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HomeMy WebLinkAboutC2018-788 - 7/24/2018 - Approved HOME SUBRECIPIENT AGREEMENT between the THE CITY OF CORPUS CHRISTI and COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE THE STATE OF TEXAS § § KNOW ALL BY THESE PRESENTS: COUNTY OF NUECES § THI SUBRECIPIENTAGREEMENT ("Agreement") is entered into as of Z , 20�, by and between CITY OF CORPUS CHRISTI, a Texas home- ule municipal corporation ("CITY"), and COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE, a Texas nonprofit corporation, hereinafter referred to as ("SUBRECIPIENT"). WHEREAS, as a participating jurisdiction in the HOME Investment Partnerships Program ("HOME"), the CITY receives HOME funds from the United States Department of Housing and Urban Development ("HUD") under Title II of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C., § 12701 et seq.), as amended and updated through December 22, 2004, December 16, 2011, and July 24, 2013, Catalogue of Federal Domestic Assistance Number 14.239; and WHEREAS, many low-income households lack the financial resources and have difficulty securing affordable homeownership opportunities in the City of Corpus Christi; and WHEREAS, SUBRECIPIENT requested HOME funds from the CITY to administer the City of Corpus Christi Homebuyer Assistance Program (" HBA Program") targeting to low- to-moderate income residents of City of Corpus Christi; and WHEREAS, SUBRECIPIENT estimates that $300,000 of HOME funds will be used to provide down payment assistance to 20-30 households over the two (2) year term of this Agreement; and WHEREAS, SUBRECIPIENT will use some of the funding for project delivery/soft cost expenses of the Program; and WHEREAS, the Program is an eligible use of HOME funds pursuant to 24 CFR 92.206 and as a nonprofit agency, SUBRECIPIENT is an eligible HOME C2018-788 24 CFR Part 92; and 7/24/18 Ord. 031483 FlCDC of Brownsville Page 1 of 19 SCANNED WHEREAS, the Program has been determined to be a categorically excluded activity pursuant to 24 CFR 58.35(b)(I) and is therefore not subject to the environmental review provisions of 24 CFR 58.5; and WHEREAS, the Program complies with the requirements of 24 CFR 58.6; and WHEREAS, SUBRECIPIENT shall ensure that households participating in the Program purchase suitable units located in the CITY that meet housing and occupancy standards and have reasonable mortgage terms and affordable housing payments as defined herein; and WHEREAS, a written agreement is required by HUD between HOME subrecipients and HOME Participating Jurisdictions for the use of CITY HOME funds, which is the subject of this Agreement; and WHEREAS, CITY HOME funds are subject to certain agreements and conditions as more particularly set out in this Agreement. NOW, THEREFORE, it is agreed by and between the parties hereto, as follows: 1. CITY HOME FUNDS A. AMOUNT In exchange for the satisfactory performance of this Agreement, the CITY hereby agrees to disburse to SUBRECIPIENT the amount of Three Hundred Thousand (S300.000) utilizing FY 2018 HOME funds ("HOME Award") as detailed in Exhibit A ("Budget") attached hereto and incorporated herein, and as provided for in Section 3 below to assist a minimum of 20-30 families with annual household incomes that do not exceed eighty percent (80%) of the area median family as established by HUD annually. In the event sufficient HOME funds for this Agreement are not available to the CITY, this Agreement shall terminate and be of no further force and effect, and SUBRECIPIENT shall hold the CITY harmless. B. EFFECTIVE DATE The effective date of this Agreement shall be the date it is executed by CITY ("Effective Date"). This Agreement shall remain in effect for two (2) years from Effective Date. The SUBRECIPIENT expressly agrees to perform all work required by this agreement in accordance with the Performance Schedule in Exhibit B. 2. CONDITIONS PRECEDENT The CITY shall not disburse CITY HOME funds to SUBRECIPIENT (as described in Section 3 below) until SUBRECIPIENT has executed and delivered to the CITY this Agreement and proof of SUBRECIPIENT'S insurance coverage pursuant to FY18 HOME CDCB Agreement Page 2 of 19 Exhibit C("Standard Indemnification and Insurance Provisions") attached hereto and incorporated herein. 3. DISBURSEMENT OF CITY HOME FUNDS Subject to satisfaction of the conditions precedent provided above in Section 2, the CITY shall disburse CITY HOME funds to SUBRECIPIENT on a reimbursement basis in accordance with this Agreement. A. ELIGIBLE HOUSEHOLDS All HBA program participant households receiving assistance shall be low-income households, purchasing residential property located in the City of Corpus Christi, with annual household incomes that do not exceed eighty percent (80%) of the area median income as established annually by HUD ("Homebuyer"). Annual household income is hereby defined as the combined household income that is anticipated by all adult members of the household during the twelve (12) months following the effective date of their acceptance to the Program ("Annual Household Income"). SUBRECIPIENT shall verify income for every Homebuyer; SUBRECIPIENT agrees that if the Homebuyer has not closed on a home within 6 months of income verification, that the Homebuyer's income will be re-verified prior to receiving assistance from the Program. B. ELIGIBLE COSTS SUBRECIPIENT shall use CITY HOME funds as described in this Section B ("Eligible Costs") to enable Homebuyers to purchase decent and affordable housing. 1) Eligible activities: To provide HOME funding for assistance to homebuyers through deferred subordinate financing, per 24 CFR 92.205(a) and (b). Eligible project costs: To provide a maximum of S300.000 in HOME funding for acquisition costs, including acquisition by homebuyers, downpayment assistance, closing costs and principal buy downs per 24 CFR 92.206(c), and a maximum of $12.000 in project delivery /soft costs and no administrative costs per 24 CFR 92.206(d) and 24 CFR 92.207.The proposed project delivery/soft costs should be related to project delivery costs, these costs include but are not limited to: processing of applications for HOME assistance; appraisals required by the HOME program regulations; preparation of work write-ups, work specifications and cost estimates or review of these items if an owner has had them independently prepared; project underwriting; construction inspections and oversight; project document preparation; costs associated with a project specific environmental review; costs associated with informing tenants or homeowners about FY18 HOME CDCB Agreement Page 3 of 19 relocation rights or benefits; costs to provide affirmative marketing and fair housing information to prospective homeowners and tenants as required by 24 CFR 92.351; and, staff time such as preparing work specifications, loan processing, inspections, and other services related to assisting potential owners, tenants, and homebuyers. Administrative Cost include but are not limited to: operational overhead (utilities, insurance, phone service, office supplies, copier leasing, building maintenance, audit services, postage, printing, auto fuel, marketing, trainings, janitorial services, licenses fees, legal notices, accounting services, and internet/web services) and administrative staff time, payroll taxes and fringe benefits. These costs are costs not tied to a specific address and will not be allowed. All costs (administration and soft/project delivery costs) will be evaluated for reimbursement. C. EXPENDITURE SUMMARY AND PAYMENT REQUEST FORM SUBRECIPIENT shall submit to the CITY monthly, requests for disbursement ("Reimbursement Requests") of CITY HOME funds. The amount requested shall be equal to the amount expended by SUBRECIPIENT for Eligible Costs. The SUBRECIPIENT acknowledges that it may not request funds disbursement until funds are needed for payment of eligible costs. The amount of each disbursement request may not exceed the amount needed. All soft costs that the SUBRECIPIENT is requesting reimbursement for shall be submitted in such detail to associate the costs with a specific HOME-assisted address. All administration costs will be reimbursed based on the approved cost allocation plan and related to this contract. All project delivery/soft costs will be capped at $12.000. No administration costs will be allowed. D. DISBURSEMENT DEADLINES SUBRECIPIENT shall start submitting Reimbursement Requests within sixty (60) days upon execution of this Agreement. The HOME Award must be expended in its entirety on or before that date two (2) years from the effective date of this Agreement. Any funds not expended by that date shall be retained by the CITY for other HOME-eligible uses. Requests for reimbursement for the final invoice must be submitted no later than 30 days after the one-year anniversary/effective date of this contract. The CITY will review, approve, and reimburse the SUBRECIPIENT within 60 days of an approved request for reimbursement from the SUBRECIPIENT. E. NO PROGRAM INCOME RETAINED BY SUBRECIPIENT Funds provided by SUBRECIPIENT to Buyers consist of funding for deferred, forgivable loans for the payment of Eligible Costs. Any repayment of HOME funds will be in the form of a recapture or repayment by the CITY under 24 CFR FY18 HOME CDCB Agreement Page 4 of 19 92.503. 4. CONDITIONS FOR USE OF CITY HOME FUNDS SUBRECIPIENT covenants and agrees to conduct the following activities in operating the Program. Failure to comply shall be an event of default under this Agreement. A. PROGRAM POLICIES AND PROCEDURES 1) SUBRECIPIENT shall administer the Program as a homebuyer assistance program in accordance with 24 CFR 92. 2) SUBRECIPIENT shall administer the Program in a manner consistent with the HOME Investment Partnerships Program 2013 Final Rule, which is set forth at 24 CFR Part 92, dated July 24, 2013, and consistent with any subsequent relevant amendments, policies, procedures, guidelines and revisions established by HUD (collectively, "HOME Regulations"). 3) SUBRECIPIENT shall administer the Program in accordance with this Agreement and the written policies, procedures and standards of the City of Corpus Christi Homebuyer Assistance Program and attached exhibits ("Policies and Procedures"), attached as Exhibit D, incorporated by reference and may be amended with review and approval of the SUBRECIPIENT. In the event of a discrepancy between the HOME Regulations and the provisions of this Agreement including the Policies and Procedures and all Exhibits attached hereto, the HOME Regulations shall apply. B. SPECIFIC PROGRAM REQUIREMENTS SUBRECIPIENT shall comply with the following requirements in administering the Program: 1) Project requirements: SUBRECIPIENT shall implement the Program under the applicable HOME homebuyer requirements at 24 CFR 92.254(a). Housing assisted will be single family housing with a purchase price that does not exceed 95 percent of the median purchase price for the area, as further defined in 24 CFR 92.254(a)(2)(iii). The project must meet the requirements at 24 CFR 92, Subpart F (HOME project requirements) and 24 CFR 92, Subpart H (other federal requirements). Assisted property must meet the applicable HOME property standards at 24 CFR 92.251. Assisted property must meet the lead-based paint hazard disclosure and remediation requirements as described in Exhibit E. 2) Affordability requirements: Assisted housing units must meet affordability requirements for not less than 5 years (if the amount of FY18 HOME CDCB Agreement Page 5 of 19 assistance is less than $15,000). The Program will be implemented under the HOME recapture requirements at 24 CFR 92.254(a)(5)(ii); the amount of assistance subject to recapture includes any HOME assistance that reduced the purchase price form fair market value to an affordable price, per 24 CFR 254(a)(5)(ii)(A)(5), and may include the following amounts due at closing: down payment assistance, principal reduction to the extent necessary to achieve required debt- to-income ratios, prepaid taxes and insurance, and reasonable and necessary closing costs, per the Policies and Procedures. The SUBRECIPIENT will determine the amount of assistance necessary and reasonable, within the above limits, to achieve the affordability ratios described in the Policies and Procedures, using the Homebuyer Affordability Analysis, attached as Exhibit F, or a similar affordability evaluation tool, with prior written approval by the CITY. The SUBRECIPIENT may propose underwriting standards that are more affordable than those presented in the Policies and Procedures, subject to prior written approval by the CITY; similarly, the SUBRECIPIENT may propose exceptions to achieve greater affordability, based on income, living expenses or other considerations which, in the opinion of the SUBRECIPIENT, are necessary and reasonable to maximize the likelihood of success of the Buyer, as long as similar cases are treated similarly and any changes in underwriting standards receive prior written approval by the CITY. Sale of Properties will be contingent on the execution of a written agreement between the SUBRECIPIENT and the Buyer, per Section 4.B.4.i below, and attached as Exhibit G. 3) Recapture provisions: If the property owner (the original buyer) no longer occupies the home as its principal residence, either voluntarily (sale) or involuntarily (foreclosure), before the end of the affordability period, the HOME funds that enabled the buyer to purchase the dwelling must be repaid to the CITY. See 24 CFR 92.254(a)(5)(ii). Note, if the property owner fails to reside in the HOME-assisted unit as its principal residence due to noncompliance, then the Buyer must repay HOME funds to the SUBRECIPIENT per the terms of the Homebuyer Assistance Contract (Exhibit G) and the Deed of Trust and Note that will be provided by and executed for the SUBRECIPIENT at closing. These funds would be considered recaptured funds, per the terms of 24 CFR 92.503. The amount subject to recapture cannot exceed the net proceeds; "net proceeds" are the sales price minus superior loan repayments (other than HOME funds) and any seller's closing costs. "Sales price" presumes an arm's length transaction at FY18 HOME CDCB Agreement Page 6 of 19 market value; if the CITY determines that the sale has occurred at less than market value, the CITY may, at its discretion, re- compute the sale price to market value, at its discretion. To compute the treatment of funds subject recapture, the SUBRECIPIENT will use the "owner investment returned first" method, described at 24 CFR 92.254(a)(5)(ii)(A)(4). SUBRECIPIENT agrees that if the Homebuyer has not closed on a home within 6 months of income verification, that the Homebuyer's income will be re-verified prior to receiving assistance from the Program. 4) Written Agreements: SUBRECIPIENT shall ensure that an offer to purchase is contingent on the execution of the Homebuyer Assistance Contract between the Buyer and the SUBRECIPIENT. i. Homebuyer Assistance Contract: The Homebuyer Assistance Contract between the SUBRECIPIENT and the Buyer shall conform to the requirements in 92.254(a), specifying the value of the property, the principal residence requirement and the recapture provisions. In addition, the agreement must specify the amount of HOME funds, the form of assistance, the use of funds, and the time by which the housing must be acquired. The Homebuyer Assistance Contract shall follow the form of Exhibit G unless revised with the prior written approval of the CITY. 5) Sponsorship: SUBRECIPIENT agrees to acknowledge the sponsorship of the CITY at any event promoting the project or any other project sponsors. As such, SUBRECIPIENT shall give credit to the CITY as the project funding source in all presentations, written documents, publicity and advertisements regarding the SUBRECIPIENT Homebuyer Assistance Program. 6) HUD approved Homebuyer Class: SUBRECIPIENT agrees to ensure homebuyer completes HUD approved Homebuyer Class prior to Homebuyer Assistance. 7) Housing Quality Standards: SUBRECIPIENT agrees to conduct HUD required Housing Quality Standard inspections for every home assisted. 8) NO CITY OBLIGATION TO BUYER the CITY'S obligation is limited exclusively to providing HOME funds to SUBRECIPIENT pursuant to the terms of this Agreement. The CITY has no obligation, either express FY18 HOME CDCB Agreement Page 7 of 19 or implied, to the Buyer. In the event HOME funds become unavailable to the CITY, the CITY'S obligations under this Agreement shall cease, and this Agreement shall terminate, as specified in Section 1.A above. 9) REPAYMENT OF CITY FUNDS, RENTAL ASSISTANCE PAYMENTS AND REVERSION OF ASSETS So long as SUBRECIPIENT continues to operate the Program pursuant to the terms and conditions of this Agreement, SUBRECIPIENT is not required to repay the CITY HOME funds as long as the. program remains in compliance. Any unspent HOME funds, and any accounts receivable attributable to the use of HOME funds, remaining at the termination of this Agreement shall revert back to the CITY. 10) PROGRAM ADMINISTRATION AND COMPLIANCE MONITORING i. Records: SUBRECIPIENT shall maintain all records as may be required to be kept pursuant to the terms of any law, regulation or ordinance to which SUBRECIPIENT may be subject in the performance of this Agreement, including, but not limited to, 24 CFR 92.508. Such records include, but are not limited to records for each Buyer, including but not limited to source documentation used or relied upon to determine income eligibility, all written agreements described above in Section 4.B.4.i, and all financial transactions in any way related to the Program. SUBRECIPIENT shall ensure that the use of CITY HOME funds is in accordance with generally accepted accounting principles. All Program-related files and records shall be made available to the CITY at any time during regular working hours at the request of the CITY. SUBRECIPIENT agrees to retain all records fora period of at least five (5) years following SUBRECIPIENT's final payment of Homebuyer Assistance pursuant to this Agreement or the termination of this Agreement, whichever is later. ii. Reports: SUBRECIPIENT shall prepare and deliver all data, reports and records that the CITY and HUD may require or request. iii. Audits: SUBRECIPIENT shall conduct annual audits in accordance with 24 CFR 92.506, 24 CFR 84.26 and 85.26, and Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards codified at 2 CFR Part 200. If SUBRECIPIENT spends $750,000 or more within its accounting year in federal funds, it shall be subject to a single-audit according to 2 CFR Part 200. FY18 HOME CDCB Agreement Page 8 of 19 iv. Review by CITY: SUBRECIPIENT agrees that the CITY shall have the right to review all records and inspect assisted homes to ensure compliance under this Agreement. SUBRECIPJENT shall make available to the CITY all records, files, reports and documents maintained by SUBRECIPIENT pursuant to the terms of this Agreement. Any such auditor review may be conducted by the CITY at any time during SUBRECIPIENT's regular business hours upon seventy-two (72) hours written notice by the CITY. SUBRECIPIENT shall also make arrangements for inspection of assisted units by CITY staff upon five (5) days written notice by the CITY. v. Reimbursement for Improper Expenditures: If it is determined by CITY that funds provided under the terms of this Agreement have been used by or on behalf of SUBRECIPIENT in a manner or for a purpose not authorized by this Agreement, SUBRECIPIENT shall, at CITY'S request, pay to CITY within 120 days of the CITY request, an amount equal to one hundred percent (100%) of all amounts expended for unauthorized purposes or in an unauthorized manner, including interest accrued on such amounts at the legal rate of interest in effect at the time of the CITY'S request. This Section E.5 shall survive the termination of this Agreement. vi. Uniform Administrative Requirements: SUBRECIPIENT shall comply with the applicable uniform administrative requirements as described in Section 92.505 of the HOME Regulations. 