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HomeMy WebLinkAboutC2008-293 - 8/12/2008 - ApprovedAFFORDABLE HOUSING PROJECT AGREEMENT CITY OF CORPUS CHRISTI -HOME BUYER ASSISTANCE This Affordable Housing Project Agreement ("Project Agreement") is entered into between the Corpus Christi Business and Job Development Corporation ("Corporation") and the City of Corpus Christi ("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 Corporation's Board of Directors ("Board"); WHEREAS, the Board issued a request for proposals for affordable housing projects; WHEREAS, the City submitted a proposal to the Board to request funds to provide deferred forgivable loans to assist eligible homebuyers with closing costs and down payments toward the purchase of existing single-family houses; 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 Project Agreement, to accomplish the affordable housing project described in this agreement and in the City's proposal; In consideration of the covenants, promises, and conditions stated in this Project Agreement, the Corporation and the City agree as follows: 1. Project Agreement to Implement Affordable Housing Project. This Project Agreement between the Corporation and City is executed to implement the promotion and development of an affordable housing project proposed by the City in response to the Board's request for proposals ("Project Response"). The Project Response submitted by the City, entitled "Home Buyer Assistance" ("Project") is attached to this 2008-293 08/12/08 Page 1 of 9 Res. 027799 ~ o~22os.doc City of Corpus Christi - 4A Board Project Agreement as Exhibit A, and is incorporated in this Project Agreement by reference. 2. Effective Date. The effective date of this Project Agreement is the latest date on which a party to the Project Agreement executes this Project Agreement. ("Effective Date") 3. Expiration Date. This Project Agreement expires on July 30, 2009. 4. Services to be Provided by City. a. The City, through the City's City Manager or his designee ("City Manager"), administers the funding and performs contract administration responsibilities, as outlined in this Project Agreement, for the Corporation. b. To provide $5,000.00 in the form of a deferred forgivable loan to up to 60 qualified homebuyers for closing costs and down payment assistance in the purchase of an existing single-family house. The funding for the $5,000.00 loan will be obtained by using $2,500.00 in 4A combined with $2,500.00 in HOME federal funds. c. The eligibility requirements for participation in the Project are specified in Exhibit B, which is incorporated in the Project Agreement by reference. d. Each homeowner must execute a note and a deed of trust that conform to Exhibits C and D of this agreement, or a revised version provided by the City. 5. Grant to be Provided by Corporation. a. The Corporation will match the City $2,500.00 for each $5,000.00 deferred forgivable loan it makes to a qualified homebuyer for closing costs and down payment assistance in the purchase of an existing single-family house. b. The total reimbursements by the Corporation to the City under this Project Agreement may not exceed $150,000.00. 6. Documentation and Reports. a. The City shall maintain all documentation relating to the receipt and expenditure of the funds provided under this Project Agreement for a period of three years following the expiration of this Project Agreement or for such longer period as may be required by Federal or State law. b. The City shall provide access to all records, documents, reports, and audits, regarding the funded activity under this Project Agreement, during regular business hours, for the purpose of inspection and copying by the City Manager. Furthermore, the City shall provide to the City Manager any information Page 2 of 9 Affordable Housing - CofCC - HBA 072208.doc pertinent to this Project Agreement, as may be requested during the term of this Project Agreement. c. Grantee shall submit a pertormance report ("Quarterly Report") to the City and the Corporation at least once each quarter, and a complete performance report ("Final Report") within 30 days of the expiration of this Project Agreement. The Quarterly and Final Reports must contain all relevant details pertaining to any homeowner assistance provided with funds made available under this agreement, and include any supporting documentation required to substantiate the written narrative contained in the reports. The reports must document: (1) Property appraisal information (2) Note and Deed of Trust for the property purchased (3) Expenses incurred for construction project (4) Purchase price of the new constructed home (5) Home buyer assistance information -amounts per homebuyer ((i). Itemized Energy efficiency (green building) features with documented expenses (7). Balance of 4A grant (8) Pending project expenses (g). Status of project time line (10). Project challenges and anticipated resolutions. 