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HomeMy WebLinkAboutResolutions - No. 2016-184RESOLUTION NO. 2016-184 A RESOLUTION OF THE LODI CITY COUNCIL APPROVING PROGRAM GUIDELINES FOR A FIRST TIME HOME BUYER PROGRAM WHEREAS, the Department of Housing and Urban Development (HUD) has determined that the City of Lodi, California, is entitled to Community Development Block Grant (CDBG) funds as an entitlement community; and WHEREAS, CDBG funds are to be used for the purposes set forth in Title I of the Housing and Community Development Act of 1974 (HCDA) to provide decent housing, a suitable living environment, and expanding economic opportunities, principally for persons of low- and moderate -income; and WHEREAS, under the provisions at 24 CFR §570.201(n), grantees may provide financial assistance to low- and moderate -income households to assist them in the purchase of a home; and WHEREAS, there is a significant need to provide this service to low-income homebuyers within our community and the CDBG Program provides the best options for implementing such a program. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve the Program Guidelines, as attached hereto as Exhibit A, for the First Time Home Buyer Program that is to be funded through the City of Lodi's CDBG Program; and BE IT FURTHER RESOLVED that the Lodi City Council hereby authorizes the City Manager, or his designee, to execute all necessary loan documents, agreements, and instruments for First Time Home Buyer Program loans up to $25,000. Dated: October 19, 2016 I hereby certify that Resolution No. 2016-184 was passed and adopted by the Lodi City Council in a regular meeting held October 19, 2016, by the following vote: AYES: COUNCIL MEMBERS — Johnson, Kuehne, Mounce, and Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Mayor Chandler ABSTAIN: COUNCIL MEMBERS — None NIFE . FERRAIOLO {ty Clerk 2016-184 Exhibit A City Of Lodi* First -Time Homebuyer Loan Program Guidelines For: Community Development Block Grant (CDBG) Program Serving the City of Lodi, a HUD Entitlement Community CITY OF LODI FIRST-TIME HOMEBUYER LOAN PROGRAM GUIDELINES 1.0. GENERAL The City of Lodi, hereinafter referred to as the'"Sponsor," has received Community Development Block Grant (CDBG) funds from the United Stan Department of Housing and Urban Development (HUD), as an entitlement jurisdiction, to administer a homebuyer program. The homebuyer program:dwcribed herein (the "Program") is designed to provide assistance to eligible home.buy€rs in purchasing homes;. also referred to herein as "housing units", located within the ProgCam'& eligible area, as described in Section 3.1.A. The Program provides this assistance in the form of deferred payment "silent' second priority loans as "gap" financing toward the purchase price, downpayment, and/or closing costs of .affordable housing units that will be occupied by the .homebuyers as their primary. residence. The Program will be administered by City of Lodi's Neighborhood Services Manager and designee (the "Program Operator"). 1.1. PROGRAM OUTREACH AND MARKETING All outreach efforts will be done in accordance with state and federal fair lending regulations to assure nondiscriminatory treatment, outreach and access to the Program. No person shall, on the . grounds of age, ancestry, color, creed, physical or mental disability or handicap, marital or familial status, medical condition, national origin, race, religion, gender or serial orientation be excluded, denied benefits or subjected to discrimination under the Program. The. Sponsor Will ensure that all persons, including those qualified individuals with handicaps, have access to the Program. A. The Fair Housing Lender and Accessibility logos will be placed on all outreach materials. Fair housing marketing actions will be based upon a characteristic analysis comparison (census data may be used) of the: Program's: eligible area compared to the ethnicity of the papulation served by the Program (includes, separately, all applications given out and those receiving assistance) and an explanation of any underserved segments of the papulation. This information is used to. show that protected classes (age, gender, ethnicity, race, and disability) are not Tieing excluded from the Program. Flyers or other outreach materials, in English and any other Ianguage that is the primary language of:a significant portion of the area residents, will be widely distributed in the Program -eligible area and will be available to any local social service agencies. The Program may sponsor homebuyer classes to help educate homebuyers about the home buying process and future responsibilities. Persons who have participated in local homebuyer seminars may be notified about the Program. B. The Program Operator will work with local real estate agents and primary lenders to explain the Program requirements for eligible housing units and homebuyers, and to review Program processes. Local real estate agents and primary lenders will also be encouraged to have their customers participate in the Program. C. Section 5.04 of the Rehabilitation Act of 1973 prohibits the exclusion of an otherwise qualified individual, solely by reason of disability, from participation under any program receiving Federal funds. The Progron. Sponsor will take appropriate steps to ensure effective communication with disabled housing applicants, residents and members of the public. 1.2. APPLICATION PROCESS AND SELECTION A. The potential Applicant (homebuyer) should contact the City of Lodi, Neighborhood Services Division at 209-333-6800 extension 2467, to obtain program information, determine whether they meet basic program qualifications and to obtain the required application. B. ;,Applicant must complete homebuyer -counseling provided by a HUD -approved Homebuyer Education program, and -receive a certificate of Completion from :the' workshop provider. More details about what homebuyer counseling qualifies is described in Section 1.5 Homebuyer Education below. C. Applicant may wish to pre -qualify for a first mortgage loan. Any reputable lender can participate in the program. D. Applicant shops for a home: and enters into a purchase contract fora: home, A real estate agent can assist the Applicant in selecting a home and executing the purchase contract. The purchase offer must allow for the Program.OperatWs review of the home inspection report. E. if not already pre-quatified, the Applicant works with the lender to qualify for a first mortgage. F. The Applicant will work with the first, mortgage lender for ownpletion of the Program application paekage+ and.tbe: first tnartgage lender will submit the application to the City. a. The application will include attachments, including Sellers Lead -Based Paint Disclosure and the EPA Booklet (A=hment A- Protect Your Family from Lead in Your Home and a confirmation that the homebuyer has reviewed/understands them. b. Completed applications are processed on a first -come -first --served basis. Applications are, deemed complete only if all information is completed„ the application is signed and dated. Incomplete applications are returned and will not be date/time stamped until complete. G. Once completed, the Program Opetatnr will review loan application package for eligibility and will notify the lender of arty additional documents that are required. Once the applicant's eligibility is confirmed, they will be provided an eligibility -approval letter. a. If the Program Operator encounters. material discrepancies andfor misrepresentations, and/or there are income, asset, household composition, or other important questions that can't be resolved, the Sponsor reserves the right to deny assistance to the household. In this case, the applicant may re -apply after six months have elapsed from the time of written assistance denial. H. Should the Applicant experience any material change in income, assets, household composition, or other eligibility