5. EVENTS OF DEFAULT This Agreement will be in default should any of the following events occur ("Event of Default"): A) FAILURE TO COMPLY If SUBRECIPIENT fails to comply with the terms of this Agreement, the HOME Program Regulations, the requirements of any applicable Annual Appropriations Acts, or any terms of Notice of Funding Availability (NOFAs), grant agreements, and awards whether stated in a Federal statute or regulation, an assurance in a State plan or application, a notice of award or other term or condition under this Agreement. B) FAILURE TO USE FUNDS AS INTENDED If SUBRECIPIENT fails to use the funds for the Program as provided herein. c) BANKRUPTCY If SUBRECIPIENT has filed a petition under the Bankruptcy Reform Act of 1978 (11 U.S.C., §§ 101 et seq.) or has taken or committed FY18 HOME CDCB Agreement Page 9 of 19 any act preparatory to the filing of any such petition, or has become insolvent, or has committed any other act of bankruptcy or insolvency. 6. RIGHTS AND OBLIGATIONS UPON EVENT OF DEFAULT The parties shall have the following rights and obligations in the Event of Default: A) NOTICE OF DEFAULT Upon the occurrence of an Event of Default described in Section 5.A or 5.B, CITY shall notify SUBRECIPIENT in writing of such occurrence, including a description of the Event of Default. Upon the occurrence of an Event of Default described in Section 5.C, SUBRECIPIENT shall notify CITY in writing of such occurrence, including a description of the Event of Default. s) CURE SUBRECIPIENT shall be entitled to cure an Event of Default as described in Sections 5.A and 5.B above at any time within three (3) months from the date on which the notice described in Section 6.1 above is given to SUBRECIPIENT or to commence to cure such default and diligently pursue such cure if said cure cannot be completed in three (3) months; provided in order to cure an Event of Default, SUBRECIPIENT shall be required to reimburse CITY, within such three- month period, for all reasonable expenses incurred by CITY in exercising its rights and obligations, including funding and other obligations to HUD, in connection with any such Event of Default. If SUBRECIPIENT so cures any Event of Default, then this Agreement shall be reinstated and shall remain in full force and effect as if such Event of Default had not occurred. 7. REMEDIES A) Remedies for Noncompliance: In case of an Event of Default that is not timely cured, CITY shall have available any or all of the following remedies: 1) Terminate this Agreement 2) Demand reimbursement pursuant to Section 6 above. 3) Suspend the current award for the SUBRECIPIENT'S Program in whole or in part. 4) Take any other remedies that may be legally available. 8. TERMINATION the CITY may terminate this Agreement for any reason with thirty (30) days prior written notice to the other party. Such termination may be for convenience. Termination for convenience shall be carried out in accordance with 24 CFR 92.504(c)(2)(ix) and 24 CFR 85.44. The regulations found at 24 CFR 92.504(c)(2)(ix) and 24 CFR 85.43(c) shall apply to termination for cause upon an Event of Default as described in Section 5. 9. ASSIGNMENT PROHIBITION SUBRECIPIENT shall not assign its rights or delegate its duties under this Agreement, without the prior written consent of CITY, FY18 HOME CDCB Agreement Page 10 of 19 which consent may be withheld. Any sale, assignment, or other transfer in violation of this Section 9 shall be null and void. 10.BINDING ON SUCCESSORS This Agreement shall bind and inure to the benefit of the respective successors and assigns of the parties hereto that are not prohibited by Section 9 above. 11.HOLD HARMLESS As an essential part of the consideration for this Agreement, SUBRECIPIENT shall, in accordance with Exhibit C attached hereto and incorporated herein and to the extent permitted by law, investigate, defend, indemnify, and hold harmless CITY, its elected and appointed officials, officers, employees, and agents, from and against any and all losses, damages, liabilities, claims, demands, detriments, costs, charges, and expenses (including reasonable attorneys' fees), and causes of action of whatsoever character, which the CITY may incur, sustain, or be subjected to, related to, arising out of or in any way connected with this Agreement. 12.INSURANCE SUBRECIPIENT shall comply with the insurance and indemnification provisions set forth in Exhibit C "Standard Indemnification and Insurance Provisions" attached hereto and incorporated herein. 13.WORKERS' COMPENSATION SUBRECIPIENT shall provide Workers' Compensation Insurance coverage for all of its employees involved in the performance of this Agreement as set forth in Exhibit C "Standard Indemnification and Insurance Provisions" attached hereto and incorporated herein. 14.OTHER GOVERNMENT REQUIREMENTS SUBRECIPIENT agrees to comply with all applicable federal, state and local laws, regulations, codes, ordinances, guidelines, directives, notices, bulletins, circulars, policies, procedures and all applicable program requirements, and to all amendments hereafter, including but not limited to the following: A) The HOME Regulations found at 24 CFR Part 92, and any amendments hereafter thereto, and B) The requirements of 24 CFR 92.257 concerning religious or faith-based organizations and agrees that funds provided under this Agreement will not be utilized for inherently religious activities prohibited by 24 CFR 92.257 including but not limited to worship, religious instruction, or proselytization, and C) The requirements of the Flood Disaster Protection Act of 1973 (42 U.S.C., §§ 4001 et seq.) and the Coastal Barrier Resources Act (16 U.S.C., §§ FY18 HOME CDCB Agreement Page 11 of 19 3501 et seq.), and D) The provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C., §§ 4321 et seq.), and applicable related Federal laws and authorities at 24 CFR 50.4, and HUD's implementing regulations at 24 CFR Part 58, and E) The requirements of the Fair Housing Act (42 U.S.C., §§ 3601 et seq.) and implementing regulations at 24 CFR Part 100 and Part 110; Executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at 24 CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C., §§ 2000d et seq.) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Part 1, and will affirmatively further fair housing and not discriminate upon the basis of race, color, religion, ancestry, sex, marital status, mental or physical disability, age, familial status, sexual orientation, or national origin in the sale, lease, rental, use or occupancy of dwellings receiving assistance pursuant to this Agreement. The United States of America shall be deemed to be a beneficiary of this provision both for its own right and also for the purpose of protecting the interest of the community and other parties, public or private, in whose favor or for whose benefit this provision has been provided and shall have the right, in the event of any breach of this provision, to maintain any actions or suits at law or equity or any other proper proceedings to enforce the curing of such breach, and F) The Age Discrimination Act of 1975 (42 U.S.C., §§ 6101 et seq.) and implementing regulations at 24 CFR Part 146, which prohibit discrimination because of age in programs and activities receiving Federal financial assistance, and G) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C., § 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally-assisted and conducted programs and activities, and H) SUBRECIPIENT shall comply with all provisions of Executive Order 11246, as amended by Executive Orders 11375, 11478, 12086, and 12107 and implementing regulations at 41 CFR Chapter 60, and 24 CFR 92.350, which references 24 CFR Part 5, subpart A, including nondiscrimination and equal opportunity; disclosure requirements; debarred, suspended or ineligible contractors; drug-free workplace; and nondiscrimination requirements at 42 U.S.C., § 12832. 1) SUBRECIPIENT will not discriminate against any employee or applicant for employment because of sex, race, religion, color or national origin, FY18 HOME CDCB Agreement Page 12 of 19 ancestry, marital status, mental or physical disability, age, or sexual orientation. SUBRECIPIENT will take affinitive action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex, race, religion, color or national origin, ancestry, marital status, mental or physical disability, age, or sexual orientation. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer; recruitment, recruitment advertising; layoff or termination; rate of pay or other forms of compensation; and selection for training, including apprenticeship. SUBRECIPIENT agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this non-discrimination clause. i. SUBRECIPIENT will, in all solicitations or advertisements for employees placed by or on behalf of SUBRECIPIENT, state that all qualified applicants will receive consideration for employment without regard to sex, race, religion, color or national origin, ancestry, marital status, mental or physical disability, age, or sexual orientation. I. Executive Order 11625, as amended by Executive Orders 12007, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority- and women-owned business enterprises. J. Applicability of Uniform Administrative Requirements 1) Governmental subrecipients shall abide by the policies, guidelines, and requirements of the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards as indicated at 2 CFR Part 200, and . 2) Non-profit subrecipients shall abide by the policies, guidelines and requirements of the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards as indicated at 2 CFR Part 200, 24 CFR Part 84 (Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations) as indicated at 24 CFR 92.505(b) as follows: 84.2, 84.5, 84.13-16, 84.21-22, 84.26- 28, 84.30-31, 84.34-37, 84.40-48, 84.51, 84.60-62, 84.72 and 84.73, in addition to 40 CFR Part 30, and, K. The Drug-Free Workplace Act of 1988 (41 U.S.C., §§ 8102 et seq.) and HUD's implementing regulations at 2 CFR Part 2429 in addition to the CITY's Drug-Free Workplace Policy, and FY18 HOME CDCB Agreement Page 13 of 19 L. The requirements of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing regulations at 24 CFR Part 35, and M. Conflict of interest provisions in accordance to Exhibit H and referred to in 24 CFR 92.356, 24 CFR 85.36, 24 CFR 84.42, and Section 530 of the Notice of Program Guidelines 56 F.R. 4458, which provide that no person who is an employee, agent, consultant, officer, or elected or appointed official of the entity and who exercises or has exercised any functions or responsibilities with respect to assisted activities, or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a financial interest or benefit from the activity, or have an interest in any contract, subcontract, or agreement with respect thereto, or the proceeds thereunder, either for himself or herself or for those with whom he or she has family or business ties, during his or her tenure or for one year thereafter, and N. The requirements of Section 104(d) of the Housing and Community Development Act of 1974 (42 U.S.C., §§ 5304), if applicable, or the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C, §§ 4601 et seq.). 0. SUBRECIPIENT will cause the foregoing provisions of this Section 14 to be inserted in all contracts and subcontracts for any work covered by this Agreement so that such provisions will be binding upon such contractors and subcontractors, provided that the foregoing provisions shall not apply to contracts or subcontracts for standard commercial supplies or raw materials. 15.CERTIFICATIONS SUBRECIPIENT certifies that: A) No Federally appropriated funds have been paid or will be paid, by or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government-wide common rule governing the restrictions on lobbying, published as an interim rule on February 26, 1990 (55 FR 6736) and supplemented by a Notice published June 15, 1990 (55 FR 24540). For HUD, this rule is found at 24 CFR Part 87. B) In accordance with the Federal requirements set forth in 24 CFR Part 5, Subpart A, SUBRECIPIENT and its principals (a) are not presently debarred, suspended, proposed for debarment or suspension, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR Part 24; 2 CFR Part 2424) by any Federal department or agency; (b) have not within a three-year period preceding the effective date of this Agreement been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of FY18 HOME CDCB Agreement Page 14 of 19 records, making false statement or receiving stolen property; (c) are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three year period preceding the effective date of this Agreement had one or more public transactions (Federal, State or local) terminated for cause or default. If SUBRECIPIENT is unable to certify to any other statements in this certification, SUBRECIPIENT shall attach an explanation to this Agreement. 16.NOTICE Whenever any notice is permitted or required by this Agreement, such notice shall be deemed to have been given and received when personally delivered, or three (3) days after it is mailed if mailed by United States mail, certified, return receipt requested, to the parties at the addresses listed below or such other addresses as the parties hereafter designate in writing: To Community Development Corporation of SUBRECIPIENT: Brownsville 901 East Levee Street Corpus Christi, Texas 78520 To CITY: City of Corpus Christi P.O. Box 9277 1201 Leopard Street, Corpus Christi, Texas 78469-9277 FY18 HOME CDCB Agreement Page 15 of 19 17.GENERAL PROVISIONS A) SEVERABILITY. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been contained herein. B) INTERPRETATION. This Agreement shall be interpreted in accordance with and governed by the laws of the State of Texas. The language in all parts of this Agreement shall be, in all cases, construed according to its fair meaning and not strictly for or against CITY or SUBRECIPIENT. C) SINGULAR AND PLURAL. As used herein, the singular of any word includes the plural. D) WAIVER OF PERFORMANCE. Failure of a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure of a party to exercise any right upon the default of the other party, shall not constitute a waiver of such parties' rights to insist and demand strict compliance by the other party with the terms of this Agreement thereafter. E) NO THIRD PARTY BENEFICIARIES.This Agreement is made and entered into for the sole protection and benefit of the parties and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. F) COUNTERPARTS. This Agreement may be executed by the parties in counterparts, which counterparts shall be constructed together and have the same effect as if all the parties had entered the same instrument. G) CORPORATE AUTHORITY. The person(s) executing this Agreement on behalf of each of the parties hereto represent and warrant that (i)such party, if not an individual, is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement such party is formally bound to the provisions of this Agreement, and (iv) entering into this Agreement does not violate any provisions of any other agreement to which such party is bound. H) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between CITY and SUBRECIPIENT with respect to the subject matter hereof and supersedes all prior agreements and negotiations, oral and written. This Agreement may not be amended or modified in any respect whatsoever except by an instrument in writing, approved by the CITY and signed by FY18 HOME CDCB Agreement Page 16 of 19 CITY and SUBRECIPIENT. 18. EFFECTIVE DATE. The effective date of this AGREEMENT shall be iq V Z , 20 15, such date being the date the City of Corpus Chris i ntered inthis AGREEMENT with SUBRECIPIENT and shall terminate on the of Y lk \ [,--, 20 --k-h_ Executed in duplicate originals this \ !C)- day of - V1 , 20B. ATTEST: City of Corpus Christi / 10, M . _ kaft I.# 1114 1 _ '.,t i//: ii 'i-- 1 Rebecca Huerta, Secretary Samuel "Keit ' � e ma , Interim City Manager CL 1 (2. I ...TA (-2„n COUNCIL 1zLJ 7t8 ACKNOWLEDGMENT STATE OF TEXAS § KNOW ALL BY THESE PRESENTS COUNTY OF NUECES § This instrument was acknowledged before me on Opf.4 �)±-—; 20A by Samuel "Keith" Selman, Interim City Manager of the City of CorpuChristi, Texas. • At.:;;I:\I:\_• MARTHAVAZQUEZ �\ . Alf .' :* *° My Notary ID#128028579 N•TA'Y PUBLIC, - e of �`-s ";%*O,4 s Expires March 5,2022 APPROVED AS TO FORM THIS DAY OF ifr. f , 201/ Miles Risley, City Attorney 1111? BY: , A/����— Kent Mcil 7'r li'' Assistant City Attorney FY18 HOME CDCB Agreement Page 17 of 19 SUBRECIPIENT Community of Develo• ' - Corp. = ion of Brownsville 1 „ / 7)1Z Jill lloCharles N. Mitch- - ive Director Date ACKNOWLEDGMENT STATE OF TEXAS § KNOW ALL BY THESE PRESENTS COUNTY OF NUECES § This instrument was acknowledged before me on ItAi.,t,Lat Z...