7. Amendments or Modifications. a. No amendments or modifications to this Project 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. b. The Corporation's Chairman and City Manager are authorized to execute minor amendments or modifications to this Project Agreement, by exchange of letters with the Grantee. The minor amendments and modifications may relate to the timing of performance and reporting, the scope of work to be performed, the number of homebuyers assisted, or the amount of assistance provided to each homebuyer. However, the minor amendments or modifications may not increase the amounts of money available to the Grantee under this Project Agreement. Page 3 of 9 Affordable Housing - CofCC - HBA 072208.doc 8. Severability. a. If for any reason, any section, paragraph, subdivision, clause, provision, phrase or word of this Project Agreement or the application of this Project 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 Project 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 Project Agreement that every section, paragraph, subdivision, clause, provision, phrase, and word of this Project 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 Project Agreement, then the remainder of this Project 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 Project Agreement automatically. 9. Compliance with Laws. The City shall comply with all applicable Federal, State, and local government laws, rules, regulations, and ordinances which may be relevant to the City's performance under this Project Agreement. 10. Jurisdiction and Venue. a. This Project Agreement is governed by and must be construed under the laws of the State of Texas. b. All actions brought to enforce compliance with this Project Agreement must be brought in Nueces County, Texas, where this Project Agreement was entered into and must be pertormed. 11. Acknowledgment and Construction of Ambiguities. The parties expressly agree that each has independently read and does understand this Project Agreement. By the City's execution of this Project Agreement, the City agrees to be bound by the terms, covenants, and conditions contained in this Project Agreement. Any ambiguities in this Project Agreement may not be construed against the drafter. 12. Indemnity. The City 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 Page 4 of 9 Affordable Housing - CofCC - HBA 072208.doc 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 the City, its officers, employees, agents, members, invitees, or independent contractors with respect to this Project Agreement or the Project that is the subject of this Project 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 /ndemnitees unmixed with the fault of any other person or entity. The City covenants and agrees that if /ndemnitees, or any of them, are made a party to any litigation against the City or in any litigation commenced by any party other than the City relating to this Project Agreement or Project, the City 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 satisfactory to Indemnitees, 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. 73. Warranties. The City warrants and represents to Corporation the following: a. The City is a duly organized, validly existing, and in good standing under the laws of the State of Texas, has all authority to carryon its business as presently conducted in Corpus Christi, Texas. b. The City has the authority to enter into and perform, and will perform, the terms of this Project Agreement. c. The City 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 Project Agreement must be utilized solely for purposes authorized under State law and by the terms of this Project Agreement. d. If an audit determines that the funds were not used for authorized purposes, the City agrees to reimburse Corporation for the sums of money spent for purposes not authorized by law within 30 days written notice requesting reimbursement. e. The parties executing this Project Agreement on behalf of the City are duly authorized to execute this Project Agreement on behalf of the City. Page 5 of 9 Affordable Housing - CofCC - HBA 072208.doc 14. Events of Default. The following events constitute a default of this Agreement: a. Failure of the City to timely, fully, and completely comply with any one or more of the requirements, obligations, duties, terms, conditions, or warranties of this Project Agreement. b. The Corporation determines that any representation or warranty on behalf of the City contained in this Project Agreement or in any financial statement, certificate, report, proposal, or opinion submitted to the Corporation in connection with this Project Agreement was incorrect or misleading in any material respect when made. 15. Notice of Default. Should the Corporation determine that the City is in default under the terms of this Agreement, the Corporation shall notify the City in writing of the event of default and provide 60 days from the date of the notice ("Cure Period") for the City to cure the event of default. 16. 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 the City, 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. The City 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 under terms of this Project Agreement. b. The City 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 the City under this Project Agreement and this Project Agreement shall terminate. d. The Corporation may be held liable for any consequential damages e. The Corporation may pursue all remedies available under law. 17. No Waiver. a. No waiver of any covenant or condition, or the breach of any covenant or condition of this Project Agreement, constitutes a waiver of any subsequent breach of the covenant or condition of the Project Agreement. b. No waiver of any covenant or condition, or the breach of any covenantor condition of this Project Agreement, justifies or authorizes the nonobservance on any other occasion of the covenantor condition or any other covenantor condition of this Project Agreement. Page 6 of 9 Affordable Housing - CofCC - HBA 072208.doc c. Any waiver or indulgence of the City's default may not be considered an estoppel against the Corporation. d. It is expressly understood that if at any time the City is in default in any of its conditions or covenants of this Project 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 Project Agreement on account of the default. 