determination occurring after application submittal, but prior to closing, they shall immediately report this to the first lender and Sponsor for review. L Upon receipt of appraisal and inspection reports (e.g. termite: inspection, professional home inspection), Program .Operator will review the reports .and provide a written list of any repairs that will be required. J. A report is submitted to the Prograin'-s Loan C:Qmmittee for loam approval. K. Once the loan is approved bythe Loan Committee,. the Sponsor will issue a conditional letter of funding commitment that is good for 30 days and will prepare the necessary loan. documents and will meet with the Applicant to sign loan documents. L. The City Manager, or their designee, will execute all necessary loan documents, agreements and instruments on behalf of the Sponsor. M. Subsequently, 'funds will be provided to the escrow or title company for the home purchase. N. Escrow agent shall record the Program's Deed of Trust and the Declaration of Conditions, Covenants, and Restrictions, and shall send original documents to the Sponsor within seven (7) working days from the date of the closure: O. If there are any cancellations or disqualifications of the first mortgage loan the lender shall immediately notify the Sponsor in writing and shall include the reason for this action. 1.3. THE HOME PURCHASE PROCESS A. The housing unit selection process will be conducted by the homebuyers. Prior to making an offer to purchase an eligible housing unit (see Section 3.0), homebuyer shall provide seller with a disclosure containing the following provisions, and obtain Sellers's confirmation of receipt of these provisions (Attachment C): 1) flomebuyer has no power of eminent domain and, therefore, will not acquire the property if negotiations fail to result in an amicable agreement; and 2) Homebuyer's offer is an estimate of the fair market value of the housing unit, to be finally determined by a state licensed appraiser; 3) The housing unit will be subject to inspection. The housing unit must comply with local codes at the time of construction and local health and safety standards. 4) All housing units built prior to January 1, 1978 will require a lead paint disclosure to be signed by both the homebuyer and Seller (Attachment B); 5) Since the purchase would be voluntary, the seller would not be eligible for relocation payments or other relocation assistance; b) The seller understands that the housing unit must be either: currently owner - occupied, newly constructed, or vacant for three months prior to submission of the purchase offer. 7) If the seller is not provided with a statement of the above six provisions prior to the purchase offer, the seller may withdraw from the agreement after this information is provided. B. Applicant will execute a standard form purchase and sale agreement. The purchase and sale agreement will be contingent on the household and housing unit meeting Program eligibility requirements and receiving Program loan approval. C. The Primary Lender completes and submits the Application to the Program Operator, who will verify applicant eligibility, housing unit and loan eligibility and amount of assistance to be provided consistent with these guidelines. D. Program Operator, where Program Operator is not the Sponsor, submits recommendation to the Loan Committee for approval or denial, including the reasons for the recommendation. The Loan Committee determines Applicant's approval or denial, and instructs Program Operator to notify Applicant. Program Operator provides written notification to Applicant of approval or denial with reason and, if denied, a copy of the Program's appeal procedures. E. When Primary Lender requirements are met, Program funds are deposited into escrow, with required closing instructions and loan documents. F. At the time of escrow closing, the Sponsor shall be named as an additional loss payee on fire, flood (if required), and extended coverage insurance for the length of the loan and in an amount sufficient to cover all encumbrances or full replacement cost of the housing unit. A policy of Title Insurance naming the Sponsor as insured is also required. 1.4. HOMEBUYER COSTS A. Eligible households must document that they have the funds necessary for down payment and closing costs as rewired by the Primary Lender and the Sponsor. The Program's down payment requirement. (below) is in place even if the Primary Lender has a lower down payment requirement. If the Primary Lender has a higher down payment requirement, there is no additional down payment requirement required by the Program. B. Homebuyer must contribute a minimum down payment of two percent (2%) of the purchase price, but may contribute more if desired. C. Sponsor will not provide a subsidy that is greater than the amount Of theprimary mortgage, and at a maximum of $25,000. The subsidy will write down the cost of the primary lender's loan so that the payments of PITI are -no more than 31% of the gross household income. The Program Operator will determine the level of subsidy and affordability during underwriting of the Program's loan to make sure that it conforms to the requirements of the CDBG funding Program. 1.5. HOMEBUYER EDUCATION Buying .a home can be one of the most confusing. and complicated: transactions anyone can make. Providing the: future homebuyer with informative homebuyer education training, can bring. success to the Sponsor, Program Operator, the Program and most importantly, the homebuyer. It has been documented that first-time homebuyers that have had homebuyer education havethe ability to handle problems that occur with homeownership. All Program participants are required to attend a HUD -approved hornebuyer education class. The homebuyer 'education class will cover such topies as the following: preparing for homeownership; available fimacing; credit analysis; loan closing; homeownership responsibilities; home maintenance; impact of refinancing and loan servicing. Merhods..of homebuyer counseling and education may include, but are not limited to: one-on-one counseling between homebuyer, counselor and familylindividual and/or group workshops and informational sessions. Tools of instruction may include fliers,. brochures, power paint presentations, worksheets, etc. If Applicant is unsure whether their homebuyer counseling meets the above requirements, they can contact the Neighborhood Services Division. to confirm that it is approved under this Program. 1.6. CONFLICT OF INTEREST REQUIREMENTS When the Sponsor's program contains Federal funds, the applicable Conflict of Interest requirements of 24 CFR Section 570.611 shall be followed for CDBG assistance. Section'92,356 of the. HOME Final Rule shall be followed for HOME assistance, as follows: (a) .Conflicts prohibited. No persons described in paragraph (b) of this section 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, may obtain a financial interest or benefit from a HOME -assisted activity, or have a financial interest in any contract, subcontract or agreement with respect to the HONW,-assisted activity, or the proceeds from such activity, either for themselves or those With whoa} they have business or immediate family ties, during their tenure or for one year thereafter. Immediate family ties include (whether by blood, marriage. ow adoption) the spouse; parent (including stepparent), child (including stepchild), brother, sister (including a stepbrother or stepsister), grandparent, grandchild and in-laws of a covered person. (b) Persons covered. The cmflict of interest proviisions of paragraph {a} af`this sea#ian apply to any person who is an employee, agent, cOnsultant, Officer, ar elected official or appointed official of the participating jurisdietion, State recipient, or subrecipient which are receiving HOME funds. (c) E=eptions: Threshold requirements. Upon the written request of the participating jurisdiction to HCD, HUD may grant an exceptiort to the provisions of paragraph (a) of this section on a case- by-case aseby-case basis when it determines that the exception will serve to further the purposes of the HOME 'Investment Partnerships Program and the effective and efficient administrafion of the partieipating jurisdiction's program or project. See 24 CFR 92.356(d)(1-6) for details on the documentation needed in order to submit an exception request to HUD. 1.7. NON-DISCRIMINATION REQUIREMENTS The program will be implemented in ways consistent with the Spofts0es .COMWitt lent to non- discrimination. No person shall be excluded from participation in, denied the benefit. af, :or W subject to discrimination under any program or activity funded in whole or in part with State fiends on the basis of his or her religion or religiom :affiliation, age; race: calor; creed, gender, sexual orientation, marital status, familial status (children); physical ormeAtal disability, national origin, or ancestry, or other arbitrary cause. 