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Contract No. C-22-18-033-3-01 Amendment No. 1 AMENDMENT TO THE AGREEMENT BETWEEN MARICOPA COUNTY ADMINISTERED BY ITS HUMAN SERVICES DEPARTMENT AND NEWTOWN COMMUNITY DEVELOPMENT CORPORATION AND THE CITY OF CHANDLER I. Maricopa County (“County”) administered by its Human Services Department and Newtown Community Development Corporation, a Community Housing Development Organization (“CHDO”), and the City of Chandler (“City”) entered into a financial agreement for services (“Agreement”) on or about April 1, 2018. The purpose of the Agreement is for the CHDO to acquire, rehabilitate and resell four (4) single family homes in Chandler area for Newtown’s Chandler Community Land Trust Program. The City provides administration and monitoring of project activities. The County provided $182,784 in 2017 HOME Investment Partnerships Program (HOME) funds from the U.S. Department of Housing and Urban Development (HUD). The County, the City, and the CHDO may be referred to individually as “Party” or collectively as “Parties.” II. The Parties wish to amend the Agreement as follows (Amendment No. 1): A. Add an additional Work Statement hereinafter referred to as “2018 Work Statement” for the CHDO to acquire, rehabilitate and resell four single family homes to be included in their Community Land Trust program. The expenditure term for this Work Statement shall expire on September 30, 2022. B. The County will provide funding for 2018 Work Statement in an amount not-to-exceed $473,522. C. All work performed or costs incurred or expended under the previously approved 2017 Work Statement in the amount of $182,784 shall remain reimbursable under the terms of the original Agreement through September 30, 2019. All work performed or costs incurred or expended under the previously approved 2017 Work Statements in the amount of $182,784 shall remain reimbursable through September 30, 2021. D. Upon approval of Amendment No. 1, the Agreement funding amount shall be increased to $656,306. E. Section IV, Compensation, Subsection D, Reimbursement shall be amended to reference total funding of $656,306. III. This Agreement is subject to A.R.S. §38-511. The foregoing paragraphs contain all the changes made by this Amendment. All other terms and conditions of the original Agreement remain the same and in full force and effect as approved and amended. Contract No. C-22-18-033-3-01 Amendment No. 1 IN WITNESS THEREOF, the Parties have signed this Amendment: APPROVED BY: APPROVED BY: CITY OF CHANDLER MARICOPA COUNTY ___________________________________ ____________________________________ Chairman, Board of Supervisors Date: __________________________ Date: __________________________ Attested To: Attested To: ____________________________________ ____________________________________ City Clerk Fran McCarroll, Clerk of the Board APPROVED BY: NEWTOWN CDC ___________________________________ Date: __________________________ IN ACCORDANCE WITH A.R.S. §§ 11-952, 11-201, AND 11-251, THIS AGREEMENT HAS BEEN REVIEWED BY THE UNDERSIGNED DEPUTY COUNTY ATTORNEY, AND, IN ACCORDANCE WITH A.R.S. § 11-952, THIS AGREEMENT HAS BEEN REVIEWED BY THE UNDERSIGNED ATTORNEY FOR CITY ON BEHALF OF CITY, AND, AS TO THEIR RESPECTIVE CLIENTS ONLY, EACH ATTORNEY HAS DETERMINED THAT THIS AGREEMENT IS IN PROPER FORM AND WITHIN THE POWER AND AUTHORITY GRANTED UNDER THE LAWS OF THE STATE OF ARIZONA. CITY OF CHANDLER MARICOPA COUNTY BY: ______________________________ BY: ______________________________ City Attorney Deputy County Attorney Date: __________________________ Date: __________________________ C-22-18-033-3-01 2018 Work Statement MARICOPA COUNTY HOME Investment Partnerships Program 2018 Work Statement Project: CHDO Newtown Community Land Trust Acquisition/Resale Program Year 2018 HOME Funds: $473,522 Type of Property: Single Family Residential Amount of Funding OTHER HOME CHDO CASH MATCH TOTAL RESOURCES AMOUNT AMOUNT BUDGET AMOUNT $473,522 $667,998 $1,141,520 Work Statement Newtown CDC (CHDO), acting in the capacity of a developer, will acquire and rehabilitate four (4) single- family houses in Chandler. This is a scattered-site homeownership project and will target zip codes 85224, 85225, and 85226 to be supplemented by the specific street address. Parties agree to execute an addendum, once properties are identified. Addenda to this Agreement identifying individual properties by street address for participation in Newtown’s Chandler Community Land Trust Program (CLT) will be executed before funding is made available. Funds will be paid to CHDO only after the CHDO has met the Commitment requirements as set forth in 24 CFR 92.2 (1) and (2) respectively and is prepared to commence construction within twelve months. Funds for rehabilitation are obligated by completing a detailed set of plans and specifications (work write-up) and completing a detailed construction/rehabilitation cost estimate based upon those specifications. Such cost estimate may include a contingency for construction change orders of up to 15% for rehabilitation and up to 5% for new construction. The property must be free from any defects that pose a danger to the health and safety of occupants, and must meet written rehabilitation standards and local codes and ordinances at project completion. Copies of final inspection must be retained in the project files and submitted to the