18. Notices. a. Any required written notices shall be sent, certified mail, return receipt requested, addressed as follows: If to the City: City of Corpus Christi Attn.: City Manager P.O. Box 9277 Corpus Christi, Texas 78469-9277 If to Corporation: City of Corpus Christi Business and Job Development Corporation Attn: Executive Director 1201 Leopard Street Corpus Christi, Texas 78401 b. Notice is effective upon deposit in the United States mail in the manner provided in subsection a of this section. 19. Incorporation of other documents. The Corpus Christi Business & Job Development Corporation 4A Board Affordable Housing Request for Proposals issued April 7, 2008, is incorporated into this Project Agreement. 20. Relationship of Parties. In performing this Agreement, the Corporation and the City shall actin 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. 21. Nonassignment. The City may not assign, mortgage, pledge, or transfer this Project Agreement or any interest contained in this Project Agreement without the prior written consent of the other parties to this Project Agreement. Page 7 of 9 Affordable Housing - CofCC - HBA 072208.doc 22. Non-discrimination. a. The City 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 taws of the United States or the State of Texas. b. The Corporation retains the right to take any action the United States or the State of Texas may direct to enforce this non-discrimination covenant. 23. Captions. The captions in this Project Agreement are for convenience only and are not a part of this Project Agreement. The captions do not in any way limit or amplify the terms and provisions of this Project Agreement. 24. Entire Agreement. This Project Agreement and the referenced and incorporated documents constitute the entire agreement between the Corporation, the City, and the City for the purpose stated. All other agreements, promises, representations, and understandings, oral or otherwise, with reference to the subject matter of this Project Agreement, unless contained in this Project Agreement, are expressly revoked, as the parties intended to provide for a complete understanding, within the provisions of this Project Agreement and its referenced and incorporated documents, of the terms, conditions, promises, and covenants relating to the each party's required performance under this Project Agreement. CORPUS CHRISTI BUSINESS & JOB DEVELOPMENT CORPORATION Elo al ar Ch rman ~1 ~© Date ATTEST: (~-~ Armando Chapa e City Secretary Date: ~/~~°~ CITY OF CORPUS CHRISTI G orge K. Noe City Manager Date: ~~°~~/D ~:.IG~~~ !~ GOUIICIL Page 8 of 9 Affordable Housing - CofCC - HBA 072208.doc APPROVED AS TO FORM:.) ~~ I ~ 2 N, ~ooe ~"' R. Jay Reining First Assistant City Attorney for the City Attorney Page 9 of 9 Affordable Housing - CofCC - HBA 072208.doc Response to 2008 Request for Proposal "4A Board Affordable Housing Program" Corpus Christi Business and Job Development Corporation Submitted By: City of Corpus Christi NEIGHBORHOOD SERVICES DEPARTMENT Project: Homebuyer Assistance 65,000 -Existing Homes 4A Funding Request: 5150,000 (Grant) Exhibit A LETTER OF TRANSMITTAL May 1, 2008 City Secretary Office City of Corpus Christi Attention: Armando Chapa, City Secretary 1201 Leopard Corpus Christi, TX 78469-9277 Enclosed is the City of Corpus Christi, Neighborhood Services Department's 2008 proposal for a grant in the amount of $150,000 regarding the 4a Board's Affordable Housing Programs for consideration and funding. We have reviewed the proposal requirements and we are submitting the necessary proposal documents. For any additional information regarding this proposal, please contact me at 826- 3234. We look fonniard to working with the 4a Board's Affordable Housing Program. Sincerely, Morales Haag Services QUALIFICATIONS & EXPERIENCE General The City of Corpus Christi through the Neighborhood Services Department (NSD) is applying for a grant in the amount of $150,000 through the 4a Board Affordable Housing Program. It is our desire to continue to assist in the development of affordable housing units by expanding the number of affordable housing units in the City of Corpus Christi. Neighborhood Services Department is the main entity that has carried the responsibility of developing and promoting affordable housing in the City of Corpus Christi for low income and very low income families for the last 30 years. Qualifications 8 Experience Neighborhood Services Department (NSD) has extensive experience managing and administrating housing programs for low income families. NSD has worked with new construction and rehabilitation programs for the last 30 years and has assisted over a thousand homeowners and homebuyers with their housing needs. The programs administered by NSD are. monitored by HUD, and are found to be managed within approved program guidelines. NSD has a staff that is highly qualified and experienced in managing housing programs. The team that will be managing the 4a Board Affordable Housing Program has several years of experience administering housing programs that assist low income families. Currently, this team manages a $5,000 Homebuyer Assistance Program and a New Construction Homebuyer Program. Additionally, this team manages a Rehabilitation