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Revised Inclusionary Housing Program Regulations Affordable
ADMINISTRATIVE ITEMS 023. Approval of Revised Inclusionary Housing Program Regulations Recommended Action: A) Approve Affordable Ownership Housing Regulations - Developer Requirements; and, B) Approve Affordable Ownership Housing Regulations - Home Owner Requirements; and, Approved as amended to remove (C) from consideration by supplemental communication. Approved 6-1 (Dwyer no) 24. Approve the implementation and funding for the temporary conversion of the first block of Main Street from two-way to one-way street Recommended Action: Approve the temporary (five (5) week) conversion of the first block of Main Street to one-way. Approve funding the temporary conversion and to conduct studies to analyze the temporary conversion traffic conditions. As amended to a five-week time period and to authorize the City Manager to restore operations at any time, if needed. Failed 3-4 (Shaw, Harper, Carchio, Boardman no) -9- 0 1 �B CITY OF HUNTINC;TON BEACH Interdepartmental Memo TO: Honorable Mayor and Members of the City Council VIA: Fred A. Wilson, City Manager FROM: Stanley Smalewitz, Director of Economic Development DATE: August 15, 2011 SUBJECT: Supplemental Information —Administrative Item #23 Approval of Revised Inclusionary Housing Program Regulations At the request of the BIA, staff recommends that the City Council not act on the Affordable Rental Housing Regulations — Recommendation #C. The BIA would like to further discuss the impacts of the Inclusionary Rental Housing policies in light of recent court rulings of Affordable Housing Requirements. Staff will be meeting with BIA within the next two weeks and return with a recommendation on the Affordable Housing Regulations. If you have any questions, please call Kellee Fritzal at extension 1519. COINMU141CATION tAvft Bale: ,%*mla Ian No. :�2 Supplemental Communication ED 11-38 -1- 8/15/2011 2:19:00 PM Council/Agency Meeting Held:_ Deferred/Continued to: p ro ed C nditi nally proved ❑ enied L� City ler s Signatur Council Meeting Date: August 15, 2011 Department- Number: ED 11-37 CITY OF HUNTINGTON REACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager/Executive Director PREPARED BY: Stanley Smalewitz, Director of Economic Development/Deputy Executive Director SUBJECT: Approval of Revised Inclusionary Housing Program Regulations Statement of Issue: In the 1990's, the City created an Inclusionary Housing Program. In 2004, the City adopted the current Affordable Housing Inclusionary Program Policies and Procedures. In 2009, the City Council held three public meetings with participants of the Inclusionary Program regarding potential changes to the Policies and Procedures. The discussions were intended to create a more transparent process for both current and future program participants and address issues brought forward from litigation regarding the Housing Inclusionary Program. Financial Impact: Not Applicable. City Council and Redevelopment Agency Recommended Action: Motion to: A) Approve Affordable Ownership Housing Regulations - Developer Requirements; and, B) Approve Affordable Ownership Housing Regulations - Home Owner Requirements; and, IQ) Appr egIat+es: �jdvc� �d C �s�d� rx� Alternative Action(s): Do not adopt the proposed regulations and direct staff as appropriate. HB -561- Item 23. - I REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 8/15/2011 DEPARTMENT ID NUMBER: ED 11-37 Analysis: Several of the Inclusionary Program homeowners brought litigation against the City regarding the program's Policies and Procedures. As a result, the City Council reviewed the 2004 Policies and Procedures and received recommendations from current homeowners, real estate agents, and staff at two Study Sessions in January and February 2009. At the March 2, 2009, City Council meeting, the City Council directed staff to present modifications to the Policies and Procedures and return to the City Council for adoption, once all litigation regarding the Program had been settled. The litigation has been settled and the Inclusionary Housing Policies and Procedures have been revised. Since 2004 there has been one set of Policies and Procedures for developers, homeowners, and rental units. To provide the detailed and relevant information to program participants, it is recommended that the current Policies and Procedures be divided into three (3) documents: 1) Affordable Ownership Housing Regulations — Developer Requirements; 2) Affordable Ownership Housing Regulations — Home Owner Requirements; 3) Affordable Rental Housing Regulations. The major changes to the documents are below: 1. Gift Limit: Existing Policy Limit is currently $15,000. Proposed Change Eliminate limit — but the maximum down payment is set at 50% of the purchase price for the home. 2. Cash Out on Refinancing: Existing Policy Allowed if bank agrees to subordinate to the City's income limits and affordable housing cost restrictions. Proposed Change Refinancing is allowed if the mortgage is based on standard underwriting criteria up to a maximum of 80% of loan to value ratio and the debt service cannot exceed the lowest of the current maximum affordable price or appraised value. 3. Timing for Affordable Price Setting: Existing Policy Affordable housing cost set daily, based on current interest rates. Proposed Change Establish affordable housing cost monthly, based on the lowest applicable interest rate published during the immediately preceding three months. 4. Grandfathering of Policies and Procedures Changes: Existing Policy Original covenants remain in place throughout the term. Policy and Procedural changes are imposed on all program participants. Proposed Change Program participants will receive a copy of the current regulations at purchase. Regulations may be updated from time-to-time to increase program's effectiveness. Owners will receive six months notice before changes are Item 23. - 2 xB -562- REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 8/15/2011 DEPARTMENT ID NUMBER: ED 11-37 considered by the City Council (going forward from these regulations). 5. Market Rate Resale Upon Death of Owner: Existing Policy The home remains subject to the income and affordability covenant restrictions. Proposed Change The heir of inclusionary home must live in the home, but may use the hardship provision for up to one year, resale must comply with the existing covenant requirements. (It should be noted that staff could not find any vehicle to purchase an insurance instrument to maintain the affordability covenant). 6. Maintain List of Interested Buyers: Existing Policy No interest list is currently provided by the City. Proposed Change The City currently maintains an interest list on the City's website to which anyone can apply, requiring updating to remain on the list. Homeowner or Real Estate Agent will remain responsible for identifying a home buyer. 7. Hardship rental provision added and is defined as temporary job relocation, family illness or medical necessity. Allows for unit to be rented for one (1) year at affordable rent for same income level as covenant. 8. The estimated Affordable Sales Prices for units will be posted on the website each quarter. 9. Homebuyers may purchase durable goods from the seller at a cost of no more than $500 per item. This is currently not allowed with the Program. 10. Utilities allowances used in the calculations will be updated annually and posted on the City's website. This is currently posted on the website. 11. Conduct workshops with homeowners and real estate brokers at the larger inclusionary projects. 12. Enforcement Documents for inclusionary homes include: recorded Notice of Affordability Covenant; Promissory Note equal to the difference between the original market price and Maximum Affordable Sales Price; recorded Deed of Trust securing the obligations; and disclosure statement signed by the homebuyer confirming that buyer has received the Regulations and has had the opportunity to ask questions about the terms and policies. 13. Enforcement Measures by staff include: ongoing maintenance of a covenant database; annual review of County Assessor's records for title changes and homeowner exemption claims; and annual notice to Program participants to verify owner occupancy. 14. Affordability Period of the covenant commences upon the close of escrow for the first unit sold in each development phase of a residential project that is required to provide affordable units. At the end of the original term, the covenants expire. xB -563- Item 23. - 3 REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 8/15/2011 DEPARTMENT ID NUMBER: ED 11-37 Staff has notified all inclusionary housing participants regarding tonight's meeting. Environmental Status: Not Applicable. Projects requiring inclusionary housing first are processed by the Planning and Building Department. Strategic Plan Goal: Improve Internal and External Communication Attachment(s): 1. Affordable Ownership Housing Regulations— Developer Requirements 2. Affordable Ownership Housing Regulations— Home Owner Requirements 3. Affordable Rental Housing Regulations 4. Power Point Presentation Item 23. - 4 HB -564- ATTACHMENT # 1 un -565- Item ,3. . 5 Affordable own r hi Housing Regulations Developer Requirements r z The City of Huntington Beach and the Huntington Beach Redevelopment Agency August 15, 2011 Item 23. - 6 HB -566- TABLE OF CONTENTS 1. INTRODUCTION .....................................................................................................I A. Affordable Ownership Programs...........................................................................1 B. Purpose of Affordable Ownership Housing Regulations .......................................3 11. DEFINITIONS OF TERMS.......................................................................................5 III. PROGRAM ADMINISTRATION ............................................................................10 A. General ..............................................................................................................10 B. Fair Housing Policy ............................................................................................ 10 C. Privacy Rights .................................................................................................... 10 D. City Includes Redevelopment Agency................................................................11 E. Authorization...................................................................................................... 11 F. Affordable Ownership Housing Regulations .......................................................11 IV. DETERMINATION OF ELIGIBLE PURCHASER ..................................................12 A. Prospective Home Buyer List.............................................................................12 B. Required Eligibility Documentation...................................................................- 12 C. Applicant Eligibility Criteria................................................................................. 12 D. Income Eligibility Criteria .................................................................................... 14 V. HOME BUYER APPLICATION AND DISCLOSURE DOCUMENTS.....................15 A. Program Application........................................................................................... 15 B. Submittal Requirements.....................................................................................15 VI. AFFORDABLE SALES PRICE .............................................................................21 A. General Policy....................................................................................................21 B. Affordable Sales Price Calculations....................................................................21 VII. FINANCING REQUIREMENTS.............................................................................24 A. Down Payment Requirements............................................................................24 B. Purchase Money Mortgage Requirements..........................................................24 VIII. COMPLAINTS AND APPEALS.............................................................................26 IX. MONITORING AND ENFORCEMENT ..................................................................27 A. General Policy........................................................ ...........-..............................27 B. File Audits Upon Close of Purchase...................................................................27 C. Program Abuse and Fraud Protections...............................................................27 xB -567- Item 23. - 7 dw1 TI"�Cif1lglGe�T.� Attachment A Inclusionary Housing Ordinance {Ordinance No. Attachment B Developer's Introduction to the City of Huntington Beach Affordable Ownership Housing Program Attachment C Home Buyer Application & Disclosures Attachment D Inclusionary Housing Plan Attachment E Inclusionary In-Lieu Fee Schedule Attachment F Household Income Chart Attachment G Utility Allowances Attachment H Affordable Sales Price Calculation Form Item 23. - 8 HB -568- I. INTRODUCTION A. Affordable Ownership Programs Inclusionary Housing Program The Inclusionary Ordinance requires at least 10% of all new housing construction of three or more units to be affordable for Very Low, Low, or Moderate-income Households. This requirement is increased to 15% for projects located within a redevelopment project area. Developers are typically required to meet their Affordable Ownership Units obligation within the market rate residential development. With approval from the City, a portion of Affordable Ownership Units may be provided at alternative locations. Developers may designate newly constructed units as affordable to meet their requirement, or they may substantially rehabilitate' existing housing units and designate them as affordable. In- lieu fees can be paid by right for projects with between three and 30 units, and for fractional unit obligations, as set forth in the Inclusionary Ordinance. Housing tensity Bonus Program California Government Code Section 65915 provides for density bonuses to affordable housing projects. State law currently offers a density bonus to developments that impose specified income and affordability covenants over at least a 30-year term. However, the income and affordability restrictions are only required to be imposed on the first home buyer. If the home buyer resells the unit at an unrestricted market rate price, the City is entitled to receive a share of the equity appreciation in the home. California Government Code Section 65915 allows cities to extend the income and affordability term, and to impose irrevocable covenants, if an inclusionary housing ordinance has been adopted by the city. The City's density bonus ordinance exercises this option. Projects that are 100% restricted to senior citizens are entitled to receive a flat 20% density bonus. Comparatively, the allowable density bonus for income restricted projects increases as the percentage of affordable units provided in the project increases. The maximum density bonus allowed under the State Density Bonus is 36%. The applicable sliding scales are: ' Based on the California Health &Safety Code Section 33413(2)(A)(iv)definition of substantial rehabilitation. The developer must demonstrate that the unit is not available at Affordable Rent. Affordable Ownership Housing Regulations-Developer August 75.2011 1106035.HB Page 1 HB -569- Item 23. - 9 Very-Low Income Low Income Moderate Income % Density % Density % Density Affordable Bonus Affordable Bonus Affordable Bonus 5% 20.0% 10% 20.0% 10% 5% 6% 22.5% 11% 21.5% 11% 6% 7% 25.0% 12% 23.0% 12% 7% 8% 27.5% 13% 24.5% 13% 8% 9% 30.0% 14% 26.0% 14% 9% 10% 32.5% 15% 27.5% 15% 10% 11% 35.0% 16% 29.0% 16% 11% 17% 30.5% 17% 12% 18% 32.0% 18% 13% 19% 33.5% 19% 14% 20% 35.0% 20% 15% 21%-40% 16%-35% 2 Redevelopment Housing Program Housing Set-Aside and Inclusionary Housing H&SC Section 33334.2 stipulates that not less than 20% of all property tax increment revenue allocated to the Agency be used to increase, improve, and preserve the community's supply of low and moderate income housing, at an affordable price, to persons and families of Very-Low, Low, and Moderate incomes. Further, H&SC Section 33413(b) imposes inclusionary housing production requirements on the following development activity within redevelopment project areas: 1. All newly developed residential units; and 2. Any substantially rehabilitated units that received Agency assistance. The Agency is required to ensure that at least 15% of all the residential development and applicable substantial rehabilitation within the redevelopment project areas is set- aside for Low and Moderate Income Households. Of this total, at least 40% of the units must be allocated to Very-Low Income Households. The units used to fulfill the production obligation must be subject to long-term income and affordability covenants; the covenants for ownership units must run for at least 45-years. 2 Each 1% increase in the percentage of affordable units allows for a 1% increase in the allowable density bonus. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 2 Item 23. - 10 HB -570- The inclusionary housing production obligations are applicable on an aggregate basis; the obligation is not required to be fulfilled in each individual development. If the appropriate findings are made at a public hearing, the obligation can be aggregated among all of the City's redevelopment project areas. The obligation may also be fulfilled outside of a redevelopment project area; however, then the credit is limited to .5 units per unit produced. B. Purpose of Affordable Ownership Housing Regulations Cify Role in the Affordable Ownership Housing Process The primary objective of the Affordable Ownership Housing Program is to provide affordable housing to residents who would otherwise have difficulty owning a home in Huntington Beach. Persons interested in purchasing an Affordable Ownership Unit through the City's Affordable Ownership Housing Program, must apply to and be approved by the City. It must be noted that the various Ownership programs offered by the City may have differing eligibility and continuing home owner requirements. The Affordable Housing Administrator will authorize a sale transaction only when it determines that the buyer is an Eligible Purchaser, and that the unit is being sold at the Affordable Sales Price. For the duration of the required Affordability Period, the participant is subject to continuing home owner requirements, which are outlined in greater detail in these Affordable Ownership Housing Regulations. In addition, if there is a Transfer of ownership during the Affordability Period, the Affordable Ownership Unit must be sold at the Affordable Sales Price to a buyer approved by the City. The City staff will conduct workshops with prospective Owners and real estate brokers at proposed large-scale inclusionary housing projects to describe the requirements imposed by the Affordable Ownership Housing Program. In addition, the City will distribute notice to Owners in advance of any City Council action to modify the Affordable Ownership Housing Regulations. Affordable Ownership Housing Agreements The principal mechanism the City uses to establish Affordable Ownership Units are the CC&Rs, Deeds of Trust, and other governing documents recorded against the subdivision or individual unit. While the individual terms of these agreements are controlling, these Affordable Ownership Housing Regulations address the following: 1. The eligibility criteria to be imposed on prospective home purchasers; 2. The procedures to be followed when buying, selling or Transferring units; Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.1-16 Page 3 HB -571- Item 23. - 11 3, The methodology for setting the maximum sales price; 4. The establishment of the minimum and maximum down payments that can be made by home buyers; 5. The regulations that will be imposed on the financing of Affordable Ownership Units; 6. The circumstances under which the Affordability Covenants will be subordinated to the deed of trust held by a mortgage lender; 7. The complaints and appeals process available to program participants; and 8. The monitoring and enforcement activities that will be undertaken by the City. In the event there is an irreconcilable conflict between the City's Deed of Trust and the Affordable Ownership Housing Regulations or the CC&Rs, the City's Deed of Trust will control. Affordable Ownership Housing Regulations-Developer August 15,201 f 1105035.HB Page 4 Item 23. - 12 xB -572- II. DEFINITIONS OF TERMS "Affordability Covenant" shall mean the CC&Rs restricting the sales price of the Unit, and limiting the maximum income of any purchaser of the unit. "Affordable Housing Administrator" has the day-to-day authority for making determinations related to these Affordable Ownership Housing Regulations. The Affordable Housing Administrator will be appointed by the Program Director. "Affordable Ownership Housing Program" shall include ownership homes developed under the Inclusionary Housing Program, using the California Density Bonus Law, or developed with Agency financial assistance. "Affordable Sales Price" shall mean the maximum price of an Affordable Ownership Unit, as calculated according to the formula described in these Affordable Ownership Housing Regulations. The formula is based on the requirements imposed by H&SC Section 50052.5. "Affordable Ownership Unit" shall mean a home in Huntington Beach that is made affordable by CC&Rs that restrict ownership, occupancy and the Affordable Sales Price as described in these Affordable Ownership Housing Regulations. "Affordability Period"shall be defined for each Affordable Ownership Unit Project. The covenant period will be identified in the CC&Rs that are recorded on legal title for each Affordable Ownership Unit. The covenant period will commence upon the close of escrow the first unit sold in each phase of the Affordable Ownership Project. At the end of the original term, the CC&Rs will expire. "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach. "Agency Loan" shall mean a loan or any other form of financial assistance provided by the Agency to assist a qualifying household in the purchase an Affordable Ownership Unit. "CC&Rs" shall the Covenants, Conditions and Restrictions executed by the City and the Owner of an Affordable Ownership Unit. "City" shall mean the City of Huntington Beach, California. "City Council"shall mean the City Council of the City of Huntington Beach. Affordable ownership Housing Regulations-Developer August 15,2011 9906035.HB Page 5 HB -573- Item 23. - 13 "City Manager" is the City Manager of the City of Huntington Beach. The City Manager has the ultimate authority to evaluate appeals submitted in relation to these Affordable Ownership Housing Regulations. "County" shall mean the County of Orange. "County Median Income" shall mean the Median Income adjusted by actual household size as published annually by HCD for the County. "Eligible Purchaser" shall mean a purchaser who meets the eligibility criteria set forth in these Affordable Ownership Housing Regulations. "Fair Market:Value" shall mean the value of the property as determined by a property appraisal performed by a licensed appraiser. "Gift Funds" shall mean the gift funds an applicant applies to the down payment on the purchase of a home. "Gross Income" shall mean all income from whatever source from all adult household members derived as provided in the Internal Revenue Code (26 USC Section 61), whether or not exempt from Federal income tax. Such income Includes, but is not limited to, the following: 1. Wages and salaries including overtime pay 2. Compensation for services, including fees, commissions, tips and bonuses 3. Net income derived from business 4. Gains derived from dealings in property 5. Interest 6. Rents 7. Royalties 8. Dividends 9. Alimony 10_ Child Support 11. Annuities 12. Income from life insurance and endowment contracts 13. Pensions 14_ Income from discharge of indebtedness 15. Distribution share of partnership gross income Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 6 Item 23. - 14 HB -574- 16. Income in respect of a decedent 17. Income from an interest in an estate or trust 18. Public benefits including but not limited to AFDC, SS1, disability income 19. When a household has net family assets in excess of$5,000, income shall include the actual amount of income, if any, derived from all of the household assets or 10 percent of the value of such assets, whichever is greater. "Housing Cost" shall mean and include all of the following costs associated with ownership of an affordable home, calculated for a 12-month period: 1. Principal and interest on a mortgage loan at the defined interest rate; 2. Property tax and assessments; 3. Home Owner Association (HOA) fees. 4. Fire and casualty insurance covering replacement value of property improvements; 5. Property maintenance and repairs; and 6. A reasonable utility allowance, as determined by the City. "HCD" means the California Housing and Community Development Department. "H&SC" shall mean the California Health and Safety Code. "HUD" shall mean the United States Department of Housing and Urban Development. "Inclusionary Ordinance" shall mean the Inclusionary Housing Ordinance adopted by the City. The Inclusionary Ordinance is currently found in (Section 230.26 of the City Zoning Code. "Inclusionary Housing Program" shall mean the City's program to implement the Inclusionary Ordinance. "Low Income" refers to households whose incomes meet the standards defined by the H&SC Section 50079.5. Generally Law Income means household income that does not exceed 80% of the County Median Income, as adjusted for household size. However, the maximum household income amount for Low Income households shall be set at the amount published by HCD annually. Low Income is sometimes also referred to as Lower Income. "Low Income Household" or "Lower Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Low Income. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.1-113 Page 7 HB -575- Item 23. - 15 "Median Income" is calculated by HCD using non-aggregated census income data and applying trending factors for metropolitan statistical areas (MSA) throughout the country. The MSA for Huntington Beach is Orange County. "Median Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Median Income. "Moderate Income" refers to households whose incomes meet the standards defined by the H&SC Section 50093. Generally, Moderate Income means household income that does not exceed 120% of the County Median Income, as adjusted for household size. The maximum household income amount for Moderate Income households shall be set at the amount published by HCD annually. "Moderate Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Moderate Income. "Mortgage Interest Rate " refers to the mortgage interest rate that must be used in the Affordable Sales Price calculation. The Mortgage Interest Rate is based on the 30-year, 90-day yield, fixed-interest rate for a fully amortizing loan with no points and no loan origination fees. The Mortgage Interest Rate will be the lowest pertinent rate published in Financial.com for the three months immediately preceding the proposed home purchase. "Owner" shall mean the purchaser of an Affordable Ownership Unit, having been approved by the City. "Ownership Housing Project" refers to a market rate project that is subject to the City's Inclusionary Housing Ordinance, or is using the California Density Bonus Law, or is being developed with Agency financial assistance. "Program Director" has the ultimate authority to evaluate appeals submitted to the terms of these Affordable Ownership Housing Regulations. The Program Director will be appointed by the City Manager "Transfer" shall mean any sale, transfer, lease, exchange, assignment or conveyance of an Affordable Ownership Unit, including any portion or interest in an Affordable Ownership Unit or other disposition of any interest in an Affordable Ownership Unit, whether voluntary or involuntary. "Very-Low Income" refers to households whose incomes meet the standards defined by the H&SC Section 50105. Generally Very-Low Income means household income that does not exceed 50% of the County Median Income, as adjusted for household size. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 8 Item 23. - 16 HB -576- The maximum household income amount for Very-Low Income households shall be set at the amount published by HCD annually. "Very-Low Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Very-Low Income. Affordable ownership Housing Regulations-Developer August 16,2011 1106035.HB Wage 9 HB -577- Item 23. - 17 III. PROGRAM ADMINISTRATION A. General The City defines the requirements that are imposed by the Affordable Ownership Housing Program. The Affordable Housing Administrator oversees the Affordable Units upon their completion, which includes calculating Affordable Sales Prices, determining home buyer eligibility, approving Transfers, and monitoring program compliance. B. Fair Housing Policy Program participants must comply fully with all Federal, State, and local non- discrimination laws. Specifically, program participants shall not discriminate on account of race, color, sex, religion, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, or deny any family or individual the opportunity to apply for or participate in the Affordable Ownership Housing Program. C. Privacy Rights All eligibility applications are held in strict confidence and are not considered public records (H&SC Section 34332). Requests for the City to release information involving an applicant or participant must be accompanied by a written release request from the applicant or participant and/or a court order, unless disclosure is authorized under Federal or State law. H&SC Section 33334.3 requires redevelopment agencies to compile, maintain and make available to the public on the internet, a database of existing new and substantially rehabilitated units that are subject to income and affordability covenants. The on-line. database will be updated annually and will include the following information: 1. The address and parcel number of the income restricted property. 2. The number of units and the number of bedrooms. 3. The year of construction completion. 4. The date when the affordability covenant or restriction was recorded. 5. The document number of the recording. 6. The expiration date of the covenant or restriction. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 10 Item 23. - 18 HB -578- 7. The date and document number of any covenants or notices that may be recorded when an ownership unit is resold. D. City Includes Redevelopment Agency These Affordable Ownership Housing Regulations shall apply equally to all affordable ownership programs administered by the City and the Agency. As used in these Regulations, the word `City' means and includes the 'Agency`. E. Authorization The Program Director and/or a designee are authorized to sign all documents requiring approvals related to the development, sales, waivers, subordinations, and any non- substantial changes to these Affordable Ownership Housing Regulations. F. Affordable Ownership Housing Regulations Each developer participating in the Affordable Ownership Housing Program will receive a copy of the Affordable Ownership Housing Regulations. These Regulations may be updated from time-to-time to increase the programs' effectiveness; modifications will require City Council approval. Each transaction will include CC&Rs and a Deed of Trust that will be executed by the City and the Owner. In the event there is a conflict between the Deed of Trust and the Affordable Ownership Housing Regulations or the CC&Rs, the Deed of Trust will prevail. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 17 HB -579- Item 23. - 19 IV. DETERMINATION OF ELIGIBLE PURCHASER A. Prospective Home Buyer List To assist the developer in identifying potential purchasers, the City will create an interest list on the City's website. Sufficient information will be provided to allow prospective purchasers to determine whether they meet the eligibility standards imposed on the home. The prospective purchasers will then self-report their income information for use by the home seller. The following terms will be imposed on the interest list: 1. To remain in the database, prospective home buyers will be required to respond to an email request every 30 days. 2. The City does not bear any responsibility for the accuracy of the information submitted by prospective home buyers. 3. It is the developer's responsibility to select an Eligible Purchaser. The City cannot provide an assurance that the information submitted by prospective home buyers is accurate or complete, or that that the City will ultimately determine that the prospective buyer is an Eligible Purchaser. That determination can only be made after the home buyer submits a complete Home Buyer Application. B. Required Eligibility Documentation Applicants will be required to furnish proof demonstrating their eligibility to purchase an Affordable Ownership Unit. Applicants unable to provide satisfactory evidence of income, assets, composition, or other qualifying criteria will not be considered Eligible Purchasers, and will not be allowed to purchase an Affordable Ownership Unit. C. Applicant Eligibility Criteria United States Citizenship/Legal Residency Applicants and all household members must be United States Citizens or have the right to permanently reside in the United States. Acceptable citizenship documentation includes a birth certificate or a Permanent Resident Card. Household and Unit Size Compatibility Applicant households must be compatible with the size of the unit to be purchased. The maximum household sizes are set as follows: Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 12 Item 23. - 20 xB -580- Number of Maximum Number Bedrooms in the of Occupants Home 1 3 2 5 3 7 4 9 Owner Occupancy Applicants must certify that the Affordable Ownership Unit will be owner-occupied at all times, and will not be rented or leased. Ownership of Other Residential Real Estate Applicants may not own other residential property, including mobile home property, unless the property will be sold prior to or in conjunction with the purchase of an Affordable Ownership Unit. Verifiable Income All adult household members, except stay-at-home spouses or domestic partners and dependents, must have at least one continuous year of verifiable income and at least two years of income tax payment history in the United States at the time of application. This requirement is increased to two continuous years of verifiable personal and business income for self-employed individuals. To make accurate verification possible, applicants may not have changed employment status within six months of application. Co-Applicants Co-applicants must demonstrate at least one full year of current joint residency at time of application. Divorced or Separated Applicants Divorced or legally separated household members must provide a copy of the divorce decree or legal separation document signed by a court officer. Otherwise separated married household members must demonstrate at least one year of complete financial and residential separation at time of application for the couple to be considered separate for purposes of determining eligibility. If this cannot be demonstrated, the couple must submit the application as co-applicants. Affordable Ownership Rousing Regulations-Developer August 15,2011 1106035.HB Page 13 xs -58 - Item 23. - 21 Joint Custody of Children Applicants with joint custody of children must have custodial parent rights defined in a divorce decree for a child to be considered part of the household. This rule shall not be interpreted as disallowing children from living with parents with less than 50% custody rights; it is solely intended to be applied when determining household size for initial program eligibility. Composition of Household Once the application is submitted, the household composition cannot be altered. D. Income Eligibility Criteria Gross Income The City will consider gross income for all adult household members when determining applicant eligibility. In the event an applicant uses a co-signer on a mortgage loan, the gross income of the co-signer will be considered part of the household income. The funds included in Gross Income are detailed in the definitions section of these Affordable Ownership Housing Regulations. Maximum Income The maximum allowable income is set forth for each project and/or unit by the Affordability Covenants or any other applicable affordable ownership housing agreement recorded on legal title to the property. Income levels include, but are not limited to Very- Low, Low, Median, and Moderate as defined in these Affordable Ownership Housing Regulations. Minimum Income Monthly household income must be at least twice as much as the monthly housing cost incurred by the Owner. Housing cost includes principal and interest on mortgage loans; property tax assessments; HOA dues; insurance costs; property maintenance and repairs costs; and utilities costs. Household Assets The total value of assets owned by an applicant prior to the purchase of the home cannot exceed 50% of the purchase price of the Affordable Ownership Unit. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 14 Item 23. - 22 HB -582- V. HOME BUYER APPLICATION AND DISCLOSURE DOCUMENTS A. Program Application Applicants must complete and submit the City's Home Buyer Application and all required attachments. The Affordable Housing Administrator will review the application for completeness and will notify the applicant of any missing information and/or documents. Incomplete applications will not be considered for eligibility. Applicants will be given 10 business days to provide all missing information and/or documents. Failure to provide requested information and/or documents will constitute cause for denial of eligibility. The Affordable Housing Administrator will evaluate the completed application to determine whether the applicant is an Eligible Purchaser. The application must clearly demonstrate eligibility with respect to all Home Buyer Eligibility Requirements. Applications that do not provide satisfactory evidence of income, assets, or other qualifying criteria will not be approved. At the written request of an applicant, the Program Director or a designee, at his/her sole discretion, may waive certain Home Buyer Eligibility Requirements. B. Submittal Requirements Household Composition Documents For all adult household members,the City will require a photocopy of a driver license or California photo identification. For minors, the City will require a copy of the birth certificate. If the birth certificate for a minor is not available, the City may accept the following: adoption papers, custody agreement, court-ordered assignment, or verification from a social services agency. School Registration Documents Adult household members who are dependents of the applicant and who are full-time students will be required to provide copies of school transcripts or registration verification showing current full-time student status. Evidence of Current Joint Residency Co-applicants are required to demonstrate one full year of current joint residency. Acceptable verification may be in the form of the following:joint bank accounts or other shared financial history, leases or other evidence of cohabitation, or credit reports showing evidence of relationship. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 15 HB -583- Item 23. - 23 Verification of Divorce or Separation Status Divorced or legally separated household members must provide a copy of the divorce decree or legal separation document signed by a court officer. Married, but separated, couples must demonstrate at least one full year of complete financial and residential separation at time of application to be considered separated for purposes of determining eligibility. If this cannot be demonstrated, the couple must submit the application as co- applicants. Financial Data Authorization to Obtain Credit l-IistorY Each adult household member must authorize the City to obtain reports from credit reporting agencies. The City will determine when it is necessary to obtain one or more credit report(s) per individual. Such reports will be used only to confirm applicant information: such as current and previous addresses, current and previous employers, marital status, loan history, income to debt ratio and other related information. Mortgage Pre-Qualification Letter and Loan Application Packet Applicants must submit a copy of a pre-qualification letter and full application packet from a licensed mortgage lender. The application packet will include, but shall not be limited to the typed and signed fully completed mortgage application, loan underwriting analysis, truth in lending disclosure, income verification, and credit verification. The mortgage loan application packet will be used by the City to verify the following: residency history; employment history; income, liabilities; assets (including real estate ownership); United States residency status; and down payment and mortgage financing amounts. Checking,_Savings, and Investment Account Statements Applicants must submit copies of the three most recent months of statements for all accounts, including checking, savings, or other investment accounts owned in part or full by all adult household members. These account statements must demonstrate evidence of funds for the identified down payment amount. These statements must also demonstrate current period and year-to-date income earned on each account through interest and/or dividends. Affordable Ownership Rousing Regulations-Developer August 15,2011 1106036.RB Page 16 Item 23. - 24 HB -584- Tax Returns All adult household members will be required to provide signed copies of their two most recent Federal income tax statements. These statements must include all schedules and attachments. Applicants unable to provide copies of Federal income tax statements will be required to obtain tax history printouts from the Internal Revenue Service. Applicants may be requested to sign an authorization for release of information to the City from the Internal Revenue Service for further verification of income. Referrals to the Internal Revenue Service may be made for confirmation of income statements on a case-by-case basis. Applicants are required to submit the identified tax statements. Applicants unable to provide tax information for any reason will not be eligible to participate in the program. Tax returns will be used by the City to verify the following: residency history; family composition; income history (including amounts and types of income); and real estate ownership. Income Verification Employment Income In the order of preference, the following employment income verification sources listed below will be considered acceptable. The documentation must specify the amount and type of pay (i.e. wages, overtime wages, commissions, and bonuses), frequency of pay, and year to date earnings: 1. Check stubs or earning statements showing employee's gross pay per pay period and frequency of pay. The check stubs should include the year-end statement for the last full year of employment, and the most recent three months of pay periods. 2. Letter from the employer on company letterhead and signed by an authorized company representative. Future income related to overtime, commissions and bonuses can be difficult to accurately predict; if necessary, these forms of income may be estimated based on historical amounts. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 17 xs -585- Item 23. - 25 Income from a Business Net income from a business owned in part or full by an applicant will be considered when determining income eligibility. Net income is defined as business receipts or sales less expenses that are essential to the operation of the business. To estimate current net business income, the City will require the two most recent Federal tax returns, four most recent quarterly tax filings, and one full year of business and personal checking, savings, and other investment account statements for all business owners/partners. Applicants with less than one full year of verifiable business income history will not be considered for eligibility to purchase an Affordable Ownership Unit. Applicants must itemize gross business receipts or sales for the period covered by the most recent Federal tax return and forecast gross business receipts or sales for the year beyond the time of application. The applicants must also itemize the business expenses that were applied to determine net business income for both periods. The City will analyze all tax returns, quarterly tax filings, account statements, and income/expense forecasts when determining net business income. Applicants that are unable to provide satisfactory evidence of business income or expenses will be denied eligibility for purchase of an Affordable Ownership Unit. Social Security, Pensions, Supplementary Security Income (SSI). Welfare, Disability Income Applicants must submit a copy of their most recent award or benefit notification letter prepared and signed by the authorizing agency. At the Program Director's sole discretion, checks or bank deposit slips that show only net amounts remaining after deductions for SSI or Medicare may be accepted when award letters cannot be obtained. Alimony or Child Support Verification of alimony or child support income will be considered acceptable in the order listed: 1. Copy of a separation of settlement agreement or a divorce decree stating amount and type of support and payment schedules. 2. A notarized letter from the person paying the support notarized attesting to the amount and terms of support payments. Affordable Ownership Housing Regulations-Developer August 15.2011 1106035.HB Page 18 Item 23. - 26 xB -586- 3. Federal income tax returns. Residential Purchase Agreement Applicants must submit a copy of the fully completed and executed Residential Purchase Agreement for the Affordable Ownership Unit. The City will review this agreement to verify the total purchase price, the deposit amount, the first trust deed mortgage terms and any secondary financing terms. The City has approval rights over any amendments to the Residential Purchase Agreement made after the submittal of a Home Buyer Application. Terms that will not be allowed include, but are not limited to: 1. The escrow period cannot exceed 90 days. 2. The seller cannot lease the property back from the buyer for more than one month following the close of escrow. 3. Buyers cannot be required to pay fees that are customarily paid by the seller. 4. Buyers cannot be required to pay any extraordinary fees, 5. No financing can be carried back by the seller. Affordability Period Under the current regulations, the Affordability Period will run for not less than 45 years. However, the Affordability Period for each Affordable Ownership Unit will be defined in the Deed of Trust and CC&Rs recorded on legal title to the property. In the event there is a conflict between the Deed of Trust and the Affordable Ownership Housing Regulations or the CC&Rs, the term identified in the Deed of Trust will prevail. Disclosure Documents Applicants and co-applicants must be listed as owners of the property. Applicants and co-applicants must execute the following documents: Special Disclosure Applicants are required to submit an original, fully completed and signed Special Disclosure on a form approved by the City that confirms that the applicant received the Affordable Ownership Housing Regulations, and has had the opportunity to ask questions about the terms and conditions. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 19 HB -587- Item 23. - 27 Certificate of Purchaser Applicants are required to submit an original, fully completed and signed Certificate of Purchaser on a form approved by the City. This document must summarize the proposed purchase transaction, and include an acknowledgement by the buyer of the CC&Rs recorded by the City on the Affordable Ownership Unit. Buyer and Seller_Declaration Applicants are required to submit a fully signed Buyer and Seller Declaration (with original signatures) stating that under penalty of perjury the parties have not entered into, and will not enter into any agreements, other than the Purchase Agreement for the purpose of exchanging money or other personal property with a cost of more than $500. Recorded Notice of Affordability Covenant The City will record the CC&Rs imposed on the Affordable Ownership Units, The CC&Rs will identify the income and affordability restrictions; and the covenant term. Real Estate Transfer Disclosure A Real Estate Transfer Disclosure Statement must be signed by both the seller and the buyer. The Statement must include language approved by the City describing the affordable housing restrictions imposed on the property. The applicant must also acknowledge in writing that restrictions will be imposed on the future resale of the property. Promissory Note The City and the applicant must execute a Promissory Note in an amount equal to the difference between the estimated market value and the Affordable Sales Price of the unit at the time of sale. Deed of Trust The City will record a Deed of Trust on the property at an amount equal to the Promissory Note. The Deed of Trust will be used to ensure the affordability covenants are recorded on title, and will remain an obligation on the property throughout the defined covenant period. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035,HB Page 20 Item 23. - 28 xB -588- VI. AFFORDABLE SALES PRICE A. General Policy Affordable Ownership Units can only be sold at the defined Affordable Sales Price. This price will be calculated based on the specific CC&Rs recorded on the Affordable Ownership Units. The Affordable Sales Price is the maximum price for which an Affordable Ownership Unit may be resold at any time during the Affordability Covenant period. The Affordable Sales Price is likely to be lower than the fair market value of the property. The City's Affordable Ownership Housing Programs are subject to the following basic financial requirements: 1. A prospective home-seller must submit a Request for the Maximum Affordable Sales Price to the Affordable Housing Administrator in order to determine the Affordable Sales Price for the home. 2. The Affordable Sales Price will be valid for 90 days. Once the Price is determined, it will not be modified during the 90-day period. 3. Prospective home buyers will be entitled to receive one free Affordable Sales Price determination per calendar year. Additional requests for Affordable Sales Price calculations will be subject to the current fee schedule established by resolution of the City Council. When applicable, fee payment must be made at time of application. B. Affordable Sales Price Calculations The Affordable Sales Price is equal to the Maximum Mortgage Amount plus the defined Down Payment. Both the Maximum Mortgage and the defined Down Payment must be calculated in accordance with the methodology defined in these Affordable Ownership Housing Regulations. The amount of the Affordable Sales Price is calculated on the basis of the identified variables. Two especially important variables used in determining the Affordable Sales Price are the County Median Income and the mortgage interest rate. As these variables change over time, the Affordable Sales Price can increase or decrease; the Affordable Sales Price is in no way tied to market prices. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 21 xB -589- Item 23. - 29 The calculation methodology, and the applicable variables, will be posted on the City's website. The actual calculation will be based on the Affordability Covenants executed between the City and the Owner. Household Size For the purposes of the Affordable Sales Price calculations, the household size is set at the number of bedrooms in the unit plus one. For example, the imputed household size for three-bedroom home is four persons. The H&SC Section 50052.5 refers to this as "the household size appropriate for the unit". However, this is not meant to be an occupancy cap; it is simply a benchmark used to create a consistent methodology for calculating the Affordable Sales Price. Income Projects developed under the Affordable Ownership Housing Program must adhere to the affordable housing cost methodology imposed by the Affordability Covenants imposed on the home. The standards currently being imposed by the Affordable Housing Program are based on the calculation methodology defined in H&SC Section 50052.5. H&SC Section 50052.5 uses the following household income levels to calculate the Affordable Sales Price: 1. Low Income: 70% of the County Median Income for a household size equal to the number of bedrooms in the unit plus one. 2. Moderate Income: 110% of the County Median Income for a household size equal to the number of bedrooms in the unit plus one. Housing Related Expenses The non-mortgage related expenses will be calculated based on standards defined by the City. The expenses and standards are as follows: 1. Property Taxes and Assessments: The tax rate applied to determine the annual property tax cost will be set at 1,08% of the purchase price of an Affordable Ownership Unit. 2. HOA Pees: The HOA fees will be set at the amount actually charged for the home being purchased. 3. The following costs will be set by the City annually, and will be posted on the City's website: Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 22 Item 23. - 30 HB -590- a. Eire and Casualty Insurance: The City will periodically survey local insurance companies to determine the typical annual cost of insuring a home for its replacement value. b, Property Maintenance and Repairs: The City will apply a nominal cost allowance to cover the costs Owners will typically bear for maintaining their property over a one-year period. c. Utilities: The City will apply utility cost allowances based on data published by the Orange County Housing Authority. Supportable Morfgage Payments The supportable mortgage payments will be established using the following equation: Benchmark Annual Household Income (Less)Annual Housing Related Expenses_ Property Taxes and Assessments HOA Fees Fire and Casualty Insurance Property Maintenance and Repairs Utilities Total Annual Housing Related Expenses Income Available for Mortgage Payments Maximum Mortgage Amount The Maximum Mortgage Amount is equal to the present value of the Income Available for Mortgage Payments over a 30-year term. The discount rate used to determine the present value is set at the Mortgage Interest Rate. The Mortgage Interest Rate will be posted on the City's website, and will be updated monthly. Down Payment The Affordable Sales Price calculation is based on a benchmark down payment amount that is not tied to the actual down payment contributed by the home buyer. The amount set for Affordable Sales Price calculation purposes is 10% of the total purchase price. The actual down payment amount will vary from unit-to-unit, and will not impact the Affordable Sales Price. Rather, the actual down payment will be subtracted from the Affordable Sales Price to determine the actual mortgage amount for the home. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 23 HB -591- Item 23. - 31 VII. FINANCING REQUIREMENTS A. Down Payment Requirements Minimum and Maximum Down Payment The minimum down payment is set at 5% of the total purchase price for the home, and the maximum clown payment is set at 50% of the purchase price of the home. The Program Director or a designee has the authority to review and approve variations to the established minimum and maximum amounts. Gift Funds The City does not impose a cap on the amount of gift funds an applicant can apply to the down payment on a home purchase. However, gift funds are included in the defined down payment cap. B. Purchase Money !Mortgage Requirements 1. The City may consider subordinating the income and affordability covenants to the mortgage financing used to purchase the home. This subordination will only be approved if the Program Director or a designee can make the finding that it would not be feasible for the home buyer to obtain conventional financing unless the covenants are subordinated to the mortgage financing. 2. Home buyers must obtain conventional, fully amortizing, fixed interest rate mortgages with a term of at least 30 years. No interest only loans, negative amortization loans, balloon payment loans or variable interest rate loans will be allowed. 3. The loan to value ratio (LTV) of the mortgage(s) used to acquire the home cannot exceed the lesser of: a. 95% of the property's appraised value, or b. The Affordable Sales Price. 4. Many lenders allow borrowers to obtain a loan without providing verifiable income information; this is commonly referred to as a Stated-Income Loan. The use of this mortgage product may impair the City's ability to determine the applicant's eligibility to participate in the City's Affordable Ownership Housing Program. Therefore, unless income can otherwise be documented to the satisfaction and Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 24 Item 23. - 32 xB -592- approval of the Program Director or a designee, applicants will not be allowed to use Stated-income Loans to finance the purchase of an Affordable Ownership Unit. 5. All primary mortgages and any secondary financing must be secured by a loan agreement and a deed of trust from banks or companies licensed to make home loans in California. Loans from family members, friends, or other non-licensed entities shall be considered gift funds to the applicant, as defined in these Affordable Ownership Housing Regulations. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035,HB Page 25 HB -593- Item 23. - 33 V[I[. COMPLAINTS AND APPEALS Complaints concerning the City's Affordable Ownership Housing Program should be made in writing and addressed to the Affordable Housing Administrator. Complaints will be accepted only if they are in writing and are received within 30 days from the event giving rise to the complaint. The Affordable Housing Administrator will contact the complainant to attempt to resolve the matter. A written response from the Affordable Housing Administrator will be made to the complainant within 10 business days. If a complainant is not satisfied with the written response, a request for an appeal may be filed with the Program Director. The written request must set forth the reasons for the appeal and must be received by the Program Director within 15 days from the date of the Affordable Housing Administrator's written response. In the event the request does not meet these requirements, the complainant will be notified that the request is denied; otherwise, the complainant will be invited to meet with the Program Director. The Program Director will provide the complainant with an opportunity to advocate his/her position and to resolve the matter. The Program Director's response will be made in writing within 10 business days following the meeting. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.1113 Page 26 Item 23. - 34 HB -594- IX. MONITORING AND ENFORCEMENT A. General Policy The City is committed to assuring that its affordable housing resources reach only eligible households so that program integrity can be maintained. Owners are required to cooperate with the City in promptly providing all information requested by the City in monitoring compliance with program requirements. B. File Audits Upon Close of Purchase Upon the close of a purchase transaction, the City will obtain the following information from the escrow company: 1. The original City Deed of Trust and notice of affordability restrictions on Transfer of property executed by the Owner and recorded on the property; and 2. Copies of: a. The Promissory Note; b. The final buyer and seller settlement statements; and C. The buyer's title policy. City staff will review these documents to ensure that the City's Deed of Trust and notice of affordability restrictions on Transfer were properly completed, executed, and recorded on legal title of the Affordable Ownership Unit. City staff will also ensure that the financial terms of the purchase transaction are consistent with those that were approved at the time of the application. C. Program Abuse and Fraud Protections City staff will investigate suspected program abuse and fraud as appropriate. Staff will take the necessary and appropriate steps, both administrative or legal, to enforce program requirements. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 27 xB -595- Item 23. - 35 Referrals, Complaints, or Tips The City will follow up on referrals that are received by mail, by telephone, or in person, which allege that the developer or applicant are violating program rules. Such follow up will be made providing that the referral contains at least one item of information that is independently verifiable. A copy of the written allegation or a summary of the verbal allegation will be placed in the Owner's file. Internal File Review The City will investigate instances where it discovers, as a result of administering the program, information or facts that conflict with previous file data, or are in any way discrepant with statements made by the developer/applicant. Referrals to the City Attorney In the event of a breach or potential breach of program requirements, the City may institute legal action to enforce compliance with the program requirements, and to enjoin any actions by Owners that violate program requirements. The City's legal remedies may additionally include the following: 1. Civil citations with monetary penalties for violations of the Affordable Ownership Housing Regulations; 2. Recovering any rent that may have been received by an Owner; 3. Reversing sales not approved by the City, and 4. Instituting foreclosure proceedings. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Page 28 Item 23. - 36 HB -596- ATTi�C I`IIVlENT INCLUSIONARV HOUSING ORDINANCE (ORDINANCE NO. Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.1113 HB -597- Item 23. - 37 ORDINANCE NO. 3687 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE BY ADDING NEW SECTION 230.26 THERETO ENTITLED"AFFORDABLE HOUSING" WHEREAS, the City Council of the City of Huntington Beach does hereby ordain as follows; SECTION 1. That the Huntington Beach Zoning and Subdivision Ordinance is hereby amended by adding new Section 230.26 thereto,entitled "Affordable Housing,"said chapter to read as follows; 230.26 Affordable Housing A. Purpose. 1. The purpose and intent of this Chapter is to implement the goals, objectives and policies of the City's Housing Element. It is intended to encourage very low,low-and median income housing,which is integrated,compatible with and complements adjacent uses, and is located in close proximity to public and commercial services, 2. The affordable housing program is one tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors, and to meet its regional fair- share requirements for construction of affordable housing. B. Applicability. This section shall apply to new residential projects three(3)or more units in size. 1. A minimum of ten (10)percent of all new residential construction shall be affordable housing units. 2. Rental units included in the project shall be made available to very low or low- income households based on the Orange County Median Income,adjusted for appropriate family size, as published by the United States Department of Housing and Urban Development or established by the State of California,pursuant to Health and Safety Code Section 50093, or a successor statute. 3. For sale units included in the project shall be made available to very low, low or median income level households based on the Orange County Median Income, adjusted for appropriate family size,as published by the United States Department of Housing and Urban Development or established by the State of California,pursuant to Health and Safety Code Section 50093,or a successor statute. 4. Developers of residential projects consisting of nine or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of the Section, unless the affordable housing requirement is outlined as part of a specific plan Common* Item 23. - 38 HB -598- Ordinance No. 3687 project. 5. Developers of residential projects may elect to provide the affordable units at an off- site location pursuant to subsection B unless otherwise outlined as part of a specific plan project. If affordable units are off-site,they roust be under the full control of the applicant, or other approved party. 6. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of determining the required number of affordable housing units,only new units shall be counted. C. Fees in Lieu of Construction. I. Fees paid to fulfill the requirements of this Section shall be placed in the City's Affordable Housing Trust Fund,the use of which is governed by subsection E. 2. The amount of the in-lieu fees shall be calculated using the fee schedule established annually by resolution of the City Council. 3. One hundred (100) percent of the fees required by this Section shall be paid prior to issuance of a building permit. 4. Fees paid as a result of new residential projects shall be based upon the total number and size of the new residential units which are to he constructed. D. Off-bite Construction of Affordable Units, Except as may be required by the Califomia Coastal Act and/or the California Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off site, at one or several sites, within the City of Huntington Beach. I. Off-site projects may be new construction or major physical rehabilitation,equal to more than one-third the value of the existing improvement, excluding land value,of existing non-restricted units conditioned upon being restricted to long-terra affordability. "At Risk"units identified in the Housing Element or mobile homes may be used to satisfy this requirement. 2. All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval(occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. R Miscellaneous Provisions. 1. The conditions of approval for any project that requires affordable units shall specify the following items: Document3 HB -599- Item 23. - 39 f ordinance No. 3687 (a) The density bonus being provided pursuant to Section 230.14,if any, (b) The number of affordable units; (c) The number of units at each income level as related to Orange County Median Income; and (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects of the affordable housing provisions shall be executed between the applicant and the City and recorded with the Orange County Recorder's Office prior to issuance of the first building permit. 3. The Agreement shall specify an affordability term of not less than sixty(60)years. 4. In a project requiring an in-lieu fee, the applicant shall execute and record an Agreement to pay an Affordable Housing Tn-Lieu Fee. 5. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units imless otherwise approved through a phasing plan. Final approval (occupancy)of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion,of the affordable units. 6. All affordable units shall be reasonably dispersed throughout the project unless otherwise designed through a master plan,shall contain on average the same number of bedrooms as the market rate units in the project, and shall be comparable with the market rate units in terms of exterior appearance, materials and finished quality. 7. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty(50)percent of the dwelling units affordable to very low- and low- income households,with at least twenty(20)percent of the units available to very low- income households. Concurrent with establishing the annual fee schedule pursuant to subsection C, the City Council shall by resolution set forth the permitted uses of Affordable Housing Trust Funds. All units that obtain Affordable Housing Trust Funds shall maintain the affordability of the units for a minimum of sixty(60)years. The funds may,at the discretion of the City Council,be used for pre-development costs, land or air rights acquisition, rehabilitation, land write downs,administrative costs, gap financing,or to lower the interest rate of construction loans or permanent financing. 8. New affordable units shall be occupied in the following manner: (a) If residential rental units are being demolished and the existing tenant(S) meets the eligibility requirements,he/she shall be given the right of first refusal to occupy the affordable unit(s);or ©ocument3 Item 23. - 40 HB -600- 1 Ordinance No. 3687 i (b) If there are no qualified tenants,or if the qualified tenant(s)chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs,then qualified households or buyers will be selected. F. Price of Affordable Units. Affordable units shall be sold or rented at prices affordable to very low, low-or median-income households pursuant to terms of the Affordable Dousing Agreement. SECTION 2. This ordinance shall become effective thirty(30)days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 1 day of NovEmbar� � ,2004 t ayo 4Citye'rk REV1B D AND PR VF AP ROVED AS TO FORM: r ti City Administrator }ty Attorn y L IU Z(P1© YNITLMMD AND APPROVED: girof Planning d©cumen* HB -601- Item 23. - 41 Ord. No. 3687 STATE OF CAMFORNIA } COUNTY OF ORANGE } ss: CITY OF HONI'INGTON BEACH ) 1, IOAN L. FLYNN,the duly appointed, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a re ular meeting thereof held on the 18th day of October,2004, attd was again read to said City Council at a regular meeting thereof held on the 1 st day of Noveimber,,2004. and was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council. AYES: Sullivan, Boardman, Cook,Winchell NOES: ; Green; Coe'rp'er ABSENT: Hardy ABSTAIN: None I,Join t-Flynn,CITY CLERK of the City of Huntington Heath and ex-officio Clerk of the City Council,do hereby certify that a synopsis of this ordinance has been published in the Hun6gtoA 1360.Fountain Valley . Independent on November 11,2004. In accordance with the Ciry Charter of said City Joan L.Flynn,City Clerk Ci lerk and ex-officio CUrk Deputy City Clerk of the City Council of the City of Huntington Beach, California Item 23. - 42 HB -602- ATTACHMENT B DEVELOPER'S INTRODUCTION TO THE CITY OF HUNTINGTON BEACH AFFORDABLE OWNERSHIP HOUSING PROGRAM Affordable Ownership Housing Regulations-Developer August 15,2011 110S035.HB xB -603- Item 23. - 43 DEVELOPER'S INTRODUCTION TO THE CITY OF HUNTINGTON BEACH AFFORDABLE OWNERSHIP HOUSING PROGRAMS AFFORDABLE HOUSING PROGRAMS The City of Huntington Beach (City) Affordable Ownership Housing Regulations cover the following three programs: 1. The City's Inclusionary Housing Ordinance; 2. The density bonus mandated by the State of California for projects that meet defined income and affordability standards; and 3. The affordable housing production requirements imposed on residential projects developed within redevelopment project areas. The following is an overview of the three programs. Inclusionary Housing Program The City requires all new ownership housing projects with three or more units to set- aside 10% of the units for Moderate-Income Households. In certain areas of the City a 15% requirement is imposed (see Redevelopment Housing Program below). The basic requirement of the inclusionary housing ordinance is that the developers must include the designated number of income restricted units within their market rate projects. However, with approval from the City Council, the following options are available: 1. Developers may impose income and affordability covenants on newly constructed units in alternate locations. 2. Developers can acquire existing projects, substantially rehabilitate the units, and then impose income and affordability covenants on the units. To exercise this option, the rehabilitation must meet the standards imposed by California Health and Safety Code Section 33413 (2)(A)(iv), and the developer must be able to demonstrate that the achievable market rents are higher than the income restricted rents. 