-1 , 20_0 by Charles N. Mitchell, as Executive Director of the Com on, Development Corporation of Brownsville, a Texas nonprofit corporation, on •:half • . the corporation. NOTARY PUB A v , State of Texas ti? TAMMY A VILLARREAL Notary Public,State of Texas Notary ID#12402997.9 `174'"'' My Commission Expires 11-16-2021 FY18 HOME CDCB Agreement Page 18 of 19 EXHIBITS Exhibit A: Budget Exhibit B: Project Schedule Exhibit C: Standard Indemnification and Insurance Provisions Exhibit D: Homebuyer Assistance Program Policies and Procedures Exhibit E: Lead-Based Paint Disclosure and Remediation Exhibit F: Homebuyer Affordability Analysis Worksheet and Instructions Exhibit G: Homebuyer Assistance Contract and Form Deed of Trust FY18 HOME CDCB Agreement Page 19 of 19 Exhibit A Budget Expense Item Cost Downpayment Cost $ 288,000 Soft Costs/Program Delivery (4%) $ 12,000 TOTAL PROGRAM COST $300,000 Page 1 of 2 Exhibit B IMPLEMENTATION SCHEDULE INSTRUCTIONS PROJECT ACTIVITIES AND MILESTONES Grantee Activity—Enter the activity that corresponds with the activity found in the Sources and Uses of Funds section of the Contract. HOME Amount—Enter the total HOME amount approved for the corresponding activity. On the same line,under each quarter,enter the amounts anticipated for expenditure for that activity in that quarter, include CDBG and match. Month—Place the first letter of the month in each column for your Program period. Uniform reporting requires the following months to be used for quarters: October,November,December; January, February,March; April, May,June;July,August, September;. Activity Milestones—For each activity, list the milestones to be accomplished. Place an"X"in the columns representing those months in which that milestone will be accomplished. Page 1 of 3 Exhibit B IMPLEMENTATION SCHEDULE PROJECT ACTIVITIES AND MILESTONES Name of Grantee: CDC Brownsville CDBG# Program Representative Linda Marin Date of Project Completion(contracted): 2018-2020 Extended Completion Date: Page of Project Activity/ CDBG/LOCAL Milestones AMOUNT 1ST QTR. 2ND QTR. 3"QTR. 4TH QTR. 5TH QTR. 6TH QTR. 7TH QTR. 8TH QTR. BUDGETED Activity: Match $3,600,000.00 $ $514,285.00 $514,285.00 $514,285.00 $514,285.00 $514,285.00 $1,028,570.00 (mortgages) HOME $300,000.00 $ $40,000.00 $40,000.00 $40,000.00 $40,000.00 $50,000.00 $90,000.00 a)Credit Building X X X X X X X X b)Financing X X X X X X X X Approval c)Lots Selection X X X X X X X X d)Design with X X X X X X X X Architect e)Construction X X X X X X X X f)Closing X X X X X X Activity: CDBG $ $ $ $ $ $ $ $ $ Other $ $ $ $ $ $ $ $ $ a) b) c) d) e) 0 Page 2 of 3 Exhibit B BUDGET Total Budget $3,900,000.00 HOME Funds $300,000.00 Project Delivery/Soft Costs(4%) $12,000.00 Matching Funds $3,600,000.00 Total $3,900,000.00 Page 3 of 3 EXHIBIT C INSURANCE REQUIREMENTS I. SUBRECIPIENT'S LIABILITY INSURANCE A. Subrecipient must not commence work under this agreement until all insurance required has been obtained and such insurance has been approved by the City. Subrecipient must not allow any Agency to commence work until all similar insurance required of any Agency has been obtained. B. Subrecipient must furnish to the City's Risk Manager and Director Human Resources, 2 copies of Certificates of Insurance (COI) with applicable policy endorsements showing the following minimum coverage by an insurance company(s) acceptable to the City's Risk Manager. The City must be listed as an additional insured on the General liability and Auto Liability policies by endorsement, and a waiver of subrogation is required on all applicable policies. Endorsements must be provided with COI. Project name and or number must be listed in Description Box of COI. TYPE OF INSURANCE MINIMUM INSURANCE COVERAGE 30-written day notice of cancellation, Bodily Injury and Property Damage required on all certificates or by applicable Per occurrence - aggregate policy endorsements CRIME/EMPLOYEE DISHONESTY $300,000 Per Occurrence Subrecipient shall name the City of Corpus Christi, Texas as Loss Payee ERRORS & OMISSIONS $1,000,000 Per Occurrence $1,000,000 Aggregate C. In the event of accidents of any kind related to this agreement,Subrecipient must furnish the Risk Manager with copies of all reports of any accidents within 10 days of the accident. II. ADDITIONAL REQUIREMENTS A. Applicable for paid employees, Subrecipient must obtain workers' compensation coverage through a licensed insurance company. The coverage must be written on a policy and endorsements approved by the Texas Department of Insurance. The workers' compensation coverage provided must be in an amount sufficient to assure that all workers' compensation obligations incurred by the Subrecipient will be promptly met. B. Subrecipient shall obtain and maintain in full force and effect for the duration of this Contract, and any extension hereof, at Subrecipient's sole expense, insurance coverage written on an occurrence basis, by companies authorized and admitted to do business in the State of Texas and with an A.M. Best's rating of no less than A-VII. C. Subrecipient shall be required to submit a copy of the replacement certificate of insurance to City at the address provided below within 10 days of the requested change. Subrecipient shall pay any costs incurred resulting from said changes. All notices under this Article shall be given to City at the following address: City of Corpus Christi Attn: Risk Manager P.O. Box 9277 Corpus Christi, TX 78469-9277 D. Subrecipient agrees that with respect to the above required insurance, all insurance policies are to contain or be endorsed to contain the following required provisions: • List the City and its officers, officials, employees, volunteers, and elected representatives as additional insured by endorsement, as respects operations, completed operation and activities of,or on behalf of,the named insured performed under contract with the City, with the exception of the workers' compensation policy; • Provide for an endorsement that the "other insurance" clause shall not apply to the City of Corpus Christi where the City is an additional insured shown on the policy; • Workers' compensation and employers' liability policies will provide a waiver of subrogation in favor of the City; and • Provide thirty (30) calendar days advance written notice directly to City of any suspension, cancellation, non-renewal or material change in coverage, and not less than ten (10) calendar days advance written notice for nonpayment of premium. E. Within five (5) calendar days of a suspension, cancellation, or non-renewal of coverage, Subrecipient shall provide a replacement Certificate of Insurance and applicable endorsements to City. City shall have the option to suspend Subrecipient's performance should there be a lapse in coverage at any time during this contract. Failure to provide and to maintain the required insurance shall constitute a material breach of this contract. F. In addition to any other remedies the City may have upon Subrecipient's failure to provide and maintain any insurance or policy endorsements to the extent and within the time herein required,the City shall have the right to order Subrecipient to remove the exhibit hereunder, and/or withhold any payment(s) if any, which become due to Subrecipient hereunder until Subrecipient demonstrates compliance with the requirements hereof. G. Nothing herein contained shall be construed as limiting in any way the extent to which Subrecipient may be held responsible for payments of damages to persons or property resulting from Subrecipient's performance of the work covered under this agreement. H. It is agreed that Subrecipient's insurance shall be deemed primary and non-contributory with respect to any insurance or self insurance carried by the City of Corpus Christi for liability arising out of operations under this agreement. I. It is understood and agreed that the insurance required is in addition to and separate from any other obligation contained in this agreement. 2019 Insurance Requirements Housing and Community Development Project Funding—Community Development Corporation of Brownsville 11/28/2018 sw Risk Management Revised 3/14/2019 Exhibit D Affordable Housing Program Guidelines Administered by: Community Development Corporation of Brownsville 901 E. Levee St. Brownsville, Texas 78520 (956) 541-4955 Phone 1 _ LC:D\HCoBu\sEhiCmmctyy Daenvd\PSrHocAeRdEurDe\sCdoomxm c .duncxty Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-1 EQUAL HOUSING OPPORTUNITY Summary of Affordable Housing Program Funding Source: U.S. Department of Housing & Urban Development's HOME Investment Partnerships Program. AHP Assistance: Amount of Assistance is determined based on a gap analysis; assistance shall be no less than $1,000 and no more than necessary to make the home affordable, up to $14,999. Debt Ratios: Monthly Housing Expense Ratio must be between 15-30% Long Term Debt Ratio must be between 36- 43% Interest Rates: Lenders interest rates shall NOT exceed 2% of the current FHA Rate. Form of Assistance: 0% interest deferred loan repayable upon resale, refinance, or payoff of the unforgiven portion of the first lien within the period of affordability, 2nd Deed of Trust held by Community Development Corporation of Brownsville. Borrower Eligibility: Households with a total gross income at or below 80%of area median income with a capacity to repay a mortgage loan. Borrower Responsibility: Must agree to live in house as principal place of residence during the affordability period and make a minimum investment of one thousand ($1,000) dollars. Property Requirements: Subject properties must be vacant (unless occupied by Seller); meet the Uniform Physical Conditions Standards; cost cannot exceed 95% of the median area purchase price, as determined by HUD. Geographic Area: Subject properties must be located within the corporate city- limits of City of Corpus Christi. Administered by: Community Development Corporation of Brownsville 901 E. Levee St., Texas 78520 Phone: (956) 541-4955 — 2 — L:\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs CDCB\Exhibit D Policy and Procedures docx.docx AFFORDABLE HOUSING PROGRAM GUIDELINES I. PURPOSE The purpose of the Affordable Housing Program(AHP)is to increase housing opportunities to qualified low to moderate income households by providing necessary financial assistance for eligible down payment, closing costs and/or principle loan reduction in order to purchase an existing or newly constructed single-family home within the city-limits of Corpus Christi,Texas. II. PROGRAM RESPONSIBILITIES The Program is under the administrative control of the Community Development Corporation of Brownsville. A. Establish processes, procedures, and criteria for the development, implementation and operation of the Program. B. Establish yearly financial assistance limits based on available funding. C. Execute all applicable program related documents and forms. The City of Corpus Christi is funding the Community Development Corporation of Brownsville (CDCB) to administer CDCB new Affordable Housing Program. CDCB,the subrecipient,will operate the Program within these guidelines. III. PROGRAM FUNDING The Program is funded with HOME Investment Partnerships Program (HOME) grant funds provided by the U.S. Department of Housing and Urban Development (HUD) to the City of Corpus Christi, and is under the jurisdiction of HUD. The Program shall operate under the applicable federal provisions of 24 CFR Part 92. Should a conflict arise between the rules of City of Corpus Christi, CDCB, the Program Guidelines, or the HOME Program regulations,and/or the fund source,the fund source interpretation shall govern. IV. DEFINITIONS/ACRONYMS A. APPLICANT—individual requesting Program assistance by submission of a complete application. B. APPLICATION—Lender's application(1003 or other application). C. AMI—Area Median Income. D. CITY—Corpus Christi,Nueces County, Texas. E. AHP—Down Payment Assistance, closing costs, etc. F. FUND SOURCE—the origination point of the funds used to provide financial assistance. F. HOMEOWNERSHIP—means ownership in fee simple title in a 1-to 4-unit dwelling or in a condominium unit, or equivalent form of ownership approved by HUD. G. HUD—U.S. Department of Housing and Urban Development. H. LONG TERM DEBT RATIO: A debt to income ratio measuring the percentage of your income that goes towards all debt payments including housing expenses, along with all other debt payments (such as auto loans, credit cards, and other debts). I. LOW-INCOME FAMILIES—means families whose gross annual income does not exceed 80% of the area median income. 3 L:\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs CDCB\Exhibit D Policy and Procedures docx.docx J. MONTHLY HOUSING EXPENSE RATIO: A debt to income ratio measuring the percentage of your income that covers housing payments including—principal, interest,taxes, and insurance(PITI). K. NEWLY CONSTRUCTED UNIT: A property which received a Certificate of Occupancy within 1 year prior to the commitment of Program funds. L. HOMEBUYER'S INVESTMENT--Money that borrower is required to invest to participate in the Program. M. PRINCIPAL RESIDENCE—primary residence of applicant. N. PROGRAM — refers to the Affordable Housing Program provided by the Community Development Corporation of Brownsville. O. PROGRAM STAFF —refers to Community Development Staff and/or staff of the Community Development Corporation of Brownsville. P. SUBJECT PROPERTY — the house the Applicant intends to purchase for which HOME assistance is being requested. Q. UNIFORM PHYSICAL CONDITION STANDARDS (UPCS) — means uniform national standards established by HUD pursuant to 24CFR 5.703 for housing that is decent,safe, sanitary,and in good repair. V. PROGRAM ELIGIBILITY Although not all-inclusive, the Applicant and subject property must meet all of the following minimum conditions in order to be considered for program assistance. AHP assistance may not be provided if any of the following minimum eligibility requirements are not met by the Applicant or the subject property. A. Homebuyer's Participation: Homebuyers are required to invest a minimum of one thousand ($1,000) dollars. This requirement can be met by payments made outside of closing (surveys, credit report fees, appraisals,etc.)as long as the buyer can provide proof of payment in the form of receipt,returned check or electronic funds transfer. Homebuyer must provide proof of the minimum$1,000 at time of application. For applicants that owe$5,000 or less on the residential lot they intend to build upon,the equity on that lot may be used to meet the Homebuyer's Participation requirement. B. First-Time Homebuyer: Applicants must be a first-time homebuyer,which is defined as follows: 1. At the time of application, did not at any time during the past 3 years, have ownership interest in any residential property. 2. The term first-time homebuyer includes displaced homemakers and single parents. A displaced homemaker is a person who has worked only in the home for a substantial number of years. C. Age: Applicant(s)must be 18 years of age or older. D. Legal Status of the Applicant: HUD prohibits providing assistance to persons not lawfully present in the United States. All contributing members of the household receiving Program funds must be either a: 1. Citizen of the United States 2. Permanent Resident Alien 3. Temporary Resident Alien with authorization work in the United States. The Program reserves the right to request documented verification as a condition to making an eligibility determination of the Applicant. 4 L:\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs CDCB\Exhibit D Policy and Procedures docx.docx I E. Establishment of Need: As a condition of eligibility,the Program requires the Applicant to demonstrate their need for assistance. If it is determined that the applicant has sufficient financial assets or capabilities, the Program is under no obligation to provide assistance. The total household liquid assets are limited to a verifiable total not to exceed$10,000.00. Total unimproved real estate where home is to be constructed is not included as an asset.Assets include,but are not limited to the following: checking and savings accounts, stocks,bonds,retirement/pensions,mutual funds,real property, and vehicles. Exempt assets include the first family vehicle, vehicles necessary for employment or training-related purposes,and vehicles used to transport a physically handicapped person. Transfer of resources within one year of application by household members for the purpose of qualifying for the Program is strictly prohibited. During income determination,households with liquid assets in excess of$5,000 will be calculated into the annual income at a rate of.06%(passbook rate). For example,a 401k or retirement plan. The Program retains the exclusive right to make the final determination of financial need and repayment capacity of the applicant household. F. Amount of Assistance/Subsidy Layering(Gap)Analysis: The Program will not invest any more HOME funds,in combination with other governmental assistance,than is necessary to make the home affordable. The actual amount of assistance will be determined by conducting a subsidy layering(gap)analysis of the transaction. To ensure long term affordability, the analysis shall take into consideration factors such as total household debt, monthly household expenses, assets available to acquire the housing, resources needed to sustain homeownership,including the terms of planned mortgages. The minimum per unit subsidy shall not be less than $1,000. The maximum per unit subsidy shall not exceed$14,999. G. Income Eligibility: An Applicant's gross annual household income may not exceed 80% of the Area Median Income(AMI)as adjusted for household size. The Program shall use the low to moderate-income limit determinations developed by the U.S.Department of Housing and Urban Development(HUD)on an annual basis. Program income limits are amended annually in Appendix 1. Until notification has been received that the annual income limits have changed,the Program may use the HUD income guidelines in effect from the previous year. Although not all-inclusive, income eligibility is based on the gross annual income produced by all members of the household(related or not)and projected over the next 12 months (24CFR92.254(a)(3)). This includes all income earned(part-time employment, overtime, bonuses, etc.) and unearned(i.e. child support,Social Security,Disability,etc.)It must be recognized by all parties that the method of calculating income for Program eligibility purposes may be different than for lending or real estate purposes. If AHP assistance is not provided within 6 months of the income certification, recertification is required. The Program assumes no responsibility or liability of income determinations made by any party involved in a specific request for assistance other than the Program and its designated staff. 5 LAI-lousing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs CDCB\Exhibit D Policy and Procedures docx.docx H. Maximum Debt Ratios: For both existing and newly constructed homes,the household's total mortgage payment, inclusive of Principal, Interest, Taxes, and Insurance (PITI) shall be no less than 15% and no greater than 30% of the household's monthly gross income at the time of assistance. The minimum and maximum household expense ratio shall be dependent upon household's income level according to the table below: The total long-term debt ratio,which includes expected monthly mortgage payments and existing recurring monthly debt payments, cannot exceed 43%percent. In computing debt-to-income ratios, debt payments must include recurring charges including payments on installment accounts, child support or separate maintenance payments, revolving accounts,and alimony, etc. The AHP takes the debt of all adult household members applying for the mortgage and if applicable non- purchasing spouse's debt into consideration when making an income eligibility determination. With compensating factors, higher ratios may be considered by the Community Development Director on a case-by-case basis. NOTE: The AHP does not include collection accounts for medical expenses in its debt ratio calculations. I. Credit History/Other Eligibility Criteria: Applicants must have, at a minimum, a 2-year history of demonstrating financial responsibility. The long-term success of the Applicant's ability to maintain homeownership is a primary consideration of the Program. Therefore, only those Applicants that have shown a demonstrated effort to be financially responsible will be awarded assistance. No bankruptcy within the following timeframes: • Chapter 7: Must be three(3)years from discharge. • Chapter 13: Must be three(3)years from discharge. No foreclosure within the past three(3)years. No outstanding judgments. An Applicant must also be rejected if he/she is presently delinquent on any Federal debt or has a lien placed against his/her property for a debt owed to the United States Government. An Applicant is not eligible to participate in the AHP if he/she is suspended,debarred, or otherwise excluded from participating in HUD programs. J. Financing: The Applicant must qualify for primary mortgage financing from a mortgage lender.The first lien mortgage must be a fully amortized,fixed rate loan for up to thirty(30)years with an interest rate that does not exceed prevailing market rates for conforming loans. The Program retains the right to choose the applicable indicator or method it will use in determining acceptable prevailing market rates for a mortgage loan secured by an Applicant. The Program may decline participation in providing program assistance if the proposed interest rate of the Applicant's mortgage exceeds the prevailing market rate indicator or L:\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer AgreementWew docs 6 CDCB\Exhibit D Policy and Procedures docx.docx method the Program has chosen. FHA 203B, FHA, VA or Conventional Loans are eligible under this Program. K. Ineligible Financing: The Program reserves the right to determine whether to participate in any application for assistance based on the type of mortgage being secured by the Applicant. For this reason, Adjustable Rates Mortgages (ARMS), Balloon Payment mortgages, Wraparound mortgages, Graduated Mortgages, Negative Amortization mortgages are NOT allowed under this Program. Should Program analysis reveal that the conditions of the primary mortgage financing exceeds the Applicant's ability to reasonably meet the financial responsibilities of the mortgage or place them in a default position,the Program reserves the right to deny the application. The Program is under no obligation to provide financial assistance to an Applicant if it is clear the mortgage is not in the best interest of the Program and/or the Applicant. L. Homebuyer Education Course: All adult household members are required to complete an 8- hour Homebuyer Education course as provided by an approved Housing Counselor(24 CFR92.254(a)(3)). M. Program Options: Applicants have a few options when applying for homebuyer assistance: • Applicants may purchase an existing home; • Applicants may choose to build an affordable home on a lot they own; • Applicants may choose to build an affordable home through a local builder. In order to be considered for Program assistance,the subject property must meet all of the following criteria prior to closing: 1. Subject property must be located within the corporate city limits of Corpus Christi. 