Loan Program, Demolition and Replacement Loan Program and an Emergency Home Repair Grant Program. Through these programs approximately 500 families are assisted on an annual basis. Neighborhood Services Department also has played an integral role in assisting other community organizations in developing their capacity to provide affordable housing. NSD created and provides support staff for the Corpus Christi Community Development Corporation (CDC) which was established to provide and assist in creating affordable housing. NSD also was instrumental in assisting Nueces County Community Action Agency with establishing their homebuyer programs. CAPABILITES STATEMENT Neighborhood Services Department (NSD) has administered and managed various housing programs inGuding homebuyer programs. During the last 30 years NSD has assisted over one thousand families through its various programs. Throughout these years NSD has provided assistance in rehabilitation, emergency repairs, and home buying and is highly adapt at working with low income households, realtors, builders, and lenders. NSD is responsible for managing and administering the funds the City of Corpus Christi receives from the Department of Housing and Urban Development. During the past 30 years NSD has received an average of 5 million dollars per year to carry out various housing programs and assist community non profit organizations with their facility needs. NSD staff has shown they are capable of managing HUD funds and following federal regulations. ACKNOWLEDGEMENT This is to acknowledge that we have reviewed all the provisions of the request for proposal and further certify we will comply with all its requirements. ~C Off'- o2g. v8 onne Moreles Haag, Dlredo Date LEVEL OF ASSISTANCE Project Scope: Neighbofiood Services Department is requesting $150,000 in the form of a grant and proposes to provide $2,500 in 4a funds as a match to its current $5,000 Homebuyer Assistance Program. The $2,500 in 4a funds will be combined with $2,500 in HOME funds for a total assistance of $5,000. The $5,000 will be provided in the form of a Deferred Forgivable Loan that will be used by the homebuyer for closing costs and down payment assistance in the purchase of an existing single-family house. Leveraging: NSD plans to leverage 4a funds with HUD HOME Program funds. NSD receives an average of $200,000 through this HUD funded homebuyer program and assists approximately 40 homebuyers. The 4a funds will allow us to assist more persons with the purchase of a house. Number Assisted: Neighbofiood Services Department anticipates being able to assist approximately 70 total families should we receive the $150,000 in 4a funds. Time Frame: NSD anticipates carrying out this Program within a one year period (August 2008 to July 2009) in conjunction with its existing $5,000 Homebuyer Program. Exhibit B Project Eligibility Criteria The City's 4A Board of Directors is requesting proposals involving the creation of individually owned single-family housing units that qualify as affordable housing. Affordable Housing: Texas Revised Civil Statues, Article 5190.6, Section 3(c) includes promotion of the development and expansion of affordable housing as defined by 42 USC 12745 as a projects eligible for the expenditure of economic development sales tax funds (4a funds). This Statute basically provides qualification or restrictions on housing to assure that the housing retains the "affordable" characteristic: Housing that is for homeownership qualifies as affordable if: (1) The initial purchase price does not exceed 95% of the median purchase price for the area, with adjustments for differences in the structure, such as single- family, new or old housing; (2) The home is the principal residence of an owner whose family qualifies as a low-income family (determined at the time of purchase); (3) The home is subject to resale restrictions to provide for resale to qualifying persons with a fair return to the owner and investment made to make the home affordable, and (4) If the home is newly constructed, it meets energy efficiency standards. (5) Rehabilitation of affordable housing would require that sufficient safeguards be placed on the funding to assure that the housing remains affordable with the definition of 42 USC 12745. Proposals must be for affordable single-family home ownership units designed to assist low and moderate income households. Persons assisted must be residents of the City of Corpus Christi; and must meet the following HUD income guidelines: FAMILY SIZE 1 2 3 4 5 6 7 8 ANNUAL INCOME 27000 30850 34700 38550 41650 44700 47800 50900 Income limits are established by HUO and are REAL ESTATE NOTE Date 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%) Term of this Note shall be 10 yeazs if the amount ranges $15,000 to $20,000; Terms of payment: This Note shall be due and payable in approximately One Hundred Twenty 120 monthly installments, each being in the amount of of the principal amount set forth above. The first of said monthly installments being due and payable on the date of closing, and the remaining installments shall be due in consecutive order thereafter on the same day of each and every succeeding month. Provided, however, that for each month Maker occupies the property described herein as Maker's principal residence during the term of this note, the monthly installment due herein shall be waived and forgiven by payee, and Maker shall not be required to pay such monthly installments. 