2.0 APPLICANT QUALIFICATIONS 2.1. CURRENT INCOME LIMITS FOR THE AREA, BY HOUSEHOLD SIZE All applicants mast certify that they meet the household income eligibility requirements for the applicable CDBG program($) and have their household income documented. The income limits in place at. the time of loran 'approval well apply when determining applicant income eligibility. All applicants must have incomes at or below $0% of the County's area median family income (MFIj . adjusted for Household size, as published by HUD. Household: Means one or more persons who will occupy a housing unit. Unborn children do not count in family size determination. Annual Income: Generally, the gross amount of income of all adult household members that is anticipated to be received during the coming 12 -month period. 2.2. INCOME QUALIFICATION CRITERIA Projected annual gross income of the applicant household will be used to determine whether they are above or below the published HUD income limits. Income qualification criteria, as shown in the most recent HCD program -specific guidance at ltttud/wWw; tc i.ea �Auff cdbu'IC.ed iel~etiPrnet .. Mq h rnl. will be followed to independently determine and certify the household's annual gross income. The Program Operator should compare this annual gross income to the income the Primary Lender used when qualifying the household. The Primary Lender is usually underwriting to FHA or conventional guidelines and may not calculate the household income or assets in the same way as required by the Program. Income will be verified by reviewing and documenting tax returns, copies of wage receipts, subsidy checks, bank statements and third -party verification of employment forms sent to employers. All documentation shall be dated within six months prior to loan closing and kept in the applicant file and held in strict confidence. A. HOUSEHOLD INCOME DEFINITION: Household income is the annual gross income of all adult household members that is projected to be received :during the coming 12-mvnth period, and will be used to determine program eligibility. Refer to. income Inclusions and Exclusions for f4 tear guidance to the types of incomes to be included or excluded when calculating gross' annual income. For those types of income counted, gross amounts (before any deductions have been taken) are used. Two types of income that are not Considered would be income of minors and live-in aides. Certain other household members living apart from the household also require special consideration. The household's projected ability to pay must be used, rather than past earnings, when: calculating income. The link to Annual Income Inclusions and Exclusions is: hi ;l b&@, ov/f cdb JF P Gni d QvcsJ endi B A uallr�cotrtelt7e lus E lusi s.do B. ASSETS: There is no asset limitation for participation in the Program. Income from assets, however, is recognized as part of annual income under the Part 5 definition. An asset is a cash or non-cash item that can be converted to cash. The value of necessary items such as -furniture and automobiles are not included.:( :(Note. it is the income earned — e.g. interest on a savings account — not the asseR .value, wbkh is counted bt annual income.) An asset's cash value is the market value less reasonable expenses required to convert the asset to cash, including, for example, penalties or fees for converting financial holdings, and costs for selling real property. The cash value (rather than the market value) of an item is counted as an asset. The Link to Asset Inclusions and Exclusions is: 2.3. DEFINITION OF AN ELIGIBLE HOMEBUYER For CDBG, an eligible homebuyer means an individual or individuals or an individual and his or her spouse who rra3ets the income eligibility requirements and is/are not currently on title to real property. Persons may be. on title of a manufactured home unit, who are planning to sell the unit as part of buying it home located on real property. Documentation of homebuyer status will be required for all homebuyers. CD80-funded programs may assist eligible homBbuyers who are not "first-time" homebuyers. 3.0. HOUSING UNIT ELIGIBILITY 3.1. LOCATION AND CHARACTERISTICS A. Housing units to be purchased must be located Within the eligible area. The eligible area is described as follows: "Within the City of Lodi " B. Housing unit types eligible for the homebuyer Program are a new or previously owned single-family residence (one unit pnaperty); a condom. i tium unit, or a Manufactured home in common -interest developments. or on a single-family lot and plaped on a permanent foundation system. C. All housing units must be in compliance with State and local codes and ordinances. D. Housing units located within a 100 -year flood zone will be required to provide proof of flood insurance with an endorsement naming the City as loss payee in order to close escrow. E. Housing must be "modest", having no more than three bedrooms, two bathrooms, and a two -car garage. Larger homes are acceptable if necessary for the following reasons: a. The family size necessitates additional bedroom(s); or b. A reasonable accommodation is necessary due to the family's disability (e.g. an extra bedroom for an aide). Exceptions must be approved by the Loan Committee and must be documented for monitoring purposes. 3.2. CONDITIONS A. Construction Inspection and Determining Need for Repairs. once the participating homebuyer has executed a purchase agrement for a housing; unit, and prior to a commitment. of Program funds, the.:following slaps must be taken for the housing unit to be eligible for purchase under the Program: 1) When the Sponsor's Program utilizes. Federal funds and if the housing, unit was constructed prior to 1978 thon the lad -based paint requirements of Section 3.2.0 will apply. 2) The Program Operator, a certified housing inspector, or a 5poosor representative will walk through the housing unit, deterinine. if it is struowrally sound, and identify any code related and health and safety deficiencies that need to be corrected. A list of code related repair items will be given to the homebuyers and their Realtor to be negotiated with the seller. Only new construction and homes built within the previous 12 months and not previously occupied are not subject to a home inspection. 