2. Subject property must be a single-family residence(detached house,townhouse,or condominium). 3. The maximum sales price of the housing unit must not exceed ninety-five percent(95%)of the median value for the area(24 CFR 92.254(a)(2)(iii)) as adjusted by HUD annually. 4. Subject property must be vacant or owner-occupied. Properties occupied by tenants within the last ninety(90)days are ineligible EXCEPT in cases where the tenant intends to purchase the housing unit they currently occupy/rent. 5. Physical Condition Standards (UPCS) evaluation, prior to commitment of program funds, but no earlier than 90 days before the commitment of HOME assistance. Evaluations will be performed by City staff free of charge. The Program will use the City's adopted codes and Uniform Physical Condition Standards issued pursuant to 24 CFR 5.705. The inspection will determine whether the subject property is decent,safe, sanitary and in good repair. If the housing unit does not meet these standards, the housing must be rehabilitated to meet the standards or it cannot be acquired with HOME funds. All noted deficiencies in the UPCS report must be addressed before the final settlement date. All manufactured housing including manufactured housing that replaces an existing substandard unit under the definition of"reconstruction" must meet the Manufactured Home Construction and Safety Standards codified a 24 CFR 3280. These standards preempt State and local codes which are not identical to the L:\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs 7 CDCB\Exhibit D Policy and Procedures docx.docx federal standards for the new construction of manufactured housing. 6. Subject property built prior to 1978 must meet applicable HUD regulations regarding Lead Based Paint in accordance with 24 CFR Part 35. A visual assessment on all painted surfaces shall be performed for detection of lead-based paint. 7. Funds provided under this Agreement may not be used in connection with acquisition, rehabilitation, or construction of a development located in an area identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards, unless the locality in which the site is located is participating in the National Flood Insurance Program or less than a year has passed since FEMA notification regarding such hazards and flood insurance is obtained as a condition of approval of the commitment. 8. Subject property must be located in an area where Federal Assistance is permitted. Housing units located in areas where the use of Federal funds is strictly prohibited by the Coastal Barriers Resources Act or located within a runway clear zone of a civil or military airport are ineligible. 9. Subject property cannot be used for rental, commercial or other non principle place of residence purposes. 10. Subject property must be free of all abandoned appliances,junked vehicles, trash, rubbish, etc. before assistance will be rendered. 11. Applicants that choose to build an affordable home on a lot they currently own or are still paying on, must provide proof of clear title and deed the property to the City which will be transferred to homebuyer after home is constructed. Proof of paid property taxes must be submitted at time of application. VI. PROGRAM ASSISTANCE The terms and conditions of Program assistance may include,but are not limited to the following: A. Fund Availability: As a condition of eligibility,the Program must have sufficient program funds available to pay for the assistance. The Program is under no obligation to process any application if it has been determined there are insufficient funds available to fund the program. The Program retains the right to restrict or adjust levels of down payment assistance during the program year in order to accommodate anticipated reductions or reduced levels of fund availability. Subject to Program and Loan Limitations, a Zero Interest Deferred Loan for closing costs, down payment, and principal reduction may be provided under this Program. In the event that all Program assistance funds are obligated, a time and date order waiting list will be maintained in case any of the loans for which homebuyer assistance is being provided fails. In that circumstance,the next applicant on the waiting list will be process for assistance. B. Subsidy Limits: The amount of Program assistance that may be provided to an eligible Applicant will be based on a gap analysis. Subsidies shall be no less than $1,000 and no more than necessary to make the home affordable. Applicants who are not eligible for at least $1,000 in total homebuyer assistance are ineligible for assistance. The Maximum-per-unit subsidy shall not exceed$14,999. - 8 _ IL\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New does CDCB\Exhibit D Policy and Procedures docx.docx C. Lien Terms/Repayment: Program assistance will be in the form of a zero interest,deferred loan. The zero interest, deferred loan will be secured through a second lien(Second Deed of Trust). The principal amount of the loan shall be deferred and forgiven over 5 years. HOME Funds to Buyer Minimum Affordability Period Less than $14,999 5 years D. Default: During the affordability period,the following conditions will constitute default, and require that the unforgiven portion of the deferred second mortgage loan to become immediately due and payable: • Upon refinance or home equity loan,sale,lease,transfer of title,or death of the principals. • Upon failure to occupy the house as the household's primary residence and claim it as their homestead. • Upon failure to maintain the property in a safe,sanitary and decent condition,with adopted codes and ordinances. Upon transfer of note, assumption of note, or sale for less than fair market value the entire amount of the HOME assistance will be immediately due and payable. If homebuyers fail to meet their obligations as stated above,the unforgiven portion of the deferred second mortgage loan shall be due and payable to the Community Development Corporation of Brownsville at the time of sale/closing,subject to the availability of net proceeds. Net proceeds to the Homebuyer shall be calculated by taking the sales price less any down payment and closing costs paid,less all capital improvements made since the purchase,if any,and less the superior non- HOME mortgage payoffs. As per 92.254(a)(5)(ii)(A), under no circumstances shall the Community Development Corporation of Brownsville recapture more than is available from the net proceeds of the sale. Net Proceeds will be calculated as follows: Sale Price Minus Down Payment and Closing Costs Paid by the Homebuyer at time of purchase Minus All Capital Improvements Made Since The Purchase. Minus Superior Non-HOME debt(1st mortgage) Equals Net Proceeds The HOME program restrictions on the property shall terminate upon foreclosure, transfer in lieu of foreclosure or assignment of the FHA insured mortgage to the U.S. Department of Housing and Urban Development(HUD). To the extent that there are any proceeds from the foreclosure or other sale of the property by HUD remaining after the HUD insured loan is paid, the remaining proceeds shall be paid to the Community Development Corporation of Brownsville. E. Eligible Assistance Costs: Allowable Program costs will be reviewed based on the Closing Disclosure Statement or other HUD approved form. The Program reserves the right to restrict its level of approved assistance. Any unallowable cost will not be included in the assistance. The Program will have sole discretion in defining the allowable closing costs,down payment assistance,and principal reduction amount for each applicant. In no instance will the applicant be allowed to receive funds back. _ n L:\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agteements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs y CDCB\Exhibit D Policy and Procedures docx.docx Fees charged by third party mortgage lenders are limited to the greater of two percent(2%)of the mortgage loan amount or$3,500,including but not limited to origination,application,and/or underwriting fees. Fees associated with the origination of Single Family Mortgage Revenue Bond and Mortgage Credit Certificate programs will not be included in the limit. Fees paid to parties other than the first lien lender and reflected on the Closing Disclosure Statement will not be included in the limit. Fees collected by the first lien lender at closing to be paid to other parties by the first lien lender that are supported by an invoice and reflected on the Closing Disclosure Statement will not be included in the limit. F. Ineligible Costs: Ineligible closing costs may include,but not be limited to the following: • Abstract of Title • Application fee • Assignment fee • Commitment fee • Endorsement fee • EPA Lien Endorsement • Flood Elevation Certificate • Lock In fee • Notary fee • Restrictions • Sales Commission • Title Examination • Any repair cost associated with bringing the housing unit up to compliance with Program standards prior to closing No funds shall be disbursed to the assisted Household at closing. The HOME assistance shall be reduced in the amount necessary to prevent the Household's direct receipt of funds if the Closing Disclosure Statement shows funds to be provided to the buyer at closing. G. Borrower's Acknowledgments/Certification: The Program will not provide assistance to an applicant who does not agree to all applicable Program requirements or limitations. The Program shall have the reclusive right to make the final determination of what Program requirements apply to each Applicant;the eligibility of the Applicant,and house to be purchased;the acceptability of the primary mortgage financing; and the amount of Program assistance to be provided. VII. APPLICATION PROCESS A. General: In order to apply for assistance through the Program,the Applicant must complete a mortgage loan application and execute a sales contract to purchase their first home. The applications,with required documents, must be provided to Program Staff. The Applicant and property must be determined eligible prior to receiving assistance. Eligibility may be reviewed throughout the process. Final approval must be issued prior to closing. The Program is under no obligation to process an application that has been found ineligible at any point during the application review process. Program participation is contingent upon the applicant submitting a"complete" application. Incomplete applications will not be processed. FAXED APPLICATION PACKAGES ARE NOT ACCEPTABLE. However,Pre-Application packages may be emailed in"pdf'format to Linda Marin at lmarin@,cdcb.org. 10 - L:\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs CDCB\Exhibit D Policy and Procedures docx.docx B. Staff Functions: CDCB Staff will have the responsibility of reviewing applications, making determinations of eligibility, ensuring application completeness,tracking projects,approving applications, denying applications, and withdrawing applications.. Their responsibilities will also include the initial preparation of second lien documents and funding. Program Staff will have the authority to develop and implement appropriate forms,processes and procedures required to satisfy Program Guidelines and limits for application processing and approval. C. Application Priority: Application processing priority shall be determined as follows: 1. Applications received prior to 12 pm on a business day will be date stamped on that day of business. 2. Program Staff requires a minimum of ten(10)working days to review and approve an application from date stamped on application. 3. Processing of the application will not begin until all documents are received and may take 30-45 days. 4. Incomplete applications will not be processed. If the application is incomplete, notification will be faxed or emailed to the lending institution and/or Applicant The Program is under no obligation to process an application that is incomplete. D. Application Submittal/Processing: CDCB staff may accept applications for assistance throughout the year on a first-qualified, first come, first serve basis, or may limit when applications may be accepted. In order to make a final income eligibility determination on any household,the following documents must be submitted: • Completed AHP Application or CDCB's Pre-Application • AHP Eligibility Release Form • Financial Privacy Notice to Applicants • HUD Program Application Requirements • Affidavit of Applicant • Borrower's Agreement/Certification • Copy of current government issued picture I.D. (for all adult household members) • Copy of Social Security card for all household members. • Copy of Divorce Decree and/or Proof of Child Support(for ALL children) • 4 most recent paycheck stubs (2-month history for all working household members) • Proof of other sources of income(i.e. SSA,SSDI, SSI,TANF,etc.) • Verification of Assets(Real Property,Retirement Savings, life insurance policies,etc.) • W2s,1040's,and 1099's for the last two years (for all adults, if applicable) • Most recent bank statements for all financial institutions for all household members (3 months for checking and 3 months savings) • Homebuyer Education Course Certificate • Lender's Loan Application • Closing Disclosure Statement • Verification of Rent/Living Arrangements(1-year rental history required,if renting) • Credit Report(s)with Explanation of Derogatory Accounts Eligibility determinations can take at least ten (10) working days from the date of receipt. Lenders/Applicants are encouraged to use the checklist contained in Appendix 2 of the Program Guidelines to ensure that files contain all of the documentation necessary to make an eligibility determination. Doing 1 so will expedite the determination process. Although Staff may process applications as submitted,they retain the right to request additional information and/or verification of information provided anytime during the review process. Applications may be denied - 11 - L:\Hou iiu8 Community Dev\SHARED\Community Development\FN2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs CDCB\Exhibit D Policy and Procedures docx.docx or placed on hold if found to be incomplete or contain faulty information. Staff is under no obligation to process or approve an application determined ineligible during any of these reviews. Staff will notify lenders within fifteen (15) days of their application being denied or placed in "HOLD" status via an Eligibility Determination Letter. Once an eligibility determination is made, Program Staff must conduct an environmental review of the property and issue a General Information Notice to the Seller advising him/her of their rights under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. In order to complete these tasks,the Lender must submit copies of the following documents: • Purchase Agreement including the name,address,phone and fax number of the Seller • 3rd Party Financing Addendum • Lead-Based Paint Disclosure(for any property built prior to 1978) Once the environmental checklist is complete and the required notices are issued,a property inspection is scheduled. Upon completion, the Lender and/or Seller will be provided with a list of deficiencies or a Funding Commitment Letter indicating the property passed the evaluation. If the unit fails the inspection, the Applicant may choose to allow the Seller time to make the necessary repairs or he/she can choose to look for another housing unit that meets the City's adopted codes. Staff will schedule another inspection once they receive notification that the repairs are complete,or they receive a purchase agreement on another property. E. Payments: Upon receipt of the Funding Commitment Letter,the Lender must submit a payment request along with copies of the Title Commitment Letter, Tax Certificate, Appraisal and Closing Disclosure Statement(or other approved form)to Program Staff. The 2nd Deed of Trust and Real Estate Lien Note cannot be prepared until these documents have been submitted. The legal documents will be delivered to the Closing Agent. F. Application Denial/Closure: The Program may deny assistance to any Applicant or application that does not meet all applicable requirements and restrictions of the Program guidelines, as amended. Once an application has been reviewed and denied for legitimate reasons, the application will be retired and considered closed. AHP applicants that are denied may not reapply for the Program until after six (6) months from the denial date. However, the six (6) month waiting period will not apply to applicants, if denial is disputed with support documentation or on the basis of a high long term debt ratio and the applicant has satisfied debt to lower the ratio. Denied applications will not be reevaluated for changes in family size, income, or other criteria until the six (6) month waiting period has expired without written approval from the Community Development Director. If an Applicant would like to reapply for assistance in the future, he/she/they must complete and submit a new application after a period of six(6)months from the date of denial. The Program will not retrieve or utilize any previous application information. Lenders will be notified within fifteen(15)days of denial. G. Disqualification of Applicants: Applicants may be disqualified from participating in the Program for any of the following reasons,which may include but are not limited to: - 1 2 - L:\Housing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New does CDCB\Exhibit D Policy and Procedures docxdocx • Any Applicant, at any stage of the Program process, who knowingly presents false or misleading information, makes false statements, or misrepresents himself or herself or their financial condition to the Program and/or staff will be disqualified from the Program. • Any Applicant who has been debarred from participation in federal programs. • Any Applicant who refuses to sign the Borrower's Acknowledgements. VIII. REPORTING AND RECORD KEEPING A. General: By making application to the Program, it is understood, agreed and authorized by the Applicant that Program Staff may research, obtain, and share financial and property related information for the purposes of determining eligibility and the need for Program assistance. B. Program Performance Measurement: For the purposes of consistency, accountability, evaluation, and tracking of units and spending,Program Staff will utilize the following definitions and premises: 1. Pending projects shall be defined as applications received,but not approved. 