3. Developers can pay a fee in lieu of fulfilling the inclusionary housing obligation on residential projects that include between three and 30 units. Developer Introduction—Affordable Ownership Housing Programs Page 1 1106035.HB August 15,2011 Item 23. - 44 xB -604- Housing Density Bonus Program California Government Code Section 65915 provides density bonuses to housing projects that impose specific income and affordability covenants over at least a 30-year term. However, the income and affordability restrictions are only required to be imposed on the first home buyer. If the home buyer resells the unit at an unrestricted market rate price, the City is entitled to receive a share of the equity appreciation in the home. The other key components of the law are: 1. A 20% density bonus is offered to"for sale" projects that include 10% low income units or 5% very-low income units. The density bonus is increased on a sliding scale up to 35% if additional income restricted units area included in the project. 2. A 5% density bonus is available to "for sale" projects that set aside 10% of the units for moderate income households. The density bonus increases on a sliding scale up to 35% as the number of moderate income units increases. 3. A 20% density bonus is available to all senior citizen projects. Redevelopment Housing Program California Health and Safety Code Section 33413(b) (Section 33413) imposes inclusionary housing production requirements on redevelopment project areas adopted after January 1, 1976. Specifically, Section 33413 requires redevelopment agencies to. ensure that at least 15% of the residential units constructed in Project Areas are subject to long-term income and affordability covenants. All the Project Areas in Huntington Beach were adopted after 1976, and to assist in fulfilling the Section 33413 obligation, the City's inclusionary housing policy imposes a 15% affordable housing requirement on residential projects located in a Project Area. REGULATIONS The Affordable Ownership Housing Regulations provides developers with the following information_ 1. The eligibility criteria to be imposed on prospective home purchasers; 2. The procedures to be followed when buying, selling or transferring units; 3. The methodology for setting the maximum sales price; 4. The establishment of the minimum and maximum down payments that can be made by home buyers; 5. The regulations that will be imposed on the financing of affordable units; Developer Introduction-Affordable ownership Housing Programs Page 2 1106035.HB August 15,2011 HB -605- Item 23. - 45 6. The circumstances under which the income and affordability covenants will be subordinated to the deed of trust held by a mortgage lender; 7. The complaints and appeals process available to program participants; and 8. The monitoring and enforcement activities that will be undertaken by the City. CITY CONTACT The requirements that are imposed on ownership housing projects are detailed in the Affordable Ownership Housing Regulations adopted by the City Council. Persons interested in obtaining the Regulations and/or learning more about the City's affordable housing program may contact: Denise Bazant Program Administrator City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 (714) 536-5470 dbazant@surfcity-hb.org Developer Introduction—Affordable Ownership Housing Programs Page 3 1106035.HB August 16,2011 Item 23. - 46 HB -606- ATTACHMENT C HOME BUYER APPLICATION & DISCLOSURES Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB xB -607- Item 23. - 47 CITY OE HUNTINGTON BEACH INCLUSIONARY HOUSING PROGRAM SU Ity Nwon eadi,e Huo% MEBUYEM APPLICATION PLEASE ALLOW UP TO 10 BUSINESS DAYS FOR REVIEW . Item 23. - 48 iin -rv0.v- HOMEBUYER APPLICATION INSTRUCTIONS 1. Fill out the application completely for all adults and children who are anticipated to live in the home. Unrelated applicants must show at least one full year of joint residency. 2. All adult household members must have at least one-full year of verifiable income and Federal tax payment history in the United States at the time of application. Self-employed Individuals must provide at least one continuous year of verifiable personal and business income. 3. Gross income (before taxes and deductions) must be disclosed for all household members. Income includes any money received from any source, such as wages, interest, dividends,distributions, annuities, pensions, child support, alimony, etc. 4. Changes in employment may not have occurred within four months of application (such as a job change, termination, or decrease in salary). 5. Adult household members with no income must be a spouse or dependent of the applicant. 6. Separated applicants(not yet divorced)must have verifiable evidence of at least one full year of complete financial and residential separation. 7. Applicants with joint custody of children must verify at least 50% custody rights for a child to be considered part of the household. 8. Applicants may not own other residential property, including mobile home property, unless such property will be sold prior to or in conjunction with the purchase of an affordable unit. 9. First time homebuyers are required to pay a minimum down payment of 5%of the purchase price. Homebuyers who have owned residential property within three years are required to pay a minimum down payment of 10%of the purchase price. 10_ Gift funds(including loans from family or friends) may not exceed$15,000, Gift funds are included in calculation of household assets. 11. The total value of liquid assets owned by an applicant cannot exceed one-half of the purchase price of the affordable home(assets do not include pension or retirement funds). 12. Household income may not exceed the maximum income limit as stipulated for each Inclusionary Housing Program project(low, median, or moderate income). 13. Household income cannot be less than the minimum amount required to pay the cost of owning a home. This amount is equal to twice the annual homeownership cost,which includes mortgage, insurance,taxes, maintenance, and homeowner association dues. 14. Applicants must use conventional mortgage financing. Interest-only and stated-income loans are not allowed. 15. Applicant households must be compatible with the size of the unit to be purchased. No more than two persons per bedroom will be allowed. 16. Applicants must certify that they will reside in the affordable unit as their primary residence. 17. Applicants must have the right to permanently reside in the United States. 1$. The City of Huntington Beach reserves the right to request any documents and/or information needed to verify program eligibility. it is the applicant's responsibility to demonstrate eligibility to purchase an Inclusionary Housing Program home. Applicants unable to provide satisfactory evidence of income, assets, or other qualifying criteria will not be considered. HB -609- Item 23. - 49 LAA CITY OF HUNTINGTON BEACH INCLUSIONARY HOUSING PROGRAM 16iD HOMEBUYER ELIGIBILITY APPLICATION This application must be completed, attached with all applicable required documents, signed by all applicants and submitted to the Housing Division. Applicants should complete this form as "Applicant" or "Co-applicant" as applicable. Co-applicant information must be provided for all adult household members and/or individuals to be designated on the property title. In such cases, Co-Applicant income and credit history will be used as a basis for eligibility qualification. m b ®m b P L ii M Address of Property to be Purchased Project/Neighborhood Name A m m i ® g FQ LDIN m i Name of Applicant Name of Co-Applicant Marital Status Date of Birth Marital Status Date of Birth Social Security# Driver License# Social Security# Driver License# Employment Status #Years at Current Address Employment Status #Years at Current Address I .J Current Address Own _Rent Current Address Own Rent Home/Work/Cell Phone/FAX# Email Address Home/Work/Cell Phone/FAX# Email Address If residing at current address for less than two years,complete the following: Prior Address _Own _Rent Prior Address _Own _Rent List all additional adults and children anticipated to live in the home. Use additional pages if necessary. Name bate of Birth Social Security# Relationship to Applicant t Current Address(if different than applicant's) Employment Status(if adult) !Name Date of Birth Social Security# Relationship to Applicant 2 Current Address(if different than appiicant's) Employment Status(if adult) Item 23. - 50 HB -610- Name Date of Birth Social Security# Relationship to Applicant 3 Current Address(if different than applicant's) Employment Status(if adult) Name Date of Birth Social Security# Relationship to Applicant 4 Current Address(if different than applicant's) Employment Status(if adult) List full names of all persons that will appear on the title of the home: Name Relationship 9 2 List gross monthly income(before taxes and deductions)from all sources for all adult household members expected to live in the home. Consider the foliowing as income:any money regularly received from any source. Use additional pages if necessary, Name Name Name Employer Name Address Phone Position/Title Number of Years at this Job Base Employment Income Overtime/Bonuses/ Commissions Dividends/Interest from Investments Pension/Social Security Child Support!Alimony Other(please describe) Total Monthly Income(add the Monthly Income Subtotal for all adult household members) Total Annual Household Income(Total Monthly Income x 12) xB -611- Item 23. - 51 Minimum Monthly Income Calculation Maximum Income(2011 Income Limits) Add the following monthly Housing costs(from loan application,realtor,or Household Income cannot exceed the limit below for the appropriate mortgage lender/broker): income level and household size: Mortgage Payment Low Median Moderate Household Income Income Income Property Tax Payment Size Limit Limit Limit Homeowner Association Dues 1 $51,700 $58,950 $70,750 Other Housing Costs 256(3-bdrm) 2 $59,100 $67,350 $80,850 (insurance,maintenance,utilities) 3 $66,500 $75,800 $90,950 TOTAL 4 $73,850 $84,200 $101,050 5 $79,800 $90,950 $109,150 otal monthly housing costs cannot exceed 112 of mo.household income '!HQ 0 List checking,savings,and other investment accounts below for all adult household members. Use Addition pages if necessary. Name and Address of Bank,S&L,Credit Union,Other Name and Address of Bank,S&L,Credit Union,Other Account# Account Type Account# Account Type Names)on Account Balance Name(s)on Account Balance Name and Address of Bank,SW Credit Union,Other Name and Address of Bank,S&L,Credit Union,Other Account# Account Type Account# Account Type Name(s)on Account Balance Name(s)on Account Balance Name and Address of Bank,S&L,Credit Union,Other Name and Address of Bank,S&L,Credit union,Other Account# Account Type Account# Account Type Names)on Account Balance Name(s)on Account Balance Real Estate Owned Address Market Value of Property Outstanding Mortgages/Lien s /r Owner EouitY Cash Value of Retirement Accounts&Pension Funds Cash Value of Other Assets Total Value of Assets(Including Real Estate Equity) Item 23. - 52 xB -612- HOU$EHOLD LIMILITIES List outstanding liabilities for all adult household members.Including auto loans,revolving charge accounts,real estate loans,alimony,child support,etc. Use addltional pages If necessary. Name and Address of Creditor Name and Address of Creditor Account# Monthly Payment Account# Monthly Payment Name(s)on Acct. Unpaid Balance Name(s)on Acct. Unpaid Balance Name and Address of Creditor Name and Address of Creditor Account# Monthly Payment Account# Monthly Payment Name(s)on Acct. Unpaid Balance Name(s)on Acct. Unpaid Balance Name and Address of Creditor Name and Address of Creditor Account# Monthly Payment Account# Monthly Payment Name(s)on Acd. Unpaid Balance Name(s)on Acct. Unpaid Balance Total Balance of Liabilities(add the Unpaid Balances of all Liabilities) . PURCHASE- b INFORMATION Name of Real Estate Agent Agent's Company Name&Address Telephone&Fax Name of Mortgage Lender/Broker Agent Lender/Broker Company Name&Address Telephone&Fax TOTAL Purchase Price of Property(including all Mortgage Amount(s) Mortgage Terms associated costs) Initials(see note below) 1#: 2': Note;All adult household members must initial next to the Total Purchase Price of Property above,acknowledging that the price of the property is restricted under the City of Huntington Beach Affordable Housing Program. By initialing this price,you indicate your understanding and agreement that no payment will be made separate from this price and/or separate from the attached Residential Purchase A reement by you or b an one nn vnau behalf. xs -613- Item 23. - 53 List all funds intended to be used from bank accounts,Certificates of Deposit,mutual funds,and other sources for meeting down payment and closing costs needs: Source of Funds Amount to be Used for Down Payment 1 2 3 Does any household member have any ownership interest in Real Estate? ©Yes ❑No If yes,provide list of properties owned. Will the Inclusionary Housing Program Unit be your permanent residence? p Yes ❑No If no,attach explanation. Do all household members have the right to permanently reside in the US? Cl Yes ❑No If no,attach explanation. Have any household members terminated employment in past 4 months? 0 Yes p No If yes,attach explanation. 1. Copy of California driver license or identification for all adult household members;copy of birth certificate for all dependents. 2 Copy of Residential Purchase Agreement and Real Estate Transfer Disclosure Statement(with City-required affordable housing program disclosure language)signed by both the buyer and seller(required language on page 11). 3. Completed and signed City forms:(a)Certificate of Purchaser,(b)Special Disclosure,and(c)Background and Financial Investigation Authorization. Copy of complete loan packet from mortgage lender(stated Income and Interest only loans are not allowed). The loan packet must include the fully 4. completed,typed and signed application,loan underwriting analysis,Truth-in-Lending Disclosure, Income and asset verification,and conditions for final loan approval. S Copy of 3 most recent monjhs of checking,savings,and other investment account statements for all adult household members. If self-employ( 12 months of personal and business account statements are required. Account statements must demonstrate sufficient funds for down payment. 6 Copy of 3 most recent months of pay stubs. Pay stubs must clearly Identify business name,employee name,salary rate,hours worked,pay period,gross Income,and year to date Income. 7. Signed copies of 2 most recent years of federal tax returns(with all schedules and attachments),including W2s&1099s for all adult household members;if self employed,include 4 most recent quarterly tax filings. 8. If applicable:copy of divorce decree evidencing dissolution of marriage,child custody,child support,and/or alimony. 9. If applicable:copy of pension statement,Social Security verification,welfare verification,or other income verification. 10. if applicable,school registration documents for adult,full-time student household members. 11 If applicable,evidence of sale of real estate. Sale of any residential real estate must be completed before final approval can be given for purchase of Inclusionary Housing Program unit, CERTIFICATION: INVe certify that the information provided in this Incluslonary Housing Program Eligibility Application is true and correct as of the date set forth opposite mylour signature(s)and acknowledge mylour understanding that any intentional or negligent misrepresentation(s) of the information contained In this application may result in civil liability and/or criminal penalties Including, but not limited to fine or imprisonment or both and liability for monetary damages to the City, its agents, insurers, and any other person who may suffer any loss due to reliance upon any misrepresentation which Ilwe have made on this application. Applicant's Signature Date Co-Applicant's Signature Date X X Please Note: Before submitting your application to the City,check carefully to make sure you have neatly and completely filled out the application and attached all required documents. Illegible or incomplete applications will not hp nr_epnted. Item 23. - 54 HB -614- 0 ! CITY OF HUNTINGTON BEACH INCLUSIONARY HOUSING PROGRAM BACKGROUND & FINANCIAL INVESTIGATION AUTHORIZATION THIS FORM MUST BE SIGNED BY ALL ADULT HOUSEHOLD MEMBERS By signing below,you provide irrevocable consent to the City of Huntington Beach for a background investigation and review of your financial affairs,budget, outstanding accounts,obligations,and debt. You understand that information obtained by the City may be governed by the Fair Credit Reporting Act(15 USC 181 ET Seq.)as it may be amended from time to time. Credit information will be obtained for affordable housing program eligibility review purposes only,and not for credit granting purposes or credit repair. All adult household members must sign this consent,attesting that you are the true and correct individual described below. Use additional pages if necessary. Full Legal Name(First,Middle,Last) Other names used in last 7 years Date of Birth Social Security# Current address Prior addresses in last 7 years Signature Date Full Legal Name(First,Middle,last) Other names used in last 7 years Bate of Birth Social Security# Current Address Prior addresses in last 7 years Signature Date HB -615- Item 23. - 55 FS CITY OF HUNTINGTON BEACH INCLUSIONARY HOUSING PROGRAM CERTIFICATE OF PURCHASER Applicant(s) Property Address The undersigned ("Applicant/Purchaser") hereby certify(ies) the following: 1, Purchaser is buying the residence ("Home" or the "Property) shown above with the intent to occupy the Home as the Purchaser's primary residence, and with the understanding that the Home cannot be rented or leased. 2. The purchase price of the Home is $ 3. Purchaser's combined household gross annual income from all sources is 4. The number of persons that will occupy the Home is 5. Purchaser has read the Special Disclosure form attached hereto and understands the information contained therein. 6. Purchaser acknowledges and understands that a Declaration of Conditions, Covenants, and Restrictions for Property ("Resale Restrictions") is recorded on the Property and that the restrictions contained therein, including restrictions relating to the transfer and use of the Property, will remain on the Property and be applicable to any future resale of the Property so long as the Declaration of Conditions, Covenants, and Restrictions for Property ("Resale Restrictions") remain in effect. Purchaser acknowledges that this certificate is being provided to the Economic Development Department of the City of Huntington Beach ("the City"), and that the City may rely on the statements made herein. All persons taking title to the Home must sign this certificate. Applicant Co-Applicant Signature: Signature: Print Name: Print Dame: Date: Date: Item 23. - 56 xB -616- Ode CITY OF HUNTINGTON BEACH INCLUSIGNARY HOUSING PROGRAM SPECIAL DISCLOSURE Applicant(s) Property Address The undersigned ("Applicant/Purchaser") who is buying the residence ("Home" or"Property") shown above, acknowledge(s) and understand(s) that a Declaration of Conditions, Covenants, and Restrictions for Property ("Resale Restrictions") is recorded on the Property and that the restrictions contained therein relate to the transfer and use of the Property. The undersigned specifically acknowledge(s) the following restrictions (all persons taking title to the home must initial each item below): The Property must be the only residence of the owner. The Property may not be rented or leased to any individual or household, this includes renting or leasing to family members of the owner. Additional debt secured by the property or refinancing existing debt on the property must be approved in advance by the City. The City may establish limits on the amount of debt that may be secured by the Property. Subsequent sales of the property will be subject to affordability restrictions, requiring the property to be sold at an affordable price to an income-eligible buyer. Future maximum affordable sales prices of the property will be determined by the City and may be less than the fair market value of the home. Ownership of the property may not be amended or transferred without prior approval by the City. Subsequent owners of the property must be income-eligible, and transfers must be made at an affordable sales price. The owner may not discriminate against potential subsequent buyers based on their race, color, religion, sex, marital status, sexual orientation, national origin, or ancestry. The undersigned has taken the requirements included in the Declaration of Conditions, Covenants, and Restrictions for Property ("Resale Restrictions"), as partially described in this Special Disclosure, into account prior to determining to purchase the Property. All persons taking title to the Home must sign this Disclosure. Applicant Co-Applicant Signature: Signature: Print Name: Print Name: Date; Date: HB -617- Item 23. - 57 Real Estate Transfer Disclosure Statement Language The following language must be inserted exactly as written below into the Deal Estate Transfer Disclosure Statement signed by both the seller and the buyer and attached to the Residential Purchase Agreement: The Subject Property is an affordable housing unit in the City of Huntington Beach's Inclusionary Housing Program. The City of Huntington Beach has established a Maximum Price for this unit, and the Purchase Price in the Residential Purchase Agreement, does not exceed this amount. All consideration for the purchase of the Subject Property has been fully disclosed and described in the Residential Purchase Agreement, which will be submitted to the City of Huntington Beach for approval. Buyer and Seller acknowledge that there may be no agreement separate from the Residential Purchase Agreement between Buyer and Seller or any other parties related in any manner to the purchase of the Subject Property, which would include payment for personal property, upgrades to the Subject Property, gifts, or other arrangements that might circumvent the Maximum Price established by the City. Item 23. - 58 HB -618- ATTACHMENT INCLUSIONARY HOUSING PLAN Affordable Ownership Housing Regulations-Developer August 15,2011 1106035,HB xs -619- Item 23. - 59 INCLUSI®NARY HOUSING PLAN Application No: City of Huntington Beach Huntington Beach Redevelopment Agency 2000 Main Street, Huntington Beach, CA 92648 (714) 536-5470 Project Type: Ownership Rental Ownership & Rental Project Address: Assessor Parcel No(s): Site Dimension and Square Footage: Applicant's Name: Phone: Address: City: Zip Code: Person to Contact Regarding Project: Address: City: Zip Code: Property Owner's Name: Phone: Address: City: Zip Code: 1. INCLUSIONARY HOUSING ALTERNATIVES A. Select one of the following alternatives to indicate how the project will comply with the Inclusionary Housing requirement: On-site Off-site' Payment of in-lieu fee' ' All off-site units must be constructed or rehabilitated prior to or concurrently within the primary project. 2 only Developer's of residential projects consisting of 30 or fewer units may elect to pay a fee in lieu of providing the units on-site. This option does not apply if an affordable housing requirement is outlined as part of a specific plan project. One hundred percent(100%)of the In- lieu fee must be paid before the first building permit Is issued. Item 23. - 60 xB -620- B. If the project will include the production of Inclusionary Units, where will the units be produced? One Site Several Sites Please list the Site(s) in which the Inclusionary Units will be produced: 2. RESIDENTIAL PROJECT DESCRIPTION ' A. Project Location: Outside a Redevelopment Project Area: Yes No Within a Redevelopment Project Area:5 Yes No B. Describe Project and Inclusionary Obligation in Chart: Number Square Total Nurriber.of; Total Numbi~' Number of Number of :Number of of I=Dotage Number' Market Inclusionary Very'Low Law Moderate Bedrooms Of Units of Units Rate Units;6 Income Income Income Units Units: = Units: Units Studio 1 2 I 3 4 6 C. Gross livable floor area of proposed project (including private balconies, decks, and patios) in square feet: D. Describe structure type (i.e. attached, semi-attached or detached): E. Will project be a phased project? 7 Yes No 3 A floor plan depicting the location of the Inclusionary Units must be included with the application. 4 At least 10%of all new ownership residential construction of three or more units must be made affordable to Moderate Income Households. At least 10%of all new rental residential developments of three or more units must be made affordable to Very-Low and Low Income households. 5 At least 15%of all new ownership or rental residential developments and applicable substantially rehabilitated units must be set-aside for Low and Moderate Income Units. e If the calculation of the number of Inclusionary Units required results in a fraction of an Inclusionary Unit,the Developer must either provide an additional full Inclusionary Unit within the project,or pay an in-lieu fee for the fractional unit, 7 A Phasing Plan which provides for the timely development of the Inclusionary Units as the Residential Development is built out must be Included with the Inclusionary Housing Plan Application. HB -621- Item 23. - 61 3. INCENTIVES REQUESTED BY DEVELOPER A. Density Bonus Incentives (Municipal code Section 230.14) Yes No If yes, provide a description of the incentives and/or concessions requested: Item 23. - 62 HB -622- OWNER'S AFFIDAVIT I hereby certify that I am the legally authorized owner of all property involved in this application or have been empowered to sign as the owner on behalf of a corporation, partnership, business, etc., as evidenced by separate instrument attached herewith. I herby grant to the applicant of this form full power to sign all documents related to this application, including any conditions or litigation measures as may be deemed necessary. I declare under penalty of perjury that the foregoing is true and correct. Executed on (Date) at , California Owner's Signature , Owner's Printed Name APPLICANT'S AFFIDAVIT I hereby certify that the statements furnished above and in the attached exhibits represent the data and information required for this initial evaluation and that the facts, statements and information presented are true and correct to the best of my knowledge and belief. Further, should the stated information be found false or insufficient, I agree to the return of this form for appropriate revisions, understanding the City of Huntington Beach cannot process this form until all applicable information is corrected or provided by the applicant. I herby certify that I have been legally authorized by the owner to present this application and to sign on behalf of all documents related to this application, including any conditions or litigation measures as may be deemed necessary. Note: When the applicant is a corporation, partnership, business, etc., a separate document verifying the authorization to sign for such applicant is required. I declare under penalty of perjury that the foregoing is true and correct. Executed on (Date) at , California Applicant's Signature , Applicant's Printed Name xB -623- Item 23. - 63 ATTACHMENT E INCLUSI®NARY IN-LIEU FEE SCHEDULE Affordable Ownership housing Regulations-Developer August 15,2011 1106035.HB Item 23. - 64 HB -624- CITY TI T° 0 PLANNING DEPARTMENT FEESCHEDUL E. CITY CpITNCIi.APPROVI(D Jt3N1 15;2009 1E)FFCT) '®cttiler;l 2010 PLANNING COMMISSION ACTIONS FEE* Annexation Request 10000100.42480 $10,400+fully burdened costs Coastal Development Permit** 42415 $5,942 Conditional Use Permit: New Residential 42420 8,990 Commercial/Industrial/Mixed Use less than %2 Block 42420 7,580 Alcohol, Dancing or Live Entertainment 42420 4,445 Mixed Use, '/z Block or Greater 42420 18,507 Entitlement Continuance 42425 346 Development Agreement Full Hourly Cost Original Contract or Significant Amendment 42430 30,482 Dep.+costs Minor Amendment 42430 18,325 Dep.+costs Annual Review(Planning Commission Hearing) 42430 3,857 Annual Review(Administrative Review) 42430 3,379 Entitlement Plan Amendment New Hearing 42435 3,910 No Chan Le to Conditions -Director Review 42440 2,047 General Plan Amendment—GPA Major 42445 41,922 General Plan Amendment- GPA Minor 42445 22,402 General Plan Conformance 42445 4,586 Local Coastal Program Amendment 42450 12,603 Reversion to Acreage 42480 3,398 Special Permit 42480 2,845 each Tentative Tract Map 42460 21,113+30/lot Variance**** 42465 3,811 Zoning Map Amendment***** 42470 21,878 Precise Plan of Street Alignment 42480 14,892 Mobile Home Park Conversion Review 42470 32,147 Zoning Text Amendment-Major 42475 15,163 Zoning Text Amendment-Minor 42475 , 8,429 Includes 4%automation fee t Plus costs for Notice of Publication,if applicable °#Coastal Development Permit reduced 50%when processed concurrently with a Conditional Use Permit,Tentative Map or Variance •" 50 percent of fee credited towards future entitlements '°*• Variance fee reduced 50%when processed concurrently«ith a Conditional Use Permit **°0` ZMA fee reduced 50%when processed concurrently with a General Plan Amendment Revised 9/30/2010 HB -625- Item 23. - 65 ZONING ADMINISTRATOR ACTIONS: FEE*' Coastal Development Permit" Single Family Dwelling 10000100.42605 2,891 All Others 42605 3,179 Conditional Use Permit 42610 4,082 Conditional Use Permit(Fences) 42610 2,053 Entitlement Continuance 42615 234 Entitlement Plan Amendment New Hearing 42620 2,101 No Change to Conditions -Director Review 42620 1,368 Temporary Use Permit 42630 1,925+500 bond if applicable Tentative Parcel Map 42635 4,175 Tentative Parcel Map Waiver 42635 2,001 Tentative Tract Ma2 42460 7,030+30/lot Variance"" 42640 2,631 EIVVIR® 'II�Ei�T`I'AE REVIEW: FEE*: Environmental Assessment 10000100.42705 $9,611 Historic Structures 42705 $4,717 Mitigated Negative Declaration 42705 2,893 (+EA Stud Fee) Mitigation Monitoring: 42705 Mitigated Negative Declaration 2,451 Environmental Impact Report 8%of EIR Environmental Impact Report(EIR)- 42710 89,930 Dep. + Consultant Pre aced costs Environmental Impact Report(EIR)- 42710 128,563 Dep. + Staff Pre ared costs Department of Fish and Game(Fees change yearly— Fee as of 08/16/09) Negative Dec laration/Mitigated Negative Declaration 1,993.00 Environmental Impact Report 2,768.25 Certified Regulatory Program 941.25 CHECKS MADE OUT TO: COUNTY OF ORANGE and sent to County of Orange with NOD Includes 4%automation fee t Plus costs for Notice of Publication,if applicable. *++ 50 percent of fee credited towards future entitlements ++++ Variance fee reduced 50%Mien processed concurrently with a Conditional Use Permit Revised 9/3012010 Item 23. - 66 HB -626- STAFY R9VIEW'AND.SERVICES: FEE*. Address Assi nment Processing 10000100.42755 $1,130/ ro'ect Address Change/Single Tenant Assignment 42755 255 Address Assignment—Meter only 42755 114 Administrative Permit 42820 List 1: Outdoor Dining, Eating and Drinking 42820 551 Establishments, Fence Extensions(<8% Personal Enrichment Services over 5,000 sq. ft.,and Home Occupations 42820 List 2: Parking Reduction, Carts&Kiosks, Waiver of 981 Development Standards,Non-conforming structure additions List 3: Privacy Gates, Game Centers, Accessory 42820 Dwelling Units, Manufactured Home Parks 1,306 List 4: Personal Enrichment Services under 5,000 sq 0 ft Animal Permits 42820 193 Categorical Exclusion letter coastal} 42820 234 CC&R Review 42760 1,129 Certificate of Compliance 42765 679 Design Review Board 42775 905 Extension of Time 42820 432 Final Parcel Ma 42780 1,237 Final Tract Map 42780 1,766 Initial Plan, Zoning &Review (land use changes, zone 42785 321 changes,conceptualplans) Limited Sign Permit 42790 754 Lot Line Adjustment/Lot Merger 42820 551 Planned Sign Program Single User and Amendments to Existing Programs 42790 791 Multiple Users 42790 1,335 Preliminary Plan Review: *�`* Single Family Residential 42795 832 Multi-Family Residential(up to 9 units) 42795 1,986 Multi-Family Residential(10+units) 42795 2,538 Non-Residential 42795 2,761 Sign Code Exception—Staff 42625 897 Sign Code Exception—Design Review Board 42625 1,741 Site Plan Review 42820 4,967 Temporary and Promotional Aetivit Si n Permit 42800 78 Temporary Sales/Event Permit 42805 281 Wireless Permit Applications 42810 "costs" Zoning Letter: Flood Verification 42810 78 Simple Staff Review 68 Zoning Letter Staff Review 151 Zoning Research/Information 42810 130/hr. (min. 1 hr. Planning Consultation/Meeting Fee(per planner) 42810 115/hr. (min. I hr. Revised 9/30/2010 HB -627- Item 23. - 67 "Includes 4%automation fee +# 50 percent of fee credited towards future entitlements APPEALS: FEES To Planning Commission Single family owner appealing decision of own 10000100.42815 $1,725 property Others 42815 2,252 Appeal of Director's Decision (PC Public Hearing) 42815 494 Appeal of Director's Interpretation PC Non-Public 42815 416 To City Council (file w/City Clerk's Office) Single family owner appealing decision of own 42815 $1,587 property 42815 3,045 Others AFFORDABLE HOUSING IN-LIEU. FE-Em 2008 FEE" 3 Unit Projects x$8,140= 42820 $24,420 4 Unit Projects x$9,150= 42820 $36,600 5 Unit Projects x$10,170= 42820 $50,850 6 Unit Projects x $11,180= 42820 $67,080 7 Unit Projects x $12,200 = 1 42820 $85,400 8 Unit Projects x $13,230= 42820 $105,840 9 Unit Projects x$14,240= 42820 $128,160 O'I'IIEB FEES: FEE.. Downtown Specific Plan Fee 42820 $831 per acre Outdoor Dining: 42820 License Agreement Application Fee 30 License Agreement Use Charge 0.01/sq.ft. License Agreement Code Enforcement Fee 4/sq. t. Park and Recreation Fee (see attached) Traffic Impact Fee See Dept.of Public Works General Plan Maintenance Fee 42825 $1.85/$1,000 valuation of new construction Includes 4%automation fee AUD TIO,NA,,L FEES`AVIAY',BE REQUI1tED: ENTITLEMENTS FOR DEVELOPMENT INCLUDE INITIAL REVIEW OF FLANS AND ONE SUBSEQUENT REVISION SUBMITTAL. REVIEW OF PLANS IN EXCESS OF ONE REVISION SHALL BE CHARGED THE FULLY BURDENED HOURLY RATE. ALSO SEE DEPARTMENTS OF PUBLIC WORKS,FIRE,AND THE BUSINESS LICENSE DIVISION FOR ADDITIONAL FEES Revised WNW 10 Item 23. - 68 1113 -628- CITY F HUNTINGTON BEACH PLANNING DEPARTMENT Park and Recreation Fees CITY C®IJNCIL A 'lPR4VED➢UNE 17;1002, EFFECTIVE LY.