3) Upon. completion of all work required by the Program Operator, Sponsor, appraiser, pest inspector and/or certified housing inspector, a final inspection will be Conducted prior to close of eseraw: The inspector will sign off on all required construction work assuring that each housing unit receiving Program assistance is in compliance with local codes and health and safety requirements at the time of purchase and prior to occupancy. B. Lead -Based faint Ef4mr0d All housing units built. prior to 1978 for which HOME or CIDBG funding is anticipated are subject to the requirements of Chis section 3.2.C. Such homes must undergo a visual assessment by.a parson who ltas.taken Hl_ WS online Visual Assessment course. Deteriorated paint mush be stabilized using. work :safe :methods. Clearance must be obtained after paint stabilization by a DHS certified LBP Risk Assessor/Inspector. HOME and CDBG general administrative and activity delivery funds may be used to pay for lead-based paint visual assessments, and if lead mitigation and clearance costs are incurred, these programs may incorporate the costs into the calculation of Program assistance. The following requirements must be met: 1) Notification: a) Prior to homebuyer's obligation to purchase a pre -1978 home, the Buyer will be given the most recent copy of and asked to read the EPA pamphlet "PnX- ect Your FamUy Firnm Ledo. in Your Home" ' (EPA 747-K-94- 001). A signed receipt of the pamphlet will be Deptin the SponsWs.hornebuyer file; b) A notice to residents is required following a risk assessment/inspection using form DHS 8552, which is provided by the DHS -certified Risk Assessor/Inspector; c) a notice to residents is required following lead-based paint mitigation work using Visual Assessment and Lead-based Paint Notice of Presumption and Hazard Reduction form, LBP — 1 (Attachment B). 2) Disclosure: Prior to the homebuyer's obligation to purchase a pre -1978 housing unit, the HUD disclosure (Attachment B), "Seller's Lead-based Paint Disclosure" notice must be provided by the seller to the homebuyer. 3) Wpedions. The Inspector shall conduct a `'Visual Assessment" of all the dowelling unit's painted surfaces .in order to idenfify., deteriorated paint.. All: deteriorated paint.vvill be stabilized in accordance with CFR 35.133'0 (a) and.(b); arrd.a Clearance shall be made in accordance with CFR 35.1340. 4) Wigation: If stabilization is required, the contractor perfuming the mitigation work must use appropriately trained workers. Prior to the contractor starting: mitigation work the Program Operator shall obtain copies of tbe. contradtor's and workers' appropriate p f of LBP training, as applicable to the job in order to assure that only qualified contractors and workers are allowed to perform the. mitigation. C. The Program Operator will: 1) confirm that the housing unit is within the eligible area, 2) will review each proposed housing unit to ensure that it meets all eligibility criteria before funding, and 3) ensure a completed Lead Compliance Document Checklist is placed in each purchaser's file. 3.3 ANTI -DISPLACEMENT POLICY AND RELOCATION ASSISTANCE Eligible homes will be those that are currently owner -occupied or have been vacant for three months prior to the acceptance of a contract to purchase. A unit is ineligible if its purchase would result in the displacement of a tenant. It is not anticipated that the implementation of the Program will result in the displacement of any persons, households, or families. However, if tenant - occupied homes are included in the Program and. relocation becomesnecessary, the activity will be carried out in compliance with Sponsor's relocation plan, which describeshow those permanently displaced will be relocated and paid benefits in accordance with the following Federal laws. A. Uniform Relocation Assistance (URA) and Real Property Acquisition Policies Act of 1970 The federal URA and Real Property Acquisition Policies, as amended by the URA Amendments of 1987, contains requirements for carrying out real property acquisition or the displacement of a person, regardless of income status, for a project or program for which HUD financial assistance (including CDBG and HOME) is provided. Requirements governing real property acquisition are described in Chapter V111. The implementing regulations, 49 CFR Part 24, require developers and owners to take certain steps in regard to tenants of housing to be acquired, rehabbed or demolished, including tenants who will not be relocated even temporarily. B. Section104(d) of the Housing and Community Development Act of 1974 Section 104(d) requires each contractor (CHDO or State Recipient), as a condition of receiving assistance under HOME or CDBG, to certify that it is following a residential anti -displacement plan and relocation assistance plan. Section 104(d) also requires relocation benefits to be provided to low-income persons who are physically displaced or economically displaced as the result of a HOME or CDBG assisted project, and requires the replacement of low-income housing, which is demolished or converted. The implementing regulations for Section 104(4) can be found in 24 CFR Part 570(a). 3.4. PROPER NOTIFICATION AND DISCLOSURES A. Upon selection of a housing unit, a qualified seller and homebuyer will be given the necessary disclosures for the Program. The homebuyer must have read and signed all Program disclosure forms. Any and all property disclosures must be reviewed and signed by the homebuyer and seller. B. All owners who wish to sell their housing units must receive an acquisition notice prior to submission of the homebuyer's original offer. This notice will be included in the contract and must be signed by all owners on title. The disclosure must contain the items listed in 1.3.13. (required for federally -funded programs). 4.0. PURCHASE PRICE LIMITS There are no purchase price limits under this program. 5.0. THE PRIMARY LOAN Prior to obtaining a loan from the Sponsor, a homebuyer must provide evidence of financing for the maximum amount the Primary Lender is willing to loan (the "primary loan"). A. QUALIFYING RATIOS The front-end (housing) debt -to -income ratio shall not exceed 30% and is the percentage of a borrower's gross monthly income (before deductions) that would cover the cost of the loan principal and interest payment, property taxes, property insurance, mortgage insurance, and HOA dues, if any. The back -end (total) debt -to -income ratio shall not exceed 45% and is the percentage of a borrowYees gross monthly income that would cover the cost of housing as described in the paragraph above; plus, any other monthly debt payments like car or personal loam and credit card debt, as well as child support and alimony payments. B. INTEREST RATE The primary, loan must have a fixed interest Me that does not exceed the current markcet roe, as established by an index of the maxinmra primary rate rule of FNA 90-day ratio plus 100 bps (1 %), found at the following Website: ltttns;/Jw+vw.�i►nie .cola/ Ire r And No temporary interest rate buy -downs are permitted. C. LOAN TYPE AND TERM The primary.lom shall be fully amortized and have a term "all due and payable" in no fewer than 30 year& (unless: conditions under 7.3 are mot). There shall not be a balloon payment due before the maturity date of the Program loan. D. IMPOUND ACCOUNT All households will be required to have impound accounts for the payment of taxes and insurance to ensure they remain current. 6.0. THE PROGRAM LOAN A. MAXIMUM AMOUNT OF PROGRAM ASSISTANCE For downpayment assistance only (not closing costs or towards purchase price of home), the Sponsor is limited to providing no more than 50% of the required downpayment for the home purchase. B. NON-RECURRING CLOSING COSTS Non-recurring costs such as credit report, escrow, closing and recording fees, and title report and title insurance, title updates and/or related costs may be included in the Program loan. C. AFFORDABILITY PARAMETERS FOR HOMEBUYERS The actual amount of a buyer's Program subsidy shall be computed according to the housing ratio parameters specified in Section 5.0.A.. Each borrower shall receive .only the subsidy needed to allow them to become homeowners: ("the Gap") while keeping their housing costs affordable. The Program Operator will use the "front-end ratfv.." of housing-exponsv-to-income to determine if the amount of the proposed primary loan is acceptable and, ultimately, the Program subsidy amount required, bridging the gap between the acquisition cost (purchase price plus closing costs) less down payment, and the amount of the primary loan. D. RATE AND TERMS FOR PROGRAM LOAN All Program assistance to individual households shall be made in the form of deferred payment (interest and principal) loan (DPL). The Program loan's t" Shall be for 30 years. Upon 30 years of the date of the signing of the Loan, a lump sum (balloon payment) of principal and interest will be due. The Program loan's interest rate shall be 2% simple interest, which accrues annually. All Progm loan payments shall be, deferred because the borrowers will have their repayment ability fill+ titiluzed tinder the primary loan. Loan principal shall not be forgiven,. and theloan period cannot be axtended,. except for loans that are resubordinated when.. a rate and term refinance is approved, per Attachment A. E. COMBINED LOAN -TO -VALUE RATIO The loan -to -value ratio for a Program loan, when combined with all other indebtedness to be secured by the property, shall not exceed 100. .pert of the sales price plus a maximum of up to 5 percent of the sales price to cover actual closing. casts. 