2. Approved projects shall be defined as pending projects that have been approved and funds committed for closing within sixty(60)days(in the same fiscal year). 3. Completed projects shall be defined as approved projects closed within the same year. IX. ADDITIONAL REQUIREMENTS A. Non-Discrimination: It is the policy of the City of Corpus Christi's Housing and Community Development Department and the Community Development Corporation of Brownsville to provide services without regard to race,color,religion,national origin, sex,familial status,physical handicap,The Program will operate in accordance with all applicable federal, state and local Fair Housing and Equal Opportunity laws and regulations. B. Conflict of Interest: The City of Corpus Christi and the Community Development Corporation of Brownsville covenants that neither member of its organization nor staff member who exercises influence on the decision making process presently has or will have any interest, direct or indirect,with any person, corporation, company or association hired to carry out any program activities or is a beneficiary of any program activity. All program participants will be required to sign a Conflict of Interest statement under which any existing or potential conflict of interest must be revealed. X. DEFAULT SANCTIONS A. Default: Default shall exist if any use of AHP Funds for any purpose other than authorized or any breach of any covenant,agreement,provision,or warrant of the Lender or Applicant made in the AHP application. B. Program Violations: Should an Applicant and/or Lender violate Program Guidelines or the terms and conditions of an approved and executed agreement with the Program,the Applicant and/or Lender will be notified of the violation in writing. If the Applicant and/or Lender do not take appropriate action to rectify the violation within the time period specified,the Program may seek legal remedies. Although it is not the intent of the Program to gain any premature monetary reimbursement of financial assistance provided to the Applicant,the Program may seek legal recourse. 13 L:U-lousing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs CDCB\Exhibit D Policy and Procedures docx.docx APPENDICES 1. 2018 HOME INCOME LIMITS 2. FILE CHECKLISTS 1 & 2 14 — L:\lousing Community Dev\SHARED\Community Development\FY2018-2019 Agreements\HOME 2018 Agreements\CDCB-Homebuyer Agreement\New docs CDCB\Exhibit D Policy and Procedures docx.docx Appendix I 2018 HOME Income Limits Low(80%) Income Limits Persons in Family 1 2 3 4 5 6 7 8 36,050 41,200 46,350 51,500 55,650 59,750 63,900 68,000 APPENDIX 2 AFFORDABLE HOUSING PROGRAM FILE CHECKLIST (Left-Side) Initial Date 1. Al-IP Eligibility Screening Form 2. AHP Eligibility Release Form 3. Financial Privacy Notice to Applicants 4. Copy of Picture I.D.Card/Social Security Card(for all household members) 5. Copy of Divorce Decree and/or Proof of Child Support DIVORCE CHILD SUPPORT (for ALL children) 6. Proof of Other IncomeNerification of Assets (SSA, SSI, SSDI, Retirement Savings, if applicable) 7. 4 most recent paycheck stubs(2-month history for all working household members) PE PE PE PE PE PE Or Certification of Zero Income 8. W2s and 1040s for the last two years(for all adults, if applicable) 2017 2016 Or Income Tax Verification Form (Completed/Signed for all adults that did not file.) 9. Most recent bank statements(3months for checking and 3months for savings) PE PE PE 10. Homebuyer Education Course(HBE)Certificate(8-hour HUD-approved) 11. Loan Application(Completed/Signed) (may need to be resigned after property address is identified) 12. Loan Estimate 13 Copy of Underwriting Findings 14. Verification of Rent/Living Arrangements(I year rental history, if renting) 15. Credit Report(s)w/Explanation of Derogatory Accounts For those applicants that own a residential lot within the city-limits of Corpus Christi, we will require proof of ownership and proof that city/school/county taxes are paid. Z:\HOME-Affordable Housing\DPA\2018\Porms\Appendix 2 APPENDIX 2 AFFORDABLE HOUSING PROGRAM FILE CHECKLIST (Right-Side) Initial Date 16. Income Eligibility Determination Worksheet 17. Monthly Housing Expense/Long-Term Debt Ratio Determination 18. 203(b)Limits Certification 19. Gap Analysis 20. City of Corpus Christi Eligibility Determination Letter 21. Borrower's Agreement/Certification 22. Earnest Money Contract or Purchase Agreement 23. 3rd Party Financing Condition Addendum 24. Lead-based Paint Disclosure(if built prior to 1978) 24. Environmental Checklist(CE Subject to 24 CFR 58.6) 25. City of Corpus Christi Final Approval Letter 26. Appraisal 27. Tax Information Certificate 28. Title Commitment Letter 29. Closing Disclosure 30.Final Closing Disclosure(Certified Copy) 31.Real Estate Lien Note(Original) 32.2"d Deed of Trust(Certified Copy) 33.Homeowner's Insurance Certificate Z:\HOME-Affordable Housing\DPA\2018\Forms\Appendix 2 Exhibit E Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards Lead Warning Statement Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase. Seller's Disclosure (a) Presence of lead-based paint and/or lead-based paint hazards (check (i) or(ii) below): (i) Known lead-based paint and/or lead-based paint hazards are present in the housing (explain). (ii) Seller has no knowledge of lead-based paint and/or lead-based paint hazards in the housing. (b) Records and reports available to the seller(check(i) or(ii) below): (i) Seller has provided the purchaser with all available records and reports pertaining to lead- based paint and/or lead-based paint hazards in the housing(list documents below). (ii) Seller has no reports or records pertaining to lead-based paint and/or lead-based paint hazards in the housing. Purchaser's Acknowledgment(initial) (c) Purchaser has received copies of all information listed above. (d) Purchaser has received the pamphlet Protect Your Family from Lead in Your Home. (e) Purchaser has (check (i) or(ii) below): (i) received a 10-day opportunity(or mutually agreed upon period)to conduct a risk assess- ment or inspection for the presence of lead-based paint and/or lead-based paint hazards; or (ii) waived the opportunity to conduct a risk assessment or inspection for the presence of lead-based paint and/or lead-based paint hazards. Agent's Acknowledgment (initial) (f) Agent has informed the seller of the seller's obligations under 42 U.S.C. 4852d and is aware of his/her responsibility to ensure compliance. Certification of Accuracy The following parties have reviewed the information above and certify,to the best of their knowledge,that the information they have provided is true and accurate. Seller Date Seller Date Purchaser Date Purchaser Date Agent Date Agent Date Page 1 of 1 Exhibit F APPLICANT'S NAME: HOME Homebuyer Development Analysis Tools Part A:Buyer Prequalification Part B:Market Range Analysis,known house Part C:Specific Transaction Assessment Specific buyer,unknown house Specific house,unknown buyer Known buyer,known house I Annual Income 1 Sales Price 1 Sales Price 2 Montly Income *VALUE! 2 Closing Costs 2 Closing Costs 3 Existing Debt 3 Total Cash Needed $0 3 Total Cash Needed *VALUE! 4 Max Housing Debt Ratio("Front End") 4 Allowable LTV 1 4 Buyer's Cash(downpayment and closing costs) 5 Max Total Debt Ratio("Back End") 5 Buyer's Mortgage 5 Max Mortgage based on value $0 • 6 Max Housing Pmt(w/out other debt) #VALUE! 6 Req for Dn Pmt&Closing Costs $0 6 Total Buyer Assistance Needed *VALUE! 7 Max Total Debt *VALUE! 7 Other Assistance 8 Max Actual Housing Pmt Ability #VALUE! 7 DPA/Closing Cost Assistance 8 HOME Assistance Needed #VALUE! • 8 Mortgage Write Down 9 Estimated Taxes--Annual 9 Annual Interest Rate 10 Estimated Insurance--Annual 9 Min.Mortgage Needed $0 10 Term--Years I I Estimated Mortgage Insurance--Monthly 11 PI Pmt *VALUE! 10 Annual Interest Rate Likely taxes and Insurance *VALUE! 11 Term--Years 12 Taxes--Annual • 12_Monthly Pmt Ability:Principal&Int #VALUE! 13 Insurance--Annual • 12 Monthly PI Payment *NUM! 14 Mortgage Insurance--Monthly • 15 Total escrows&mortgage insurance #VALUE! 13 Annual Interest Rate 13 Taxes--Annual 14 Term--Years 14 Insurance--Annual 16 Total PITI Payment *VALUE! 15 Mortgage Insurance—Monthly 15 Max Mortgage Qualification Amt I #VALUE! 17 Annual Income 16 Tax&Insurance Payment $0 18 Existing Debt 17 Total PITI Payment I #NUM! 19 Housing Ratio #VALUE! 20 Total Debt Ratio #VALUE! 18 Housing Ratio 21 First Mortgage LTV #VALUE! 22 Buyer's cash investment(%of purchase price) #VALUE! 19 Min.Monthly Income @ ratio in line 18 #NUM! 20 Min.Annual Income required #NUM! 21 Cash investment needed from buyer @ close $0 Gey of OmwnsvJle HanebuYer Pssstanw Program Last Revrsed 10/8/2015 Page 1 of 1 Exhibit G-Homebuyer Assistance Contract and Form Deed of Trust COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE HOMEBUYER ASSISTANCE CONTRACT This Homebuyer Assistance Contract(hereafter referred to as CONTRACT) is entered into this , between the Community Development Corporation of Brownsville (hereafter referred to as CDCB), and (hereafter referred to as BUYER) Whereas,BUYER has requested financial assistance in the amount of$ (HOME Direct Subsidy Amount) (hereafter referred to as HOME ASSISTANCE) and not to exceed $14,999 from CDCB to be used by the BUYER for down payment, closing costs, prepaid expenses and/or principal reduction for the purchase of a home located at: ., Corpus Christi., Texas 784 Whereas, HOME ASSISTANCE is provided to CDCB for disbursement in accordance with the requirements of the HOME Investment Partnerships (HOME) Program,per the federal regulations at 24 CFR Part 92; and Whereas, the CDCB is required to enter into a written agreement with the BUYER that describes the terms of such assistance, per 24 CFR 92.504(c)(5)(i); Whereas, HOME ASSISTANCE will be awarded to BUYER, subject to CDCB'S HOME Program Policies, in the form of a deferred forgivable loan; and Whereas,BUYER, based on the information furnished to CDCB, qualifies for HOME ASSISTANCE under the CDCB'S HOME Program; NOW THEREFORE, CDCB and BUYER agree as follows: 1. BUYER represents and warrants that all information furnished to CDCB in or as a part of BUYER'S application for financial assistance in the Homebuyer Program is true and correct. 2. CDCB has determined that the residence identified herein, for which HOME ASSISTANCE is requested, meets the definition of"modest housing,"per 24 CFR 92.254(a)(2)(iii)as represented by the appraised value,which is less than or equal to 95%of area median sales price, as follows: a. Effective April 1, 2018 HUD has determined that the maximum appraised value for a HOME-assisted single-family resident for homeownership is $162,000.00 for an existing home and $162,000.00 for a newly constructed HOME; and b. If the home of the household assisted by this agreement is newly constructed,the appraised value is $ ; OR c. If the home of the household assisted by this agreement is an existing home, the appraised value is $ . Page 1 of 6 3. BUYER agrees to execute a second Note and a second Deed of Trust identifying CDCB as the grantee to secure this loan. BUYER has 30 days from date of this agreement to close on the purchase of the residence herein identified, or this contract is nullified. 4. This assistance is being provided under the HOME recapture provisions as described at 24 CFR 92.254(a)(5)(ii). The term of the second Note and second Deed of Trust shall be in effect for TEN (10) years (hereafter referred to as AFFORDABILITY PERIOD AS INDICATED IN THE HUD AFFORDABILITY CHART BELOW). If the total HOME direct The period of subsidy in the unit is: affordability is: Under$14,999 5 years Between $15,000 and $40,000 10 years Over$40,000 15 years 5. BUYER will maintain property herein identified as BUYER'S PRINCIPAL RESIDENCE for the entire AFFORDABILITY PERIOD per the HOME requirements at 92.254(a)(3). 6. During the AFFORDABILITY PERIOD, HOME ASSISTANCE will be forgiven by CDCB in equal increments based on the length of the AFFORDABILITY PERIOD,on each anniversary date of the signing of closing documents. Forgiveness will be based on determination by the CDCB that the BUYER is continuously occupying the property as its principal residence; as part of this determination, the BUYER may be required to certify principal residency to CDCB annually during AFFORDABILITY PERIOD. 7. In the event that BUYER fails to occupy the property or through a voluntary or involuntary sale during AFFORDABILITY PERIOD, BUYER shall repay THE FULL OUTSTANDING BALANCE (Prorated based on annual forgiveness of Loan as stated in paragraph 6 above— Forgiveness schedule attached as Exhibit A, and herein after referred to as Outstanding Balance) of HOME ASSISTANCE. 8. In the event of a voluntary or involuntary sale of residence by the BUYER or BUYER ceases to continuously use residence as BUYER'S principal residence during the AFFORDABILITY PERIOD, BUYER will REPAY THE OUTSTANDING HOME ASSISTANCE, in accordance with CDCB'S HOME Program recapture policy, which is calculated by the CDCB using the"owner investment returned first"method of recapture,per 92.254(a)(5)(ii)(A)(4), and described as follows: Page 2 of 6 a. Upon sale, rent or by any means that BUYER no longer occupies home as principal residence, BUYER will repay the outstanding balance of HOME ASSISTANCE. If property is sold through an arm's length transaction at market value, the repayment will be subject to net proceeds of sale: i. Net proceeds will be calculated as the sales price minus superior non-HOME loan repayments and any BUYER-paid closing costs. ii. From net proceeds, BUYER/owner/seller will be allowed first to recover their investment, which includes BUYER/owner/seller's original down payment(not including any down payment assistance)plus the principal that BUYER/owner/seller has amortized on superior non-HOME loan senior debt. iii. Then,to the extent net proceeds are available,the full amount of the HOME ASSISTANCE, as recorded in the second note,will be repaid. However, in cases where there are no net proceeds or the net proceeds are insufficient to repay the HOME ASSISTANCE, the homeowner is not liable for payment of the HOME ASSISTANCE (recorded in the second Note and second Deed of Trust)beyond the amount of net proceeds that remain. iv. Finally, if any proceeds remain available after full satisfaction of HOME ASSISTANCE,these funds may be retained by the BUYER/owner/seller. v. The above limitation of repayment to net proceeds notwithstanding, if the CDCB determines that the sale has been at less-than-market value to a related or other interested party,the CDCB may require the full repayment of the outstanding balance, at its sole and absolute discretion. b. AFFORDABILITY PERIOD will terminate upon transfer of title and payment of any amount due, including HOME ASSISTANCE. 9. Failure of BUYER to continuously occupy residence as their principal residence during AFFORDABILITY PERIOD will subject BUYER to CDCB non-compliance penalties as established in CDCB'S HOME Program policies. CDCB will first request principal residency be reestablished and determine new anniversary date for HOME ASSISTANCE forgiveness. However, should BUYER continue to cease occupying residence, CDCB will accelerate Second Note and demand payment on balance of HOME ASSISTANCE or suspend forgiveness of the second Deed of Trust indefinitely, at its sole and absolute discretion. Page 3 of 6 10. Failure to pay HOME ASSISTANCE in accordance with CONTRACT and/or failure to comply with loan documents and/or failure to comply with provisions of the Note and/or Deed of Trust documents may result in the foreclosure of CDCB'S lien against the property and the loss of BUYER'S residence and property. 11. This CONTRACT creates a binding agreement between you as the BUYER and The CDCB of Brownsville. BUYER represents and warrants to The CDCB of Brownsville that BUYER has reviewed CONTRACT, understands it, and is executing it freely and voluntarily. Executed and effective as of the date and year first written above. Community Development Corporation of Brownsville Charles N. Mitchell Executive Director BUYER signature STATE OF TEXAS § § COUNTY OF NUECES § BEFORE ME, the undersigned, a Notary Public in and for said County and State, on this date personally appeared and , known to me to be the persons whose names are subscribed to the foregoing instrument and acknowledged to me that they executed the same for the purposes and consideration therein expressed. GIVEN TO ME UNDER MY HAND AND SEAL OF OFFICE, THIS DAY of ,20_ (SEAL) Notary Public Page 4 of 6 STATE OF TEXAS § § COUNTY OF NUECES § BEFORE ME,the undersigned, a Notary Public on this day personally appeared and , known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said Community Development Corporation of Brownsville, a non-profit corporation,and that she or he had executed the same as the act of such non-profit corporation for the purpose and consideration therein expressed,an in the capacity therein stated. GIVEN TO ME UNDER MY HAND AND SEAL OF OFFICE,THIS DAY of ,20 . (SEAL) Notary Public Page 5 of 6 ATTACHMENT A Forgiveness Schedule Page 6 of 6 DEED OF TRUST THIS DEED OF TRUST ("Security Instrument") is made on , 20 . The grantor(s) is/are ("Borrower"). The trustee is ("Trustee"). The beneficiary is Lender name,address,city and state ,organized and existing under the laws of Texas,and whose address Lender address (Lender"). Borrower owes Lender the principal sum of Dollars (U.S. $ ) in HUD HOME funds. This debt is evidenced by Borrower's note dated the same date as this Security Instrument("Note"). The Note provides for no payments if the Borrower complies with the terms of the Note and this Security Instrument. The Note provides that the full debt, if not paid or forgiven, shall be due and payable on the"Maturity Date"of the Note. This Security Instrument secures to Lender: (a) the repayment of the debt evidenced by the Note with, as applicable, interest or shared appreciation as provided in the Note, and all renewals, extensions and modifications of the Note; (b)the payment of all other sums, with interest as provided in the Note,advanced under paragraph 8 to protect the security of this Security Instrument; and(c)the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose,Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale,the property located in Cameron County, Texas, more specifically described as(insert legal description—lot,block,subdivision,and address): TOGETHER WITH all the improvements now or hereafter erected on the property,and all easements, appurtenances,and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property." BORROWER COVENANTS that Borrower is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Property and, the Property is unencumbered. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to such encumbrances of record. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal and Interest; Prepayment and Late Charges. Borrower shall promptly pay when due the principal of and interest(or any shared appreciation)on the debt evidenced by the Note and any late charges due under the Note. 2. Application of Payments. Unless applicable law provides otherwise,all payments received by Lender Name Deed of Trust Page 1 of 10 INITIALS Lender under paragraph 1 shall be applied: first, to any prepayment charges due under the Note; second, to amounts payable under paragraph 2;third,to interest due;fourth,to principal due;and last,to any late charges due under the Note. 3. Prior Deeds of Trust; Charges; Liens. Borrower shall perform all of Borrower's obligations under the Deed of Trust,including Borrower's covenants to make payments when due. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the Property which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any. As the Borrower makes these payments directly,Borrower shall promptly furnish to Lender receipts evidencing the payments. Except for the lien of the Deed of Trust,Borrower shall promptly discharge any other lien which shall have attained priority over this Security Instrument unless Borrower: (a)agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b)contests in good faith the lien by, or defends against enforcement of the lien in,legal proceedings which in the Lender's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. Except for the lien of the Deed of Trust,if Lender determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument,Lender may give Borrower a notice identifying the lien. Borrower shall satisfy such lien or take one or more of the actions set forth above within 10 days of the giving of notice. 4. Subordination. Lender and Borrower acknowledge and agree that this Security Instrument is not subject and subordinate in any respects to the liens, terms, covenants and condition of any advances heretofore made or which may hereafter be made for the purpose of construction, renovating, repairing, furnishing or equipping the Property. The terms and provision of the Deed of Trust are paramount and controlling,and they supersede any other terms and provisions hereof in conflict therewith. Further if the Lien Holder acquires title to the Property pursuant to a deed in lieu of foreclosure,the lien holder's acquisition of title, provides that(i) debtor has been given written notice of a default under the Deed of Trust and(ii.) debtor shall not have cured the default under the Deed of Trust, or diligently pursued curing the default as determined by the Lien holder, within the 60-day period provided in such notice sent to lender. 5. Hazard or Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage" and any other hazards, including floods or flooding, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not be unreasonably withheld. If Borrower fails to maintain coverage described above, Lender may, at Lender's option,obtain coverage to protect Lender's rights in the Property in accordance with paragraph 7. All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgagee clause. All requirements hereof pertaining to insurance shall be deemed satisfied if Borrower complies with the insurance requirements under the Deed of Trust. All original policies of insurance required pursuant to the Deed of Trust shall be held by the Lien Holder;provided,however,Lender may be named as a loss payee as its interest may appear. Borrower shall promptly give to Lender copies of all receipts of paid premiums and renewal notices. In the event of loss,Borrower shall give prompt notice to the insurance carrier, and Lender. Lender may make proof of loss if not made promptly by the Borrower. Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged,if the restoration or repair is economically feasible and Lender's Lender Name Deed of Trust Page 2 of 10 INITIALS security is not lessened. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, with any excess paid to Borrower. If Borrower abandons the Property,or does not answer within 30 days,a notice from Lender that the insurance carrier has offered to settle a claim,then Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore the Property. The 30-day period will begin when the notice is given. Unless Lender and Borrower otherwise agree in writing,any application of proceeds to principal shall not extend or postpone the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If under paragraph 22 the Property is acquired by Lender, Borrower's right to any insurance policies and proceeds resulting from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security Instrument immediately prior to the acquisition. 6. Occupancy,Preservation,Maintenance and Protection of the Property; Borrower's Loan Application; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence. Borrower shall not destroy damage or impair the Property, allows the Property to deteriorate, or commit waste on the Property. Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal, is begun that in Lender's good faith judgment could result in forfeiture of the Property or otherwise materially impair the lien created by this Security Instrument or Lender's security interest. Borrower may cure such a default and reinstate,as provided in paragraph 17,by causing the action or proceeding to be dismissed with a ruling that,in Lender's good faith determination,precludes forfeiture of the Borrower's interest in the Property or other material impairment of the lien created by this Security Instrument or Lender's security interest. Borrower shall also be in default if Borrower, during the loan application process, gave materially false or inaccurate information or statements to Lender (or failed to provide Lender with any material information)in connection with the loan evidenced by the Note, including,but not limited to, representations concerning(i)Borrower's occupancy of the Property as a principal residence and(ii)Borrower's income. Borrower acknowledges that this Property is subject to certain use and occupancy restrictions(which may be further evidenced by a separate agreement recorded in the land records where the Property is located), limiting the Property's use to Primary Residence as defined by Lender in the Note. 7. Protection of Lender's Rights in the Property. If Borrower fails to perform the covenants and agreements contained in this Security Instrument,or there is a legal proceeding that may significantly affect Lender's rights in the Property(such as a proceeding in bankruptcy,probate,for condemnation or forfeiture or to enforce laws or regulations),then Lender may do and pay for whatever is necessary to protect the value of the Property and Lender's rights in the Property. Although Lender may take action under this paragraph 7, Lender does not have to do so. Any amounts disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this Security Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from the date of disbursement at the Note rate and shall be payable,with interest, upon notice from Lender to Borrower requesting payment. Lender and Borrower further agree that a default hereunder shall constitute a default under the Deed of Trust. In the event of a default hereunder, the Lien Holder shall have the right to exercise all rights and remedies under the Deed of Trust. Notwithstanding anything to the contrary contained herein,if the Borrower's first mortgage is an FHA- insured mortgage,the Borrower is not liable for Lender's costs and expenses,including attorney's fees, if the Lender Name Deed of Trust Page 3 of 10 INITIALS event of default results solely from Borrower's violation of the owner-occupancy restriction. 8. Inspection. Lender or its agent may make reasonable entries upon and inspections of the Property. Lender shall give Borrower notice at the time of or prior to an inspection specifying reasonable cause for the inspection. 9. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in lieu of condemnation,are hereby assigned and shall be paid to Lender,subject to the terms of the Deed of Trust. In the event of a total taking of the Property,the proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due,with any excess paid to Borrower. In the event of a partial taking of the Property in which the fair market value of the Property immediately before the taking is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the taking,unless Borrower and Lender otherwise agree in writing,the sums secured by this Security Instrument shall be reduced by the amount of the proceeds multiplied by the following fraction: (a)the total amount of the sums secured immediately before the taking, divided by (b) the fair market value of the Property immediately before the taking. Any balance shall be paid to Borrower. In the event of a partial taking of the Property in which the fair market value of the Property immediately before the taking is less than the amount of the sums secured immediately before the taking,unless Borrower and Lender otherwise agree in writing or unless applicable law otherwise provides,the proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower,or if,after notice by Lender to Borrower that the condemner offers to make an award or settle a claim for damages,Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the proceeds, at its option, either to restoration or repair of the Property or to the sums secured by this Security Instrument,whether or not then due. Unless Lender and Borrower otherwise agree in writing,any application of proceeds to principal shall not extend or postpone the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of such payments. 10. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to any successor in interest of Borrower shall not operate to release the liability of the original Borrower or Borrower's successors in interest. Lender shall not be required to commence proceedings against any successor in interest or refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or Borrower's successors in interest. Any forbearance by Lender in exercising any right or remedy shall not be a waiver of or preclude the exercise of any right or remedy. 11. Successors and Assigns Bound; Joint and Several Liability; Co-signers. The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of Lender and Borrower,subject to the provisions of paragraph 16. Borrower's covenants and agreements shall be joint and several. Any Borrower who co-signs this Security Instrument but does not execute the Note: (a)is co-signing this Security Instrument only to mortgage,grant and convey Borrower's interest in the Property under the terms of this Security Instrument;(b)is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower may agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without that Borrower's Lender Name Deed of Trust Page 4 of 10 INITIALS consent; provided, however, that such modification or accommodation shall not be made without the prior written consent of the Senior Lien Holder. 12. Loan Charges. If the loan secured by this Security Instrument is subject to a law which sets maximum loan charges,and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the loan exceed the permitted limits,then: (a)any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit;and(b)any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal,the reduction will be treated as a partial prepayment without any prepayment charge under the Note. 13. Notices. Any notice to Borrower provided for in this Security Instrument shall be given by delivering it or by mailing it by certified mail unless applicable law requires use of another method. The notice shall be directed to the Property Address or any other address Borrower designates by notice to Lender. Any notice to Lender shall be given by first class mail to Lender's address stated herein or any other address Lender designates by notice to Borrower. Any notice required to be given to the Lien Holder shall be given by Certified mail to the following address: Lien Holder: Lender Name ATTN: Name of Representative for Lender Institution Address,city,state and zip code or such other address the Lien Holder designates by notice to Borrower. Any notice provided for in this Security Instrument shall be deemed to have been given to Borrower or Lender when given as provided in this paragraph. 14. Governing Law; Severability. This Security Instrument shall be governed by laws of the State of Texas. In the event that any provision or clause of this Security Instrument or the Note conflicts with applicable law,such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. To this end the provisions of this Security Instrument and the Note are declared to be severable. 15. Borrower's Copy. Borrower shall be given one conformed copy of the Note and of this Security Instrument. 16. Borrower's Right to Reinstate. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earlier of: (a)5 days (or such other period as applicable law may specify for reinstatement)before sale of the Property pursuant to any power of sale contained in this Security Instrument; or (b) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a)pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred;(b)cures any default of any other covenants or agreements;(c)pays all expenses incurred in enforcing this Security Instrument,including,but not limited to,reasonable attorneys'fees;and(d)takes such action as Lender may reasonably require to assure that the lien of this Security Instrument,Lender's rights in the Property and Borrower's obligation to pay the sums secured by this Security Instrument shall continue unchanged. Upon reinstatement by Borrower, this Security Instrument and the obligations secured hereby shall remain fully effective as if no acceleration had occurred. Lender Name Deed of Trust Page 5 of 10 INITIALS However,this right to reinstate shall not apply in the case of acceleration under paragraph 16. 17. Hazardous Substances. Borrower shall not cause or permit the presence,use,disposal,storage, or release of any Hazardous Substances on or in the Property. Borrower shall not do,nor allow anyone else to do,anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence,use,or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property. Borrower shall promptly give Lender written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge. If Borrower learns,or is notified by any governmental or regulatory authority,that any removal or other remediation of any Halardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Prior to taking any such remedial action,however,Borrower shall notify the Senior Lien Holder that such remedial action is necessary and shall obtain the Senior Lien Holder's prior written consent for such remedial action. As used in this paragraph 18, "Hazardous Substances" are those substances defined as toxic or hazardous substances by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products,toxic pesticides and herbicides,volatile solvents,materials containing asbestos or formaldehyde, and radioactive materials. As used in this paragraph 18, "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety, or environmental protection. NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 18. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument. The notice shall specify: (a)the default; (b)the action required to cure the default; (c)a date,not less than 30 days from the date the notice is given to Borrower(and with respect to the Senior Lien Holder,60 days from the date the notice is given to the Senior Lien Holder), by which the default must be cured; and(d)that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured by Borrower on or before the date specified in the notice,and the Lien Holder has not exercised its right to cure the default,then Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by applicable law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this paragraph 18, including, but not limited to, reasonable attorneys'fees and costs of title evidence. Notwithstanding anything to the contrary contained herein,if the Borrower's first mortgage is an FHA- insured mortgage,the Borrower is not liable for Lender's costs and expenses, including attorney's fees, if the event of default results solely from Borrower's violation of the owner-occupancy restriction. If Lender invokes the power of sale, Lender or Trustee shall mail copies of a notice of sale in the manner prescribed by applicable law to Borrower, and to the other persons prescribed by applicable law. Trustee shall give notice of sale by public advertisement for the time and in the manner prescribed by applicable law. Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder for cash at the time and place and under the terms designated in the notice of sale in one or more parcels and in Lender Name Deed of Trust Page 6 of 10 INITIALS any order Trustee determines. Trustee may postpone sale of all or any parcel of the Property to any later time on the same date by public announcement at the time and place of any previously scheduled sale. Lender or its designee may purchase the Property at any sale. Trustee shall deliver to the purchaser Trustee's deed conveying the Property without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order:(a)to all expenses of the sale,including,but not limited to,reasonable Trustee's and attorneys'fees;(b)to all sums secured by this Security Instrument;and(c)any excess to the person or persons legally entitled to it. 19. Release. Upon MEETING ALL THE REQUIREMENTS or payment of all sums secured by this Security Instrument,Lender shall release this Security Instrument without charge to Borrower. Borrower shall pay any recordation costs. 