County upon submitting completion report. The completed home will be sold to an eligible low-income first-time homebuyer. The property will be acquired with Newtown’s line of credit, following completion of environmental review requirements. Newtown CDC will execute a Deed of Trust and Note naming the City of Chandler as Beneficiary in order to secure any funds provided to Newtown CDC as reimbursement for acquisition costs. Resale provisions will be used to ensure compliance with the period of affordability required by HUD at 92.254 of the HOME regulation. The affordability restrictions will be secured by a Community Land Trust (CLT) Ground Lease and a Declaration of Affirmative Land Use Restrictions. The completed unit shall be sold through the Newtown (CLT) program in which the buyer purchases the improvements only and enters into a 99-year CLT Ground Lease with Newtown CDC. The CLT Ground Lease contains provisions that require the housing to be used as the buyer’s principal residence and restricts resale/transfer only to Low-Income buyers. In addition, the CLT Ground Lease has a shared-appreciation provision that limits the sale price of the housing and helps ensure affordability for future buyers. A Memorandum of Ground Lease and Right of First Refusal are recorded. A “Performance” Deed of Trust is also recorded with the Newtown CDC as the beneficiary; this ensures the Newtown CDC is notified in the event the owner of the improvements attempts to refinance or transfer the property. C-22-18-033-3-01 2018 Work Statement The shared appreciation provision conforms to Maricopa HOME Consortium Recapture / Resale Provisions: “Fair Return” for leasehold properties is defined as the lessees purchase price, plus 25% of the lessee’s share of the increase in leasehold value at time of resale based on a leasehold valuation performed by a duly licensed appraiser. Declaration of Affirmative Land Use Restrictions: Upon sale to an eligible buyer, a Declaration of Affirmative Land Use Restrictive Covenant for HOME Project is executed between the Administrator and Newtown CDC and recorded against the land to secure the Period of Affordability as required by HUD. The Period of Affordability is based on the total amount of HOME funds invested in the housing. Eligible buyers will be required to complete an approved homebuyer education class and homeownership counseling. Eligible buyers will also be required to complete a Community Land Trust (CLT) orientation, at which time the ground lease, resale restrictions, shared equity and all other provisions of the CLT program are fully explained. Beneficiaries: Four (4) first time homebuyers at or below 80% of the area median income level. Newtown CDC will secure affordability through the Resale Provisions. The City shall ensure the beneficiaries are income eligible and comply with 24 CFR 92.203(d)(1). Consolidated Plan – Project will increase the supply of affordable rental units for low and very low income households. High priority rated in the Consolidated Plan. A. OBJECTIVES AND OUTCOMES: OUTCOMES OBJECTIVE AVAILABILITY/ ACCESSIBILITY AFFORDABILITY SUSTAINABILITY DECENT Single Family Homebuyer Activities, Housing Rehab and Acquisition/Rehab of rental housing, Housing Activities in a HOUSING Emergency Rehab; Acquisition/New Construction of rental targeted revitalization Homebuyer housing, TBRA, Expansion of assisted area Assistance rental units B. PERFORMANCE INDICATORS The City of Chandler will partner with Newtown CDC to acquire and rehabilitate four homes which will be sold to a low or moderate homeowner using a Community Land Trust Model. The outcome will be increased affordable housing for low to moderate income families as well as to increase homeownership, provide decent housing, improve neighborhoods and quality of life. C. SITE INFORMATION: Scattered sites in Chandler. Parties will execute addenda to this agreement when specific parcels are identified. C-22-18-033-3-01 2018 Work Statement D. PERFORMANCE REPORTING GOALS/TIMELINE OF ACTIVITIES START COMPLETION MILESTONES: Tasks to be Performed DATE DATE Application/market study 11/06/2017 12/07/2017 Execute Amendment 08/01/2018 11/30/2018 Site selection 12/01/2018 10/31/2020 Environmental reviews to City of Chandler 12/01/2018 09/30/2020 Homeownership counseling/buyer preparation 07/01/2018 09/30/2020 Acquisition 12/15/2018 09/30/2020 Work write-ups and bid selection 12/15/2018 09/30/2020 Homebuyer financing secured 12/01/2018 09/30/2020 Rehabilitation 12/30/2018 09/30/2020 Resale of properties to homeowners 01/15/2019 09/30/2020 Final Close-out /Project Completion Form 10/31/2020 Any change to the Timeline will need to be approved by the County. E. ACTIVITY FOLLOW-UP AND LONG TERM COMMITMENT: The HOME unit will have a period of affordability of 15 years. During this time, the project will be monitored annually and the unit will be verified annually. The affordability standard is applied to both the original homebuyer and subsequent purchaser and will be enforced by imposing deed restrictions, covenants running with the land, or other similar mechanisms. C-22-18-033-3-01 2018 Work Statement F. ACTIVITY BUDGET SUMMARY: CHDO Funds Additional Sources* ACTIVITIES TOTAL COST PY 2018 defined in Table G. Acquisition $473,522 $326,478 $800,000 Land $0 Inspections, title, appraisal $9,600 $9,600 Legal Fees $0 TOTAL $473,522 $336,078 $809,600 SITE & DEMOLITION $0 Site Work $0 Demolition $0 TOTAL $0 $0 $0 REHABILITATION $0 Construction $200,000 $200,000 Builder Overhead Builder Profit General Requirements Consultant/Specialist Permits & Fees Construction Contingency Sales Tax Other-Infrastructure TOTAL $0 $200,000 $200,000 ARCHITECTURAL FEES Design Supervision Other TOTAL $0 $0 $0 RESALE / CARRYING COSTS - Interest $11,680 $11,680 Taxes $1,600 $1,600 Insurance $960 $960 Utilities, maintenance $4,160 $4,160 Title & recording $6,000 $6,000 Realtor fees $26,720 $26,720 TOTAL $0 $51,120 $51,120 ADMINISTRATION COSTS $0 Developer Fee (address specific-project delivery) $80,800 $80,800 TOTAL $0.00 $80,800 $80,800 GRAND TOTAL $473,522 $667,998 $1,141,520 C-22-18-033-3-01 2018 Work Statement *If match will be in the form of cash and will be used in this project only. Do not include non-cash match in this budget. **$2,500 per activity/property will be withheld from the total amount of HOME funds obligated to each activity/address until a completion form is submitted by Newtown CDC. G. ADDITIONAL SOURCES (as outlined in Section F-Budget) SOURCE AMOUNT Newtown Line of Credit and cash $667,998 H. ACTIVITY MATCH: AMOUNT FORM OF MATCH SOURCE $118,381 IDA Funds Federal Home Loan Bank I. SALES PRICE: To ensure the home is affordable for the target income groups, the sales prices shall be calculated so that the Buyers' monthly housing expenses are 28% of their gross monthly household income. Monthly housing expenses include principal, interest, property taxes, home insurance, HOA fees, and monthly ground lease fees. Buyers' monthly housing expenses must be at least 24% and not exceed 33% of Buyer's gross monthly household income; unless there are documented compensating factors. Homebuyers may obtain only mortgage loans with a fixed term and interest rate; lender fees may not exceed 5% of the mortgage amount. The income of buyers shall be determined according to the requirements at 92.203. In addition, the property will have an estimated value after rehabilitation that does not exceed 95 percent of the median purchase price for the area as described in 24 CFR 92.254(a)(2)(iii). J. CHDO PROJECT PROCEEDS: All proceeds generated from CHDO development activities shall be considered project proceeds and subject to the project proceeds requirements set forth in HOME Program regulations. Project proceeds shall be tracked by the CHDO. Documentation supporting the amount of project proceeds received and expended shall be submitted on the periodic progress report, if requested by the County. Project proceeds shall be retained and expended by the CHDO for acquisition and/or rehabilitation of additional properties under this agreement, or for other HOME-eligible activities with prior approval from the Administrator. K. CONVERSION TO RENTAL: Any HOME homebuyer units that have not been sold to an eligible homebuyer within nine (9) months of receipt of a Certificate of Occupancy must be converted to a HOME rental unit that complies with all HOME requirements for the period of affordability applicable to such rental units, according to 24 CFR 92.254(a)(3). If the vacant property is not converted, HOME funds must be repaid to the County. L. AFFORDABILITY REQUIREMENTS: 1. The housing that is acquired with HOME funds must be single family housing. The family or individual acquiring the housing must qualify as Low Income and maintain the housing as the principal residence throughout the Period of Affordability, which shall be for a period of 15 years in accordance with HOME program requirements. C-22-18-033-3-01 2018 Work Statement 2. Resale provisions (Attachment D) will be used to ensure compliance with the period of affordability required by HUD at 92.254 of the HOME regulation. The affordability restrictions will be secured by a Community Land Trust (CLT) Ground Lease and a Declaration of Affirmative Land Use Restrictions and a Deed of Trust. a.) CLT Ground Lease. Completed units shall be sold through Newtown’s Community Land Trust (CLT) program in which the buyer purchases the improvements only and enters into a 99-year CLT Ground Lease with Newtown CDC. The CLT Ground Lease contains provisions that require the housing to be used as the buyer’s principal residence and restricts resale to only Low-Income buyers. In addition, the CLT Ground Lease has a shared-appreciation provision that limits the sale price of the housing and helps ensure affordability for future buyers. A Memorandum of Ground Lease and Right of First Refusal are recorded. A “Performance” Deed of Trust is also recorded with Newtown CDC as the beneficiary; this ensures Newtown CDC is notified in the event the owner of the improvements attempts to refinance or transfer the property. b.) Declaration of Affirmative Land Use Restrictions. Upon sale to an eligible buyer, a Declaration of Affirmative Land Use Restrictions is executed between the Administrator and Newtown CDC and recorded against the land to secure the Period of Affordability as required by HUD. The Period of Affordability is based on the total amount of HOME funds invested in the housing. c.) Deed of Trust. Upon sale to an eligible buyer, a Deed of Trust is executed between the Administrator and Newtown CDC and recorded against the land to secure the Period of Affordability as required by HUD. The Period of Affordability is based on the total amount of HOME funds invested in the housing.