7.0. PROGRAM LOAN REPAYMENT 7.1. PAYMENTS ARE VOLUNTARY Borrowers may begin making voluntary payments at any time. 7.2. RECEIVING LOAN PAYMENTS A. Program loan payments will be made to: City of Lodi Neighborhood Services Division 221 West Pine Street Lodi, CA 95241 B. The Sponsor will be the receiver of loan payments or recaptured funds and will maintain a financial record-keeping system to record payments and file 5taternents. an payment status. Payments shall be deposited and accounted for in the Sponsor's Program Income Aecoun% as required by HUD programs. The Program lender will accept loan payments from borrowers prepaying deferred loans, and from borrowers making payments in full upon sale or transfer of the property. All loan payments are payable.to the Sponsor., The .Sponsor may at its discretion, enter into aa agreement with a third party to collect and distribute payments and/or complete all loan servicing aspects of the Program. 7.3. DUE UPON SALE OR TRANSFER In the event that an owner sells, transfers title, or discontinues residence in the purchased property for any reason, the principal balance of the Deferred Payment Loan is due and payable, except: A. The owner shall be assured a fair return on investment including the owner's investment and any capital improvement. If the Net proceeds are insufficient for the Sponsor to recapture the balance of Program Loan owed, the Sponsor shall share the Net proceeds with the owner in proportion to each par yrs investment in the property. The Net proceeds are the sales price less repayment of the primary loan, and closing costs. B. If the owner of the property dies, and the heir to the property meets income requirements, the First -Time Homebuyer definition, and intends to occupy the home as a principal residence, the heir may be permitted, upon approval of the Sponsor, to assume the load at the rate and terms the heir qualifies for under the curmt participation guidelines. If the property owner dies and the heir does not meet eligibility requirements, the loan is due and payable. C. If an owner wants to convert the property to a rental unit, or any commercial or non- residential use, the loan is due and payable. D. The loan will be in default if the borrower fails to maintain required fire or flood insurance or fails to pay property taxes. See Attachment A on loan defaults for further information on property restrictions. 7.4. LOAN SERVICING POLICIES AND PROCEDURES See Attachment A for local Ioart servicing policies and procedures. While the attached policy outlines a systemathat care accommodate a crisis that restricts borrower repayment ability, it should in no way be misunderstood: The loan retest be repaid. All legal means to ensure the repayment of a delinquent loan as outlined in the Loan Servicing Policies and Procedures will be pursued. 7.5. LOAN MONITORING PROCEDURES Sponsor will monitor Borrowers and their housing units annually to ensure adherence to Program requirements including, but not limited to, the following: A. Owner -occupancy B. Property tax payment C. Hazard insurance coverage D. Good standing on Primary loans E. General upkeep of housing units 8.0. PROGRAM LOAN PROCESSING AND APPROVAL A. Loan Processing per the requsst of the homebuyer, the City will send out an eligibility packetwith all the necessary fbims, disci sum$,, information, and application. They should submit a complete application packet with all the Sponsor's. Program loan.documents. executed as. well as all the infarmation front the Primary` nder. The Primary Lender should submit all documents listed in the Application Transmittal Checklist Form, which includes but is not limited to: 1) accepted property sales contract with proper seller notification; 2) mortgage application with good Wth ostersrates' and first mortgage disclosures; 3) full mortgage credit report and rent verification;. 4) current third party. income verifleations and verifications of assets; 5) homeownership education aertifleate, if applicable; and f) signed underwriting transmittal. summary and final signed loan application, both froth primary lender. Staff will work with local leandem to ensurequalified participants receive only the benefit from the Sponsor's Program needed to purchase the housing unit and that leveraged funds will be used when possible. B. Creditworthiness Qualifying ratios are only a rough guideline in determining a potential borrower's creditworthiness. Many factors such as excellent or poor credit history, amount of down payment, and size of loan will influence the decision to approve or disapprove a particular loan. The borrower's credit history will be reviewed by the Sponsor and documentation of such maintained in the loan file. The Sponsor may elect to obtain a credit report or rely on a current copy obtained by the primary lender. As a guide, if the applicant's middle credit score is less than 610, which is based on certified credit agencies, including Equifax, Experian, and TransUnion, then consideration of the additional factors will be evaluated and a determination of creditworthiness will be approved by the Loan Committee. Applicant's must allow a certain amount to time pass, after one of the following events: a. Two years from the date of discharge for Bankruptcy, Chapter 7, or Chapter 13. b. Three years from the date of foreclosure. C. Documents from Primary Lender After initial review of the qualified homebuyer's application packet, which includes both the Applicant's and the Primary Lender's sections, the Program Operator will request any additional documents needed. Documents may be faxed, but originals shall be received through the mail before Program funds are committed to escrow. Based on receipt and review of the final documents, the Program Operator will do an income certification (using most recent HUD program's guidance on income calculation and determination), and homebuyer certification (review of credit report and income taxes). Documentation of affordability will then be verified and subsidy requirement determined. D. Disclosure of Program and Loan Information to Homebuyers The Program's application and disclosure forms will contain a summary of the loan qualifications of the borrower with and without Program assistance. Housing ratios with and without Program assistance are also outlined in these guidelines. Information on the Program's application will be documented with third party verifications in the file. For example, the sales contact will provide the final purchase price and outline how much of the closing costs are to be paid by the seller, etc. The appraisal, termite and title report will provide information to substantiate the information in the sales contract and guide the construction inspection. The Program loan application will provide current debt and housing information and will be documented by the credit report and income/asset verifications. The Primary Lender's approval letter and estimated closing cost statement should reflect all the information in the loan package and show any contingencies of loan funding. .Reviewing the Primary Lender's loan underwriting documentation will provide basic information about the qualification of the applicant and substantiate the affordability provided by the Program loan. By reviewing and crosschecking all the Primary Lender information, the final Program loan amount approved will fall within the affordability parameters of the Program. 