporation Affordable Housing Project CATEGORY I. HOMEBUYER ASSISTANCE ORGANIZATION: EXTREME HOMES OF TEXAS Extreme Homes of Texas 3826 Apollo Corpus Christi, Texas 78413 361- 215-0661 361- 215 -9995 TO: City of Corpus Christi FROM Extreme Homes of Texas RE: 4A Board Affordable Housing Proposal DATE: February 3, 2006 LETI'ZR OF TRANSMITTAL: Extreme Homes of Texas has been building affordable homes over the last two years. We currently have 56 lots available and ready to start construction. We are seeking city assistance for funds to aide is reaching out to low and moderate income households. Outlined below is our request for assistance. Attached you will find a plat map and or Survey of Lots available. BACKGROUND AND PROJECT CONCEPT: limn.uvers Assistance Proposed funding - $250,000.00 Grant Amount per Household - $10,000.00 per household to be used for down payment and or closing cost assistance. Terms - A forgivable grant after 5 years of ownership. If broken a 20% per year penalty. Repayable by the buyer back to the City's Homebuyers Assistance program. Income Limits - HUD income guidelines # of Households Assisted - 25 Start Date - btamediately Completion Date - 90 to 120 Days per House Total Completion Date - 1 Year Type of Construction - Minimum 1147 square feet with 3 Bedrooms, 2 Baths, 1 Car garage, Indoor Laundry Room (Not part of Garage), Ceramic Tile in Kitchen / Bath/ Living sad Diming, Stove, Vent Hood, Dishwasher and garbage disposal included. Sales Price $85,000.00 All construction will meet the City of Corpus Christi Building Code, Texas State Board of Insurance Windstorm requirements, FHA/VA requirements and the new Federal Energy Code. Lots are not located in a Flood Plan. All Buyers must intend to occupy the home as their principal residence. All Homebuyers assisted must not currently own a home. Funds requested may be used along with other down payment/closing cost assistance programs available by the City. OUALIFICATIONS AND �,XPERIENCE, Extreme Homes of Texas is currently owned and operated as a Sole Proprietor by John Mikuleacak. I have been building homes in the Corpus Christi area over the last five years. I have built our personal home in King Estates and a 2ad home in Country Creek followed by a 3'd home out Chapman Ranch area. I became a Certified Builder Registered by the Sate in April of 2004. I have built approximately 23 starter homes in the 1147 square foot range since April 2004 and 2 larger homes in South Fork subdivision. My primary focus is the starter home market. CAPABILITIES We currently have two financial intuitions that we work with on our interim financing and ctsitently have the asset's available to assist us in this project. A financial statement and letter from our current bank can be provided upon request. BEUIIMUMNRCIfflin We are currently following City and Windstorm Requirements as well as FHA/VA requirements. We carry insurance on all homes until sold. Additional information or any questions needed, please feel free to contact me at anytime. Sincerely, John Mikulencak/Owner Builder Extreme Homes of Texas "Exhibit F" CITY OF CORPUS CHRISTI Chris **inane 17112, as amended, requires all persons or Irds seeking to do business alit the City to information. Every must be answered. Ifthe question is not applicable, answer with ?NA ?. 3114 A-..o.1.1.o CITY' ... ZIP: � ` 1-3 Corporation [ l 2. Partnership [ l .ft 4. Association [ l City of Corplating ovide the FIRM NAME: $TtEET: FIRM Is: 1 pr 3. Sole Owner 5. Other [ l DISCLOSURE QUESTIONS tl additional space is necessary, please use the reverse side of this page or attach separate sheet 1. Stale the acmes eteach'employeeofthe City ofCOnpus Christi having an *ownership interest constituting 3% or more of the ownership in ire above named "inn'. Name Job Tilt and City Department (s known) NOEL 2. State the wanes of each Wick( tithe Cky of Corpus Christi having an'ownership interest" constituting 3% or more of the ownership intro above named "km'. Name Noj- 3. Stale theaames of each "board member' of the City of Corpus Christi having an 'ownership interest' constituting 3% or more of kite ~reship in the above named "firm'. Name Board, Commission or Committee /LJo&L 4. Slate Mammas of each employes or oficer of a 'consullant" for the City of Corpus Christi who waked on any matter mated t the ssidect of this contract and has an °ownership interest conslbuling 3% or more of the ownership in the above mined "Erin". Name Consultant Ala AL-e- CERTIFICATE I craftily that all infDrnattion provided tonne and correct as of the date of this statement, that I have not knowingly withheld disclosure daily iinration requested; and that supplemental statements will be promptly subn>hted to the City of Corpus Chridi, Texas as changes occur. Certifying Person: .�...