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 primazily for residential purposes by the owner. Default in the payment of any part of the principal, when due, or failure to comply with any or the agreement and conditions in any and all instruments given to secure this note including, without limitations any default under the terms and provisions of the Real Estate Notes, shall at the option of the holder hereof, at once mature the whole of this note, without notice. EXHIBIT C Page I of 2 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 the court costs. The markers 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. Each maker is responsible for the entire amount of this note. This note is secured by Deed of Trust covering the following described property situated in Nueces County, Texas, to wit: MAKERS EXHIBIT C Page 2 of 2 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. (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): Exhibit D DEED OF TRUST.doc 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 has no further effect, and Beneficiary shall release it at Grantor's expense. GRANTOR'S OBLIGATIONS 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. 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. 8. If this is not a first lien, pay all prior lien notes tharGrantor is personally liable to pay and abide by all prior lien instruments. 9. Principal residence requirement: a. Grantor agrees to occupy the property described in this deed of trust as Grantor's principal residence. b. As used in this deed of trust, "principal residence" means a home which, depending upon all of the facts and circumstances (including the DEED OF TRUST.doc good faith of the occupant) is occupied primarily for residential purposes by Grantor. c. 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). d. Grantor agrees to submit annual recertification, in a form prescribed by Beneficiary, to the Beneficiary to evidence Grantor's occupancy under the provisions of this Deed of Trust. e. 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 the property, 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. DEED OF TRUST.doc 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. 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 by this deed of trust, or any interest in the property covered by this deed of trust, 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: tf 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. 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. 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. DEED OF TRUST.doc 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 remains 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 must 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 the sums to reduce the note. Beneficiary is 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. a. Leases are not assigned. b. 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. c. Grantor shall 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. d. If Grantor defaults in payment of the note or performance of this deed of trust, Beneficiary may 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. e. Beneficiary neither has nor assumes any obligations as lessor or landlord with respect to any occupant of the property. f. Beneficiary may exercise Beneficiary's rights and remedies under this paragraph without taking possession of the property. g. 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. DEED OF TRUST.doc h. 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. i. 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 do not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law. a. Any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. b. 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. c. This provision overrides other provisions in this and all other instruments concerning the debt. 9. In the event the property described in this deed of trust is subject to prior liens in favor of third parties, any default under any prior lien instrument is a default under this deed of trust. 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 binds, inures to the benefit of, and may be exercised by successors in interest of all parties. 13. The note secured by this deed of trust evidences funds advanced for a portion of the purchase price of the property described in this deed of trust, and is additionally secured by a vendor's lien on the property. 14. Upon the sale, rent, or change of ownership of the property described in this deed of trust for any reasons, by any means, or upon the death of the Makers of the Real Estate Note(s) secured by this deed of trust, the entire principal and appropriate interest of the Real Estate Note(s) immediately become due and payable without notice or presentment of any kind including, without limitations, notice of intent to accelerate and notice of acceleration. a. The Executive Director of the Corpus Christi Business and Job Development Corporation may waive this requirement upoh the written DEED OF TRUST.doc request of the Makers of the Real Estate Note(s) or their heirs, successors, and assigns. b. 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 , 200_ A. D. Name: Name: STATE OF TEXAS COUNTY OF NUECES This instrument was acknowledged before me on the day of , 200_, by Notary Public, State of Texas STATE OF TEXAS COUNTY OF NUECES This instrument was acknowledged before me on the day of , 200_, by Notary Public, State of Texas DEED OF TRUST.doc 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 DEED OF TRUST.doc