8.1. COMPLETION OF UNDERWRITING AND APPROVAL OF PROGRAM LOAN Once the loan. approval package has been completed the Program Operator will submit it to the Sponsor for approval. Sponsor will review the, rawest and may approve it with or without conditions. Upon approval, a final closing date for escrow is set and Program funds. are amassed for the homebuyer. 8.2. PRIMARY AND PROGRAM LOAN DOCUMENT SIGNING The homebuYer(s) sign promissory notes; loan agreements, deeds of trust, and S.Mutory lending notices (Truth In Lending (Til,), etc:); the Deeds of Trust are recorded with the County Clerk/Recorder at the same. time,. and the requests) for copy of Notice of Default are also recorded with the County Clerk/Recorder. The City Manager, or their designee, will execute all necessary loan documents, agreements and instruments on behalf of the Sponsor. 8.3. ESCROW PROCEDURES The escrow/title company shall review the escrow instruction provided by the Program lender and shall issue a California Land Title Association (CLTA) and the American Land Title Association (ALTA) after closing. The. CLTA policy is issued to the homebuyer and protei<ts there against failure of title based on public records and against such unrecorded risks.as forgery of a dead. The ALTA is issued to each lender providing additional coverage- for the physical aspects of the property, as well as the homebuyers title .failure; These aspects include anything which can be, determined by only physical inspection,. such as correct survey lines; encroachments; mechanics liens; mining claims and water rights. The Program leader instructs. the escrowititle company in the escrow instructions as to what may show on the policy; the amdard of inwrarice on the policy. (all liens should be covered) and the loss payee (each tender should be listed as a loss payee and receive an original ALTA). 9.0. SUBORDINATE FINANCING With today's high costs, in order for a low-income household to. obtain a home, several funding sources might be required. Subordinate !paras may be used to cover mortgage .subsidy casts that exceed the Program maximum loan amount. All subordinate liens must have the payments deferred and the term must be for at least as long as the term of the Program loan. 10.0. EXCEPTIONS AND SPECIAL CIRCUMSTANCES The Sponsor may make amendments to these Participation Guidelines.. Any flanges shall be made in accordance with regulations and approved by the Sponsor's Loan Committee and/or governing body. Material changes only shall then be sent to HUD for approval. 10.1. DEFINITION OF EXCEPTION Any ease to whicha standard policy or procedure, as stated in the guidelines,.does not apply or an applicant treated differently from others of the same cuss would be an exception. 10.2. PROCEDURES FOR .EXCEPTIONAL CIRCUMSTANCES A. The Sponsor or its agent may initiate consideration of an exception and prepare a report. This report shall contain a narrative, including the Sponsor's recommended torose of action and any written or verbal information supplied by the applicant. B. The Sponsor shall make a tletrmitration of the exception based on the recommendation of the Program Operator• The request can be presented to.. this Sponsor's loan committee.: and/or governing body for a decision. 11.0. DISPUTE RESOLUTION AND APPEALS PROCEDURE Any applicant denied assistance from the, Prom has the right to appeal. Complaints concerning the. Program should be.. matte to the Program Ope aw first. If uMwolved in this; manner, tete complaint or appeal must be made in writing and filed with the Sponsor. The Sponsor will then schedule a r[ieeting with the Loan Review. Committee. Their written response will be made within thirty .(30) working 'days If the .applicant. is not satisfied with the: Committee's decision, a request for an appeal may, be. filen with the Spon.SWS governing, body. Final appeal must be filed in writing with.HUD within one year after denial. ATTACHMENT A LOAN SERVICING POLICIES AND PROCEDURES FOR CITY OF LODI The City of Lodi, hereafter castled "Lender," has adopted these policies and procedures in order to preserve its Financial interest in properties whose "$orrowers" have been assisted with publiofunds. The Lender will to the greatest extent possible follow these policies and procedures, but each loan will be evaluated and handled on a case-by-case basis. The Lender has f armulated this document to comply with state and federal regulations regarding the use of these public funds and any property restrictions, which are associated with them. The policies and procedures are broken down into the following areas: 1) making required monthly payments or voluntary payments an a loan's. principal and ititerest; 2) required payment of property taxes and insurance; 3) required Request for Notice of Default on all second rnortgaW; 4) loans with annual occupancy restrictions and certifications 5) required noticing and Umitations on any changes in title or use of property; {) required noticing and process for requesting a subordination during a refinance; 7) processing; of foreclosure in of default on the loan. 1. Loan.-ReWmenLt- The Lender will collect monthly payments from those borrowers who are obligated to do so under Notes which are amortized promissory notes (or Lender will use an appointed loan collection Company to collect payments). Late fees will be charged for payments received after the assigned monthly due date. For Notes which are deferred payment loans, the Lender must accept voluntary payments on the loan. Loan payments will be credited to principal. The Borrower may repay the loan balance at any time with no penalty. 2. EqMent of EMR@M Taxes And Itisoranee: As part of keeping the loan from going into default, borrower must maintain property insurance coverage naming the Lender as loss payee. Except for HOME -funded loans, if borrower fails to maintain the necessary insurance, the Lender may take out force placed insurance to cover the property while the Borrower puts a new insurance policy in place. All costs for installing the necessary insurance will be added to the loan balance at time of installation of Borrower's new insurance. When a property is Located in a 100year flood plaits, the Borrower will be required to carry the necessary flood insurance: A certificate of insurance for flood and for standard property insurance with an endorsement naming the City as lender loss payee will be required at close of escrow. The lender will verify the insurance on an annual basis. property taxes must be kept. current during the term of the loan. If the Borrower fails to maintain payment of property faxes titan the lender may pay the taxes current and add the balance of the tax payment plus any penalties. to the balance of the loan (not permissible When funded with HOME). Whmver possible, the Lender encourages Borrower to have. impound accounts set up with their first mortgagee wherein they pay their taxes and insurance as part of their monthly mortgage payment. 3. RgggLmd It est 62T Notice of WWI, When the Borrower's loan is in second position behind an existing first mortgage, it is the Lender's policy to prepare and record a "Request for Notice of Default" for each senior lien in front of bender's loan. This document requires any senior lienholderlisted in the notice to notify the lender of Initiation of a foreclosure action. The. Lender will then have time to contact the Borrower and assist them in bringing the first loan current, if possible. The Lender can also Monitor the foreclosure process and go through the necessary analysis to determine if the loan can be made whole or preserved. When the Lender is in a third position and receives notification of foreclosure from only one senior lienholder, it is in their best interestto contact any other senior lienholdem regarding the status of their loans. 