`17,200z IE: Pursuant to City Council Ordinance No. 3562,and Resolution Nos. 2002-56 and 2002-57 adopted on June 17,2002, park in-lieu fees for residential developments involving a subdivision reap are as follows: PROJECTS.RE UIRING A SUBDIVISION:MAP 20900200.47115 Tract Map No./Parcel Map No: Park and Recreation Fee Formula Per Chapter 254: 5 (9 units x 2.68) x Per acre value of project site* =Park In Lieu Fee 1,000 * Based on Cit -a roved site-specific appraisal of project site CITY COUNCIL APPRQVEDECEIYIBER 16,2002 EFFEL" BER Ib'2002 Pursuant to City Council Ordinance No. 3596, and Resolution No. 2002-129 adopted on December 16, 2002, park fees for commercial and industrial developments and residential developments not requiring a subdivision map are as follows: PItG,TEC`I'S NET REQUIRING A S[3BDIVISIOIV'MAP.209g02094'72'80 Commercial and Industrial Floor Area= $0.23/square foot Residential Floor Area(includes garages)—$0.86/square foot Date Fees Paid: Plan Check No.: Receipt No.: Job Location: Tentative Tract Map No./Tentative Parcel Map No.: ff Revised 9/30/2010 xB -629- Item 23. - 69 ATTACHMENT F HOUSEHOLD INCOME CHART Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Item 23. - 70 HB -630- CITY OF HUNTINGTON BEACH AFFORDABILITY CRITERIA To Be Updated Annually By the City Based on Orange County HUD/HCD Income Limits The incomes fisted below will be used to qualify your Moderate, Low and Very-Low Income potential buyers or renters: MAXIMUM INCOMES-2011 No of Persons/ Moderate Median Low Very Low No. of Bdrms Income Income Income Income 1 person/studio $70,050 $58,900 $51,700 $32,350 2 person/1 Bdrm $80,850 $67,350 $59,160 $36,950 3 person/2 Bdrm $90,960 $75,800 $66,500 $41,550 4 person/3 Bdrm $101,050 $84,200 $73,860 $46,150 5 person/4 Bdrm $109,150 $90,950 $79,800 $49,850 6 person/5 Bdrm $117,200 $97,650 $85,700 $53,650 7 person/6 Bdrm $125,300 $104,400 $91,600 $57,250 8 person/7 Bdrm $133,400 $111,150 $97,500 $60,950 The table below will be used to determine the rent of an affordable rental unit: INCLUSIONARY MONTHLY RENTS -2011 No. of Persons/ No. of Sdrms Moderate Income Low Income Very-Low Income 1 person/studio $1,621 $884 $737 2 person/1 Bdrm $1,852 $1,010 $842 3 person/2 Bdrm $2,085 $1,137 $948 4 person/3 Bdrm $2,316 $1,263 $1,063 5 person/4 Bdrm $2,601 $1,364 $1,137 6 person/5 Bdrm $2,685 $1,465 $1,221 7 person/6 Bdrm $2,871 $1,566 $1,305 8 person/7 Bdrm $3,057 $1,667 $1,389 Note:Affordable Rents are calculated based on requirements imposed by California Health&Safety Code Section 50053. These Affordable Rents do not included utilities and are considered"gross"rents. Utility allowances can be obtained from the City of Huntington Beach,Economic Development Department. These are NOT"fair market rents"as defined by HUD. Gross rents cannot exceed these amounts and still be considered affordable under most City programs. HB -631- Item 23. - 71 ATTACHMENT C UTILITY ALLOWANCE Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.HB Item 23. - 72 HB -632- CITY OF HUNTINGTON BEACH UTILITY ALLOWANCE SCHEDULE Effective Date: October 1, 2010 To Be Updated Annually By the City Based on Orange County Utility Allowance Schedule Bedrooms 0 1 2 3 4 5+ GAS Cooking $2 $5 $5 $8 $10 $13 Heating $10 $12 $15 $22 $27 $28 Water Heater $5 $6 $7 $12 $16 $17 ELECTRIC Basic $11 $16 $20 $34 $34 $34 Cooking $4 $7 $8 $11 $15 $17 Heating $9 $13 $17 $22 $28 $32 Water Heater $13 $18 $23 $31 $32 $32 Water $16 $19 $23 $32 $28 $43 Trash &Sewer $23 Refrigerator $9 Stove $7 Mobile home $62 File Name:Attachment_Utitity Allowance.xls,2010 HB -633- Item 23. - 73 ATTACHMENT H AFFORDABLE SALES PRICE CALCULATION FORM Affordable Ownership Housing Regulations-Developer August 15,2011 1106035.116 Item 23. - 74 xB -634- o City of Huntington Beach �a Economic Development Department, Housing Division 2000 Main Street, 5"' Floor • Huntington Beach,California 92648 (714)636-5470 REQUEST FOR MAXIMUM AFFORDABLE SALES PRICE INCLUSIONARY HOUSING PROGRAM Homeowners are entitled to one complimentary Affordable Sales Price Calculation per calendar year, no more frequently than once every three months. The price given will be valid for three months and will not be recalculated within this time. Should the price expire, and the homeowner wish to submit a new request, the City will charge a$50 application fee. Completed applications (and fee payment, if applicable)should be submitted to the Housing Division. The property owner(s)and the owner's Realtor will receive a written response within 10 business days. Owner(s)Name Name of Neighborhood/Affordability Level(circle one) Ash St.Condos(Median Income) Brisas del Mar(Low Income/Moderate Income) Owner's Daytime Phone Number&FAX Number Cape Ann(Moderate Income) Greystone Keys(Moderate Income) Pacific Park Villas(Low Income I Moderate Income) Property Address Promenade(Moderate Income) Tides(Moderate Income) Other Number of Bedrooms Mailing Address, If Different Date of anticipated sale Name/Address/Phone of Management Company The City maintains a list of affordable homes for sale in print and on the Total Amount of Homeowner Association Dues web. Would you like your property added to this list? Yes I No Name of Real Estate Agent Real Estate Agent's phone&FAX numbers Real Estate Agent's Company Name&Address Real Estate Agent's Email CERTIFICATION: I/We certify that the information provided in this sales price determination request is true and correct as of the date set forth opposite my/our signature(s)on this request and acknowledge my/our understanding that any intentional or negligent misrepresentation(s)of the information contained in this request may result in civil liability and/or criminal penalties including, but not limited to fine or imprisonment or both and liability for monetary damages to the City, its agents, insurers, and any other person who may suffer any loss due to reliance upon any misrepresentation which I/we have made on this request. Homeow,ner's Signature Date Co-Owner's Signature Date X X For City Use Only MAXIMUM SALES PRICE: THIS PRICE WILL BE VALID UNTIL (90 DAYS FROM REQUEST): PREPARED BY: DATE HB -635- Item 23. - 75 AFFORDABLE HOUSING RESALE INSTRUCTIONS 1 Obtain the maximum affordable sales price for your home from the City by submitting to the Housing Division a Request for Maximum Affordable Sales Price. The price formula and sample calculations can be viewed at http://www.huntingtonbeachca.gooylgovernment/departments/ED/housing/home ownership.cfm. Be sure to indicate on your application if you would like your property added to the City's list of affordable homes for sale. Please note that this price will be valid for three months and cannot be recalculated during this period. If the price expires and the home is not sold, you must submit a new request to obtain the current maximum affordable sales price for your home, together with the City's $50 application fee. 2 Detailed information about the Inclusionary Housing Program, including current income limits and eligibility requirements, can be found at http://www.huntingtonbeachca.gov/government/departments/ED/housing/home ownership cfm. 3 Select a buyer you believe meets the Inclusionary Housing Program eligibility requirements. 4 Execute a Residential Purchase Agreement with one buyer. Make sure the purchase amount does not exceed your home's maximum Affordable Sales Price. The purchase agreement should include a clause that requires the purchaser to obtain City approval; permanent fixtures in the property may not be excluded from the sale; escrow, title, commissions, and other costs must be paid by the party that normally pays such costs; and any agreements separate from the purchase agreement (for the sale of personal property, for example) are prohibited. 5 Execute a Real Estate Transfer Disclosure Statement with the following language; The Subject Property is an affordable housing unit in the City of Huntington Beach's Inclusionary Housing Program. The City of Huntington Beach has established a Maximum Price for this unit, and the Purchase Price in the Residential Purchase Agreement, does not exceed this amount. All consideration for the purchase of the Subject Property has been fully disclosed and described in the Residential Purchase Agreement, which will be submitted to the City of Huntington Beach for approval. Buyer and Seller acknowledge that there may be no agreement separate from the Residential Purchase Agreement between Buyer and Seller or any other parties related in any manner to the purchase of the Subject Property, which would include payment for personal property, upgrades to the Subject Property, gifts, or other arrangements that might circumvent the Maximum Price established by the City. 6 Instruct the buyer to submit to the Housing Division a completed Homebuyer Eligibility Application with all required attachments. Applications are available at http://www.huntingtonbeachea.gov/government/departments/ED/housing/home ownership.cfm_. The City will accept only one application at a time per unit, and the application must include a Residential Purchase Agreement signed by both the Buyer and Seller. 7 Homebuyer applications will be reviewed by the City within 10 business days. 8 If the City requires additional information or documentation from the applicant, notices will be faxed to the Buyer's and Seller's Realtors. 9 Upon City approval of the Buyer, a Notice of Approval will be mailed to the Buyer and Seller, and a copy will be faxed to the Buyer's and Seller's Realtors. This Notice of Approval will include instructions for your Escrow Company. 10 Upon receipt of information and documents from Escrow, the City will prepare additional documents for the Buyer and Seller to sign in Escrow. Item 23. - 76 HB -636- CITY OF HUNTINGTON BEACH Affordable Housing Program 2011 Illustrative Sales Prices 1-Bedroom 2.$edr+oorns 3-Bedrooms 4-Bedrooms ovr=tnccirrn Income Basis (80% of Median) ' $ 59,100 $ 66,500 $73,850 $ 79,850 Income for Housing (35%) 20,685 23,275 25,848 27,930 (Less) Ongoing Expenses 2 8_,569 9,097 9,885 10,374 Income Available for Mortgage 12,116 14,178 15,962 17.556 Maximum Price 3 $208,981 $244,545 $275,318 $302,806 Median-lncom Income Basis' $ 67,350 $ 78,500 $ 84,200 $90,950 Income for Housing (35%) 23,573 26,530 29,470 31,833 (Less) Ongoing Expenses 2 8,618 9,204 10,050 10,582 , Income Available for Mortgage 14,955 17,326 19,420 21,250 Maximum Price 3 $257,943 $298,851 $334,968 $366,527 Moderate-I' r� Income Basis (120% of Median) ' $ 80,850 $ 90,950 $ 101,050 $ 109,150 Income for Housing (35%) 29,298 31,833 35,368 38,203 (Less) Ongoing Expenses 2 88J 56 8.832 9,772 10,379 Income Available for Mortgage 20,141 23,000 25,596 27,823 Maximum Price 3 $347,407 $396,711 $441,479 $479,908 i I, The Income Basis for calculating affordable home prices equals the income limit for a family size equal to the number of bedrooms,plus one. CD (For example,the price for a three-bedroom home uses the income limit for a four-person household). N 2. Ongoing Expenses include HOA dues,homeowner's insurance,utilities,interior property maintenance and property taxes. W 3. Assumes 30-year mortgage term,5.00%interest rate,and 10%down payment(actual Fannie Mae 30-year mortgage rate published on www,thefinancials.com,FNMA 30y fxd yid 90d, Tuesday through Friday) J J ATTACHMENT #2 Affordable Owr i Housing Regulations ame.: VW rr The City of Huntington Beach and the Huntington Beach Redevelopment Agency August 15, 2011 HB -639- Item 23. - 79 TABLE OF CONTENTS 1. INTRODUCTION.....................................................................................................1 A. Home Ownership Opportunities............................................................................1 B. Purpose of Affordable Ownership Housing Regulations........................................1 IL DEFINITIONS OF TERMS.......................................................................................3 111. PROGRAM ADMINISTRATION ..............................................................................8 A. General.................................................................................................................8 B, Fair Housing Policy .......................................................................8 C. Privacy Rights.......................................................................................................8 D. City Includes Redevelopment Agency...................................................................9 E. Authorization.........................................................................................................9 F. Affordable Ownership Housing Regulations..........................................................9 IV. DETERMINATION OF ELIGIBLE PURCHASER ........................I.......I....I............10 A. Prospective Home Buyer List.............................................................................. 10 B. Required Eligibility Documentation...................................................................... 10 C. Home Buyer Eligibility Criteria............................................................................. 10 D, Income Eligibility Criteria..................................................................................... 12 V. HOME BUYER APPLICATION AND DISCLOSURE DOCUMENTS.....................13 A. Program Application............................................................................................ 13 B. Submittal Requirements......................................................................................13 VI. AFFORDABLE SALES PRICE .............................................................................20 A. General Policy ....................................................................................................20 B. Affordable Sales Price Calculations ....................................................................20 VIE. FINANCING REQUIREMENTS .............................................................................24 A. Down Payment Requirements ............................................................................24 B. Purchase Money Mortgage Requirements..........................................................24 C. Refinancing Approved by the City.......................................................................25 VIII. CONTINUING OWNER REQUIREMENTS............................................................26 A. General Policy ....................................................................................................26 B. Owner Requirements..........................................................................................26 IX. COMPLAINTS AND APPEALS.............................................................................29 X. MONITORING AND ENFORCEMENT ..................................................................30 A. General Policy....................................................................................................30 B. Program Audits...................................................................................................30 C. Program Abuse and Fraud Protections...............................................................31 Item 23. - 80 HB -640- ATTACHMENTS Attachment A Prospective Home Owners Introduction to the City of Huntington Beach Affordable Ownership Housing Program Attachment B Affordable Ownership Housing Program FAQ's Attachment C Home Buyer Application & Disclosures Attachment D Household Income Chart Attachment E Utility Allowances Attachment F Affordable Sales Price Calculation Form Attachment G Annual Certification Form xB -641- Item 23. - 81 I. INTRODUCTION A. Home Ownership Opportunities The City manages an Affordable Ownership Housing Program that consists of the City's Inclusionary Housing Program and ownership projects assisted by the Agency. The Program provides Low and Moderate income households with the opportunity to own a home in Huntington Beach, The City currently administers covenants on over 400 homes within Huntington Beach. By requiring Owners to adhere to long-term resale restrictions, the City maintains the opportunity for new owners to buy affordable housing units in Huntington Beach. B. Purpose of Affordable Ownership Housing Regulations City Role in the Affordable Ownership Housing Process The primary objective of the Affordable Ownership Housing Program is to provide affordable housing to residents who would otherwise have difficulty owning a home in Huntington Beach. Persons interested in purchasing an Affordable Ownership Unit through the City's Affordable Ownership Housing Program, must apply to and be approved by the City. It must be noted that the various Ownership programs offered by the City may have differing eligibility and continuing home owner requirements. The Affordable Housing Administrator or a designee will authorize a sale transaction only when it determines that the Home Buyer is an Eligible Purchaser, and that the unit is being sold at the Affordable Sales Price. For the duration of the required Affordability Covenant period, the Owner is subject to continuing home owner requirements, which are outlined in these Affordable Ownership Housing Regulations. In addition, if there is a Transfer of ownership during the Affordability Covenant period, the Affordable Ownership Unit must be sold at the Affordable Sales Price to a Home Buyer approved by the City. The City staff is available to describe the Affordable Ownership Housing Program requirements. In addition, the City will distribute notice to Owners in advance of any City Council action to modify the Affordable Ownership Housing Regulations. Affordable Ownership Housing Agreements The principal mechanism the City uses to establish Affordable Ownership Units are the CC&Rs, Deeds of Trust, and other governing documents recorded against the home. While the individual terms of these agreements are controlling, these Affordable Ownership Housing Regulations address the following: Affordable Ownership Housing Regulations-Owner August 16,2011 1106036.HB Page t Item 23. - 82 HB -642- 1. The eligibility criteria to be imposed on prospective home purchasers; 2. The procedures to be followed when buying, selling or Transferring units; 3. The methodology for setting the maximum sales price; 4. The establishment of the minimum and maximum down payments that can be made by Home Buyers; 5. The regulations that will be imposed on the financing and refinancing of Affordable Ownership Units; 6. The circumstances under which the Affordability Covenants will be subordinated to the deed of trust held by a mortgage lender; 7. The complaints and appeals process available to program participants; and 8. The monitoring and enforcement activities that will be undertaken by the City. In the event there is an irreconcilable conflict between the City's Deed of Trust and the Affordable Ownership Housing Regulations or the CC&Rs, the City's Deed of Trust will control. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036M Page 2 xB -643- Item 23. - 83 IL DEFINITIONS OF TERMS "Affordability Covenant" shall mean the CC&Rs restricting the sales price of the Unit, and limiting the maximum income of any purchaser of the unit. "Affordable Housing Administrator" has the day-to-day authority for making determinations related to these Affordable Ownership Housing Regulations. The Affordable Housing Administrator will be appointed by the Program Director. "Affordable Ownership Housing Program" shall include ownership homes developed under the Inclusionary Housing Program, using the California Density Bonus Law, or developed with Agency financial assistance. "Affordable Sales Price" shall mean the maximum price of an Affordable Ownership Unit, as calculated according to the formula described in these Affordable Ownership Housing Regulations. The formula is based on the requirements imposed by H&SC Section 60052.5. "Affordable Ownership Unit" shall mean a home in Huntington Beach that is made affordable by CC&Rs that restrict ownership, occupancy and the Affordable Sales Price as described in these Affordable Ownership Housing Regulations. "Affordability Period" shall be defined for each Affordable Ownership Unit Project. The covenant period will be identified in the CC&Rs that are recorded on legal title for each Affordable Ownership Unit. The covenant period will commence upon the close of escrow the first unit sold in each phase of the Affordable Ownership Project. At the end of the original term, the CC&Rs will expire. "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach. "Agency Loan" shall mean a loan or any other form of financial assistance provided by the Agency to assist a qualifying household in the purchase an Affordable Ownership Unit. "CC&Rs" shall the Covenants, Conditions and Restrictions executed by the City and the Owner of an Affordable Ownership Unit. "City" shall mean the City of Huntington Beach, California. "City Council" shall mean the City Council of the City of Huntington Beach, Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 3 Item 23. - 84 HB -644- "City Manager" is the City Manager of the City of Huntington Beach. The City Manager has the ultimate authority to evaluate appeals submitted in relation to these Affordable Ownership Housing Regulations. "County" shall mean the County of Orange. "County Median Income" shall mean the Median Income adjusted by actual household size as published annually by HCD for the County. "Eligible Purchaser" shall mean a Home Buyer who meets the eligibility criteria set forth in these Affordable Ownership Housing Regulations. "Fair Market Value" shall mean the value of the property as determined by a property appraisal performed by a licensed appraiser. "Gift Funds" shall mean the gift funds a Home Buyer applies to the down payment on the purchase of a home. "Gross Income" shall mean all income from whatever source from all adult household members derived as provided in the Internal Revenue Code (26 USC Section 61), whether or not exempt from Federal income tax. Such income includes, but is not limited to, the following: 1. Wages and salaries including overtime pay 2. Compensation for services, including fees, commissions, tips and bonuses 3. Net income derived from business 4. Gains derived from dealings in property 5. Interest 6. Rents 7. Royalties 8. Dividends 9. Alimony 10. Child Support 11. Annuities 12. Income from life insurance and endowment contracts 13. Pensions 14. Income from discharge of indebtedness 15. Distribution share of partnership gross income Affordabte_Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 4 HB -645- Item 23. - 85 16. Income in respect of a decedent 17. Income from an interest in an estate or trust 18, Public benefits including but not limited to AFDC, SSI, disability income 19. When a household has net family assets in excess of$5,000, income shall include the actual amount of income, if any, derived from all of the household assets or 10 percent of the value of such assets, whichever is greater. "Home Buyer" shall mean the prospective purchaser of an Affordable Ownership Unit from the current Owner. "Housing Cost" shall mean and include all of the following costs associated with ownership of an affordable home, calculated for a 12-month period. 1. Principal and interest on a mortgage loan at the defined interest rate; 2. Property tax and assessments; 3. Home Owner Association (HOA)fees; 4. Fire and casualty insurance covering replacement value of property improvements; 5. Property maintenance and repairs; and 6. A reasonable utility allowance, as determined by the City. "HCD" means the California Housing and Community Development Department. "H&SC" shall mean the California Health and Safety Code. "HUD" shall mean the United States Department of Housing and Urban Development. "Inclusionary Ordinance" shall mean the Inclusionary Housing Ordinance adopted by the City. The Inclusionary Ordinance is currently found in (Section 230.26 of the City Zoning Code. "Inclusionary Housing Program" shall mean the City's program to implement the Inclusionary Ordinance. "Low Income" refers to households whose incomes meet the standards defined by the H&SC Section 50079.5. Generally Low Income means household income that does not exceed 80% of the County Median Income, as adjusted for household size. However, the maximum household income amount for Low Income households shall be set at the amount published by HCD annually, Low Income is sometimes also referred to as Lower Income. Affordable Ownership Housing Regulations-owner August 15,2011 1106036.HB Page 5 Item 23. - 86 Hs -646- "Low Income Household" or "Lower Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Low Income. "Median Income" is calculated by HCD using non-aggregated census income data and applying trending factors for metropolitan statistical areas (MSA)throughout the country. The MSA for Huntington Beach is Orange County. "Median Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Median Income. "Moderate Income" refers to households whose incomes meet the standards defined by the H&SC Section 50093. Generally, Moderate Income means household income that does not exceed 120% of the County Median Income, as adjusted for household size. The maximum household income amount for Moderate Income households shall be set at the amount published by HCD annually. "Moderate Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Moderate Income. "Mortgage Interest Rate " refers to the mortgage interest rate that must be used in the Affordable Sales Price calculation. The Mortgage Interest Rate is based on the 30-year, 90-day yield, fixed-interest rate for a fully amortizing loan with no points and no loan origination fees. The Mortgage Interest Rate will be the lowest pertinent rate published in Financial.com for the three months immediately preceding the proposed home purchase. "Owner" shall mean the current owner of an Affordable Ownership Unit, having been approved by the City. "Ownership Housing Project" refers to a market rate project that is subject to the City's Inclusionary Housing Ordinance, or is using the California Density Bonus Law, or is being developed with Agency financial assistance. "Program Director" has the ultimate authority to evaluate appeals submitted to the terms of these Affordable Ownership Housing Regulations. The Program Director will be appointed by the City Manager "Transfer" shall mean any sale, transfer, lease, exchange, assignment or conveyance of an Affordable Ownership Unit, including any portion or interest in an Affordable Ownership Unit or other disposition of any interest in an Affordable Ownership Unit, whether voluntary or involuntary. Affordable Ownership Rousing Regulations-Owner August 16,rt2011 1106036.HB Page 6 HB -647- Item 23. - 87 The following Transfers shall not be considered a Transfer for purposes of ownership of an Affordable Ownership Unit. However, when such Transfers occur, the Owner shall provide notice to the City of any such disposition. 1. A Transfer resulting from the death of an Owner; 2. A Transfer by an Owner where the spouse becomes a co-owner of the Affordable Ownership Unit; 3. A Transfer of title to a spouse as part of divorce or dissolution proceedings; and 4. A Transfer by an Owner into a trust in which the Owner or Owners are beneficiaries. "Very-Low Income" refers to households whose incomes meet the standards defined by the H&SC Section 50105. Generally Very-Low Income means household income that does not exceed 50% of the County Median Income, as adjusted for household size. The maximum household income amount for Very-Low Income households shall be the amount published by HCD annually. "Very-Low Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Very-Low Income. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 7 Item 23. - 88 HB -648- III. PROGRAM ADMINISTRATION A. General The Affordable Housing Administrator oversees the Affordable Ownership Units upon their completion. The activities include calculating Affordable Sales Prices, determining Home Buyer eligibility, approving Transfers, and monitoring program compliance. B. Fair Housing Policy Program participants must comply fully with all Federal, State, and local non- discrimination laws. Specifically, program participants shall not discriminate on account of race, color, sex, religion, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, or deny any family or individual the opportunity to apply for or participate in the Affordable Ownership Housing Program. C. Privacy Rights All eligibility applications are held in strict confidence and are not considered public records (H&SC Section 34332). Requests for the City to release information involving a Home Buyer or Owner must be accompanied by a written release request from the Home Buyer or Owner and/or a court order, unless disclosure is authorized under Federal or State law. H&SC Section 33334.3 requires redevelopment agencies to compile, maintain and make available to the public on the internet, a database of existing new and substantially rehabilitated units that are subject to income and affordability covenants. The on-line database will be updated annually and will include the following information: 1. The address and parcel number of the income restricted property. 2. The number of units and the number of bedrooms. 3. The year of construction completion. 4. The date when the affordability covenant or restriction was recorded. 5. The document number of the recording. 6. The expiration date of the covenant or restriction. 7. The date and document number of any covenants or notices that may be recorded when an ownership unit is resold. Affordable Ownership Housing Regulations-Owner August I5,2011 1106036.HB Page 8 xB -649- Item 23. - 89 D. City Includes Redevelopment Agency These Affordable Ownership Housing Regulations shall apply equally to all affordable ownership programs administered by the City and the Agency. As used in these Regulations, the word 'City' means and includes the 'Agency'. E. Authorization The Program Director and/or a designee are authorized to sign all documents requiring approvals related to the sales, waivers, refinances, subordinations, and any non- substantial changes to these Affordable Ownership Housing Regulations. F. Affordable Ownership Housing Regulations Each Owner participating in the Affordable Ownership Housing Program will receive a copy of the Affordable Ownership Housing Regulations. These Regulations may be updated from time-to-time to increase the programs' effectiveness; modifications will require City Council approval. The transaction will include CC&Rs and a Deed of Trust that will be executed by the City and the Owner. In the event there is a conflict between the Deed of Trust and the Affordable Ownership Housing Regulations or the CC&Rs, the Deed of Trust will prevail. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 9 Item 23. - 90 HB -650- IV. DETERMINATION OF ELIGIBLE PURCHASER A. Prospective Home Buyer List To assist the Owner in identifying potential purchasers, the City will create an interest list on the City's website. Sufficient information will be provided to allow prospective Home Buyers to determine whether they meet the eligibility standards imposed on the home. The prospective Home Buyers will then self-report their income information for use by the Owner. The following terms will be imposed on the interest list: 1. To remain in the database, prospective Home Buyers will be required to respond to an email request every 30 days. 2. The City does not bear any responsibility for the accuracy of the information submitted by prospective Home Buyers. 3. It is the Owner's responsibility to select an Eligible Purchaser. The City cannot provide an assurance that the information submitted by prospective Home Buyers is accurate or complete, or that that the City will ultimately determine that the prospective Home Buyer is an Eligible Purchaser. That determination can only be made after the Home Buyer submits a complete Home Buyer Application. B. Required Eligibility Documentation Home Buyers will be required to furnish proof demonstrating their eligibility to purchase an Affordable Ownership Unit. Home Buyers unable to provide satisfactory evidence of income, assets, composition, or other qualifying criteria will not be considered Eligible Purchasers, and will not be allowed to purchase an Affordable Ownership Unit. C. Home Buyer Eligibility Criteria United States Citizenship/L.ega!Residency Home Buyers and all household members must be United States Citizens or have the right to permanently reside in the United States. Acceptable citizenship documentation includes a birth certificate or a Permanent Resident Card. Household and Unit Size Compatibility Home Buyer households must be compatible with the size of the unit to be purchased. The maximum household sizes are set as follows: Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 10 HB -651- Item 23. - 91 Number of Maximum Number Bedrooms in the of Occupants Home 1 3 2 5 3 7 4 9 Owner Occupancy Home Buyers must certify that the Affordable Ownership Unit will be owner-occupied at all times, and will not be rented or leased. Ownership of Other Residential Real Estate Home Buyers may not own other residential property, including mobile home property, unless the property will be sold prior to or in conjunction with the purchase of an Affordable Ownership Unit. Verifiable Income All adult household members, except stay-at-home spouses or domestic partners and dependents, must have at least one continuous year of verifiable income and at least two years of income tax payment history in the United States at the time of application. This requirement is increased to two continuous years of verifiable personal and business income for self-employed individuals. To make accurate verification possible, Home Buyers may not have changed employment status within six months of application. Co-Applicants Co-applicants must demonstrate at least one full year of current joint residency at time of application. Divorced or Separated Nome Buyers Divorced or legally separated household members must provide a copy of the divorce decree or legal separation document signed by a court officer. Otherwise separated married household members must demonstrate at least one year of complete financial and residential separation at time of application for the couple to be considered separate for purposes of determining eligibility. If this cannot be demonstrated, the couple must submit the application as co-applicants. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 11 Item 23. - 92 xB -652- Joint Custody of Children Home Buyers with joint custody of children must have custodial parent rights defined in a divorce decree for a child to be considered part of the household. This rule shall not be interpreted as disallowing children from living with parents with less than 50% custody rights, it is solely intended to be applied when determining household size for initial program eligibility. Composition of Household Once the application is submitted, the household composition cannot be altered. D. Income Eligibility Criteria Gross Income The City will consider gross income for all adult household members when determining Home Buyer eligibility. In the event a Home Buyer uses a co-signer on a mortgage loan, the gross income of the co-signer will be considered part of the household income. The funds included in Gross Income are detailed in the definitions section of these Affordable Ownership Housing Regulations. Maximum Income The maximum allowable income is set forth for each project and/or unit by the Affordability Covenants or any other applicable affordable ownership housing agreement recorded on legal title to the property. Income levels include, but are not limited to Very- Low, Low, Median, and Moderate as defined in these Affordable Ownership Housing Regulations. Minimum Income Monthly household income must be at least twice as much as the monthly housing cost incurred by the Owner. Housing cost includes principal and interest on mortgage loans; property tax assessments; HOA dues; insurance costs; property maintenance and repairs costs; and utilities costs. Household Assets The total value of assets owned by a Home Buyer prior to the purchase of the home cannot exceed 50% of the purchase price of the Affordable Ownership Unit. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 12 HB -653- Item 23. - 93 V. HOME BUYER APPLICATION AND DISCLOSURE DOCUMENTS A. Program Application Home Buyers must complete and submit the City's Home Buyer Application and all required attachments. The Affordable Housing Administrator will review the application for completeness and will notify the Home Buyer of any missing information and/or documents. Incomplete applications will not be considered for eligibility. Home Buyers will be given 10 business days to provide all missing information and/or documents. Failure to provide requested information and/or documents will constitute cause for denial of eligibility. The Affordable Housing Administrator will evaluate the completed application to determine whether the Home Buyer is an Eligible Purchaser. The application must clearly demonstrate eligibility with respect to all Home Buyer Eligibility Requirements. Applications that do not provide satisfactory evidence of income, assets, or other qualifying criteria will not be approved. At the written request of a Home Buyer, the Program Director or a designee, at his/her sole discretion, may waive certain Home Buyer Eligibility Requirements. B. Submittal Requirements Household Composition Documents For all adult household members, the City will require a photocopy of a driver license or California photo identification. For minors, the City will require a copy of the birth certificate. If the birth certificate for a minor is not available, the City may accept the following: adoption papers, custody agreement, court-ordered assignment, or verification from a social services agency. School Registration Documents Adult household members who are dependents of the Home Buyer and who are full-time students will be required to provide copies of school transcripts or registration verification showing current full-time student status. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 13 Item 23. - 94 HB -654- Evidence of Current Joint Residency Co-applicants are required to demonstrate one full year of current joint residency. Acceptable verification may be in the form of the following:joint bank accounts or other shared financial history, leases or other evidence of cohabitation, or credit reports showing evidence of relationship. Verification of Divorce or Separation Status Divorced or legally separated household members must provide a copy of the divorce decree or legal separation document signed by a court officer. Married, but separated, couples must demonstrate at least one full year of complete financial and residential separation at time of application to be considered separated for purposes of determining eligibility. If this cannot be demonstrated, the couple must submit the application as co- applicants. Financial Data Authorization to Obtain Credit History Each adult household member must authorize the City to obtain reports from credit reporting agencies. The City will determine when it is necessary to obtain one or more credit report(s) per individual. Such reports will be used only to confirm applicant information such as current and previous addresses, current and previous employers, marital status, loan history, income to debt ratio and other related information. Mortgage Pre-Qualification Letter and Loan Application Packet Home Buyers must submit a copy of a pre-qualification letter and full application packet from a licensed mortgage lender. The application packet will include, but shall not be limited to the typed and signed fully completed mortgage application, loan underwriting analysis, truth in lending disclosure, income verification, and credit verification. The mortgage loan application packet will be used by the City to verify the following: residency history; employment history; income, liabilities; assets (including real estate ownership); United States residency status; and down payment and mortgage financing amounts. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.1-113 Page 14 HB -655- Item 23. - 95 Checking, Savings, and Investment Account Statements Home Buyers must submit copies of the three most recent months of statements for all accounts, including checking, savings, or other investment accounts owned in part or full by all adult household members. These account statements must demonstrate evidence of funds for the identified down payment amount. These statements must also demonstrate current period and year-to-date income earned on each account through interest and/or dividends. Tax Returns All adult household members will be required to provide signed copies of their two most recent Federal income tax statements. These statements must include all schedules and attachments. Home Buyers unable to provide copies of Federal income tax statements will be required to obtain tax history printouts from the Internal Revenue Service. Home Buyers may be requested to sign an authorization for release of information to the City from the Internal Revenue Service for further verification of income. Referrals to the Internal Revenue Service may be made for confirmation of income statements on a case-by-case basis. Home Buyers are required to submit the identified tax statements. Home Buyers unable to provide tax information for any reason will not be eligible to participate in the program. Tax returns will be used by the City to verify the following: residency history; family composition; income history (including amounts and types of income); and real estate ownership. Income Verification Employment Income In the order of preference, the following employment income verification sources listed below will be considered acceptable. The documentation must specify the amount and type of pay (i.e. wages, overtime wages, commissions, and bonuses), frequency of pay, and year to date earnings: 1. Check stubs or earning statements showing employee's gross pay per pay period and frequency of pay. The check stubs should include the year-end statement for the last full year of employment, and the most recent three months of pay periods. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB page 15 Item 23. - 96 xB -656- 2. Letter from the employer on company letterhead and signed by an authorized company representative. Future income related to overtime, commissions and bonuses can be difficult to accurately predict; if necessary, these forms of income may be estimated based on historical amounts. Income from a Business Net income from a business owned in part or full by a Home Buyer will be considered when determining income eligibility. Net income is defined as business receipts or sales less expenses that are essential to the operation of the business. To estimate current net business income, the City will require the two most recent Federal tax returns, four most recent quarterly tax filings, and one full year of business and personal checking, savings, and other investment account statements for all business owners/partners. Home Buyers with less than one full year of verifiable business income history will not be considered for eligibility to purchase an Affordable Ownership Unit. Home Buyers must itemize gross business receipts or sales for the period covered by the most recent Federal tax return and forecast gross business receipts or sales for the year beyond the time of application. The Home Buyers must also itemize the business expenses that were applied to determine net business income for both periods. The City will analyze all tax returns, quarterly tax filings, account statements, and income/expense forecasts when determining net business income. Home Buyers that are unable to provide satisfactory evidence of business income or expenses will be denied eligibility for purchase of an Affordable Ownership Unit. Social Security Pensions Supplementary Security Income(SSI), Welfare, Disability Income Home Buyers must submit a copy of their most recent award or benefit notification letter prepared and signed by the authorizing agency. At the Program Director's sole discretion, checks or bank deposit slips that show only net amounts remaining after deductions for SSI or Medicare may be accepted when award letters cannot be obtained. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 16 HB -657- Item 23. - 97 Alimony or Child Support Verification of alimony or child support income will be considered acceptable in the order listed: 1. Copy of a separation of settlement agreement or a divorce decree stating amount and type of support and payment schedules. 2. A notarized letter from the person paying the support notarized attesting to the amount and terms of support payments. 3. Federal income tax returns. Residential Purchase Agreement Home Buyers must submit a copy of the fully completed and executed Residential Purchase Agreement for the Affordable Ownership Unit. The City will review this agreement to verify the total purchase price, the deposit amount, the first trust deed mortgage terms and any secondary financing terms. The City has approval rights over any amendments to the Residential Purchase Agreement made after the submittal of a Home Buyer Application. Terms that will not be allowed include, but are not limited to: 1. The escrow period cannot exceed 90 days. 2. The seller cannot lease the property back from the Home Buyer for more than one month following the close of escrow. 3. Buyers cannot be required to pay fees that are customarily paid by the seller. 4. Buyers cannot be required to pay any extraordinary fees. 5. No financing can be carried back by the seller. Affordability Period Under the current regulations, the Affordability Period will run for not less than 45 years. However, the Affordability Period for each Affordable Ownership Unit will be defined in the Deed of Trust and CC&Rs recorded on legal title to the property. In the event there is a conflict between the Deed of Trust and the Affordable Ownership Housing Regulations or the CC&Rs, the term identified in the Deed of Trust will prevail. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 17 Item 23. - 98 HB -658- Disclosure Documents Applicants and co-applicants must be listed as owners of the property. Applicants and co-applicants must execute the following documents: Special Disclosure Home Buyers are required to submit an original, fully completed and signed Special Disclosure on a form approved by the City that confirms that the Home Buyer received the Affordable Ownership Housing Regulations, and has had the opportunity to ask questions about the terms and conditions. Certificate of Purchaser Home Buyers are required to submit an original, fully completed and signed Certificate of Purchaser on a form approved by the City. This document must summarize the proposed purchase transaction, and include an acknowledgement by the Home Buyer of the CC&R's recorded by the City on the Affordable Ownership Unit. Buyer and Seller Declaration Home Buyers are required to submit a fully signed Buyer and Seller Declaration (with original signatures) stating that under penalty of perjury the parties have not entered into, and will not enter into any agreements, other than the Purchase Agreement for the purpose of exchanging money or other personal property with a cost of more than $500. Recorded Notice of CC&Rs The City will record the CC&Rs imposed on the Affordable Ownership Unit. The CC&Rs will identify the income and affordability restrictions; and the covenant term. Real Estate Transfer Disclosure A Real Estate Transfer Disclosure Statement must be signed by both the seller and the Home Buyer. The Statement must include language approved by the City describing the affordable housing restrictions imposed on the property. The Home Buyer must also acknowledge in writing that restrictions will be imposed on the future resale of the property. Affordable Ownership Housing Regulations-owner August 15,2011 1106036.HB Page 18 xB -659- Item 23. - 99 Promissory Note The City and the Home Buyer must execute a Promissory Note in an amount equal to the difference between the estimated market value and the Affordable Sales Price of the unit at the time of sale. Deed of Trust The City will record a Deed of Trust on the property at an amount equal to the Promissory Note. The Deed of Trust will be used to ensure the affordability covenants are recorded on title, and will remain an obligation on the property throughout the defined covenant period. Affordable Ownership mousing Regulations-Owner August 15,2011 1106036.118 Page 19 Item 23. - 100 HB -660- VI. AFFORDABLE SALES PRICE A. General Policy Affordable Ownership Units can only be sold at the defined Affordable Sales Price. This price will be calculated based on the specific CC&Rs recorded on the Affordable Ownership Units. The Affordable Sales Price is the maximum price for which an Affordable Ownership Unit may be resold at any time during the Affordability Covenant period. The Affordable Sales Price is likely to be lower than the fair market value of the property. The City's Affordable Ownership Housing Programs are subject to the following basic financial requirements: 1. An Owner that wishes to sell an Affordable Ownership Unit must submit a Request for the Maximum Affordable Sales Price to the Affordable Housing Administrator in order to determine the Affordable Sales Price for the home. 2. The Affordable Sales Price will be valid for 90 days. Once the Price is determined, it will not be modified during the 90-day period. 3. Prospective Home Buyers will be entitled to receive one free Affordable Sales Price determination per calendar year. Additional requests for Affordable Sales Price calculations will be subject to the current fee schedule established by resolution of the City Council. When applicable, fee payment must be made at time of application. B. Affordable Sales Price Calculations The Affordable Sales Price is equal to the Maximum Mortgage Amount plus the defined Down Payment. Both the Maximum Mortgage and the defined Down Payment must be calculated in accordance with the methodology defined in these Affordable Ownership Housing Regulations. The amount of the Affordable Sales Price is calculated on the basis of the identified variables. Two especially important variables used in determining the Affordable Sales Price are the County Median Income and the mortgage interest rate. As these variables change over time, the Affordable Sales Price can increase or decrease; the Affordable Sales Price is in no way tied to market prices. Affordable ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 20 HB -661- Item 23. - 101 The calculation methodology, and the applicable variables, will be posted on the City's website. The actual calculation will be based on the Affordability Covenants executed between the City and the Owner. The income and affordability requirements apply to any resales that occur throughout the original Affordability Covenant period. In the unusual event that the home's market value is less than the maximum allowable sales price, the market value will implicitly prevail. Household Size For the purposes of the Affordable Sales Price calculations, the household size is set at the number of bedrooms in the unit plus one. For example, the imputed household size for three-bedroom home is four persons. The H&SC Section 50052.5 refers to this as "the household size appropriate for the unit". However, this is not meant to be an occupancy cap; it is simply a benchmark used to create a consistent methodology for calculating the Affordable Sales Price. Income Projects developed under the Affordable Ownership Housing Program must adhere to the affordable housing cost methodology imposed by the Affordability Covenants imposed on the home. The standards currently being imposed by the Affordable Housing Program are based on the calculation methodology defined in H&SC Section 50052.5. H&SC Section 50052.5 uses the following household income levels to calculate the Affordable Sales Price: 1. Low Income: 70% of the County Median Income for a household size equal to the number of bedrooms in the unit plus one. 2. Moderate Income: 110% of the County Median Income for a household size equal to the number of bedrooms in the unit plus one. Housing Related Expenses The non-mortgage related expenses will be calculated based on standards defined by the City. The expenses and standards are as follows: 1. Property Taxes and Assessments: The tax rate applied to determine the annual property tax cost will be set at 1.08% of the purchase price of an Affordable Ownership Unit, Affordable Ownership Housing Regulations-Owner August 16,2011 1106036.HB Page 21 Item 23. - 102 HB -662- 2. HOA Fees: The HOA fees will be set at the amount actually charged for the home being purchased. 3. The following costs will be set by the City annually, and will be posted on the City's website: a. Fire and Casualty Insurance: The City will periodically survey local insurance companies to determine the typical annual cost of insuring a home for its replacement value. b. Property Maintenance and Repairs: The City will apply a nominal cost allowance to cover the costs Owners will typically bear for maintaining their property over a one-year period. C. Utilities: The City will apply utility cost allowances based on data published by the Orange County Housing Authority. Supportable Mortgage Payments The supportable mortgage payments will be established using the following equation: Benchmark Annual Household Income (Less) Annual Housing Related Expenses Property Taxes and Assessments HOA Fees Fire and Casualty Insurance Property Maintenance and Repairs Utilities Total Annual Housing Related Expenses Income Available for Mortgage Payments Maximum Mortgage Amount The Maximum Mortgage Amount is equal to the present value of the Income Available for Mortgage Payments over a 30-year term. The discount rate used to determine the present value is set at the Mortgage Interest Rate. The Mortgage Interest Rate will be posted on the City's website, and will be updated monthly. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 22 xB -663- Item 23. - 103 Dawn Payment The Affordable Sales Price calculation is based on a benchmark down payment amount that is not tied to the actual down payment contributed by the Home Buyer. The amount set for Affordable Sales Price calculation purposes is 10% of the total purchase price. The actual down payment amount will vary from unit-to-unit, and will not impact the Affordable Sales Price. Rather, the actual down payment will be subtracted from the Affordable Sales Price to determine the actual mortgage amount for the home. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 23 Item 23. - 104 xB -664- VII.FINANCING REQUIREMENTS A. Down Payment Requirements !Minimum and Maximum Down Payment The minimum down payment is set at 5% of the total purchase price for the home, and the maximum down payment is set at 50% of the purchase price of the home. The Program Director or a designee has the authority to review and approve variations to the established minimum and maximum amounts. Gift Funds The City does not impose a cap on the amount of gift funds a Home Buyer can apply to the down payment on a home purchase. However, gift funds are included in the defined down payment cap. B. Purchase Money Mortgage Requirements 1. The City may consider subordinating the income and affordability covenants to the mortgage financing used to purchase the home. This subordination will only be approved if the Program Director or a designee can make the finding that it would not be feasible for the Home Buyer to obtain conventional financing unless the covenants are subordinated to the mortgage financing. 2. Home Buyers must obtain conventional, fully amortizing, fixed interest rate mortgages with a term of at least 30 years. No interest only loans, negative amortization loans, balloon payment loans or variable interest rate loans will be allowed. 3. The loan to value ratio{LTV} of the mortgage(s) used to acquire the home cannot exceed the lesser of: a. 95% of the property's appraised value, or b. The Affordable Sales Price. 4. Many lenders allow borrowers to obtain a loan without providing verifiable income information; this is commonly referred to as a Stated-Income Loan. The use of this mortgage product may impair the City's ability to determine the Home Buyer's eligibility to participate in the City's Affordable Ownership Housing Program. Therefore, unless income can otherwise be documented to the Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 24 HB -665- Item 23. - 105 satisfaction and approval of the Program Director or a designee, Home Buyers will not be allowed to use Stated-Income Loans to finance the purchase of an Affordable Ownership Unit. 5. All primary mortgages and any secondary financing must be secured by a loan agreement and a deed of trust from banks or companies licensed to make home loans in California. Loans from family members, friends, or other non-licensed entities shall be considered gift funds to the Home Buyer, as defined in these Affordable Ownership Housing Regulations, C. Refinancing Approved by the City These Affordable Ownership Housing Regulations allow Owners to refinance their mortgage if the proposed refinancing complies with both of the following standards: 1. The mortgage amount can be based on the lender's standard underwriting criteria up to a maximum of an 80% loan to value ratio. The then current Affordable Sales Price must be used in the loan to value ratio calculation. 2. The debt service payments on the mortgage cannot exceed the then current Supportable Mortgage Payment, The City may agree to subordinate the income and affordability covenants if the proposed refinancing complies with the requirements imposed by the Affordable Ownership Housing Regulations. Requests to subordinate the City's Deed of Trust must be made by Owners in a form approved by the Program Director. The completed form is subject to review and approval by the Program Director or a designee. City approval of subordination requests are subject to the determination that the Owner is in compliance with program requirements and that the mortgage comports with the established requirements. In accordance with a City Council resolution, a subordination request fee will be imposed. The fee must be paid when the application is submitted. Because subordination requests are often made to the City prior to the Owner's final determination of the debt amount, Owners may request revised subordination agreements free of charge within one month of the initial application. Requests for revisions to subordination agreements made beyond one month will require payment of a new subordination request fee. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036,HB Page 25 Item 23. - 106 Hs -666- Vill. CONTINUING OWNER REQUIREMENTS A. General Policy The City's Affordable Ownership Housing Programs are intended to provide affordable housing to residents who would otherwise have difficulty owning a home in Huntington Beach. It is not intended to help residents profit from property ownership. It is also not intended to allow Owners to take actions that are unreasonably risky thus jeopardizing the City's investment in affordable housing. The requirements below are designed to address these matters. B. Owner Requirements Principal Place of Residence The Affordable Ownership Unit must be the household's only residence during the covenant period. On an annual basis, the City will send Owners an Ownership Annual Certification form to be filled out and returned to the City within 30 days of receipt. Owners will affirm that they are occupying the home as their principal residence. The Owner will be required to submit copies of two current utility bills as part of the annual recertification process. In addition, the City will undertake an annual review of the County Assessor's records to identify any title changes and home owner exemption claims. A hardship provision adopted by the City Council allows the Owner to vacate the home for a maximum of one year during the covenant period if one of the following conditions exist: 1. A job relocation as evidenced by verification submitted by the employer. 2. A family illness as evidenced by verification submitted by a licensed physician. 3. Medical necessity as evidenced by verification submitted by a licensed physician. Hardship exemptions must be approved by the Program Director or a designee. If the exemption is approved, the Owner may rent the unit for a maximum of one year during the covenant period. The unit must be rented to an Eligible Tenant at the Affordable Rent for the defined income category. Affordable Ownership Housing Regulations-Owner August`15,20i 1 1106036.HB Page 26 HB -667- Item 23. - 107 Make Payments on all Debts Owners must remain current on their payments for all debts recorded against the property, including but not limited to mortgages, taxes, HOA dues, and assessments. Should a borrower default on any debt recorded against the property, a lien holder could initiate foreclosure proceedings against the Owner. Failure to remain in good standing with all creditors who have a claim against the property is a violation of Owner Requirements and will result in immediate action by the City. Property Maintenance Owners are required to maintain the interior and exterior of the Affordable Ownership Unit and the landscaping on the property in a manner consistent with community standards, and in accordance with all applicable City codes. Transfer of Home Transfers Explicitly Allowed by the Affordable Ownership Housing Regulations The Owner must provide the City with written notice of any proposed Transfer of the home's ownership. City approval is required for voluntary or involuntary Transfers of any portion or interest in an Affordable Ownership Unit, with the following exceptions for Transfers that are explicitly allowed by the Affordable Ownership Housing Regulations: 9. A Transfer resulting from the death of an Owner; 2. A Transfer by an Owner where the spouse becomes a co-owner of the Affordable Ownership Unit; 3. A Transfer of title to a spouse as part of divorce or dissolution proceedings; and 4. A Transfer by an Owner into a trust in which the Owner or Owners are beneficiaries. A beneficiary that inherits the home from an Owner is not required to meet the income requirements imposed by the CC&Rs recorded against the Affordable Ownership Unit. The beneficiary is required to fulfill all the other CC&R terms, including the Principal Place of Residence requirement, The beneficiary can invoke the hardship provision, which allows the Affordable Ownership Unit to be rented for up to one year to an Eligible Tenant at an Affordable Rent. Thereafter, the beneficiary must either reside in the unit, or sell the unit to an Eligible Purchaser at the Affordable Sales Price for the defined income category. Affordable Ownership Housing Regulations-Owner August 15,2011 1 i06036_HB Page 27 Item 23. - 108 HB -668- Transfers Requiring City Approval The Owner must request City approval:for any other voluntary or involuntary Transfers of any portion or interest in an Affordable Ownership Unit during the covenant term. To receive approval, the Owner must sell the unit to an Eligible Purchaser at the then current Affordable Sales Price. Affordable Ownership Housing Regulations-Owner August 15,2011 i10S036.HS Page 28 xB -669- Item 23. - 109 IX. COMPLAINTS AND APPEALS Complaints concerning the City's Affordable Ownership Housing Program should be made in writing and addressed to the Affordable Housing Administrator. Complaints will be accepted only if they are in writing and are received within 30 days from the event giving rise to the complaint. The Affordable Housing Administrator will contact the complainant to attempt to resolve the matter. A written response from the Affordable Housing Administrator will be made to the complainant within 10 business days. If a complainant is not satisfied with the written response, a request for an appeal may be filed with the Program Director. The written request must set forth the reasons for the appeal and must be received by the Program Director within 15 days from the date of the Affordable Housing Administrator's written response. In the event the request does not meet these requirements, the complainant will be notified that the request is denied; otherwise, the complainant will be invited to meet with the Program Director. The Program Director will provide the complainant with an opportunity to advocate his/her position and to resolve the matter. The Program Director's response will be made in writing within 10 business days following the meeting. Affordable Ownership Housing Regulations-Owner August 15,2011 i106036.HB Page 29 Item 23. - 110 HB -670- X. MONITORING AND ENFORCEMENT A. General Policy The City is committed to assuring that its affordable housing resources reach only eligible households so that program integrity can be maintained. Owners are required to cooperate with the City in promptly providing all information requested by the City in monitoring compliance with program requirements. B. Program Audits City staff will maintain a high level of awareness to indicators of possible abuse and fraud by Home Buyers and Owners. Regular ongoing program audits shall include, but will not be limited to the following activities: File Audits Upon Close of Purchase Upon the close of a purchase transaction, the City will obtain the following information from the escrow company: 1. The original City Deed of Trust and notice of affordability restrictions on Transfer of property executed by the Owner and recorded on the property; and 2. Copies of: a. The Promissory Note; b. The final buyer and seller settlement statements; and C. The buyer's title policy. City staff will review these documents to ensure that the City's Deed of Trust and notice of affordability restrictions on Transfer were properly completed, executed, and recorded on legal title of the property. City staff will also ensure that the financial terms of the purchase transaction are consistent with those that were approved at the time of the application. File Audits Upon Refinances Requests by Owners for the City to subordinate its Deed of Trust to refinanced mortgage deeds of trust will be approved only upon determination that the Owner is in compliance with these Affordable Ownership Housing Regulations. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.1113 Page 30 xB -671- Item 23. - III Owner Audits The City will conduct periodic random quality control audits of Affordable Ownership Units to assure compliance with program rules and requirements. Such audits may include verification of continued ownership of Affordable Ownership Units by approved buyers, verification of Owner residency, verification of property tax records, and verification of utility billing records. C. Program Abuse and Fraud Protections City staff will investigate suspected program abuse and fraud as appropriate. Staff will take all necessary and appropriate steps, both administrative or legal, to enforce program requirements. Referrals, Complaints, or Tips The City will follow up on referrals that are received by mail, by telephone, or in person, which allege that a Home Buyer or Owner is violating program rules. Such follow up will be made providing that the referral contains at least one item of information that is independently verifiable. A copy of the written allegation or a summary of the verbal allegation will be placed in the Owner's or Home Buyer's file. Internal Rile Review The City will investigate instances where it discovers, as a result of administering the program, information or facts that conflict with previous file data, or are in any way discrepant with statements made by the Owner or Home Buyer. Referrals to the City Attorney In the event of a breach or potential breach of program requirements, the City may institute legal action to enforce compliance with the program requirements, and to enjoin any actions by Owners that violate program requirements. The City's legal remedies may additionally include the following: 1. Civil citations with monetary penalties for violations of the Affordable Ownership Housing Regulations; 2. Recovering any rent that may have been received by an Owner; 3. Reversing sales not approved by the City, and 4. Instituting foreclosure proceedings. Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Page 31 Item 23. - 112 HB -672- ATTACHMENT A PROSPECTIVE OWNERS INTRODUCTION TO THE CITY OF HUNTINGTON BEACH AFFORDABLE OWNERSHIP HOUSING PROGRAM Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB xB -673- Item 23. - 113 PROSPECTIVE HOME OWNER'S INTRODUCTION TO THE CITY OF HUNTINGTON BEACH AFFORDABLE HOUSING PROGRAM The primary objective of the Affordable Housing Program is to provide affordable housing homeownership opportunities to residents who would otherwise have difficulty owning a home in Huntington Beach. The City will determine if a potential buyer is an eligible affordable buyer (within the "Low, Median or Moderate Income" categories) and that the unit is being sold at an affordable sales price. For the duration of the required affordability period, (a minimum of 30 years) the participant is subject to affordable homeowner requirements. If the owner wishes to sell during the affordability period, the unit must be sold at an affordable sales price to a buyer approved by the City. The program is not intended to allow the property owner to share in the increased value of the house. The intent is to allow residents to become property owners, and as their income increases it is anticipated that they will move on to purchase market rate housing. At that time the affordable unit will again become available to eligible home buyers. The amount of the affordable sales price is calculated on the basis of defined variables. As these variables change, the affordable sales price can increase or decrease. Homeowners should understand that the affordable sales price can increase or decrease, and that the affordable sales price is in no way tied to market prices. ELIGI�II�I�'Y CR9TElR1A � _ Income Eligible incomes range from Low Income (generally defined as 80% of the County median) to Moderate Income (generally defined as 120% of the County median). The exact qualifying incomes are published annually for each income category by the California Department of Housing and Community Development. The City will consider gross income for all adult household members when identifying the prospective home buyer's income category. If an applicant uses a co-signer on a mortgage loan, the gross income of the co-signer will be considered part of the household income. Annual household income must be at least twice as much as the annual housing cost for the home being purchased. The annual housing cost includes mortgage, property taxes, homeowner association dues, utilities costs,.insurance and maintenance. Item 23. - 114 HB -674- Owner Occupancy Applicants must certify that the housing unit will be owner-occupied at all times and will not be rented or leased. Household Assets The total value of assets owned by an applicant cannot exceed one-half of the purchase price of the home. Minimum Down Payment The minimum down payment is set at 5% of the total purchase price for the home. The maximum down payment is set at 50% of the purchase price for the home. Gift Funds The City does not impose a cap on the amount of gift funds a Home Buyer can apply to the down payment on a home purchase. However, gift funds are included in the defined down payment cap. Ownership of Other Residential Real Estate Applicants may not own other residential property, including mobile home property, unless the property will be sold prior to or in conjunction with the purchase of the income restricted unit. Household and Unit Size Compatibility The size of the applicant households must be compatible with the size of the unit to be purchased. The maximum household sizes are set as follows: Dumber of Bedrooms Maximum Number of in the Home Occupants 1 3 2 5 3 T 4 9 First Time Homebuyers First time homebuyer requirements, when applicable, will be set forth in the affordable housing covenants recorded on legal title to the property and will require that all members of the household to be First Time Homebuyers. US Citizenship/Legal Residency Applicants and all household members must be United States Citizens or have the right to permanently reside in the United States. xB -675- Item 23. - 115 Principal and Interest on Mortgage Debt (Mortgage Payments) The supportable mortgage payments will be established based on benchmark standards imposed by California Health and Safety Code Section 50052.5. The calculation methodology is available on the City's website. Maximum Mortgage The maximum mortgage is equal to the amount that can be obtained given the supportable mortgage payment calculation. The interest factor applied to the mortgage calculation will be based on the Fannie Mae fixed interest rate for a 30-year fully amortizing loan. The interest rate used by the City is the mortgage interest rate based on the Fannie Mae Required Net Yields, 30-year, 90-day yield, as published at TheFinanicals.com. FpIUAI�CIAL ASSISTANCE; As part of the administration of the City's Housing Program, the City has historically offered a down payment assistance loan program. These loans are intended to make affordable housing units more affordable to income eligible buyers. The loans accrue simple interest for the loan term and require no payments of principal or interest until the property transfers ownership, at such time, the homeowner may fully pay off the City loan. Alternatively, the City Council has authorized the loans to be assumed by subsequent eligible buyers. This Program is not currently being offered by the City. C06�T�►CT Persons interested in purchasing an affordable housing unit through the City's Affordable Housing Program, must apply to and be approved by the Economic Development Department. It must be noted that the various homeownership programs offered by the City may have differing eligibility and continuing homeowner requirements. These requirements are detailed in the Affordable Housing Program Regulations approved by the City Council. Persons interested in obtaining this document and/or learning more about the City's affordable housing program may contact: Denise Bazant Housing Program Administrator Economic Development Department City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 (714) 536-5470 dbazant@surfcity-hb.org Item 23. - 116 xB -676- ATTACHMENT B AFFORDABLE OWNERSHIP HOUSING PROGRAM FAQ'S Affordable Ownership Housing Regulations-Owner August 16,2011 1106036.HB HB -677- Item 23. - 117 AFFORDABLE OWNERSHIP HOUSING PROGRAM FAQ'S CITY OF HUNTINGTON BEACH 1. WHY DOES THE CITY HAVE AN AFFORDABLE OWNERSHIP HOUSING PROGRAM? Huntington Beach, like many coastal communities, has a shortage of housing that is affordable to middle-income working families. The affordable ownership housing program provides these households with the opportunity to own a home in the community. The City of Huntington Beach (City) currently administers covenants on over 400 homes. By requiring owners to adhere to resale restrictions, the City maintains the opportunity for new families to buy affordable housing units in Huntington Beach. The City's affordable housing program reflects the community's desire as well as its legal obligation to address this issue. These homes have covenants recorded on legal title to ensure their continued affordability for a defined period. For the duration of this affordability period, the City governs the use and transfer of these homes. Affordable homes are required to be owner occupied, are not investment properties, and are not intended to generate market-rate equity growth for their owners. 