20. Substitute Trustee. Lender, at its option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder by an instrument recorded in the county in which this Security Instrument is recorded. Without conveyance of the Property,the successor trustee shall succeed to all the title,power,and duties conferred upon Trustee herein and by applicable law. THIS SPACE WAS INTENTED TO REMAIN BLANK. Lender Name Deed of Trust Page 7 of 10 INITIALS BY SIGNING BELOW, Borrower and Lender accept and agree to the terms and covenants contained in this Security Instrument. Borrower(s): Borrower's Signature Date Borrower's Signature Date Lender: By:Lender Name Name: Name of representative for Lender Institution Title: STATE OF TEXAS § COUNTY OF NUECES § BEFORE ME, the undersigned, a Notary Public in and for said County and State, on this date personally appeared and known to me to be the persons whose names are subscribed to the foregoing instrument and acknowledged to me that they executed the same for the purposes and consideration therein expressed. GIVEN TO ME UNDER MY HAND AND SEAL OF OFFICE,THIS DAY of ,20 (SEAL) Notary Public Lender Name Deed of Trust Page 8 of 10 INITIALS STATE OF TEXAS § § COUNTY OF CAMERON § BEFORE ME,the undersigned,a Notary Public on this day personally appeared as of Name of Lending Institution, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said Name of Lending Institutions and that she or he had executed the same as the act of such for the purpose and consideration therein expressed,and in the capacity therein stated. GIVEN TO ME UNDER MY HAND AND SEAL OF OFFICE, THIS DAY of ,20_. (SEAL) Notary Public Lender Name Deed of Trust Page 9 of 10 INITIALS Please return recorded document to: Lender Name ATTN: Name of Representative for Lender Institution Address,city,state and zip code Lender Name Deed of Trust Page 10 of 10 INITIALS PROMISSORY NOTE COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE HOME INVESTMENT PARTNERSHIPS PROGRAM HOMEBUYER ASSISTANCE PROGRAM (5)-YEAR FORGIVABLE MORTGAGE NOTE—PRORATED MONTHLY (For lien amounts up to $14,999) FOR VALUE RECEIVED, ( ), (Single) (the"Borrower")promises to pay to the COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE, a municipality in the State of Texas (the "City"), the principal sum off ) Dollars ($ J, not to exceed $14,999 and bearing no interest and subject to the following conditions, as prescribed by the federal HOME Investment Partnerships Program ("HOME") at 24 CFR Part 92, and more particularly described in the recapture provisions at 24 CFR 92.254(a)(5)(ii)(A)(4) and previously disclosed to the Borrower in a Homebuyer Assistance Contract between the City and the Borrower, dated (date ): (A) If Borrower's interest in the property described in Exhibit A, which is incorporated by reference herein (the"Property"), is sold,transferred,or otherwise conveyed, voluntarily or involuntarily,through foreclosure or otherwise,the Property ceases for any other reason to be the Borrower's principal place of residence, or if the Borrower defaults in the terms or payment of any other lien now existing against the Property, the lesser of the entire principal balance of this Mortgage Note due at the time of the sale, transfer or conveyance, or the net proceeds shall be due and payable. For the purposes of this Note, net proceeds shall mean, the sales price of the property described in the attached Exhibit A minus ordinary closing costs and any repayment of a senior loan(s). (B) The entire sum secured by this lien, without interest, shall be due in full as described in (A), above, subject to an annual prorated reduction to Zero Dollars ($0) over ten (10) years in the outstanding principal balance due and owing, based on the original principal balance of this Mortgage Note, commencing from the date of this agreement. The forgiveness of the loan shall be applied annually on the anniversary of this agreement. The amount due shall be as calculated by the City or its designee, using the methodology disclosed in Exhibit A to the Homebuyer Assistance Contract. Any required repayment of principal shall be made in full to the City not later than the 30th day following the sale,transfer,or other conveyance, or later as the City, in its sole discretion,may designate. If default is made in any payment due under this Mortgage Note, the entire principal sum due under this Mortgage Note shall at once become due and payable, upon notice from and at the option of the City. Any payments required under this Note shall be payable at the offices of the Community Development Corporation of Brownsville at 901 E Levee St, Brownsville, TX 78520, or at any address designated in writing by an Authorized Officer of the City or any holder of this Note. Page 1 of 3 Presentment, notice of dishonor, and protest are hereby waived by the Mortgagor. Unless prohibited by law,the Mortgagor agrees to pay all costs of collection, including reasonable attorney's fees and legal expenses, incurred by any holder hereof in the event this Note is not duly paid according to its terms. Notwithstanding anything to the contrary contained herein, if the Borrower's first mortgage is an FHA-insured mortgage,the Borrower is not liable for Lender's costs and expenses,including attorney's fees, if the event of default results solely from Borrower's violation of the owner-occupancy restriction. This Note is described by and secured by a Mortgage given to the Borrower from the City dated (dav i.e. 10th)(month), (year). Signed this day of . By: (Borrower name) By: (Co-borrower name) Page 2 of 3 EXHIBIT A LEGAL DESCRIPTION Commonly known as: Parcel/Property Tax ID#: Page 3 of 3 REAL ESTATE LIEN NOTE DATE: MAKER: ELIGIBLE RECIPIENT MAKER'S MAILING ADDRESS: ELIGIBLE RECIPIENT ADDRESS CITY,STATE,ZIP CODE PAYEE: COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE,A non-profit organization 1. Place for Payment: COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE 901 E.LEVEE ST. BROWNSVILLE,TEXAS 78520 2. Principal Amount:(FOURTEEN THOUSAND NINE HUNDRED NINETY-NINE DOLLARS)$14,999.00 3. Annual Interest Rate on Unpaid Principal from Date: ZERO AND NO/100 PERCENT(0.00%) interest will be charged on this Note unless and until a Default has been declared by the Note Holder as stated in paragraph 9 of this note. 4. Annual Interest Rate on Matured,Unpaid Amounts:TEN AND N0/100 PERCENT(10.00%)(the rate charged on judgments in Texas)interest will be charged on the then-outstanding principal balance of this note from the date of any Default until paid. 5. Maker's Promise to Pay a.Purpose. This note implements requirements applicable to assistance furnished by Payee to Maker under a program to help eligible families become homeowners being carried out by Payee,which,for certain loans may use grant funds furnished by HUD pursuant to 24 CFR Part 92.The Payee has assisted the Maker with respect to purchase of the Property,for use as the Maker's principal residence. b.Promise to pay.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 plus other charges at the rates stated above.All unpaid amounts shall be due by the final scheduled payment date. c.Nonrecourse Note. Payment of this Note may be enforced solely out of the proceeds of sale of the Property(except in the event of fraud or misrepresentation by the Maker). The Note Holder may not seek or obtain a deficiency judgment or any other recovery from the Maker personally in the event that the proceeds of sale are insufficient to fully satisfy the amounts due on this Note.However,the Note Holder may,at its option,seek and obtain a personal judgment for all amounts payable under this Note against any Maker responsible for any fraud or misrepresentation, which constitutes a Default under paragraph 9.a.v.This right shall be in addition to any other remedies available to the Note Holder for such fraud or misrepresentation. 6. Terms of Payment(principal and interest):The principal amount of hereof shall be deferred and forgiven at the rate of IQfs per year and shall be forgiven in its entirety upon expiration of the Affordability Period of FIVE'S) years required in 24 CFR,Section 92.254. If the Maker transfers the property either voluntarily or involuntarily or ceases to reside or dwell in the HOME- assisted unit at any time during the period of affordability,the unforgiven portion of the deferred second mortgage loan shall be due and payable to the Community Development Corporation of Brownsville subject to the availability of net proceeds.Net proceeds to the Homebuyer shall be calculated by taking the sales price less any closing costs and the superior non-HOME mortgage payoffs. As per 92.254(a)(5)(ii)(A), under no circumstances shall the Community Development Corporation of Brownsville recapture more than is available from the net proceeds of the sale. The Homeowner's investment[down payment and closing costs paid by the owner,if any and capital improvements made by the owner since purchase]will be returned first before any HOME funds are recaptured. Net Proceeds will be calculated as follows: Current Sales Price(Not less than fair market value) Minus Superior Non-HOME debt(1st mortgage) Minus Closing Costs =Net Proceeds Assuming that there are sufficient net proceeds available,recaptured HOME funds will be calculated as follows: Number of years the homebuyer remaining in AP X Total direct HOME Subsidy=Recaptured Divided by the total affordability period (multiply) Amount Available Net Proceeds Minus Homeowner's Investment* Minus Recaptured Amount =Funds returned to Homeowner *Down payment and capital improvements made by the owner since purchase. The Maker and Payee agree that the HOME program restrictions on the property shall terminate upon foreclosure, transfer in lieu of foreclosure or assignment of the FHA insured mortgage to the U.S. Department of Housing and Urban Development (HUD). To the extent that there are any proceeds from the foreclosure or other sale of the property by HUD remaining after the HUD insured loan is paid,the remaining proceeds shall be paid to the Payee. 7. Security for Payment and Obligations: a.In addition to the protections given to the Note Holder under this Note,this Note is secured by a subordinated Deed of Trust,which is dated , 2019,fromMaker to ,Trustee,that conveys the Property as described below in trust(collectively,the"Subordinate Security Instrument"). b.The lien securing this Note shall remain subordinate to the indebtedness evidenced by one or more notes payable to the Financial Institution as defined below,which notes are secured by the Senior Lien as defined below,and as renewed, extended, re-amortized, or otherwise adjusted from time to time; provided, however, that the renewal, extension,or other credit extension does not constitute an increase in the unpaid principal balance of the Financial Institution's indebtedness. c.The Subordinate Security Instrument describes the conditions under which Maker may be required to make immediate payment in full of all amounts Maker owes under this Note.One of those conditions set forth therein is that if all or any part of the Property or any interest in it(including a beneficial interest)is sold or transferred without compliance with the terms of this Note and the Subordinate Security Instrument, the Note Holder will require immediate payment in full of all sums secured by the Subordinate Security Instrument. In the event of such a sale,or in the event of any other Default under this Note or the Subordinate Security Instrument,the Note Holder may give the Maker Notice of Default and acceleration under paragraph 9 of this Note. 8. Additional Definitions: a. "Affordability Period" means the FIVE (51 years time during which units must remain affordable to eligible households as defined by 24 CFR Part 92. b."Bona Fide Net Resale Proceeds" means the amount calculated by the Note Holder by subtracting from the contract sales price between the Maker and the proposed buyer for the Property the amounts due on the Closing Date on any"Senior Liens"and on"Maker's Other Liens",and also subtracting the amount of any reasonable and customary sales expenses paid by the Maker in connection with the sale,each as determined by the Note Holder.If any part of the contract sales price for the Property is paid in the form of a promissory note,or any thing of value other than lawful money of the United States,the Note Holder is hereby authorized to assign a fair market value thereto. Maker agrees to accept such thing of value at such assigned fair market value as part of maker's equity,or to allow it to be retained by the Note Holder as Alternate Principal,as the Note Holder in its sole discretion may determine. c."Closing Date"means the date of closing of Maker's sale of the Property to a buyer,or if there is no formal closing, the date on which the conveyance(deed)is recorded. d."Down Payment Assistance"means any loan made by Payee using either HOME funds or other funds to assist a borrower with down payment funds on a home. e. "Financial Institution"means the lender which provides the loan funds for the Senior Lien Note. f. "HOME" means the Home Investment Partnerships program authorized by Title II of the National Affordable Housing Act,Pub.L. 101-625,as amended and codified at 42 U.S.C. 12701,et. seq. and implemented by 24 CFR Part 92. g."HUD"means the United States Department of Housing and Urban Development. h."Maker's Other Liens"means unpaid liens or other charges that Maker authorized,or allowed to exist,against the Property since the date of this Note. Such liens may include, for example, liens for money borrowed to finance additional improvements, home equity lines of credit, and other voluntary liens; liens for unpaid taxes, special assessments,water,sewer,and other utility charges,mechanics'liens,and other liens and charges arising by operation of law; and judgment or other creditor's liens, any of which may affect the amount of the sales proceeds. Maker hereby authorizes Note Holder to determine, in Note Holder's sole discretion,the amount by which these liens or charges reduce the Bona Fide Net Resale Proceeds for the Property,and to reduce the amount payable to Maker as maker's equity by an equal amount. i. "Note Holder"means the lender of any authorized party who takes this note by assignment and is entitled to receive amounts due under this note. j. "Property"means the certain real property described on Exhibit"A" attached to this note and by this reference incorporated in it. "Senior Lien Note"means another note in the original principal amount of DOLLARS (50.001, which is dated executed by Maker, payable to the order of ,and fully described in the Senior Lien. k."Senior Lien"means a deed of trust recorded or to be recorded in the real property records of Cameron County, Texas. 1. "Subordinate Security Instrument"means the Deed of Trust and Subordination Agreement. 9. Default a.Events of Default.Any of the following events shall constitute a Default under this Note,as of the date of the Notice of Default under paragraph 10: i. Rental during term of Note.If the Maker rents or leases(including an oral lease)the Property or any part thereof to any person or entity during the term of this Note,the Maker is in Default under this Note. u. Failure to Occupy Property as Principal Residence during the term of the Note. If all Makers are continuously absent from the Property for a period of more than thirty(30)days,or move substantially all their personal possessions out of the Property,without the written consent of the Note Holder,the Makers shall be deemed not to be occupying the Property as their Principal Residence and shall be in Default under this Note. iii. Failure to maintain the property in a safe,sanitary and decent condition,in accordance to the City of Harlingen Property Maintenance Code. All home improvements shall comply with the City of Harlingen's applicable permitting,inspection,and licensing requirements. iv. Any Transfer of the Property.Any transfer of the Property or any interest therein(including a beneficial interest) is a Default under this Note. Maker authorizes the Note Holder to determine, in its sole discretion, whether a transfer of a portion of the Property,or a partial interest therein,or any other reason has an effect on the value of the Note Holder's interest substantial enough to be considered a transfer for purposes of this paragraph. Maker will mail,certified mail,return receipt requested, or deliver notice of any proposed transfer and a copy of the sales contract to the Note Holder at least thirty(30)calendar days before the proposed Closing Date,at the Place for Payment as stated in paragraph 1 or any other place that Payee may designate inwriting. v. The Property is not Affordable Housing or Maker is not Eligible under HOME. The Maker is in default under this Note,if: (1) at the time Maker purchased the Property,the Property did not qualify as affordable housing as stated at 24 CFR§92.254(a)because the Property: (a) was purchased by Maker at an initial purchase price exceeding the HUD mortgage limit stated at 24 CFR§92.254 for the type of single family housing for the area; (b) had an estimated appraised value when Maker purchased the Property,if standard,or after any repair needed to meet the property standards stated at 24 CFR §92.251, exceeding the appropriate HUD mortgage limit stated at 24 CFR§92.254(a)(1)(i); (c) did not become the principal residence of the Maker;or (d) was in an area identified by the Federal Emergency Management Agency as having a special flood hazard,or,if the Property is in a flood hazard area,flood insurance had not been obtained by Maker; (2) at the time Maker purchased the Property, the Maker had owned a home during the three-year period before the Date of this Note and was not a first-time homebuyer as stated at 24 CFR§92.254(a)(3); (3) at the time Maker purchased the Property,the Maker's household was not a low-income family as stated at 24 CFR §92.7 at the later of(a) Maker's occupancy of the Property, or(b) at the time the Principal is advanced;or (4) at the time Maker purchased the Property,any City of Harlingen employee,agent,consultant,officer,or elected or appointed official who exercises or has exercised any functions or responsibilities with respect to activities assisted with HOME funds or who are in a position to participate in a decision-making process or gain inside information with regard to these activities,has obtained a financial interest or benefit from Down Payment Assistance,or has an interest in any contract,subcontract,or agreement with respect thereto,or the proceeds thereunder,either for themselves or those with whom they have family or business ties,during their tenure or for one year thereafter as stated at the conflict of interest provisions of 24 C.F.R.