4. Annual Oceupancv Restrictions andCe 'cations: On owner -occupant loans, the Lender may require that Borrowers submit utility bills and/or other documentation every five (5) year to prove occupancy during the term of the loan. For CDBG,. some loans may have income and housing cost evaluations, which require a household to document that they are not able to make amortized loan payments, typically every five years. These loan terms are incorporated in the original Note and Deed of Trust. S. Fired Noticing and Restrictions on. AnyChanmes a'fTitle or Occu arm acv: In all cases where there is a change in title or occupancy or use, the Borrower roust notify the Lender in writing of any change. Lender and Borrower will work together to. ensure the property is kept in compliance with the original Progiram terms and conditions such that it remains.,available as an affordable home for low-income families. These types of changes are typical when Borrowers do estate planning (adding a relative to title) or if a Borrower dies and properly is transferred to heirs or when the property is .sold or transferred as. part of a business transaction. In some cases the Borrower may move:and turn the property into a rental unit without notifying the Lender. Changes in title or occupancy must be in keeping with the objective of benefit to low-income households (below 80 percent of AMI). Change from owner -occupant to owner -occupant occurs at a sale. When a new owner -occupant is not low-income, the loan is not assumable and the loan balance is immediately due and payable. If the new owner -occupant qualifies as low-income, the purchaser may either pay the loan in full or assuriie: all loan repayment obligations of the original owner -occupant, subject to the approval of the Lender's Loan Committee. If a transfer of the property occurs through inheritance, the heir (as owner -occupant) may be provided the opportunity to assume the loan at an interest rate based on household size and household income, provided the heir is income eligible. If the heir intends to occupy the property and is not low-income, the balance of the loan is due and payable. For CDBG only, if the heir intends to act as an owner -investor (not permitted under HOME), the balance of the loan may be converted to an owner/investor interest rate and loan term and a rent iimitation.agredment is signed and recorded on title. All such changes are subject to the review and approval of the Lender's Loan Committee. Change fxom owner -occupant to owner -investor. occurs. when an owner -occupant decides to move out and rent` the. assisted property, or if the property is sold to an investor. If the owner converts any assisted unit from owner -occupied to rental, the loan is due. in full. Conversion to use other than residential use is not allowable where the full use of the property is changed from residential to commercial or other. In some cases, Borrowers may request that the Lender allow for a partial conversion where some of the residence is used for a business but the household still resides in the property. Partial conversions can be allowed if it is reviewed and approved by any and all agencies required by local statute. If the use of the property is converted to a fully non-residential use, the loan balance is due and payable. 6. Rettuest� s for SuWd3nationg When a Borrower wishes to re#°inance their existing first mortgage, they must submit a subordination request to the Sponsor. The Sponsor will sulbordinate their loan only when there.is no "cash out" as part of the refinance. No cash out.means there are no additional charges an the transac�#ion aliovve an �l escrow closing fees. There.can be no third -party debt payoffs or addifional encumbrances on the property. above traditional refinance transaction costs. The refinance should lower the existing housing Cost of the household. The total indebtedness on the property should not exceed the current market value except when the borrower is obtaining a HARP II or other similar federally approved refinance loan. If the HARP II or other similar financing is approved and meets all other requirements, combined Loan -To - Value will not be considered when reviewing the subordination request. Also, the loan must: I , be fully amortized and have a 'fixed interest rate that does not exceed the current nwket rate; as established by an index of the maximum primary rate rule of FNMA. 90 -day rate plus 100 bps (1%), found at the following website: h ://www.efanniemae coin/sVrefmaterlalsl = /in ex s 2. not have a temporary interest rate buy -down; 3. have a term "all due and payable" that mahires prior to or concurrently with the maturity date of the Promissory Note. Therefore, the maturity date of the .existing Promissory Note. should be modified to coincide with the maturity date of the new first mortgage; and, 4. not have a balloon payment due before the maturity date of the Program loan. Upon receiving the proper documentation from the refinance lender, the request will be considered by the loan committee for review and approval. Upon approval, the escrow company will provide the proper subordination document for execution and recordation by the Sponsor. 7. PropM for Loon.ForecIosgM Upon any condition of loan default: 1) non-payment; a) lack of insurance or property tax payment, 3) change in title or use without approval; 4) default on senior loans, the Lender will send out a letter to the Bormwer notifying.them ofthe default situation. If the default situation continues then the Lender may start a formal process of foreclosure. When a senior lienholder starts a foreclosure process and the Lender is notified via a Request for Notice of Default, the Lender, who is the junior lienholder, may cancel the foreclosure proceedings by "reinstating" the senior lienholder. The reinstatement amount or payoff amount must be obtained by contadtingthe senior lienholder. This amount will include. all delinquent payments, late charges and fees to date: Lender must confer with Borrower to determine if, upon paying tho senior lienholder current, the Borrower can provide future payments. If this is the ease then the Lender may cure the foreclosure and add the costs to the balance.of the loan with allotice of Additional Advance on the existing note. If the Lender determines, based on information on the reinstatement amount and status of Borrower, that bringing, the loan current will not preserve the loan, then staff trust determine if it is Cost effective to protect their position by paying off the senior lienholder in total acid restructure the debt such that the unit is made affordable to. the Borrower. if the Lcnder does not have sufficient. funds to pay, the senior lienholder in full, then they may choose to cure the senior lienholder and fntecicaeon the property themselves. As long as there is sufficient value in the property, the Lender can afford to pay for the foreclosure process and pay off the senior lienholder and retain some or all of their investment. If the Lender decides to reinstate, the senior lienholder will accept the amount to reinstate the loan up until five (5) days prior to the set "foreclosure sale date." This "foreclosure sale date" usually occurs about four (4) to six (6) months from the date of recording of the "Notice of Default." If the Lender fails to reinstate the senior lienholder before five (5) days prior to the foreclosure sale date, the senior lienholder would then require a full pay off of the balance, plus costs, to cancel foreclosure. If the Lender determines the reinstatement and maintenance of the property not to be cost effective and allows the senior lienholder to complete foreclosure, the Lender's lien may be eliminated due to insufficient sales proceeds. Lender as Senior Lienholder When the Lender is first position as a senior lienholder, active collection efforts will begin on any loan that is 31 or more days in arrears. Attempts will be made to assist the homeowner in bringing and keeping the loan current. These attempts will be conveyed in an increasingly urgent manner until loan payments have reached 90 days in arrears, at which time the Lender may consider foreclosure. Lender's staff will consider the following factors before initiating foreclosure_ 1) Can the loan be cured and can the rates and terms be adjusted to allow for affordable payments such that foreclosure is not necessary? 