2. HOW IS THE MAXIMUM AFFORDABLE PRICE OF MY HOME DETERMINED? The maximum sales price is calculated according to the terms of the covenants and the deed of trust recorded by the City on legal title to the property. The Program Administrator will calculate the allowable sales price for a home when the seller submits a Request for Sales Price Calculation. This form is available at www,hbbiz.com, or by calling (714) 536-5470. Sales price calculations are valid for 90 days, and home owners are entitled to one free calculation per year. Home owners should understand that the affordable price is likely to be lower than the fair market value of the home. The affordable sales price is based on the City's calculation of the supportable first trust deed mortgage amount plus a defined down payment. These amounts must be calculated in accordance with the methodology defined in the Affordable Ownership Housing Regulations. Two especially important variables used in determining the affordable sales price are the Orange County median income and the prevailing mortgage interest rate. As these variables change over time, the affordable sales price can increase or decrease; the affordable sales price is in no way tied to market prices. The Regulations call for the mortgage interest rate to be based on a 30-year fully amortizing loan with a fixed-interest rate, with no points and no loan origination fees. The mortgage interest rate will be set at the lowest rate, that meets these standards, published in Financial.com for the three months immediately preceding the proposed home sale. Affordable Ownership Housing Program FA4's Page 1 1106035.HB August 15,2011 Item 23. - 118 xB -678- The other variables used in the affordable housing cost calculations are updated annually. These variables include the Orange County median income, the utilities allowances published by the Orange County Housing Authority, and the estimated maintenance and insurance costs. HOA fees are based on the actual fees charged by the Association in which the home is located. 3. DOES THE REAL ESTATE MARKET HAVE ANYTHING TO DO WITH THE PRICE OF MY HOME? The maximum sales price formula is based solely on the defined household income level and the affordable housing cost variables. The formula is not based on real estate market conditions. However, in the unusual event that the home's market value is less than the maximum allowable sales price, it is likely that a prospective home buyer will not be willing to purchase the home at a price that exceeds the market value. 4. HOW DID THE BUILDER SET THE PRICE OF MY HOME, AND THE OTHER HOMES IN MY COMMUNITY? Every new community built in Huntington Beach is required to go through a planning approval process, and it is during this process that the initial sales prices for the affordable homes are established. These prices are calculated prior to completion of the units so that builders can forecast sales revenues as well as construction costs, both of which are necessary for obtaining construction financing. While the City establishes the maximum allowable sales prices, some builders sell early phase units for less than the maximum allowable prices, and then they make adjustments for units in more desirable locations or with upgrades. The City reviews and approves all sales to ensure that prices do not exceed the maximum affordable price. However, developers have full discretion to set the prices at less than the defined maximum affordable sales price. 5. CAN MAXIMUM AFFORDABLE SALES PRICES DECREASE? The City's affordable housing costs formula allows prices to increase and decrease as the variables used in the calculations change. The affordable prices have increased in the past due to a combination of increases in the Orange County median incomes and decreases in mortgage interest rates. Home owners should understand, however, that program income limits can decrease, and interest rates can increase, which may lead to reductions in the affordable sales prices. Affordable Ownership Housing Program FAA's Page 2 1106035.HB August 15,2011 HB -679- Item 23. - 119 The City's intent is to establish maximum sales prices that are affordable to income- eligible buyers. If over time, the affordable housing costs increase for the targeted income group, the allowable sales price will increase. Similarly, if mortgage interest rates increase, and/or the Orange County median income decreases, the allowable sales price will decrease. 6. IS THERE A CAPON THE AMOUNT THAT THE MAXIMUM AFFORDABLE SALES PRICES CAN INCREASE OR DECREASE? There are no upper or lower limits on the maximum sales prices that will result from the City's affordable housing cost calculations. There have been periods of low mortgage interest rates, and significant increases in the Orange County median income, that have resulted in dramatically increasing affordable sales prices. It is similarly possible for the variables used in the affordable housing costs calculation formula to result in a reduction in the maximum affordable housing price. The City cannot predict whether the affordable sales price for a home will increase or decrease over time. 7. IF I WANT TO SELL MY HOME, AM I ALLOWED TO HAVE AN ARRANGEMENT WITH THE BUYER THAT IS SEPARATE FROM THE PURCHASE AGREEMENT? Buyer and Seller Declarations must be submitted to the City prior to the sale of each home that is subject to affordability covenants. These Declarations must state that the purchase agreement is the only agreement being entered into for the purpose of exchanging money or personal property. These Declarations must also state that the parties have not entered into, and will not enter into, any other agreements for the purpose of exchanging money or other personal property with a cost of more than $500. This means that any outside arrangement, for whatever purpose, is prohibited. For example, a home owner cannot have an agreement to sell furniture or other personal property to the home buyer for a total price of more than $500. The home owner equally cannot accept a cash payment for accepting a buyer's offer. Any such agreement,which is not fully disclosed in a purchase agreement, is prohibited and would trigger action by the City. 8. WHERE DOES IT SAY THAT THE CITY HAS THE RIGHT TO CONTROL THE SALE OF MY HOME? There is an affordable housing covenant recorded on the legal title of every home in the City's affordable ownership housing program. This document, which escrow provides to each home owner at the time of purchase, describes the resale price controls and other use restrictions required by the City. Additional copies of these covenants can be obtained from a title company or from the City for a nominal fee. Affordable Ownership Housing Program FAQ's Page 3 1106035.HB August 15,2011 Item 23. - 120 HB -680- S. WERE THE CITY'S AFFORDABLE HOME OWNERSHIP RESTRICTIONS DISCLOSED TO ME WHEN I BOUGHT MY HOME? The affordable Dousing restrictions were disclosed to every home owner on at least two occasions: at the time of application to the City and in escrow. Each home buyer's eligibility application includes several forms on which applicants acknowledge that their home must be owner occupied and that a future transfer of their home must be made at . an affordable price to an income-eligible buyer. In escrow, each buyer signed a deed of trust to the City securing these affordability restrictions. Separately, escrow provided each buyer a copy of the affordable housing covenants recorded on legal title to the property. More specific administrative guidelines used by City staff for handling routine transactions, such as procedures for reviewing home buyer eligibility applications, are clearly set forth in the Affordable Ownership Housing Regulations, are reviewed by the City Council as necessary, and are available for public review. 10. CAN I OPT OUT OF THE CITY'S AFFORDABLE HOME OWNERSHIP PROGRAM? The covenants recorded on legal title to each property establish a term for the affordable housing restrictions. The City will not release home owners from their obligations until the covenant term expires. 11.WHERE CAN I GET MORE INFORMATION ABOUT THE CITY'S AFFORDABLE HOME OWNERSHIP PROGRAM? Detailed information about the City's housing programs can be found at www.hbbiz.com or by calling the Program Administrator at (714) 536-5470. Affordable Ownership Housing Program FAQ's Page 4 1106035.HB August 15,2011 HB -681- Item 23. - 121 ATTACHMENT C HOME BUYER APPLICATION & DISCLOSURES Affordable Ownership Housing Regulations-Owner August 16,2011 1106036,HB Item 23. - 122 HB -682- CITY OF HUNTINGTON BEACH INCLUSIONARY HOUSING PROGRAM $ lty Hunt, Sexch „ HOMEBUYEnKffl"6' APPLI0%CATION PLEASE ALLOW UP TO 10 BUSINESS DAYS iiri .n+, Item 23. - 121 HOMEBUYER APPLICATION INSTRUCTIONS 1. Fill out the application completely for all adults and children who are anticipated to live in the home. Unrelated applicants must show at least one full year of joint residency. 2. Ail adult household members must have at least one-full year of verifiable income and Federal tax payment history in the United States at the time of application. Self-employed individuals must provide at least one continuous year of verifiable personal and business income. 3. Gross income(before taxes and deductions) must be disclosed for all household members. Income includes any money received from any source, such as wages, interest, dividends, distributions, annuities, pensions, child support, alimony, etc. 4. Changes in employment may not have occurred within four months of application (such as a job change, termination, or decrease in salary). 5. Adult household members with no income must be a spouse or dependent of the applicant. 6. Separated applicants (not yet divorced) must have verifiable evidence of at least one full year of complete financial and residential separation. 7. Applicants with joint custody of children must verify at least 50%custody rights for a child to be considered part of the household. 8. Applicants may not own other residential property, including mobile home property, unless such property will be sold prior to or in conjunction with the purchase of an affordable unit. 9. First time homebuyers are required to pay a minimum down payment of 5% of the purchase price. Homebuyers who have owned residential property within three years are required to pay a minimum down payment of 10%of the purchase price. 10. Gift funds(including loans from family or friends) may not exceed$15,000. Gift funds are included in calculation of household assets. 11. The total value of liquid assets owned by an applicant cannot exceed one-half of the purchase price of the affordable home(assets do not include pension or retirement funds). 12. Household income may not exceed the maximum income limit as stipulated for each Inclusionary Housing Program project(low, median, or moderate income). 13. Household income cannot be less than the minimum amount required to pay the cost of owning a home. This amount is equal to twice the annual homeownership cost, which includes mortgage, insurance, taxes, maintenance, and homeowner association dues. 14. Applicants must use conventional mortgage financing. Interest-only and stated-income loans are not allowed. 15. Applicant households must be compatible with the size of the unit to be purchased. No more than two persons per bedroom will be allowed. 16, Applicants must certify that they will reside in the affordable unit as their primary residence. 17. Applicants must have the right to permanently reside in the United States. 18. The City of Huntington Beach reserves the right to request any documents and/or information needed to verify program eligibility. It is the applicant's responsibility to demonstrate eligibility to purchase an Inclusionary Housing Program home. Applicants unable to provide satisfactory evidence of income, assets, or other qualifying criteria will not be considered. Item 23. - 124 HB -684- FOB CITY OF HUNTINGTON BEACH INCLUSIONARY HOUSING PROGRAM HOMEBUYER ELIGIBILITY APPLICATION This application must be completed, attached with all applicable required documents, signed by all applicants and submitted to the Housing Division. Applicants should complete this form as "Applicant" or"Co-applicant" as applicable. Co-applicant information must be provided for all adult household members and/or individuals to be designated on the property title. In such cases, Co-Applicant income and credit history will be used as a basis for eligibility qualification. a s ®o ® ®® Address of Property to Fe r'urchased Project/Neighborhood Name Name of Applicant Name of Co-Applicant Marital Status Date of Birth Marital Status Date of Birth Social Security# Driver License# Social Security# Driver license# Employment Status #Years at Current Address Employment Status #Years at Current Address Current Address —Own —Rent Current Address _Own _Rent Home/Work/Cell PhonelFAX# Email Address Home/Work I Cell Phone/FAX# Email Address If residing at current address for less than two years,complete the following: Prior Address Own —Rent Prior Address _Own —Rent List all additional adults and children anticipated to live in the home. Use additional pages if necessary. Name Date of Birth Social Security# Relationship to Applicant Current Address(if different than applicant's) Employment Status(if adult) Name Date of Birth Social Security# Relationship to Applicant 2 Current Address(if different than applicant's) Employment Status(if adult) HB -685- Item 23. - 125 Name Date of Birth Social Security# Reiationship to Applicant 3 Current Address(if different than applicant's) Employment Status(if adult) Name Date of Birth Social Security# Relationship to Applicant a Current Address(if different than applicant's) Employment Status(if adult) List full names of all persons that will appear on the title of the home: Name Relationship i 2 ® ® ® i List gross monthly income(before taxes and deductions)from all sources for all adult household members expected to live in the home. Consider the following as income:any money regularly received from any source. Use additional pages If necessary. Name Name Name Employer Name Address Phone Position/Title Number of Years at this.fob Base Employment Income Overtime J Bonuses! Commissions Dividends I Interest from Investments Pension/Social Security Child Support/Alimony Other(please describe) Total Monthly Income(add the Monthly Income Subtotal for all adult household members) Total Annual Household Income(Total Monthly Income x 12) Item 23. - 126 HB -686- Minimum Monthly Income Calculation Maximum Income(2011 Income Limits) Add the following monthly Housing costs(from loan application,reactor,or Household Income cannot exceed the limit below for the appropriate mortgage lenderlbroker): income level and household size: Mortgage Payment Low Median Moderate Household Income Income Income Property Tax Payment Size Limit Limit Limit Homeowner Association Dues 1 $51,700 $59,950 $70,750 Other Housing Costs 256(3•bdrm) 2 $59,10Q $67,350 $80,850 (insurance,maintenance,utilities) 3 $66,600 $75,800 $90,950 4 $73,850 $84,200 $101,050 TOTAL 5 $79,800 $90,950 $109,150 Total month-)-housing month-ly-housing costs cannot exceed 112 of mo,household income HOUSE ® D List checking,savings,and other investment accounts below for all adult household members. Use Addition pages If necessary. Name and Address of Bank,S&L,Credit Union,Other Name and Address of Bank,S&L,Credit Union,Other Account# Account Type Account# Account Type Name(s)on Account Balance Name(s)on Account Balance Name and Address of Bank,S&L,Credit Union,Other Name and Address of Bank,S&L,Credit Union,Other Account# Account Type Account# Account Type Name(s)on Account Balance Name(s)on Account Balance Name and Address of Bank,S&L,Credit Union, Other Name and Address of Bank,S&L,Credit Union,Other Account# Account Type Account# Account Type Name(s)on Account Balance Names)on Account Balance Real Estate Owned Address /Market Value of Property Outstanding MortgageslLiens / Owner Eouity Cash Value of Retirement Accounts&Pension Funds Cash Value of Other Assets Total Value of Assets(Including Real Estate Equity) HB -687- Item 23. - 127 ® ! i L1ABJLjjT1.F, List outstanding liabilities for all adult household members.Including auto loans,revolving charge accounts,real estate loans,alimony,child support,etc. Use additional pages if necessary. Name and Address of Creditor Name and Address of Creditor Account# Monthly Payment Account# Monthly Payment Name(s)on Acct. Unpaid Balance Name(s)on Acct. Unpaid Balance Name and Address of Creditor Name and Address of Creditor Account# Monthly Payment Account# Monthly Payment Name(s)on Acct. Unpaid Balance Name(s)on Acct. Unpaid Balance Name and Address of Creditor Name and Address of Creditor Account# Monthly Payment Account# Monthly Payment Name(s)on Acct_ Unpaid Balance Name(s)on Acet. Unpaid Balance Total Balance of Liabilities(add the Unpaid Balances of all Liabilities) ® e e i 0o Name of Real Estate Agent Agent's Company Name&Address Telephone&Fax Name of Mortgage Lender/Broker Agent Lender/Broker Company Name&Address Telephone&Fax TOTAL Purchase Price of Property(including all Mortgage Amount(s) Mortgage Terms associated costs) 3l. Initials(see note below) 2"d: Note:All adult household members must initial next to the Total Purchase Price of Property above,acknowledging that the price of the property Is restricted under the City of Huntington Beach Affordable Housing Program. By initialing this price,you indicate your understanding and agreement that no payment will be made separate from this price and/or separate from the attached Residential Purchase Agreement by you or by anyone on your behalf. Item 23. - 128 HB -688- ® D b fl ° D61F ° y a List all funds intended to be used from bank accounts,Certificates of Deposit,mutual funds,and other sources for meeting down payment and closing costs needs: Source of Funds Amount to be Used for Down Payment 1 2 3 o AVE109V lWiPRRAD'ON Does any household member have any ownership interest in Real Estate? ❑Yes ❑No If yes,provide list of properties owned. Will the Inclusionary Housing Program Unit be your permanent residence? ❑Yes p No If no,attach explanation. Do all household members have the right to permanently reside in the US? ❑Yes ❑No If no,attach explanation. Have any household members terminated employment in past 4 months? ❑Yes p No if yes,attach explanation. ° 41 RED �b 1. Copy of California driver license or identification for all adult household members;copy of birth certificate for all dependents. 2 Copy of Residential Purchase Agreement and Real Estate Transfer Disclosure Statement(with City-required affordable housing program disclosure language)signed by both the buyer and seller(required language on page 11). 3. Completed and signed City forms:(a)Certificate of Purchaser,(b)Special Disclosure,and(c)Background and Financial Investigation Authorization. Copy of complete loan packet from mortgage tender{stated income and interest only loans are not allowed). The loan packet must include the fully 4. completed,typed and signed application,loan underwriting analysis,Truth-In-Lending Disclosure,income and asset verification,and conditions for final loan approval. 5 Copy of 3 most recent months of checking,savings,and other investment account statements for all adult household members. If self-employed, 12 months of personal and business account statements are required, Account statements must demonstrate sufficient funds for down payment. 6 Copy of 3 most recent months of pay stubs. Pay stubs must clearly identify business name,employee name,salary rate,hours worked,pay period,gross income,and year to date income. 7 Signed copies of 2 most recent years of federal tax returns(with all schedules and attachments),including W2s&1099s for all adult household members;If self employed,include 4 most recent quarterly tax filings. 8. if applicable:copy of divorce decree evidencing dissolution of marriage,child custody,child support,and/or alimony. 9. If applicable:copy of pension statement,Social Security verification,welfare verification,or other income verification. 10. If applicable,school registration documents for adult,full-time student household members. 11. if applicable,evidence of sale of real estate. Sale of any residential real estate must be completed before final approval can be given for purchase of Inclusionary Housing Program unit. CERTIFICATION: Me certify that the information provided in this Incluslonary Housing Program Eligibility Application is true and correct as of the date set forth opposite my/our signature(s) and acknowledge my/our understanding that any intentional or negligent misrepresentation(s)of the Information contained in this application may result in civil liability and/or criminal penalties including, but not limited to fine or imprisonment or both and liability for monetary damages to the City, its agents, insurers, and any other person who may suffer any loss due to reliance upon any misrepresentation which I/we have made on this application. Applicant's Signature Date Co-Applicant's Signature pate X Please (Vote: Before submitting your application to the City, check carefully to make sure you have neatly and completely filled out the application and attached all required documents. Illegible or incomplete applications will not be accepted. HB -689- Item 23. - 129 CITY OF HUNTINGTON BEACH INCLUSIONARY HOUSING PROGRAM BACKGROUND & FINANCIAL INVESTIGATION AUTHORIZATION THIS FORM MUST BE SIGNED BY ALL ADULT HOUSEHOLD MEMBERS By signing below,you provide irrevocable consent to the City of Huntington Beach for a background investigation and review of your financial affairs,budget, outstanding accounts,obligations,and debt. You understand that information obtained by the City may be governed by the Fair Credit Reporting Act(15 USC 181 ET Seq.)as it may be amended from time to time. Credit information will be obtained for affordable housing program eligibility review purposes only,and not for credit granting purposes or credit repair. All adult household members must sign this consent,attesting that you are the true and correct individual described below. Use additional pages if necessary. Full Legal Name(First,Middle,Last) Other names used in last 7 years Date of Birth Social Security# Current Address Prior addresses in last 7 years Signature Date Full Legal Name(First, Middle,Last) Other names used in last 7 years Date of Birth Social Security# Current Address Prior addresses in last 7 years Signature Date Item 23. - 130 HB -690- oo� wa CITY OF HUNTINGTON BEACH El M1NCLUSIONARY HOUSING PROGRAM e CERTIFICATE OF PURCHASER Applicant(s) Property Address The undersigned ("Applicant/Purchaser") hereby certify(ies) the following: 1. Purchaser is buying the residence ("Home" or the "Property) shown above with the intent to occupy the Home as the Purchaser's primary residence, and with the understanding that the Home cannot be rented or leased. 2. The purchase price of the Home is $ 3. Purchaser's combined household gross annual income from all sources is 4. The number of persons that will occupy the Home is 5. Purchaser has read the Special Disclosure form attached hereto and understands the information contained therein. 6. Purchaser acknowledges and understands that a Declaration of Conditions, Covenants, and Restrictions for Property ("Resale Restrictions") is recorded on the Property and that the restrictions contained therein, including restrictions relating to the transfer and use of the Property, will remain on the Property and be applicable to any future resale of the Property so long as the Declaration of Conditions, Covenants, and Restrictions for Property ("Resale Restrictions") remain in effect. Purchaser acknowledges that this certificate is being provided to the Economic Development Department of the City of Huntington Beach ("the City"), and that the City may rely on the statements made herein. All persons taking title to the Home must sign this certificate. Applicant Co-Applicant Signature: Signature: _ Print Name: Print Name: Date: Date: xB -691- Item 23. - 131 F J CITY OF HUNTINGTON BEACH INCLUSIONARY HOUSING PROGRAM SPECIAL DISCLOSURE Applicant(s) Property Address The undersigned ("Applicant/Purchaser") who is buying the residence ("Home" or"Property") shown above, acknowledge(s) and understand(s) that a Declaration of Conditions, Covenants, and Restrictions for Property ("Resale Restrictions") is recorded on the Property and that the restrictions contained therein relate to the transfer and use of the Property. The undersigned specifically acknowledge(s) the following restrictions (all persons taking title to the home must initial each item below): The Property must be the only residence of the owner. The Property may not be rented or leased to any individual or household, this includes renting or leasing to family members of the owner. Additional debt secured by the property or refinancing existing debt on the property must be approved in advance by the City. The City may establish limits on the amount of debt that may be secured by the Property. Subsequent sales of the property will be subject to affordability restrictions, requiring the property to be sold at an affordable price to an income-eligible buyer. Future maximum affordable sales prices of the property will be determined by the City and may be less than the fair market value of the home. Ownership of the property may not be amended or transferred without prior approval by the City. Subsequent owners of the property must be income-eligible, and transfers must be made at an affordable sales price. The owner may not discriminate against potential subsequent buyers based on their race, color, religion, sex, marital status, sexual orientation, national origin, or ancestry. The undersigned has taken the requirements included in the Declaration of Conditions, Covenants, and Restrictions for Property ("Resale Restrictions"), as partially described in this Special Disclosure, into account prior to determining to purchase the Property. All persons taking title to the Home must sign this Disclosure. Applicant Co-Applicant Signature: Signature: Print blame: Print Name: Date: Date: Item 23. - 132 xB -692- Real Estate Transfer Disclosure Statement Auage The following language must be inserted exactly as written below into the Real Estate Transfer Disclosure Statement signed by both the seller and the buyer and attached to the Residential Purchase Agreement. The Subject Property is an affordable housing unit in the City of Huntington Beach's Inclusionary Housing Program. The City of Huntington Beach has established a Maximum Price for this unit, and the Purchase Price in the Residential Purchase Agreement, does not exceed this amount. All consideration for the purchase of the Subject Property has been fully disclosed and described in the Residential Purchase Agreement, which will be submitted to the City of Huntington Beach for approval. Buyer and Seller acknowledge that there may be no agreement separate from the Residential Purchase Agreement between Buyer and Seller or any other parties related in any manner to the purchase of the Subject Property, which would include payment for personal property, upgrades to the Subject Property, gifts, or other arrangements that might circumvent the Maximum Price established by the City. xB -693- Item 23. - 133 ATTACHMENT HOUSEHOLD INCOME CHART Affordable Ownership Housing Regulations-Owner August 16,2011 1106036.HB Item 23. - 134 HB -694- CITY OF HUNTINGTON BEACH AFFORDABILITY CRITERIA To Be Updated Annually By the City Based on Orange County HUD/HCD Income Limits The incomes listed below will be used to qualify your Moderate, Low and Very-Low Income potential buyers or renters: MAXIMUM INCOMES -2011 No of Persons/ Moderate Median Low Very Low No. of Bdrms Income Income Income Income 1 person/studio $70,050 $58,900 $61,700 $32,350 2 person/1 Bdrm $80,850 $67,350 $69,100 $36,950 3 person/2 Bdrm $90,950 $76,800 $66,500 $411550 4 person/3 Bdrm $101,050 $84,200 $73,850 $46,150 5 person/4 Bdrm $109,150 $90,950 $79,800 $49,850 6 person/5 Bdrm $117,200 $97,650 $85,700 $53,550 7 person/6 Bdrm $126,300 $104,400 $91,600 $57,250 8 person/7 Bdrm $133,400 $111,150 $97,500 $60,950 The table below will be used to determine the rent of an affordable rental unit: INCLUSIONARY MONTHLY RENTS - 2011 No. of Persons/ No. of Bdrms Moderate Income Low Income Very-Low Income 1 person/studio $1,621 $884 $737 2 person/1 Bdrm $1,852 $1,010 $842 3 person/2 Bdrm $2,085 $1,137 $948 4 person/3 Bdrm $2,316 $1,263 $1,053 5 person/4 Bdrm $2,501 $1,364 $1,137 6 person/5 Bdrm $2,685 $1,465 $1,221 7 person/6 Bdrm $2,871 $1,566 $1,305 8 person/7 Bdrm $3,057 $1,667 $1,389 Note:Affordable Rents are calculated based on requirements imposed by California Health&Safety Code Section 50053. These Affordable Rents do not Included utilities and are considered"gross"rents. Utility allowances can be obtained from the City of Huntington Beach,Economic Development Department. These are NOT"fair market rents"as defined by HUD. Gross rents cannot exceed these amounts and still be considered affordable under most City programs. HB -695- Item 23. - 135 ATTACHMENT E UTILITY ALLOWANCE Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Item 23. - 136 xB -696- CITY OF HUNTINGTON BEACH UTILITY ALLOWANCE SCHEDULE Effective Date: October 1, 2010 To Be Updated Annually By the City Based on Orange County Utility Allowance Schedule Bedrooms 0 1 2 3 4 5+ GAS Cooking $2 $5 $5 $8 $10 $13 Heating $10 $12 $15 $22 $27 $28 Water Heater $5 $6 $7 $12 $15 $17 ELECTRIC Basic $11 $16 $20 $34 $34 $34 Cooking $4 $7 $8 $11 $15 $17 Heating $9 $13 $17 $22 $28 $32 Water Heater $13 $18 $23 $31 $32 $32 Water $16 $19 $23 $32 $28 $43 Trash &Sewer $23 Refrigerator $9 Stove $7 Mobile Home $62 File Name:Attachment-Utility Allowance.xis,2010 HB -697- Item 23. - 137 ATTACHMENT F AFFORDABLE SALES PRICE CALCULATION Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Item 23. - 138 xs -698- o City of Huntington Beach Economic Development Department, Housing Division • 2000 Main Street, 5th Floor • Huntington Beach, California 92648 (714)536-5470 REQUEST FOR MAXIMUM AFFORDABLE SALES PRICE INCLUSIONARY HOUSING PROGRAM Homeowners are entitled to one complimentary Affordable Sales Price Calculation per calendar year, no more frequently than once every three months. The price given will be valid for three months and will not be recalculated within this time. Should the price expire, and the homeowner wish to submit a new request, the City will charge a$50 application fee. Completed applications (and fee payment, if applicable)should be submitted to the Housing Division. The property owner(s)and the owner's Realtor will receive a written response within 10 business days. Owner(s)Name Name of Neighborhood/Affordability Level(circle one) Ash St.Condos(Median Income) Brisas del Mar(Low Income I Moderate Income) Owner's Daytime Phone Number&FAX Number Cape Ann(Moderate Income) Greystone Keys(Moderate Income) Pacific Park Villas(Low Income I Moderate Income) Property Address Promenade(Moderate income) Tides(Moderate Income) Other Number of Bedrooms Mailing Address,If Different Date of anticipated sale Name/Address]Phone of Management Company The City maintains a list of affordable homes for sale in print and on the Total Amount of Homeowner Association Dues web. Would you like your property added to this list? Yes t No Name of Real Estate Agent Real Estate Agent's phone&FAX numbers Real Estate Agent's Company Name&Address Real Estate Agent's Email CERTIFICATION: I/We certify that the information provided in this sales price determination request is true and correct as of the date set forth opposite my/our signature(s) on this request and acknowledge mylour understanding that any intentional or negligent misrepresentation(s)of the information contained in this request may result in civil liability and/or criminal penalties including, but not limited to fine or imprisonment or both and liability for monetary damages to the City, its agents, insurers, and any other person who may suffer any loss due to reliance upon any misrepresentation which I/we have made on this request. Homeowner's Signature Date Co-Owner's Signature Date X X For City Use Only MAXIMUM SALES PRICE: THIS PRICE WILL BE VALID UNTIL(90 DAYS FROM REQUEST): PREPARED BY: DATE xB -699- Item 23. - 139 AFFORDABLE HOUSING RESALE INSTRUCTIONS 1 Obtain the maximum affordable sales price for your home from the City by submitting to the Housing Division a Request for Maximum Affordable Sales Price. The price formula and sample calculations can be viewed at http://www.huntingtonbeachca.govlgovernment/departments/ED/housinq/home ownership.cfm. Be sure to indicate on your application if you would like your property added to the City's list of affordable homes for sale. Please note that this price will be valid for three months and cannot be recalculated during this period. if the price expires and the home is not sold, you must submit a new request to obtain the current maximum affordable sales price for your home, together with the City's $50 application fee. 2 Detailed information about the lnclusionary Housing Program, including current income limits and eligibility requirements, can be found at http://www.huntingtonbeachca.goy/government/departments/EDIhousing/home ownership.cfm. 3 Select a buyer you believe meets the lnclusionary Housing Program eligibility requirements. 4 Execute a Residential Purchase Agreement with one buyer. Make sure the purchase amount does not exceed your home's maximum Affordable Sales Price. The purchase agreement should include a clause that requires the purchaser to obtain City approval; permanent fixtures in the property may not be excluded from the sale; escrow, title, commissions, and other costs must be paid by the party that normally pays such costs; and any agreements separate from the purchase agreement (for the sale of personal property, for example) are prohibited. 5 Execute a Real Estate Transfer Disclosure Statement with the following language: The Subject Property is an affordable housing unit in the City of Huntington Beach's lnclusionary Housing Program. The City of Huntington Beach has established a Maximum Price for this unit, and the Purchase Price in the Residential Purchase Agreement, does not exceed this amount. All consideration for the purchase of the Subject Property has been fully disclosed and described in the Residential Purchase Agreement, which will be submitted to the City of Huntington Beach for approval. Buyer and Seller acknowledge that there may be no agreement separate from the Residential Purchase Agreement between Buyer and Seller or any other parties related in any manner to the purchase of the Subject Property, which would include payment for personal property, upgrades to the Subject Property, gifts, or other arrangements that might circumvent the Maximum Price established by the City. 6 Instruct the buyer to submit to the Housing Division a completed Homebuyer Eligibility Application with all required attachments. Applications are available at http://www.huntingtonbeachca.aovlgovernment/departments/ED/housing/home ownership.cfm. The City will accept only one application at a time per unit, and the application must include a Residential Purchase Agreement signed by both the Buyer and Seller. 