§92.356. v. Any Default under the Note or the Subordinate Security Instrument: (1) If there is an uncured default in payment of any part of principal or interest of the 's DOLLARS($0.00),note or in observance of any obligations or covenants of any instruments securing it, the debt evidenced by this (FOURTEEN THOUSAND NINE HUNDRED NINETY-NINE DOLLARS)$14.999.00 note shall immediately become payable at the option of Payee at the end of the cure period. (2) If Maker defaults in the payment of this note or in the performance of any obligation in any instrument securing or collateral to it,and the default continues after Payee gives Maker notice of the default and the time within which it must be cured by Maker,as may be required by law or by written agreement,then Payee may declare the unpaid principal balance and earned interest on this note immediately due. (3) If Maker fails to perform any of Maker's obligations in this note or in any instruments securing it,Payee may perform those obligations and be reimbursed by Maker, on demand, at the place where this note is payable for any amounts so paid,including attorney's fees,plus interest on those amounts from the date of payment at the annual interest rate on the matured,unpaid amount. The amount to be reimbursed shall be secured by all instruments securing this note. vi. Any Refinancing of the Senior Lien Note. If either the Senior Lien Note is refinanced or the Maker's equity interest in the property pursuant to Art. 16§50(a)(6)of the Texas Constitution is financed and the refinancing or financing is without Payee's prior written approval,the outstanding principal balance and accrued interest of this note shall be due and payable. vii. Maker's Fraud or Misrepresentation.Any willful misstatement of,or failure to disclose,a material fact by a Maker relating to his or her eligibility for assistance with respect to the Property under the Payee's Down Payment Assistance program under 24 CFR Part 92 is a Default under this paragraph.Recovery against the Maker responsible for the fraud or misrepresentation is not limited to the proceeds of sale of the Property, but may include personal judgment and execution thereon to the full extent authorized by law. b. Notice of Default and Amount Due. If Maker is in Default,the Note Holder may send Maker a written notice stating the reason Maker is in Default and telling Maker to pay immediately: (i)the full amount of Principal then due on this Note,(ii)all of the interest that Maker owes,and that will accrue until paid,on that amount,and(iii)all of the Note Holder's costs and expenses reimbursable under paragraph 9.c. c. Payment of Note Holder's Costs and Expenses.If the Note Holder has notified Maker to pay immediately in full under paragraph 9.b.and this note or any instrument securing or collateral to it is given to an attorney for collection or enforcement,or if suit is brought for collection or enforcement,or if it is collected or enforced through probate, bankruptcy,or other judicial proceeding,then Note Holder has the right to be repaid from the proceeds of foreclosure for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include,for example,all costs of collection and enforcement,including reasonable attorney's fees and court costs,in addition to other amounts due.Reasonable attorney's fees shall be 10%of all amounts due unless either party pleads otherwise. other amounts due. Notwithstanding anything to the contrary contained herein, if the Borrower's first mortgage is an FHA-insured mortgage,the Borrower is not liable for Lender's costs and expenses,including attorney fees,if the event of default results solely from Borrower's violation of the owner-occupancy restriction. d. No Waiver By Note Holder. Even if,at a time when Maker is in Default,the Note Holder does not require Maker to pay immediately in full under paragraph 9.b.,the Note Holder will still have the right to do so if Maker is in Default for the same reason,or for another reason,at a later time. 10. Giving of Notices a.Unless applicable law requires a different method,any notice that must be given to Maker under this Note will be given by delivering it or by mailing it by certified mail to Maker at the Property Address above, or at a different address if Maker gives the Note Holder a notice of Maker's different address. b.Any notice that must be given to the Note Holder under this Note will be given by mailing it certified mail to the Note Holder at the Place for Payment stated in paragraph 1,or at a different address,if Maker is given a notice of that different address. 11. Obligations of Persons under this Note If more than one person signs this Note,each person is fully obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed from the proceeds of sale of the Property.Any person who is a guarantor,surety or endorser of the Note is also obligated to the same extent.Any person who takes over these obligations,including the obligations of a guarantor,surety or endorser of this Note,is also obligated to keep all of the promises made in this Note.The Note Holder may enforce its rights under this Note against each person individually or against all of the persons signing the Note together. 12. Waivers Maker and any person who has obligations under this Note waive all demands for payment,presentations for payment,notices of intention to accelerate maturity,notices of acceleration of maturity,protests,notices of protest, the rights of presentment,and notice of dishonor to the extent not prohibited by applicable law."Presentment" means Maker's right to require the Note Holder formally to demand payment of amounts due. "Notice of dishonor" means the right to require the Note Holder to give notice to other persons that amounts due have not been paid. 13. Release and Satisfaction This Note shall be deemed satisfied and Maker shall be entitled to a release of the Subordinate Security Instrument upon payment of a reasonable fee,as determined by the Note Holder,for preparation and recordation of the release under the circumstances described in paragraph 6,upon payment of all amounts due upon Default under paragraph 9,or upon recordation of a deed-in-lieu of foreclosure. 14. Governing Law This Note and the Subordinate Security Instrument shall be in accordance with 42 USC 12701,et.seq. and 24 CFR Part 92 and shall be construed in accordance therewith. To the extent not inconsistent therewith,these documents shall be governed by the law of the State and local jurisdiction in which the Property is located. Each Maker is responsible for all obligations represented by this note. When the context requires singular nouns and pronouns include the plural. EXECUTED AND DELIVERED as of the day and year first above written. BY: NAME: ATTACHED EXHIBIT A-Legal Description of Property EXHIBIT A (Legal Description of Property) The Property(including any improvements)referred to in this agreement is described as follows: SECOND DEED OF TRUST Date: Grantor: Grantor's Mailing Address(including county): Trustee: Name of Trustee Trustee's Mailing Address(including county): Beneficiary:COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE,A non-profit organization Beneficiary's Mailing Address(including county): COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE 901 E.LEVEE ST. BROWNSVILLE,TEXAS 78520 Note(s) Date: Amount: FOURTEEN THOUSAND NINE HUNDRED NINETY-NINE DOLLARS($14,999.00) Maker: Payee: COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE,A non-profit organization Final Maturity Date: Terms of Payment(optional):As provided in the Note. Property(including any improvements): The certain real property more particularly described on Exhibit"A"attached to this Deed of Trust and by this reference incorporated in it,all fixtures and improvements situated thereon and all rights,titles and interests appurtenant thereto. Prior Lien(s)(including recording information): The liens securing another Note in the original principal amount of DOLLARS fS0.001 which is dated ,executed by Grantor,payable to the order of (herein "Financial Institution"), including without limitation the liens evidenced by that certain Deed of Trust and security agreement,dated ,,executed by Grantor in favor of Financial Institution and recorded in the real property records of Nueces County,Texas. Other Exceptions to Conveyance and Warranty: 1. This conveyance is subject to the following guidelines to insure that units for which Homebuyer's assistance is provided through the HOME Investment Partnerships Program,remain affordable for the length of time as required in 24 CFR, Section 92.254.These guidelines are subject to change as deemed necessary in order to insure compliance at all times with HOME regulations and program activities. Actions to be taken by the COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE include but are not limited to: A. Informing Homebuyer of the recapture provisions associated with receipt of HOME assistance, noting the program's objective to safeguard the availability of affordable housing accessible to families of very low and low income. B. Including as a deed restriction,the recapture guidelines and conditions which do not limit the sale of HOME-assisted units,but do obligate the owner to: 1. Advise the Community Development Corporation of Brownsville of any intended sale of the HOME- assisted property and to provide the City of Harlingen with any legal documentation resultingtherefrom. 2. The principal amount of the HOME subsidy shall be deferred and forgiven at the rate of 21E16 per year and shall be forgiven in its entirety upon expiration of the period of affordability. If the Grantor transfers the property either voluntarily or involuntarily,or ceases to reside or dwell in the HOME-assisted unit at any time during the period of affordability,the unforgiven portion of the deferred second mortgage loan shall be immediately due and payable to the City of Harlingen,subject to the availability of net proceeds.Net proceeds to the Homebuyer shall be calculated by taking the sales price less any closing costs and the superior non-HOME mortgage payoffs. As per 92.254(a)(5)(ii)(A), under no circumstances shall the Community Development Corporation of Brownsville recapture more than is available from the net proceeds of the sale. C. Any violation or negation of the required provisions of this policy will result in the following: 1. Sanctions imposed as specified by the Real Estate Lien Note. 2. Other sanctions may be imposed as are available through rules,regulations or applicable policy. 3. Actions as are deemed appropriate will include,but are not limited to,cancellation,termination,suspension, in whole or in part,of the contract,a request for payment in full,a penalty fee charge or debarment from any further assistance or contracts under this program. 2. Note dated of even date herewith,between Grantor and Beneficiary(the"note").All obligations and covenants in the Note shall terminate on the date Beneficiary, in its sole discretion,issues a release of all present and future rights to establish or enforce the Deed of Trust lien that secures the Note.The release shall be in such form as to enable it to be recorded in the real property records of Nueces County,Texas;and 3. Easements, rights-of-way, and prescriptive rights, whether of record or not; all presently recorded instruments that affect the property;taxes for(20181_the payment of which Grantor assumes;and subsequent assessments for that and prior years due to change in land usage,ownership,or both,the payment of which Grantor assumes. 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 obligations and covenants in the Note 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 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 smaller 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; 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. if all or any part of the Property or an interest in it(including a beneficial interest)is sold or transferred without compliance with the terms of the Note and this Deed of Trust, immediately pay in full to Beneficiary all sums secured by this Deed of Trust;and 10. comply at all times with the terms,representations,and conditions of the Note. 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 if Grantor fails to perform any of Grantor's obligations,or if all or any part of the Property or an interest in it(including a beneficial interest)is sold or transferred without compliance with the terms of the Note and this Deed of Trust,or if default occurs on a prior lien Note or other instrument,and the default continues after Beneficiary gives Grantor notice of the default and the time within which it must be cured,as may be required by law or by written agreement,then Beneficiary may: a. declare the unpaid principal balance and earned interest on the Note immediately due; 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 the Grantor defaults on the Note or fails to perform any of Grantor's obligations under this Deed of Trust,the Beneficiary shall provide the Financial Institution,a prior lienholder,with copies of all correspondence transmitted to Grantor regarding the default or notice of acceleration. Trustee's Duties 1. If requested by Beneficiary to foreclose this lien,Trustee shall: a. either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then amended; b. 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; c. from the proceeds of the sale,pay,in this order: i. expenses of foreclosure,including a commission to Trustee of 5%of the bid; ii. to Beneficiary,the full amount of principal,interest,attorney's fees,and other charges due and unpaid; iii. any amounts required by law to be paid before payment to Grantor;and iv. to Grantor,any balance; d. if the prior lien has not been released,give written notice to Financial Institution that Grantor is in default under this Deed of Trust and a copy of the notice of foreclosure sale given Grantor. 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. Proceeding under this Deed of Trust,filing suit for foreclosure,or pursuing any other remedy will not constitute an election of remedies. 4. The HOME program restrictions on the property shall terminate upon foreclosure,transfer in lieu of foreclosure or assignment of the FHA insured mortgage to the U.S.Department of Housing and Urban Development(HUD).To the extent that there are any proceeds from the foreclosure or other sale of the property by HUD remaining after the HUD insured loan is paid,the remaining proceeds shall be paid to the Beneficiary. 5. 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. 6. If any portion of the Note cannot be lawfully secured by this Deed of Trust, payments shall be applied first to discharge that portion. 7. 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.Notwithstanding anything to the contrary contained herein,if the Grantor's first mortgage is an FHA-insured mortgage,the Grantor is not liable for Beneficiary's costs and expenses,including attorney fees,if the event of default results solely from f Grantor's violation of the owner- occupancy restriction. 8. Following the maturity of the above described Financial Institution loan,Grantor assigns to Beneficiary absolutely, not only as collateral, all present and future rent and other income and receipts from the property. Prior to such maturity Borrower's rights shall not arise under this paragraph 8. 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 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 8 without taking possession of the property. Beneficiary shall apply all rent and other income and receipts collected under this paragraph 8 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 8,and acting under this paragraph 8 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. 9. 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. 10. Grantor represents that this Deed of Trust and the Note are given in part payment for purchase-money on the property. 11. Except where otherwise required or permitted by the Beneficiary in connection with a transfer on death,divorce, legal separation,or legal incapacity of a Grantor as provided in the Note,the Note and this Deed of Trust may not be assumed. 12. If Grantor fails to pay any part of principal or interest secured by a prior lien or liens on the property when it becomes payable or defaults on any prior lien instrument,the debt secured by this Deed of Trust shall immediately become payable at the option of Beneficiary. a Beneficiary and Grantor acknowledge and agree that this Deed of Trust is subject and subordinate in all respects to the liens, terms, covenants and conditions of the prior lien and to all advances heretofore made or which may hereafter be made pursuant to the prior lien,including all sums advanced for the purpose of(a)protecting or further securing the lien of the prior lien or(b)constructing,renovating,repairing,furnishing,fixturing or equipping the Property.The terms and provisions of the prior lien are paramount and controlling,and they supersede any other terms and provisions of this Deed of Trust in conflict therewith. In the event of a foreclosure or deed in lieu of foreclosure of the prior lien,any provisions herein or any provision in any collateral agreement restricting the use of the Property to low or moderate income households or otherwise restricting the Grantor's ability to sell the Property shall have no further force or effect on subsequent owners or purchasers of the Property. Any person, including his successors or assigns(other than the Grantor or a person or entity related to the Grantor),receiving title to the Property through foreclosure or deed in lieu of foreclosure of the prior lien shall receive title to the Property free and clear from such restrictions. Further, if the Financial Institution acquires title to the Property pursuant to a deed in lieu of foreclosure, the lien of this Deed of Trust shall automatically terminate upon the Financial Institution's acquisition of title,provided that(i)the Beneficiary has been given written notice of a default under the prior lien and(ii)the Beneficiary(or another party acting on its behalf)shall not have cured the default under the prior lien,or diligently pursued curing the default as determined by the Financial Institution,within the sixty-day period provided in such notice sent to the Beneficiary. 14. This Deed of Trust and the Note are implemented in accordance with the HOME Investment Partnerships Act and 24 CFR Part 92.To the extent not inconsistent therewith,these documents shall be governed by the laws of Texas and the local jurisdiction in which the Property is located. 15. When the context requires,singular nouns and pronouns include the plural. 16. The term"Note"includes all sums secured by this Deed of Trust. 17. This Deed of Trust shall bind,inure to the benefit of,and be exercised by successors in interest of all parties. 18. If Grantor and Maker are not the same person,the term"Grantor"shall include Maker. Executed and Delivered as of the date first above written. Grantor: BY: NAME: (Grantor's Acknowledgment) STATE OF TEXAS COUNTY OF Nueces This instrument was acknowledged before me on ,by Notary Public,State of Texas FxHIBIT A (Legal Description of Property) The Property(including any improvements)referred to in this agreement is described as follows: AFTER RECORDING RETURN TO: COMMUNITY DEVELOPMENT CORPORATION OF BROWNSVILLE 901 E.LEVEE ST. BROWNSVILLE,TEXAS 78520 Exhibit H CITY OF CORPUS CHRISTI - DISCLOSURE OF INTEREST City of Corpus Christi Ordinance 17112, as amended, requires all persons or firms seeking to do business with the City to provide the following information. Every question must be answered. If the question is not applicable, answer with "NA."See the definitions for the Disclosure of Interest in Section II -General Information. n COMPANY NAME: l �J VVA.VYLU.v1,� ht.u-e_L�)/�N.L u l v vOcila- SLA- c )T -OL Su ((Q ADDRESS: 9 U 1 �. LLulLl1 SA. WUjrcaV�S 12•111r Select one: Corporation ( ) Partnership( )Sole Owner( )Association Other(V) Y L.v1- 1 'rr ft r DISCLOSURE QUESTIONS: If additional space is needed, please use reverse side of this page or attach a separate sheet. 1. State the names of each"employee"of the City of Corpus Christi having an "ownership interest"constituting 3%or more of the ownership in the above named"firm." Name Job Title and City Department(if known) 2. State the names of each "official" of the City of Corpus Christi having an "ownership interest" constituting 3% or more of the ownership in the above named"firm." Name Title 3. State the names of each "board member"of the City of Corpus Christi having an "ownership interest"constituting 3%or more of the ownership in the above named"firm." Name Board, Commission, or Committee 4. State the names of each employee or officer of a "consultant" for the City of Corpus Christi who worked on any matter related to the subject of this contract and has an"ownership interest"constituting 3%or more of the ownership in the above named"firm." Name Consultant CERTIFICATE-I certify that all information provided is true and correct as of the date of this statement,that I have not knowingly withheld disclosure of any information requested, and that supplemental statements will be promptly submitted to the City of Corpus Christi Texas as ch. •es •ccur. Certifying Person: A • i a-CA4el1 Title: E' cu ' .e ' et, Signature: Date: L —Lep ��