2) Can the Borrower refinance with a private lender and pay off the Lender? 3) Can the Borrower sell the property and pay off the Lender? 4) Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.) 5) Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain fire insurance, maintain or bring current delinquent property taxes, monthly yard maintenance, periodic inspections of property to prevent vandalism, etc.) foreclosure, and marketing costs? If the balance is substantial and all of the above factors have been considered, the Lender may opt to initiate foreclosure. The Borrower must receive, by certified mail, a thirty -day notification of foreclosure initiation. This notification must include the exact amount of funds to be remitted to the Lender to prevent foreclosure (such as, funds to bring a delinquent Below Market Interest Rate current or pay off a Deferred Payment Loan.. At the end of thirty days, the Lender should contact a reputable foreclosure service or local title company to prepare and record foreclosure documents and make all necessary notifications to the owner and junior lienholders. The service will advise the Lender of all required documentation to initiate foreclosure (Note and Deed of Trust usually) and funds required from the owner to cancel foreclosure proceedings. The service will keep the Lender informed of the progress of the foreclosure proceedings. When the process is completed, and the property has "reverted to the beneficiary" at the foreclosure sale, the Lender could sell the home themselves under a homebuyer program or use it for an affordable rental property managed by a local housing authority or use it for transitional housing facility or other eligible use. The Lender could contract with a local real estate broker to list and sell the home and use those funds for program income eligible uses. ATTACHMENT B S_ELIM LgAD-BASE© PAM PI§CLOSURE 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 nounAogioal 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 irifornitition listed above. (d) purchpor 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 assessment or inspection for the presence of lead-based paint and/or lead-based paint hazards; br (ii) waived the opportunity to conduct a risk assessment or inspection for the presence of Lead-based paint and/or lead-based paint hazards (NOT PERMISSIBLE FOR HOME AND CDBG). Agent's Acknow[edgrnent (initial) (f) Agent bas infomed the: seller of the seller's obligations under 42 U.S.C. 4852d and is aware of hiAer 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 ATTACHMENT C Disclosure to Seller with Voluntary, Arm's Length Purchase Offer DECLARATION This is to inform you that would like to purchase the property, located at _ , if a satisfactory agreement can be reached. We are prepared to pay $ for a clear title to the property under conditions described in the attached proposed contract of sale. Because Federal funds may be used in the purchase, however, we are required to disclose to you the following information: 1. The sale is voluntary. If you do not wish to sell, the buyer, , thru the agency, will not acquire your property. The buyer does not have the power of eminent domain to acquire your property by condemnation (i.e. eminent domain) and the agency/Sponsor will not use the power of eminent domain to acquire the property. 2. The estimated fair market value of the property is $ and was estimated by , to be finally determined by a professional appraiser prior to close of escrow. Since the purchase would be a voluntary, arms length, transaction you would not be eligible for relocation payments or other relocation assistance under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA), or any other law or regulation. Also, as indicated in the contract of sale, this offer is made on the condition that no tenant will be permitted to occupy the property before the sale is completed. Again, please understand that if you do not wish to sell your property, we will take no further action to acquire it. If you are willing to sell the property under the conditions described in the attached contract of sale, please sign the contract and return it to us at: . If you have any questions about this matter, please contact Sincerely, Title Buyer Buyer at Date Date Form continues on next page witl: Seller's Acknowledgment Disclosure to Seller with Voluntary, Arm's Length Purchase Offer (Page 2) Acknowledgement As the Seller I/we understand that the will inspect the property for health and safety deficiencies. I/we also understand that public funds may be involved in this transaction and, as such, if the property was built before 1978, a lead-based paint disclosure must be signed by both the buyer and seller, and that a Visual Assessment will be conducted to determine the presence of deteriorated paint. As the Seller, I/we understand that under the City's program, the property must be currently owner - occupied, vacant for three months at the time of submission of purchase offer, new (never occupied), or renter purchasing the unit. I/we hereby certify that the property is: ❑ Vacant at least 3 months; ❑ Owner -occupied; ❑ New; or ❑ Being Purchased by Occupant 1/we hereby certify that I have read and understand this "Declaration" and ❑ a copy of said Notice was given to me prior to the offer Ire parchase. I�f received after pmenta on of the pomhase offer, IIWe chow ❑ to withdraw or ( not to wUhdraw,. fromthe Pufthase AgreewW. Seller Seller Date Date ATTACHMENT D LEAD-BASED PAINT VISUAL ASSESSMENTS NOTICE OF PRESUWTIONq AND HAZARD REDUCTION FORM Section 2: Visual Assessment. Fill out Sections 1, 2, and 6. Sections 4 and 5 after the work is completed. Visual Assessment Date: Reporl Check if no deteriorated t found ❑ Attachment A: Summary where deteriorated paint was found. if paint stabilization is Date: also fill out Section 5: Resident Receipt of Notice for Presumption or Lead -Based Paint Hazard Reduction.Actirv' Printed Name: Signature: Date: Section 6: Contact Information Organization: Contact Name: Contact Signature; Date: Address: Phone: ATTACHMENT E Homebuyer Program Lead Compliance Document Checklist The following documents should be in each Homebuyer unit file to document compliance with the lead requirements: This was taken from the HUD Website at: b=. llwww.hud. ov/o gestc d/afordablehoustn 1. in'n �leadsafelusefulfamn �ndex.cf m#crosscut in Document Name Purpose Lead Safe Housing Rule Screening Sheet Documents exem tions Physical inspection form (HQS or equivalent) Documents visual assessment results Seller Certifbation Seller certifies that paint was stabilized by qualified workers and that safe work practices were followed during paint stabilization Clearance Report and Clearance Review Worksheet Documents that unit .passed clearance Disclosure Form Documents that buyer received disclosure and pamphlet. Lead Hazard Reduction Notice Documents that buyer received required lead hazard reduction notification. This was taken from the HUD Website at: b=. llwww.hud. ov/o gestc d/afordablehoustn 1. in'n �leadsafelusefulfamn �ndex.cf m#crosscut in