7 Homebuyer applications will be reviewed by the City within 10 business days. 8 If the City requires additional information or documentation from the applicant, notices will be faxed to the Buyer's and Seller's Realtors. 9 Upon City approval of the Buyer, a Notice of Approval will be mailed to the Buyer and Seller, and a copy will be faxed to the Buyer's and Seller's Realtors. This Notice of Approval will include instructions for your Escrow Company. 10 Upon receipt of information and documents from Escrow, the City will prepare additional documents for the Buyer and Seller to sign in Escrow. Item 23. - 140 HB -700- CITY OF HUNTINGTON BEACH Affordable Housing Program 2011 Illustrative Sales Prices '1-Bedroorvi 2-Beditooms 3-Bedroor>ras 4-�ediro®ms ` Low-Incom Income Basis (80% of Median) ' $ 59,100 $66,500 $ 73,850 $79,850 Income for Housing (35%) 20,685 23,275 25,848 27,930 (Less) Ongoing Expenses 2 8,569 9,097 9,885 10,374 Income Available for Mortgage 12,116 14,178 15,962 17.556 Maximum Price 3 $208,981 $244,545 $275,318 $302,806 (Median-Incorn Income Basis' $ 67,350 $ 78,500 $ 84,200 $ 90,950 Income for Housing (35%) 23,573 26,530 29,470 31,833 (Less) Ongoing Expenses 2 8,618 9,204 10,050 10,582 Income Available for Mortgage 14,955 17,326 19,420 21,250 Maximum Price 3 $257,943 $298,851 $334,968 $366,527 Moderate-Incom Income Basis (120% of Median) 1 $ 80,850 $ 90,950 $ 101,050 $ 109,150 Income for Housing (35%) 29,298 31,833 35,368 38,203 (Less) Ongoing Expenses z 8 156 8,832 9,772 10,379 Income Available for Mortgage 20,141 23,000 25,596 27,823 Maximum Price 3 $347,407 $396,711 $441,479 $479,908 1. The Income Basis for calculating affordable home prices equals the income limit for a family size equal to the number of bedrooms,plus one. (For example,the price for a three-bedroom home uses the income limit for a four-person household). N W 2, Ongoing Expenses include HOA dues,homeowner's insurance, utilities,interior property maintenance and property taxes. 3. Assumes 30-year mortgage term,5.00%interest rate, and 10%down payment(actual Fannie Mae 30-year mortgage rate published on www,thefiinancials.com,FNMA 30y fxd yld 90d, �-' Tuesday through Friday) -P ATTACHMENT C ANNUAL CERTIFICATION FORM Affordable Ownership Housing Regulations-Owner August 15,2011 1106036.HB Item 23. - 142 xB -702- CITY OF HUNTINGTON BEACH " INCLUSIONARY HOUSING PROGRAM HOMEOWNER CERTIFICATION FORM Date: Unit Address: Project Name: Owner Name: CERTIFICATION INVe, the undersigned specifically acknowledge and understand that the Property I/we own is subject to certain affordability restrictions. I understand that these restrictions prohibit renting or leasing of the Property, and I/we hereby certify that the Property is my/our primary residence and is not rented or leased. INVe acknowledge my/our understanding that any intentional or negligent mis- representation in this certification may result in civil liability and/or criminal penalties including, but not limited to, fine or imprisonment or both, and liability for monetary damages under the provisions of Title 18, United States Code, Section 1001, et seq. Owner Co-Owner (N/A) Signature: Signature: Print Name: Print Name: Date: Date: Telephone: Telephone: xB -703- Item 23. - 143 ATTAC H M E N T #3 Item 23. - 146 ilia - .w- A►ff-0-rl tI H ou li r� S�y ab S . At s The City of Huntington Beach and the Huntington Beach Redevelopment Agency August 15, 2011 HB -705- Item 23. - 145 TABLE OF CONTENTS I. INTRODUCTION .....................................................................................................1 A. Affordable Rental Housing Programs ................................................... .. 1 .............. B. Purpose of Affordable Rental Housing Regulations..............................................3 If. DEFINITIONS OF TERMS.......................................................................................4 Ill. PROGRAM ADMINISTRATION ..............................................................................8 A. General ................................................................................................................ B. Fair Housing Policy ..............................................................................................8 C. Privacy Rights................................................................................................ D. City Includes Redevelopment Agency ..................................................................9 E. Authorization........................................................................................................9 F. Affordable Rental Housing Regulations................................................................9 1V. DETERMINATION OF TENANT ELIGIBILITY AND AFFORDABLE RENT..........10 A. General Policy.................................................................................................... 10 B. Applicant Eligibility Criteria ................................................................................. 10 C. Income Eligibility Criteria.................................................................................... 11 D. Affordable Rent Calculations.............................................................................. 11 V. COMPLAINTS AND APPEALS.............................................................................13 Vl. MONITORING AND ENFORCEMENT..................................................................14 A. General Policy....................................................................................................14 B. Program Audits................................................................................................... 14 C. Program Abuse and Fraud Protections...............................................................14 Item 23. - 146 xB -706- ATTACHMENTS Attachment A Inclusionary Housing Ordinance (Ordinance No. Attachment B Developer's Introduction to the City of Huntington Beach Affordable Rental Housing Program Attachment C Inclusionary Housing Plan Attachment D Inclusionary In-Lieu Fee Schedule Attachment E Household Income Chart Attachment F Utility Allowances Attachment G Annual Tenant Recertification Form (Sample) Attachment H Annual Rental Housing Compliance Report (Sample) xB -707- Item 23. - 147 I. INTRODUCTION A. Affordable Rental Housing Programs Inclusionary Housing Program The Inclusionary Ordinance requires at least 10% of all new housing construction of three or more units to be affordable for Very Low, Low, or Moderate-Income Households. This requirement is increased to 15% for projects located within a redevelopment project area. Developers are typically required to meet their Affordable Rental Units obligation within the market rate residential development. With approval from the City, a portion of Affordable Rental Units may be provided at alternative locations. Developers may designate newly constructed units as affordable to meet their requirement, or they may substantially rehabilitate' existing housing units and designate them as affordable. In- lieu fees can be paid by right for projects with between three and 30 units, and for fractional unit obligations, as set forth in the Inclusionary Ordinance. Housing Density Bonus Program California Government Code Section 65915 provides for density bonuses to affordable housing projects. State law currently offers a density bonus to developments that impose specified income and affordability covenants over at least a 30-year term. However, California Government Code Section 65915 allows cities to extend the income and affordability term if an inclusionary housing ordinance has been adopted by the city. The City's density bonus ordinance exercises this option. Projects that are 100% restricted to senior citizens are entitled to receive a flat 20% density bonus. Comparatively, the allowable density bonus for income restricted projects increases as the percentage of affordable units provided in the project increases. The maximum density bonus allowed for rental projects under the State Density Bonus is 35%. The applicable sliding scales are: ' Based on the California Health &Safety Code Section 33413(2)(A)(iv)definition of substantial rehabilitation. The developer must demonstrate that the unit is not available at Affordable Rent. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 1 Item 23. - 148 HB -708- Very-Low Income Low Income % Density % Density Affordable Bonus Affordable Bonus 5% 20.0% 10% 20.0% 6% 22.5% 11% 21.5% 7% 25.0% 12% 23.0% 8% 27.5% 13% 24.5% 9% 30.0% 14% 26.0% 10% 32.6% 15% 27.5% 11% 35.0% 16% 29.0% 17% 30.5% 18% 32.0% 19% 33.5% 20% 35.0% Redevelopment Housing Program Housing Set-Aside and lnclusionary Housing H&SC Section 33334.2 stipulates that not less than 20% of all property tax increment revenue allocated to the Agency be used to increase, improve, and preserve the community's supply of low and moderate income housing, at an affordable price, to persons and families of Very-Low, Low, and Moderate incomes. Further, H&SC Section 33413(b) imposes inclusionary housing production requirements on the following development activity within redevelopment project areas: 1. All newly developed residential units; and 2. Any substantially rehabilitated units that received Agency assistance. The Agency is required to ensure that at least 15% of all the residential development and applicable substantial rehabilitation within the redevelopment project areas is set- aside for Low and Moderate Income Households. of this total, at least 40% of the units must be allocated to Very-Low Income Households. The units used to fulfill the production obligation must be subject to long-term income and affordability covenants; the covenants for Rental units must run for at least 55-years. The inclusionary housing production obligations are applicable on an aggregate basis; the obligation is not required to be fulfilled in each individual development. If the appropriate findings are made at a public hearing, the obligation can be aggregated Affordable Rental Housing Regulations August 15,2011 110603THS Page 2 HB -709- Item 23. - 149 among all of the City's redevelopment project areas. The obligation may also be fulfilled outside of a redevelopment project area; however, then the credit is limited to .5 units per unit produced. B. Purpose of Affordable Rental Housing Regulations The primary objective of the Affordable Rental Housing Program is to provide affordable housing to residents who would otherwise have difficulty renting a home in Huntington Beach. Persons interested in renting an Affordable Rental Unit through the City's Affordable Rental Housing Program, must comply with household eligibility requirements imposed by the City. It must be noted that the various Affordable Rental Housing programs offered by the City may have differing eligibility and continuing tenant recertification requirements. The principal mechanism the City uses to establish restrictions on Affordable Rental Units are the CC&Rs, Deeds of Trust, and other governing documents recorded against the rental project. While the individual terms of these agreements are controlling, these Affordable Rental Housing Regulations address the following: 1. The eligibility criteria to be imposed on prospective tenants; 2. The methodology for setting the maximum rental rate; 3. The circumstances under which the Affordability Covenants will be subordinated to the deed of trust held by a mortgage lender; 4. The complaints and appeals process available to program participants; and 5. The monitoring and enforcement activities that will be undertaken by the City. In the event there is an irreconcilable conflict between the City's Deed of Trust and the Affordable Rental Housing Regulations or the CC&Rs, the City's Deed of Trust will control. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 3 Item 23. - 150 xB -710- II. DEFINITIONS OF TERMS "Affordability Covenants" shall mean the CC&Rs restricting the rental rate standards that will be applied to the Unit, and limiting the maximum income of the household occupying the unit. "Affordable Housing Administrator" has the day-to-day authority for making determinations related to these Affordable Rental Housing Regulations. The Affordable Housing Administrator will be appointed by the Program Director. "Affordable Rental Housing Program" shall include rental units developed under the Inclusionary Housing Program, using the California Density Bonus Law, or developed with Agency financial assistance. "Affordable Rent" shall mean the maximum rent for an Affordable Rental Unit, as calculated according to the formula described in these Affordable Rental Housing Regulations. The formula is based on the requirements imposed by H&SC Section 50053. "Affordable Rental Unit" shall mean a rental unit in Huntington Beach that is made affordable by covenants or conditions restricting occupancy and rental rate charged as described in these Affordable Rental Housing Regulations. "Affordability Period" shall be defined for each Affordable Rental Unit in the Affordability Covenants recorded on legal title to the property. "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach. "Agency Loan" shall mean a loan or any other form of financial assistance provided by the Agency to Affordable Rental Units. "CC&Rs" shall the Covenants, Conditions and Restrictions executed by the City and the developer of Affordable Rental Units.. "City" shall mean the City of Huntington Beach, California. "City Council"shall mean the City Council of the City of Huntington Beach. "City Manager" is the City Manager of the City of Huntington Beach. The City Manager has the ultimate authority to evaluate appeals submitted in relation to these Affordable Rental Housing Regulations. "County" shall mean the County of Orange. Affordable Rental Housing Regulations August 15,2011 1106037,HB Page 4 HB -711- Item 23. - 151 "County Median Income" shall mean the Median Income adjusted by actual household size as published annually by HCD for the County. "Eligible Tenant"shall mean a tenant who meets the eligibility criteria set forth in these Affordable Rental Housing Regulations. "Gross Income"shall mean all income from whatever source from all adult household members derived as provided in the Internal Revenue Code (26 USC Section 61), whether or not exempt from Federal income tax. Such income includes, but is not limited to, the following: 1. Wages and salaries including overtime pay 2. Compensation for services, including fees, commissions, tips and bonuses 3. Net income derived from business 4. Gains derived from dealings in property 5. Interest 6. Rents 7. Royalties 8. Dividends 9. Alimony 10. Child Support 11. Annuities 12. Income from life insurance and endowment contracts 13. Pensions 14. Income from discharge of indebtedness 15. Distribution share of partnership gross income 16. Income in respect of a decedent 17. Income from an interest in an estate or trust 18. Public benefits including but not limited to AFDC, SSI, disability income 19. When a household has net family assets in excess of$5,000, income shall include the actual amount of income, if any, derived from all of the household assets or 10 percent of the value of such assets, whichever is greater. "Housing Cost" shall mean rent, plus interior utilities costs, plus any mandatory charges the Property Owner assesses to the tenant calculated for a 12-month period: "HCD" means the California Housing and Community Development Department. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 5 Item 23. - 152 HB -712- "H&SC" shall mean the California Health and Safety Code. "HUD" shall mean the United States Department of Housing and Urban Development. "Inclusionary Ordinance" shall mean the Inclusionary Housing Ordinance adopted by the City. The Inclusionary Ordinance is currently found in (Section 230.26 of the City Zoning Code. "Inclusionary Housing Program" shall mean the City's program to implement the Inclusionary Ordinance. "Low Income" refers to households whose incomes meet the standards defined by the H&SC Section 50079.5. Generally Low Income means household income that does not exceed 80% of the County Median Income, as adjusted for household size. However, the maximum household income amount for Low Income households shall be set at the amount published by HCD annually. Low Income is sometimes also referred to as Lower Income. "Low Income Household" or"Lower Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Low Income. "Median Income" is calculated by HCD using non-aggregated census income data and applying trending factors for metropolitan statistical areas (MSA) throughout the country. The MSA for Huntington Beach is Orange County. "Median Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Median Income. "Moderate Income" refers to households whose incomes meet the standards defined by the H&SC Section 50093. Generally, Moderate Income means household income that does not exceed 120% of the County-Median Income, as adjusted for household size. The maximum household income amount for Moderate Income households shall be set at the amount published by HCD annually. "Moderate Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Moderate Income. "Program Director" has the ultimate authority to evaluate appeals submitted to the terms of these Affordable Rental Housing Regulations, The Program Director will be appointed by the City Manager. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 6 HB -713- Item 23. - 153 "Property Owner" shall mean the owner of the project that includes Affordable Rental Units. "Very-Low Income" refers to households whose incomes meet the standards defined by the H&SC Section 50105. Generally Very-Low Income means household income that does not exceed 50% of the County Median Income, as adjusted for household size. The maximum household income amount for Very-Low Income households shall be set at the amount published by HCD annually. "Very-Low Income Household" shall mean individuals or households who have an adjusted gross income that does not exceed Very-Low Income. Affordable Rental Housing Regulations August 15.2011 1106037.HB Page 7 Item 23. - 154 HB -714- III. PROGRAM ADMINISTRATION A. General The City defines the requirements that are imposed by the Affordable Rental Housing Program. The Affordable Housing Administrator oversees the Affordable Units upon their completion, which includes calculating Affordable Rent, determining tenant eligibility, and monitoring program compliance on an ongoing basis. B. Fair Housing Policy Property Owners must comply fully with all Federal, State, and local non-discrimination laws. Specifically, Property Owners shall not discriminate on account of race, color, sex, religion, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, or deny any family or individual the opportunity to apply for or participate in the Affordable Rental Housing Program. C. Privacy Rights All eligibility applications are held in strict confidence and are not considered public records (H&SC Section 34332). Requests for the City to release information involving an applicant or participant must be accompanied by a written release request from the applicant or participant and/or a court order, unless disclosure is authorized under Federal or State law. H&SC Section 33334.3 requires redevelopment agencies to compile, maintain and make available to the public on the internet, a database of existing new and substantially rehabilitated units that are subject to income and affordability covenants. The on-line database will be updated annually and will include the following information: 1. The address and parcel number of the income restricted property. 2. The number of units and the number of bedrooms. 3. The year of construction completion. 4. The date when the affordability covenant or restriction was recorded. 5. The document number of the recording. 6. The expiration date of the covenant or restriction. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 8 xB -715- Item 23. - 155 D. City Includes Redevelopment Agency These Affordable Rental Housing Regulations shall apply equally to all affordable rental programs administered by the City and the Agency. As used in these Regulations, the word 'City' means and includes the 'Agency'. E. Authorization The Affordable Housing Administrator and/or a designee are authorized to sign all documents requiring approvals related to the development, waivers, subordinations, and any non-substantial changes to these Affordable Rental Housing Regulations. F. Affordable Rental Housing Regulations Each Property Owner participating in the Affordable Rental Housing Program will receive a copy of the Affordable Rental Housing Regulations. These Regulations may be updated from time to time to increase the programs' effectiveness; modifications will require City Council approval. Each transaction will include CC&Rs and a Deed of Trust that will be executed by the City and the Property Owner. In the event there is a conflict between the Deed of Trust and the Affordable Rental Housing Regulations or the CC&Rs, the Deed of Trust will prevail. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 9 Item 23. - 156 HB -716- IV. DETERMINATION OF TENANT ELIGIBILITY AND AFFORDABLE RENT A. General Policy Applicants will be required to provide documentation demonstrating that they are eligible to rent an Affordable Rental Unit. Applicants unable to provide satisfactory evidence of income, assets, household composition, or other qualifying criteria will not be considered an Eligible Tenant, and will not be allowed to rent an Affordable Rental Unit. B. Applicant Eligibility Criteria United States Citizenship/Legal Residency Applicants and all household members must be United States Citizens or have the right to permanently reside in the United States. Acceptable citizenship documentation includes a birth certificate or a Permanent Resident Card. Household and Unit Size Compatibility Applicant households must be compatible with the size of the unit to be occupied. The maximum household sizes are set as follows: Number of Maximum Number Bedrooms in the of Occupants Home 1 3 2 5 3 7 4 9 Verifiable Income/Annual Recertification All adult household members listed on the tenant application must provide income documentation to the Property Owner or property manager. This documentation can include income tax returns, employment verification, wage statements, interest statements, and/or unemployment compensation statements to determine eligibility to reside in the Affordable Rental Unit, Affordable Rental Housing Regulations August 16,2011 1106037.HB Page 10 HB -717- Item 23. - 157 Once per year, over the life of the Affordability Covenants, the Property Owner or property manager will recertify each tenant's annual household income. The Property Owner or property manager will establish an annual recertification schedule and perform all tenant recertifications at the same time. Each tenant will be required to provide the appropriate documentation to certify their Gross Income. Composition of Household Any alteration to the household composition must be disclosed during the annual recertification process. C. Income Eligibility Criteria Gross Income The Property Owner or property manager will consider Gross Income for all adult household members when determining applicant eligibility to reside in an Affordable Rental Unit. The funds included in Gross Income are detailed in the definitions section of these Affordable Rental Housing Regulations. Maximum Income The maximum allowable income is set forth for each project and/or unit by the affordable housing agreements recorded on legal title to the property. Income levels include, but are not limited to Very-Low, Low and Moderate Income as defined in these Affordable Rental Housing Regulations. In the case of conflict among the agreements, the most stringent requirement must be applied. D. Affordable Rent Calculations Rental rates for the Affordable Rental Units must be set at levels affordable to Very-Low, Low Income and Moderate Income Households as set forth in the property's Affordability Covenants. The Affordable Housing Administrator will calculate the allowable rental rates based on the standards imposed by the Affordability Covenants imposed on the project. In the case of conflicts in the requirements imposed by the City and other funding sources used to finance the project, the most stringent requirement must be applied. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 11 Item 23. - 158 HB -718- Rents may be re-evaluated once annually based on changes in the household incomes published by the applicable source (usually updated during the first quarter of each year). Any changes in the rents must first be approved in writing by the Affordable Housing Administrator. The Property Owner, or property manager, must provide a Notice of Rent Increase to each household renting an Affordable Rental Housing Unit. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 12 xB -719- Item 23. - 159 V. COMPLAINTS AND APPEALS Complaints concerning the City's Affordable Rental Housing Program should be made in writing and addressed to the Affordable Housing Administrator. Complaints will be accepted only if they are in writing and are received within 30 days from the event giving rise to the complaint. The Affordable Housing Administrator will contact the complainant to attempt to resolve the matter. A written response from the Affordable Housing Administrator will be made to the complainant within 10 business days. If a complainant is not satisfied with the written response, a request for an appeal may be filed with the Program Director. The written request must set forth the reasons for the appeal and must be received by the Program Director within 15 days from the date of the Affordable Housing Administrator's written response. In the event the request does not meet these requirements, the complainant will be notified that the request is denied; otherwise, the complainant will be invited to meet with the Program Director. The Program Director will provide the complainant with an opportunity to advocate his/her position and to resolve the matter. The Program Director's response will be made in writing within 10 business days following the meeting. Affordable Rental housing Regulations August 15,2011 1106037.HB Page 13 Item 23. - 160 xs -720- VI. MONITORING AND ENFORCEMENT A. General Policy At the time of initial occupancy, and annually thereafter, the City will monitor the project to ensure that the income verifications are correct and in compliance with these Affordable Rental Housing Regulations. The City is committed to assuring that its affordable housing resources reach only eligible households so that program integrity can be maintained. Property Owners are required to cooperate with the City in promptly providing all information requested by the City in monitoring compliance with program requirements. B. Program Audits City staff will maintain a high level of awareness to indicators of possible abuse and fraud by Property Owners and tenants living in Affordable Rental Units. The City will conduct periodic random quality control audits of Affordable Rental Units to assure compliance with program rules and requirements. Such audits may include verification of continued occupancy in Affordable Rental Units by Eligible Tenants, compliance with the Affordability Covenants, and physical inspections of the property. C. Program Abuse and Fraud Protections City staff will investigate suspected program abuse and fraud as appropriate. Staff will take all steps necessary and appropriate, both administrative or legal, to enforce program requirements. Referrals, Complaints, or Tips The City will follow up on referrals from other agencies, companies, or individuals that are received by mail, by telephone, or in person, which allege that a Property Owner or tenant of an Affordable Rental Unit is in non-compliance with or otherwise violating program rules. Such follow up will be made providing that the referral contains at least one item of information that is independently verifiable. A copy of the written allegation or a summary of the verbal allegation will be placed in the Property Owner's file. Internal File Review The City will investigate instances where it discovers, as a result of administering the program, information or facts that conflict with previous file data or any knowledge of the Property Owner or tenant, or are in any way discrepant with statements made by the Property Owner or tenant. Affordable Rental Housing Regulations August 15,2011 1106037.HB Page 14 HB -721- Item 21 - 161 Referrals to the City Attorney In the event of a breach or potential breach of program requirements, the City may institute legal action to enforce compliance with the program requirements, and to enjoin any actions by Property Owners that violate program requirements. The City's legal remedies may additionally include the following: 1. Civil citations with monetary penalties for violations of the Affordable Rental Housing Regulations; 2. Recovering any excess rent that a tenant may have paid to a Property Owner; and 3. Instituting foreclosure proceedings. Affordable Rental Housing Regulations August 15,2011 1106037.1-18 Page 15 Item 23. - 162 xB -722- ATTACHMENT A INCLUSIONARY HOUSING ORDINANCE {ORDINANCE NO. Affordabfe Rental Housing Regulations August 15,2011 1106037.HB xB -723- Item 23. - 163 ORDINANCE NO, AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE BY ADDING NEW SECTION 230.26 THERETO ENTITLED "AFFORDABLE HOUSING" WHEREAS,the City Council of the City of Huntington Beach does hereby ordain as follows. SECTION 1. That the Huntington Beach Zoning and Subdivision Ordinance is hereby amended by adding new Section 230.26 thereto,entitled "Affordable Housing,"said chapter to read as follows: 230.26 Affordable Housing A. purpose. 1. The purpose and intent of this Chapter is to implement the goals, objectives and policies of the City's housing Element. It is intended to encourage very low,low-and median income housing,which is integrated, compatible with and complements adjacent uses, and is located in close proximity to public and commercial services. 2. the affordable housing program is one tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors, and to meet its regional fair. share requirements for construction of affordable housing. B. Applicability. This section shall apply to new residential projects three(3)or more units in Size. l. A minimum of ten(10)percent of all new residential construction shall be affordable housing units. 2. Rental units included in the project shall be made available to very low or low- income households based on the Orange County Median Income, adjusted for appropriate family size,as published by the United States Department of Housing and Urban Development or established by the State of California,pursuant to Health and Safety Code Section 50093,or a successor statute. 3. For sale units included in the project shall be made available to very low, low or median income level households based on the Orange County Median Income, adjusted for appropriate family size,as published by the United States Department of Housing and Urban Development or established by the State of California,pursuant to Health and Safety Code Section 50093,or a successor statute. 4. Developers of residential projects consisting of nine or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of the Section, unless the affordable housing requirement is outlined as part of a specific plan Document& Item 23. - 164 HB -724- _.. Ordinance No. 3687 1 project. 5. Developers of residential projects may elect to provide the affordable units at an off- site location pursuant to subsection B unless otherwise outlined as part of a specific plan project. If affordable units are off site,they must be under the full control of the applicant,or other approved party. ' 6. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of determining the required number of affordable housing units,only new units shall be counted. C. Fees in Lieu of Construction. I. Fees paid to fulfill the requirements of this Section shall be placed in the City's Affordable Housing Trust Fund,the use of which is governed by subsection E. 2. The amount of the in-lieu fees shall be calculated using the fee schedule established annually by resolution of the City Council. 3. One hundred (I00) percent of the fees required by this Section shall be paid prior to issuance of a building permit. 4. Fees paid as a result of new residential projects shall be based upon the total number and size of the new residential units which are to he constructed. D. Off-&tp Construction of Affordable Units. Except as may be required by the California Coastal Act and/or the California Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off-site,at one or several sites, within the City of Huntington Beach. 1. Off-site projects may be new construction or major physical rehabilitation,equal to more than one-third the value of the existing improvement, excluding land value,of existing non-restricted units conditioned upon being restricted to long-term affordability. "At Risk"units identified in the Housing Element or mobile homes may be used to satisfy this requirement. 2. All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval (occupancy)of the first market rate residential-unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. E. Miscellaneous Provisions. i. The conditions of approval for any project that requires affordable units shall specify the following items: Document3 HB -725-._..___...- Item 23. - 165-. ordinance No. 3687 ? i (a) The density bonus being provided pursuant to Section 230.14,if any; i (b) The number of affordable units; (c) The.number of twits at each income level as related to Orange County Median Income;and (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects of the affordable housing provisions shall be executed between the applicant and the City and recorded with the Orange County Recorder's Office prior to issuance of the first building permit. 3. The Agreement shall specify an affordability term of not less than sixty(60)years. 4. In a project requiring an in-lieu fee, the applicant shall execute and record an Agreement to pay an Affordable Housing In-Lieu Fee. 5. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units unless otherwise approved through a phasing plan. Final approval (occupancy)of the first market rate residential unit shall be.contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion,of the affordable units. 6. All affordable units shall be reasonably dispersed throughout the project unless otherwise designed through a master plan,shall contain on average the same number of bedrooms as the market rate units in the project,and shall be comparable with the market rate units in terms of exterior appearance, materials and finished duality. 7. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty(50)percent of the dwelling units affordable to very low-and low- income households,with at Ieast twenty(20)percent of the units available to very low- income households. Concurrent with establishing the annual fee schedule pursuant to subsection C, the City Council shall by resolution set forth the permitted uses of Affordable Housing Trust Funds. All units that obtain Affordable Housing Trust Funds shall maintain the affordability of the units for a minimum of sixty(60)years. The funds may,at the discretion of the City Council, be used for pre-development costs, land or air rights acquisition,rehabilitation,land write downs,administrative costs, gap financing, or to lower the interest rate of construction loans or permanent financing. 