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MARICOPA COUNTY HOME Investment Partnerships Program Program Year 2017 DUNS Number: 022225143 Project: Chandler CLT Acquisition / Resale Type of Property: Single Family Residential Amount of Funding OTHER CHDO HOME CASH MATCH TOTAL RESOURCES AMOUNT AMOUNT BUDGET AMOUNT $182,784 340,319 523,103 A. DETAILED SCOPE OF WORK Work Statement Newtown CDC (CHDO), acting in the capacity of a developer, will acquire and rehabilitate up to two (2) 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 Administrator must inspect the property prior to occupancy and at project completion to ensure compliance with applicable standards and codes. 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. Completed homes will be sold to eligible low-income first-time homebuyers. Properties will be acquired using the CHDO’s line of credit, following completion of environmental review requirements. In addition to the requirements set forth in Section IV Compensation, CHDO will execute a Deed of Trust and Note provided by the Administrator and naming the city as Beneficiary in order to secure any funds provided to CHDO as reimbursement for acquisition costs. Upon resale of the property to an eligible buyer the Administrator will provide a Deed of Release and Reconveyance (By Beneficiary) for the secured acquisition funds. 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 CLT Ground Lease and a Declaration of Affirmative Land Use Restrictions. Completed units shall be sold through the CLT program in which the buyer purchases the improvements only and enters into a 99-year CLT Ground Lease with the CHDO. 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 CHDO as the beneficiary; this ensures the CHDO is notified in the event the owner of the improvements attempts to refinance or transfer the property. 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 CHDO 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 CLT orientation, at which time the ground lease, resale restrictions, shared equity and all other provisions of the CLT program are fully explained. Beneficiaries: Up to Two (2) first time homebuyers at or below 80% of the area median income level. CHDO will secure affordability through the Resale Provisions. Beneficiaries income eligibility will be verified by CHDO staff and will comply with 24 CFR 92.203(d)(1). Consolidated Plan – Project will increase homeownership opportunities for low and moderate income households. High priority rated in the Consolidated Plan. B. OBJECTIVES AND OUTCOMES: OUTCOMES OBJECTIVE AVAILABILITY/ AFFORDABILITY SUSTAINABILITY ACCESSIBILITY Homebuyer Activities, DECENT Single Family Acq/Rehab of rental housing, HOUSING Housing Rehab and Acq/New Construction of Housing Activities in a Emergency Rehab, rental housing, Expansion of targeted revitalization area Homebuyer assisted rental units in the Assistance private marketplace C. LOGIC MODEL: PERFORMANCE INDICATORS OUTPUTS INPUTS/RESOURCES ACTIVITIES PARTICIPATION OUTCOMES OBJECTIVES CHDO staff, Funding, Acquire and Up to two (2) Increased affordable Decent housing. Contractors rehabilitate up households. housing for low mod to two (2) units income families. of Affordable Increase in home- Housing. ownership, improved neighborhoods, improved quality of life. D. SITE INFORMATION: Scattered sites in Chandler targeting zip codes 85281, 85282, and. Parties will execute addenda to this Agreement when specific parcels are identified. E. PERFORMANCE REPORTING GOALS TIMELINE OF ACTIVITIES START COMPLETION MILESTONES: Tasks to be Performed DATE DATE Application/market study 12/1/16 12/8/16 Execute contract 11/1/17 12/15/17 Site selection 12/31/17 3/31/19 Environmental reviews to City of Chandler 12/31/17 3/31/19 Homeownership counseling/buyer preparation 7/1/17 4/30/19 Acquisition 12/31/17 3/31/19 Work write-ups and bid selection 12/31/17 3/31/19 Homebuyer financing secured 12/31/17 4/30/19 Rehabilitation 1/1/18 3/31/19 Resale of properties to homeowners 1/31/18 4/30/19 Expend Proceeds 6/30/20 Final Close-out /Project Completion Form 6/30/20 Any change to the Timeline will need to be approved by the County. F. ACTIVITY FOLLOW-UP AND LONG TERM COMMITMENT: The period of affordability is based on the total amount of HOME funds invested in the housing. The Project will be monitored annually and the units will be verified annually during the period of affordability. 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. G. ACTIVITY BUDGET SUMMARY: OTHER TOTAL HOME CASH ACTIVITY RESOURCES ACTIVITY AMOUNT MATCH (a) AMOUNT BUDGET Acquisition (c) $182,784 182,016 364,800 Rehabilitation 99,000 99,000 Relocation Development Costs (b) 19,880 19,880 Staff Costs (b) Services (b) Administration Costs Development Fees 39,423 39,423 Other (Specify) TOTALS $182,784 $ 0 340,319 523,103 1. 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. These costs must be address specific; otherwise, these costs must be considered administrative costs. 3. A total of $3,000 per Project will be withheld from the total amount of HOME funds obligated to each activity/address. $1,500 may be reimbursed upon completion of rehabilitation/new construction (certificate of occupancy) and a signed purchase contract with a qualified buyer. The final $1,500 will be reimbursed when a completion form is submitted by CHDO to the County. H. ACTIVITY MATCH: AMOUNT FORM OF MATCH SOURCE $45,696 IDA Match Funds FHLB SF TOTAL: $45,696 I. SALES PRICE: To ensure the homes are 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 has 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. 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 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 CLT program in which the buyer purchases the improvements only and enters into a 99-year CLT Ground Lease with CHDO. 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 the CHDO as the beneficiary; this ensures the CHDO 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 CHDO 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 CHDO 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 fund