� t��.l!a: fY)"KLL(4Q.1(J Prim Signature of Certifying Person- ,ille: OMJ'i Date: A3 I hiblt G — Coact of Interest Questionnaire Form CIQ Instructions Dear Vendor. H.B. 914, passed daring the 2005 *dative session, becomes effective on January 1, 2006. The bill enacts Local Government Code Chapter 176. It requires a vendor that wishes to conduct business or be considered for business with a city to file a "conflict of questionnaire." The cct of interest questionnaire (FORM CIQ) was created by the TexasEthics Commission (TEC) and is avalabie online at www.ethics.state.tx.us or the City website at www.ccftuas.com or frail the City Secretary's office, City of Corpus Christi. A copy of H.B. 914 is dso available from the City Secretary's Office. The bill defines who must file the conflict of interest questionnaire: • Any person who contracts or seeks to contract for the sale or purchase of property, goads, or services with a local government entity; and • An agent of a person who contracts or seeks to contract for the sale or purchase of property, goods, or services with a local government entity. The bill appesrs to apply to all persons or businesses who conduct t business with the city, including those who submit bids on city contracts, make purchases of surplus city property, or participate in any other purchase or sake transaction with the city. Avendor slue file a completed correct of interest questionnaire with the City Secretary not later than the seventh Winos day after the date that the vendor: Begins contract discussions or negotiations with the City; or Submits to the City an application, response to a request for proposals or bids, correspondence, or another writing related to a potential agreement with the local City. A vendor shall file an updated completed questionnaire with the City Secretary's Office not later: September 1 of each year in which an activity is pending ; and The seventh business day after the date of an event that would make a statement in the questionnaire incomplete or inaccurate. A vendor is not required to file an updated completed questionnaire in a year if he has filed a questionnaire on or after June 1, but before September 1, of that year. A vendor carunits an offense if the vendor violates this section. An offense under this subsection is a Class C misdemeanor. CONFLICT OF INTEREST QUESTIONNAIRE For vendor or other person doing business with local governmental entity FORM C IQ This questionnaire is being fded in accordance with chapter 176 of the Local Government Cede by a person doing business with the governmental entity. By law this questionnaire must be filed with the records administrator of the local government not later than the 7th business day after the date the person becomes aware of facts that require the statement to be fded. See Section 176.006, Loc4Government Code. A person committs an offense if the person violates Section 176.006, Local Government Cede. An offense under this section is a Class C misdemeanor. OFFICE USE ONLY 11 Name of person doing business with local governmental entity. )L+(1( tiOrrur o f f X4.5 Date Received n Check this box if are fling an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than September 1 of the year for which an activity described in Section 176.006(a), Local Govemment Code, is pending and not later than the 7th business day aMer the date the originally riled questionnaire becomes incomplete or inaccurate.) 1/43 1 Nsme each employee or contractor of the local governmental entity who makes recommendations to a focal government odicer of the goPsmmental entity with respect to expenditures of money AND describe the aff hladon or business relationship. IUUNQ 4 Name each focfll government officer who appoints or employs local government officers of the governmental en ty for which this questionnaire is filed AND describe the affiliation or business relationship. Adopled 11/02/2005 CONFLICT OF INTEREST QUESTIONNAIRE For vendor or other person doing business with local governmental entity FORM C IQ Page 2 Name of local gorermnent officer with whom filer has aff h$tat on or business reationship. (Complete this section only if the answer to A, B, ea C Is YES.) This section, item 5 including subparts A, B, C & D, must be completed for each officer with whom the filer has affiliation or other relationship. Attach addonal pages to this Form CI4 as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income from the filer of the questionnaire? nYes B. Is the filer of the questionnaire receiving or likely to receive taxable income from or at the direction .of the local govemment officer named in this section AND the taxable income is not from the local governmental entity? n Yes -10 C. Is the filer of this questionnaire affiliated with a corporation or other business entity that the local govemment officer serves as an officer or director, or holds an ownership of 10 percent or more? Yes D. Describe each affiliation or business relationship. Signature of person doing business with the governmental entity Dale Adopted 11102/2005 CITY OF CORPUS CHRISTI CERTIFICATION OF FUNDS (City Charter Article IV, Sections 7 & 8) 1, the Director of Financial Services of the City of Corpus Christi, Texas (or his /her duly authorized representative), hereby certify to the City Council and other appropriate officers that the money required for the current fiscal year's portion of the contract, agreement, obligation or expenditure described below is in the Treasury to the credit of the Fund specified below, from which it is to be drawn, and has not been appropriated for any other purpose. Future payments are subject to annual appropriation by the City Council. City Council Action Date November 14. 2006 Agenda Item: C. Resolution approving the execution of an Affordable Housing Program Agreement between the Corpus Christi Business and Job Development Corporation ( "Corporation"), the City of Corpus Christi ( "City"), and John Mikulencak DBA Extreme Homes of Texas to allow the Corporation to grant $160,067 of Affordable Housing Funds to Extreme Homes of Texas for New Construction Homebuyer Assistance, and authorizing the City Manager to execute the Program Agreement on behalf of the City. Amount Required: $ 160,067.00 Fund Name Fund No. Org. No. Account No. Project No. Amount 4A 1 /8th Cent Sales Tax for Economic Development $160,067.00 Total $160,067.00 Certification Not Required Director of Fina ial S rvices Date: //9