8. New affordable units shall be occupied in the following manner: (a) If residential rental units are being demolished and the existing tenant(s) meets the eligibility requirements,he/she shall be given the right of first refusal to occupy the affordable unit(s); or QocumenM Item 23. - 166 -- ._ . .-._._- ._HB -726- ordinance No. 3687 i (b) If there are no qualified tenants,or if the qualified tenant(s)chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs,then qualified households or buyers will be selected, F. Price of Affordable Units. Affordable units shall be sold or rented at prices affordable to very low, low-or median-income households pursuant to terms of the Affordable Housing Agreement, SECTION 2. This ordinance shall become effective thirty(30)days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 1 _day of November ,2004IF . 7 Zza ayo ATTEST: City Cferk REVIE VED AND PR�VF JAPOVI;I]AS TO FORtVI: City Administratorttorney L 1U 2t �0'� INITI D AND APPROVED: ctor of Planning Donument3 HB -727- Item 23. - 167 Ord. No.3687 STATE OF CALIFORNIA } COUNTY OF ORANGE } ss: CITY OF IIUNTINGTON BEACH } 1, JOAN L. FLYNN, the duly appointed, qualified City Clerk of the City of Huntington Beach,and ex-officio Clerk of the City Council of said City,do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a re uilar meeting thereof held on the 18th day of October,2004, and was again read to said City Council at a regular meeting thereof held on the 1st day of November,2004, and was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council. AYES: Sullivan,Boardman,Cook,Winchell NOES: Green; Cverper. ABSENT: Hardy ABSTAIN: None 1,Joan I.,Flynn,CITY CLERK of the City of Huntington Brach and ex-officio Clerk of the City Counoil,do hereby i certify that a synopsis of this ordinance has been i published in the iluntington'Beach Fountain Valley _ Independent on November It,2004. F In accordance with the City Charter of said City Joan L.Fl nn,City Clerk Ci lerk and ex-officio Wrk Deputy City Clerk of the City Council of the City of Huntington Beach, California 1 i fi Item 23. - 168 HB -728- ATTACHMENT B DEVELOPER'S INTRODUCTION TO THE CITY OF HUNTINGTON BEACH AFFORDABLE RENTAL HOUSING PROGRAM Affordable Rental Housing Regulations August 16,2011 1106037.HB Hs -729- Item 23. - 169 DEVELOPER'S INTRODUCTION TO THE CITY OF HUNTINGTON BEACH AFFORDABLE RENTAL HOUSING PROGRAMS AFFORDABLE HOUSING PROGRAMS The City of Huntington Beach (City) Affordable Rental Housing Regulations cover the following three programs: 1. The City's Inclusionary Housing Ordinance; 2. The density bonus mandated by the State of California for projects that meet defined income and affordability standards; and 3. The affordable housing production requirements imposed on residential projects developed within redevelopment project areas. The following is an overview of the three programs. Inclusionary Housing Program The City requires all new rental housing projects with three or more units to set-aside 10% of the units for Very-Low, Low or Moderate-Income Households. In certain areas of the City a 15% requirement is imposed (see Redevelopment Housing Program below). The basic requirement of the inclusionary housing ordinance is that the developers must include the designated number of income restricted units within their market rate projects. However, with approval from the City Council, the following options are available: 4. Developers may impose income and affordability covenants on newly constructed units in alternate locations. 5. Developers can acquire existing projects, substantially rehabilitate the units, and then impose income and affordability covenants on the units. To exercise this option, the rehabilitation must meet the standards imposed by California Health and Safety Code Section 33413(2)(A)(iv), and the developer must be able to demonstrate that the achievable market rents are higher than the income restricted rents. 6. Developers can pay a fee in lieu of fulfilling the inclusionary housing obligation on residential projects that include between three and 30 units. Developer Introduction—Affordable Rental Housing Programs Page t 1106035.118 August 15,2011 Item 23. - 170 xB -730- Housing Density Bonus Program California Government Code Section 65915 provides density bonuses to housing projects that impose specific income and affordability covenants over at least a 30-year term. However, Section 65915 allows cities to extend the income and affordability term if an inclusionary housing ordinance has been adopted by the city. The City's density bonus ordinance exercises this option. The density bonus is offered to projects that meet one of the following thresholds; 1. A 20% density bonus is offered to rental projects that include 10% low income Units or 5%very-low income units. The density bonus is increased on a sliding scale up to 35% if additional income restricted units area included in the project. 2. A 20% density bonus is available to all senior citizen projects. Redevelopment Housing Program California Health and Safety Code Section 33413(b) (Section 33413) imposes inclusionary housing production requirements on redevelopment project areas adopted after January 1, 1976. Specifically, Section 33413 requires redevelopment agencies to ensure that at least 15% of the residential units constructed in Project Areas are subject to long-term income and affordability covenants. All the Project Areas in Huntington Beach were adopted after 1976, and to assist in fulfilling the Section 33413 obligation, the City's inclusionary housing policy imposes a 15% affordable housing requirement on residential projects located in a Project Area. REGULATIONS The Affordable Rental Housing Regulations provides developers with the following information: 1. The eligibility criteria to be imposed on prospective tenants; 2. The methodology for setting the maximum rental rate; 3. The circumstances under which the income and affordability covenants will be subordinated to the deed of trust held by a mortgage lender; 4. The complaints and appeals process available to program participants; and 5. The monitoring and enforcement activities that will be undertaken by the City. Developer Introduction—Affordable Rental Housing Programs Page 2 1106035,H13 August 15,2011 HB -731- Item 23. - 171 CITY CONTACT The requirements that are imposed on ownership housing projects are detailed in the Affordable Rental Housing Regulations adopted by the City Council. Persons interested in obtaining the Regulations and/or learning more about the City's affordable housing program may contact: Denise Bazant Program Administrator City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 (714) 536-5470 dbazant@surfcity-hb.org Developer Introduction—Affordable Rental Housing Programs Page 3 1106035.HB August 15,2011 Item 23. - 172 HB -732- ATTACHMENT C INCLUSIONARY HOUSING PLAN Affordable Rental Housing Regulations August 16,2011 1106037.HB xB -733- Item 23. - 173 INCLUSIGNARY HOUSING PLAN Application No: City of Huntington Beach Huntington Beach Redevelopment Agency 2000 Main Street, Huntington Beach, CA 92648 (714) 536-5470 Project Type: Ownership Rental Ownership & Rental Project Address: Assessor Parcel No(s): Site Dimension and Square Footage: Applicant's Name: Phone: Address: City: Zip Code: Person to Contact Regarding Project: Address: City: Zip Code: Property Owner's Name: Phone: Address: City: Zip Code: 1. INCLUSIONARY HOUSING ALTERNATIVES A. Select one of the following alternatives to indicate how the project will comply with the Inclusionary Housing requirement: On-site Off-site' Payment of in-lieu feet 1 All off-site units must be constructed or rehabilitated prior to or concurrently within the primary project. 2 only Developer's of residential projects consisting of 30 or fewer units may elect to pay a fee in lieu of providing the units on-site. This option does not apply if an affordable housing requirement is outlined as part of a specific plan project. One hundred percent(100%)of the in- lieu fee must be paid before the first building permit is issued. Item 23. - 174 HB -734- B. If the project will include the production of Inclusionary Units, where will the units be produced? One Site Several Sites Please list the Site(s) in which the Inclusionary Units will be produced: 2. RESIDENTIAL PROJECT DESCRIPTION ' A. Project Location: Outside a Redevelopment Project Area:4 Yes No Within a Redevelopment Project Area:S Yes No B. Describe Project and Inclusionary Obligation in Chart: Number Square Total Nulr ber of; Total Numbe Number of Number of Number of, of Tootge Number Market Inclusionary Uerya_ow % Low Moderate Bedrooms Of UrTts of Units' Rate Unttss Incvirle income Income Urnfs Units ' Urn#s:a Units Studio 1 2 3 4 5 C. Gross livable floor area of proposed project (including private balconies, decks, and patios) in square feet: D. Describe structure type (i.e. attached, semi-attached or detached): E. Will project be a phased project? 7 Yes No s A floor plan depicting the location of the Inclusionary Units must be included with the application. 4 At least 10%of all new ownership residential construction of three or more units must be made affordable to Moderate Income Households. At least 10%of all new rental residential developments of three or more units must be made affordable to Very-Low and Low Income households. 5 At least 15%of all new ownership or rental residential developments and applicable substantially rehabilitated units must be set-aside for Low and Moderate Income Units. 6 If the calculation of the number of Inclusionary Units required results in a fraction of an Inclusionary Unit,the Developer must either provide an additional full Inclusionary Unit within the project,or pay an in-lieu fee for the fractional unit. 7 A Phasing Plan which provides for the timely development of the Inclusionary Units as the Residential Development is built out must be included with the Inclusionary Housing Plan Application. xB -735- Item 23. - 175 3. INCENTIVES REQUESTED BY DEVELOPER A. Density Bonus Incentives (Municipal code Section 230.14) Yes No If yes, provide a description of the incentives and/or concessions requested: Item 23. - 176 HB -736- OWNER'S AFFIDAVIT I hereby certify that I am the legally authorized owner of all property involved in this application or have been empowered to sign as the owner on behalf of a corporation, partnership, business, etc., as evidenced by separate instrument attached herewith. I herby grant to the applicant of this form full power to sign all documents related to this application, including any conditions or litigation measures as may be deemed necessary. I declare under penalty of perjury that the foregoing is true and correct. Executed on (Date) at , California Owner's Signature , Owner's Printed Name APPLICANT'S AFFIDAVIT I hereby certify that the statements furnished above and in the attached exhibits represent the data and information required for this initial evaluation and that the facts, statements and information presented are true and correct to the best of my knowledge and belief. Further, should the stated information be found false or insufficient, I agree to the return of this form for appropriate revisions, understanding the City of Huntington Beach cannot process this form until all applicable information is corrected or provided by the applicant. I herby certify that I have been legally authorized by the owner to present this application and to sign on behalf of all documents related to this application, including any conditions or litigation measures as may be deemed necessary. Note: When the applicant is a corporation, partnership, business, etc., a separate document verifying the authorization to sign for such applicant is required. I declare under penalty of perjury that the foregoing is true and correct. Executed on (Date) at , California Applicant's Signature Applicant's Printed Name HB -737- Item 23. - 177 ATTACHMENT D INCLUSIONARY IN-LIEU FEE SCHEDULE Affordable Rental Housing Regulations August 15,2011 1106037.HB Item 23. - 178 xB -738- OAT") CITY OF HUNTINGTON CH PLANNING DEPARTMENT FEE SCHEDULE CITY COUNCIL APPROVED JUNE 15,2009 EFFECTIVE Oetober 1,7010 PLANNING..COMMISSION ACTIONS: PEE* Annexation Request 10000100.42480 $10,400 +fully burdened costs Coastal Development Permit** 42415 $5,942 Conditional Use Permit: New Residential 42420 8,990 Commercial/Industrial/Mixed Use less than %Block 42420 7,580 Alcohol, Dancing or Live Entertainment 42420 4,445 Mixed Use, ''/a Block or Greater 42420 18,507 Entitlement Continuance 42425 346 Development Agreement Full Hourly Cost Original Contract or Significant Amendment 42430 30,482 Dep.+costs Minor Amendment 42430 18,325 Dep.+costs Annual Review(Planning Commission Hearing) 42430 3,857 Annual Review Administrative Review 42430 3,379 Entitlement Plan Amendment New Hearing 42435 3,910 No Change to Conditions-Director Review 42440 2,047 General Plan Amendment—GPA Major 42445 41,922 General Plan Amendment-GPA Minor 42445 22,402 General Plan Conformance 42445 4,586 Local Coastal Program Amendment 42450 12,603 Reversion to Acreage 42480 3,398 Special Permit 42480 2,845 each Tentative Tract Map 42460 21,113+30/lot Variance**** 42465 3,811 Zoning Map Amendment***** 42470 21,878 Precise Plan of Street Alignment 42480 14,892 Mobile Home Park Conversion Review 42470 32,147 Zoning Text Amendment-Major 42475 15,163 Zoning Text Amendment-Minor 42475 8,429 Includes 4%automation fee 1 Plus costs for Notice of Publication,if applicable *+Coastal Development Permit reduced 50%when processed concurrently with a Conditional Use Permit,Tentative Map or Variance ++* 50 percent of fee credited towards future entitlements ++*+ Variance fee reduced 501/o when processed concurrently with a Conditional Use Permit *** * ZMA fee reduced 50%when processed concurrently with a General Plan Amendment Revised 9/30=0 HB -739- Item 23. - 179 ZONING ADMINISTRATOR ACTIONS: FEE* Coastal Development Permit** Single Family Dwelling 10000100.42605 2,891 All Others 42605 3,179 Conditional Use Permit 42610 4,082 Conditional Use Permit Fences 42610 2,053 Entitlement Continuance 42615 234 Entitlement Plan Amendment New Hearing 42620 2,101 No Change to Conditions - Director Review 42620 1,368 Temporary Use Permit 42630 1,925+500 bond if applicable Tentative Parcel Map 42635 4,175 Tentative Parcel Map Waiver 1 42635 2,001 Tentative Tract Map 42460 7,030+30/lot Variance"" 42640 2,631 ENVIRONMENTAL REVIEW: FEE* Environmental Assessment 10000100.42705 $9,611 Historic Structures 42705 $4,717 Mitigated Negative Declaration 42705 2,893 (+EA Study Fee) Mitigation Monitoring: 42705 Mitigated Negative Declaration 2,451 Environmental Impact Re ort 8%of EIR Environmental Impact Report(EIR)- 42710 89,930 Dep. + Consultant Prepared costs Environmental Impact Report(EIR)- 42710 128,563 Dep. + Staff Prepared costs Department of Fish and Game (Fees change yearly— Fee as of 08/16/09) Negative Declaration/Mitigated Negative Declaration 1,993.00 Environmental Impact Report 2,768.25 Certified Regulatory Program 941.25 CHECKS MADE OUT TO: COUNTY OF ORANGE and sent to Cotui of Orange with NOD -includes 4%automation fee I Plus costs for Notice of Publication,if applicable. * * 50 percent of fee credited towards future entitlements **** Variance fee reduced 50%«hen processed concurrently with a Conditional Use Permit Revised 9/30/2010 Item 23. - 180 Hs -740- STAFF REVIEW AND SERVICES: FEES Address Assignment Processing 10000100.42755 $1,130/ ro'ect Address Change/Single Tenant Assignment 42755 255 Address Assignment—Meter only 42755 114 Administrative Permit 42820 List 1: Outdoor Dining,Eating and Drinking 42820 551 Establishments,Fence Extensions (<8'),Personal Enrichment Services over 5,000 sq. ft,, and Home Occupations 42820 List 2: Parking Reduction, Carts &Kiosks, Waiver of 981 Development Standards, Non-conforming structure additions List 3: Privacy Gates, Game Centers, Accessory 42820 Dwelling Units, Manufactured Home Parks 1,306 List 4: Personal Enrichment Services under 5,000 sq 0 ft Animal Permits 42820 193 Categorical Exclusion letter coastal 42820 234 CC&R Review 42760 1,129 Certificate of Com fiance 42765 679 Design Review Board 42775 905 Extension of Time 42820 432 Final Parcel Map 42780 1,237 Final Tract Map 42780 1,766 Initial Plan, Zoning &Review(land use changes,zone 42785 321 changes,conceptual lams Limited Sign Permit 42790 754 Lot Line Adjustment/Lot Merger 42820 551 Planned Sign Program Single User and Amendments to Existing Programs 42790 791 Multiple Users 42790 1,335 Preliminary Plan Review: *** Single Family Residential 42795 832 Multi-Family Residential (up to 9 units) 42795 1,986 Multi-Family Residential (10+units) 42795 2,538 Non-Residential 42795 2,761 Sign Code Exce tion—Staff 42625 897 Sign Code Exception—Design Review Board 42625 1,741 Site Plan Review 42820 4,967 Temporary and Promotional Activity Sign Permit 42800 78 Temporary Sales/Event Permit 42805 281 Wireless Permit Applications lications 42810 "costs" Zoning Letter: Flood Verification 42810 78 Simple Staff Review 68 Zoning Letter Staff Review 151 Zoning Research/Information 42810 130/hr. min. 1 hr. Planning Consultation/Meeting Fee(per planner) 42810 115/hr. min. 1 hr.),_j Revised 9/30/2010 HB -741- Item 23. - 181 *Includes 4%automation fee *** 50 percent of fee credited towards future entitlements APPEALS: FEE* To Planning Commission Single family owner appealing decision of own 10000100.42815 $1,725 property Others 42815 2,252 Appeal of Director's Decision (PC Public Hearing) 42815 494 Appeal of Director's Interpretation (PC Non-Public) 42815 416 To City Council (file w/City Clerk's Office) Single family owner appealing decision of own 42815 $1,587 property 42815 3,045 Others AFFORDABLE HOUSING IN-LIEU FEE - 2008 FEE* 3 Unit Projects x$8,140= 42820 $24,420 4 Unit Projects x$9,150= 42820 $36,600 5 Unit Projects x$10,170= 42820 $50,850 6 Unit Projects x$11,180 = 42820 $67,080 7 Unit Projects x$12,200= 42820 $85,400 8 Unit Projects x $13,230= 42820 $105,840 9 Unit Projects x$14,240= 42820 $128,160 OTHER FEES: FEE* Downtown Specific Plan Fee 42820 $831 per acre Outdoor Dining: 42820 License Agreement Application Fee 30 License Agreement Use Charge 0.01/sq.ft. License Agreement Code Enforcement Fee 4/sq. ft. Park and Recreation Fee(see attached) Traffic Impact Fee See Dept. of Public Works General Plan Maintenance Fee 42825 $1.85/$1,000 valuation of new construction Includes 4%automation fee ADDITIONAL FEES MAY BE REQUIRED: ENTITLEMENTS FOR DEVELOPMENT INCLUDE INITIAL REVIEW OF PLANS AND ONE SUBSEQUENT REVISION SUBMITTAL. REVIEW OF PLANS IN EXCESS OF ONE REVISION SHALL BE CHARGED THE FULLY BURDENED HOURLY RATE. ALSO SEE DEPARTMENTS OF PUBLIC WORKS,FIRE,AND THE BUSINESS LICENSE DIVISION FOR ADDITIONAL FEES Revised 9/30/20 10 Item 23. - 182 HB -742- CITY OF HUNTINGTON BEACH PLANNING DEPARTMENT Park and Recreation Fees CITY COUNCIL APPROVED JUNE 17,2002 EFFECTIVE JULY 17 2002 Pursuant to City Council Ordinance No. 3562,and Resolution Nos. 2002-56 and 2002-57 adopted on June 17, 2002,park in-lieu fees for residential developments involving a subdivision map are as follows: PROJECTS REQUIRING A SUBDIVISION MAP 20900209.47115 Tract Ma2 No./Parcel Map No: Park and Recreation Fee Formula Per Chapter 254: 5 (9 units x 2.68) x Per acre value of project site's =Park L>; Lieu Fee 1,000 * Based on City-approved site-specific appraisal of project site CITY COUNCIL APPROVED DECEMBER 16,2002 EFFECTIVE DECEMBER 16,2002 Pursuant to City Council Ordinance No. 3596, and Resolution No. 2002-129 adopted on December 16, 2002, park fees for commercial and industrial developments and residential developments not requiring a subdivision map are as follows: PROJECTS NOT REQUIRING A SUBDIVISION MAP 20900209.47280 Commercial and Industrial Floor Area=$0.23/square foot Residential Floor Area(includes garages) =$0.86/square foot Date Fees Paid: Plan Check No.: Receipt No.: Job Location: Tentative Tract Map No./Tentative Parcel Map No.: Revised 9/30/2010 xB -743- Item 23. - 183 ATTACHMENT E HOUSEHOLD INCOME CHART Affordable Rental Housing Regulations August 16>201i 1106037.HB Item 23. - 184 HB -744- CITY OF HUNTINGTON BEACH AFFORDABILITY CRITERIA To Be Updated Annually By the City Based on Orange County HUD/HCD Income Limits The incomes listed below will be used to qualify your Moderate, Low and Very-Low Income potential buyers or renters: MAXIMUM INCOMES-2011 No of Persons/ Moderate Median Low Very Low No. of Bdrms Income Income Income Income 1 person/studio $70,050 $58,900 $51,700 $32,350 2 person/1 Bdrm $80,850 $67,350 $59,100 $36,950 3 person l2 Bdrm $90,950 $75,800 $66,500 $41,550 4 person/3 Bdrm $101,050 $84,200 $73,850 $46,150 5 person/4 Bdrm $109,150 $90,950 $79,800 $49,850 6 person/5 Bdrm $117,200 $97,650 $85,700 $53,550 7 person/6 Bdrm $125,300 $104,400 $91,600 $57,250 8 person/7 Bdrm $133,400 $111,150 $97,500 $60,950 The table below will be used to determine the rent of an affordable rental unit: INCLUSIONARY MONTHLY RENTS - 2011 No. of Persons/ No.of Bdrms Moderate Income Low Income Very-Low Income 1 person/studio $1,621 $884 $737 2 person/1 Bdrm $1,852 $1,010 $842 3 person/2 Bdrm $2,085 $1,137 $948 4 person/3 Bdrm $2,316 $1,263 $1,053 5 person/4 Bdrm $2,501 $1,364 $1,137 6 person/5 Bdrm $2,685 $1,465 $1,221 7 person/6 Bdrm $2,871 $1,566 $1,305 8 person/7 Bdrm $3,057 $1,667 $1,389 Note:Affordable Rents are calculated based on requirements imposed by California Health&Safety Code Section 50053, These Affordable Rents do not included utilities and are considered"gross"rents. Utility allowances can be obtained from the City of Huntington Beach,Economic Development Department. These are NOT'fair market rents"as defined by HUD. Gross rents cannot exceed these amounts and still be considered affordable under most City programs. HB -745- Item 23. - 185 ATTACHMENT F UTILITY ALLOWANCES Affordable Renta[Housing Regulations August 15,2011 1106037.HB Item 23. - 186 xB -746- CITY OF HUNTINGTON BEACH UTILITY ALLOWANCE SCHEDULE Effective Date:October 1, 2010 To Be Updated Annually By the City Based on Orange County Utility Allowance Schedule Bedrooms 0 1 2 3 4 5+ GAS Cooking $2 $5 $5 $8 $10 $13 Heating $10 $12 $16 $22 $27 $28 Water Heater $5 $6 $7 $12 $15 $17 ELECTRIC Basic $11 $16 $20 $34 $34 $34 Cooking $4 $7 $8 $11 $15 $17 Heating $9 $13 $17 $22 $28 $32 Water Heater $13 $18 $23 $31 $32 $32 Water $16 $19 $23 $32 $28 $43 Trash &Sewer $23 Refrigerator $9 Stove $7 Mobile Home $62 File Name:Attachment—Utility Allowance.xis,2010 HB -747- Item 23. - 187 ATTACHMENT C ANNUAL TENANT RECERTIFICATION FORM (SAMPLE) Affordable Rental Housing Regulations August 15,2011 1106037.HB Item 23. - 188 xB -748- U.S. department of dousing OMB Approval No.2502-0204 Recertification Notice and Urban Development (exp.0513112031) Office of Housing Federal Housing Commissioner Exhibit 7-1: Annual Recertification Initial Notice Initial Notice [To be signed by resident and owner at initial certification and at subsequent recertification's]. (Tenant's Name) (Date) (Address) Dear As stated in paragraph [15, 10,or 9—indicate the paragraph number that corresponds to the paragraph of the model lease being used for the tenant]of your lease,the U.S. Department of Housing and Urban Development(HUD)requires that we review your income and family composition every year to redetermine rent and assistance levels. To complete our review of your income and family composition,you must meet with (Resident Manager, Occupancy Clerk, etc.)and supply the required information each year. (The Resident Manager, Occupancy Clerk,etc.)will conduct your recertification interviews in (month and year). We will send you a reminder notice when it is time for your next recertification interview. At that time you must contact(the Resident Manager, Occupancy Clerk,etc.)to schedule an appointment for an interview. "Cooperation with the recertification requirement is a condition of continued program participation.You must report the required information and provide the required signatures to enable the owner to process the recertification by the(insert the Vh day of the 111h month after the last annual recertification). ** When you attend the interview,you must bring the following information: (List all required information.) I have read and understand this letter describing the requirement for my participation in an annual recertification interview. Signature of the Head of Family Date Signature of Witness Date Public reporting burden for this collection is estimated to average 10 minutes per response,including the time for reviewing instructions, searching existing data sources,gathering and maintaining the data needed,and completing and reviewing the collection of information.This information Is required to obtain benefits and is voluntary.HUD may not collect this information,and you are not required to complete this form, unless it displays a currently valid OMB control number. This information is authorized by 24 CFR 5.657,880.603,884,218,886.324,891.410, 891.610 and 891.750 require that the owner must reexamine the income and composition of all families at least annually.By providing tenants notification in advance of the scheduled recertification meeting and the information they need to provide,the tenant is made aware of the documents they need to retain throughout the recertification period in order to reduce their burden at the time of recertification,This information is considered non-sensitive and does no require any special protection. form HUD-90100 12/2007 xB -749- Item 23. - 189 ATTACHMENT H ANNUAL RENTAL HOUSING COMPLIANCE REPORT (SAMPLE) Affordable Rental Housing Regulations August 15,2011 1106037.HB Item 23. - 190 HB -750- ,,�.: .— _ '_ .•vae � .:s"� :rf ur �w��i-o -- _ wsrt�'� - v- rS tea � r COu N is,v State Recipient: City County of: HOME Contract#: -HOME- Project City: Project County: Owner Name: Project Name: Project Address: Project Zip: Prepared by: Title of Report Preparer: manager agent owner Other: Date Prepared: is this rental project also: TCAC HUD 811 HUD 202 USDA-RD HUD project-based rental assistance Transitional Housing SRO Housing Group Housing Other. US' 'Mina WIN - xt• r 7f a _•i- Total#Units: #HOME Units: fixed floating Owner!Agent NOTE: group housing- SRO FMR 50%(wow 65%High Federal HOME rent limits #of HOME units group housing- 20% 25% 30% 35% 40% 45°10 50% 55% 160% 65% SRO FMR State HOME rent limits See Exhibit 8 of the HOME Regulatory #of HOME units Agreement .�,.:7:, ,. , .�.,,. � ..>�,:: °� _» .;..:•. ,. -,:: .,,� : :.;,. ...M .,�.:. . �,.,<,.., ,.,� :4�''+' •:;� f c,<' -::ET ... �'- • . . ' .; ,- 'r •X': �f. - _ n u � a� 3M� yt .,�n+pe . eSTk`�tT15 REPORT7a d�s�1l�etlJ e° ear[/s1 attaced .<.� i.... �If.'!,^ .s:..,.3 - ..t A ..... ....C.`i:. ? .7.... 1 COPY OF THE RENT AND INCOME LIMIT CHART(S) USED FOR INCOME CERTIFICATION with effective dates noted COPY OF THE UTILITY ALLOWANCE SCHEDULE(S)USED FOR INCOME CERTIFICATION(form HUD-52667)with effective date(s) noted ,.,,.._ f,,.,.. :,�'. , ..v+ ..`;- - n.i"' ' ■gay/ 7. pp�, // 't^.,xu.^C;i; cj kl � ,i � �} ���:�3 } + n + •ui 'R '.� _ ..fk}e\:/...dY � r �/ sv�N '�'"VF�e`',yi '�'� N tii*-..312 } 1`�X�'. 1 -TAw,� i all rental ro"ects :r that the information in this report is true and correct 1.Owner I Manager signature. Title: manager agent owner other: Date: 2.City 1 County signature: Title: Date: for rental p ro'ects with 5 or more HOME-assisted units I certify that at feast 20%of the HOME-assisted units are occupied by households with incomes not exceeding 504/6 AMI and paying rents not exceeding the 50% HOME rent limit. 1,Owner Manager signature: Title: manager agent owner other: Date: 2.City I County signature Title: Date: for rental projects funded after September 29,2003 not applicable,funded prior to 912912003 1 certify that rented vacant units met the minimum occupancy standards of the State's Uniform Multifamily Regulations(Title 25 Division 1 Ch 7 Subch 17 Article 3) 1.Owner I Manager signature: Title: manager agent owner other: Date: CD 5 N W F--I ;ity!County signature: Title: ©ate: R Occu anc Standards:zero bdrm-1 to 2 people; one bdrm-1 to 4 le; two bdrm-2 to 6 people; three bdrm-4 to 8 people; four bdrm-6 to 14 le; five bdrm-8 to 12 people ANNUAL PROJECT COMPLIANCE REPORT: RENTAL HOUSING [V This report is to be completed by the project owner or manager G- ,ral Info. Rent Information for HOME-Assisted-Units .e _•. . T ' B C D H I J K L M N 0 F--� FEDERAL HOME STATE HOME Y'v INC RENT LIMIT RENT LIMIT f" ANNUAL INCOME LIMIT N Select HUD's Hinh Select actual rent r;a GROSS % (lesser of FMR or limi designation used N Does the INCOME Enter the ? in certification and Eff.Date 6S%AMI)Or l,�W^ p }K total in(H) Selectthe of anSerlhe exceed Salectihe Enter the of Lost (Umit HOME Rent g the amount number of corresponding dollar � Number of Initial "Annual" Limit Amount and bedrooms amount in(C)or persons Enter the Occupancy Income for the enter the (amount includes a Enter the (D)? Enter the in the House- ACTUAL Select income Date Certification HOME unit corresponding utility allowance) Total of Select Tenant hold from the certified le+ret of iter the from the (amount amurincludes a See Exhibit 8 of r c.g Columns from the (head-of house) drop down Household house-hold from (date field (date field TOME drop down fhe HOME a j• (E*F*G) drop down Name menu: Income the drop down formatted) formatted) utility allowance) Jnit# menu Regulatory lu menu menu: Agreement >. g _ 2•., ,a•a-Aa $ $ 5 $ $ $ $ S $ $ 5 $ $ $ S S S S $ $ $ $ $ $ $ $ S $ $ $ $ $ $ $ N $ $ — ' $ $ $ $ $ $ $ $ $ $ $ $ VOTE: Columns C and D:If a single-room occupancy(SRO)unit has neither kitchen nor bathroom,or only one,select"SRO FMR limit'and enter the appropriate amount(75%of FMR for 0 bdrm unit) VOTE: Columns C and D-. group home rents are based on the FMR for the unit size;select"group housing FMR"and enter the appropriate amount IOTE: Columns D: the"Rent Limit Amount"entered should reflect the same year in column O"Da' ist Annual Income Certification," IOTE: Column I :ions: Yes-OOC(out of compliance);Yes-OI(over income);Yes-PBRA(2roject base. .at assistance) ANNUAL PROJECT COMPLIANCE REPORT: RENTAL HOUSING This report is to be completed by the project owner or manager General Info. Rent information for HOME-Assisted Units A B C D A. H l J K L M N 0 STATE HOME FEDERAL HOME RENT LIMIT °;` , ANNUAL INCOME LIMIT RENT LIMIT Select actual rent fe } GROSS °h I)LrjfS designation used t3 'AtJ'' _ Does the INCOME Enterthe (65% or L Select )or Low High In certification and E+ {�,':;>w total in(H) Eff,pate z4++ Select the enter the - .,i;,°�t^,S exceed Salectthe Enterthe of Last (50%)HOME Rent Po S,LAa the amount Number of Initial 'Annual" number of corresponding dollar Limit Amount and bedrooms amount ". in(C)or persons Enterthe Ocwparscy Income eater the for the corresponding (amount includes a r�51� Enter the (D)9 Enterthe in the House- ACTUAL Select income Date Certification HOME unit utility aibwance) �bf Total of Select Tenant hard from the certified level of x ��" titer the from the dollar amount See Exhibit of the S ( Columns from the (head-of house) drop down Household house-hold from (date field (date field TOME drop down (amount includes a HOME Regulatory kP (E+F+G) drop down Name menu: Income the drop down formatted) formatted) utiftty allowance xy t�s Unit 9 menu Agreement r_s?. ..,_t.. c menu: menu: $ $ $ $ $ $ $ $ $ $ $ S $ $ $ $ S $ $ $ $ $ $ S S $ $ $ $ $ S $ $ S $ S $ $ $ $ $ $ $ $ $ $ $ $ S $ $ $ $ $ $ $ $ $ f� CD N W •I I� W ATTACHMENT #4 Item 23. - 194 nn . ,.4. Ownership Affordable ■ xRegulations v, Huntington Beach City Council August 15 , 2011 X-, N\2 N, X"AN �\�\N IMM \NXXX CD Y"'W' A V, \N kE INO CD Apffa ARM W ions Regulations were prepared for Developers of projects , and owners of affordable units . overlapping Regulations are included in both documents . This presentation is focused on changes to the Regulations that have been approved by the City Council . Keyser Marston Associates,Inc. August 15,2011 Page 2 Affordability Period The covenant period commences upon the close of escrow for the first unit sold in each development phase of a residential project that is required toprovide affordable units . a At the end of the original term , the covenants expire . CD 1F{{ a 4K FS Keyser Marston Associates,Inc. August 15,2011 Page 3 J N W EnforcementDocuments 00 Covenants , Conditions & Restrictions (CC& Rs) between the City and the owner will be executed and recorded . x A Promissory Note equal to the difference between the original market price and affordable sales price will be executed . Each home buyer will be required to sign a q g special disclosure statement confirming receipt and understanding of Regulations . "07 Keyser Marston Associates,Inc. August 15,2011 Page 4 Applicability of Changes to the Regulations Each Developer & Home Owner will receive a copy of the then current Regulations . x Regulations may be updated from tune -to- time to increase programs ' the effectiveness . Owners will receive six months notice before changes are considered by the City Council . CD A 1 \ ' Keyser Marston Associates,Inc. August 15,2011 Page 5 CD N W Applicability of Ch anges to the o 0 Regulations Each transaction will include executed CC& Rs ; and a Deed of Trust . If there are conflicts between the Deed of Trust , and the CC& Rs or the Regulations , the Deed of Trust will prevail . \ti. \`,, Keyser Marston Associates Inc. August 15 2011 Page 6 ■ Prospective The City will create an interest list that is posted on the City' s website . Prospective purchasers will be provided with sufficient information to determine whether they meet the eligibility standards . Participants will be required to respond to emails from the City each month to remain on the list. The Citydoes not bear an responsibility for the y p accuracy of the information provided by the home buyers . CD �.�t�A\ Keyser Marston Associates,Inc. August 15,2011 g ALL\ O _ N W i N N Pricing Affordable sales price calculations will be placed on the City' s website . Calculations will be updated monthly based on lowest interest rate published during N preceding three months . The utilities allowa nces used in the calculations will be updated annually. y e - � N � hvv\1: � Keyser Marston Associates,Inc. August 15,2011 Page 8 dill}e\4 . 1\\�`..AV\tS1l•. � ,`. Pricing Home buyers may purchase durable goods from the seller at a cost of no more than $ 500 . Citywill hold worksho s for home buyers and p brokers at large inclusionary projects to explain the program requirements . 1 �i \ Keyser Marston Associates,Inc. August 15,2011 Page 9 N O W CD N W N -� Mama iwund, s No limit is imposed on the amount of gift funds that can be applied to the down payment used to purchase a home . The maximum down payment is set at 50% of the purchase price for the home . S 4 j` �4� Keyser Marston Associates,Inc. August 15,2011 Page 10 Cash Out on Refinancing Any refinancing is allowed if both of the following criteria are met : The mortgage must be based on standard underwriting criteria up to a maximum 80% loan to value ratio . Debt service payments cannot exceed then current maximum affordable amount® Keyser Marston Associates,Inc. August 15,2011 Page 11 O c , c N W N Hardship P Definition of Hardship : Job relocation verified by employer Family illness documented by licensed physician Medical necessity documented by licensed physician Terms : Hardship can only be declared once during covenant period Unit can be rented for u to one year to income eligible tenant at the defined affordable rent act 4��� '\�`` Keyser Marston Associates,Inc. August 15,2011 Page 12 Inheritance Transfer to an heir in the case of death is allowed in all instances . x The heir must live in the home , but may use the hardship provision for up to one year. Resale must comply with the existing covenant requirements . CD ` . ON Keyser Marston Associates,Inc. August 15,2011 Page 13 O J N W N Enforcement Measures ongoing maintenance of covenant data base . x Annual review of County Assessor' s records for title changes and home owner exemption claims . Annual notice to owners to verify owner occupancy. Page \104 ,\� Keyser Marston Associates,Inc. August 15,2011 14