Loading...
HomeMy WebLinkAboutCC Resolution 12855 (BMR Ownership Program)RESOLUTION NO. 12855 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING AN EXPENDITURE IN THE AMOUNT OF $80,000 BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN RAFAEL FOR AN AGREEMENT WITH MARIN HOUSING FOR ADMINISTRATION AND ENFORCEMENT OF THE CITY'S BELOW MARKET RATE OWNERSHIP PROGRAM; MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA; AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT FOR SUCH SERVICES WITH MARIN HOUSING WHEI�1,AS, the City Council (the "City Council") of the City of San Rafael (the "City") has adopted and amended, from time to time, the Redevelopment Plan (the "Redevelopment Plan") for the Central San Rafael Redevelopment Project Area (the "Project Area"); and WHEREAS, the Redevelopment Agency of the City of San Rafael (the "Agency") is responsible for administering the Redevelopment Plan to cause redevelopment of the Project Area, including the provision of housing available at affordable housing cost to low and moderate income households; and WHEREAS, the City of San Rafael General Plan Policy H-19 provides for on site units affordable to very low, low and moderate income households in new residential projects; and WHEREAS, such units provided by developers to comply with the General Plan are known as Below Market Rate Housing ("BMR") units, and each buyer of a BMR unit executes enforceable resale restrictions so the units remain affordable over time; and WI IEREAS, for many years the City of San Rafael has hired the I lousing Authority of the County of Marin ("Marin Housing") to administer the City's BMR Ownership Housing Program ("the Program"), and to enforce the resale restrictions on BMR units in the Program; and WHEREAS, the City and Marin Housing wish to formalize their agreement as to the services to be provided by Marin Housing for comprehensive administration and management of the Program for Fiscal Year 2009-10, at an annual cost to the City of Seventy Thousand Dollars ($70,000); and WHEREAS, it is estimated that an additional Ten Thousand Dollars ($10,000) will be required in Fiscal Year 2009-10 to pay Marin Housing for legal fees in connection with their enforcement of BMR unit resale restrictions; and WHEREAS, it is proposed that the Agency fiend the payments to be made to Marin Housing under such an agreement with Eighty Thousand Dollars ($80,000) from the Agency's Low and Moderate Income Housing Fund (the "Housing Fund"); and 1 1'� B55 WHEREAS, Health and Safety Code Section 33334.2(g) authorizes expenditure of Housing Fund monies outside the Project Area upon a finding by the Agency and the City Council that such use will be of benefit to the Project Area; and WHEREAS, the Program will benefit the Project Area and serve major Redevelopment Plan goals and objectives by maintaining housing available at affordable cost in the community, thereby decreasing the market pressure on the supply of affordable housing in the community and the Project Area, by enhancing the economic viability of business within the Project Area by providing housing near the Project Area for people who will patronize businesses in the Project Area, and by alleviating blight in an arca in close proximity to the Project Area; and WHEREAS, by staff report accompanying this Resolution and incorporated into this Resolution by this reference (the "Staff Report"), the City Council has been provided with additional information upon which the findings and actions set forth in this Resolution are based. NOW, THEREFORE, BE IT RESOLVED that the City Council hereby finds and determines that the above recitals are true and correct and have served as the basis, in part, for the findings and actions of the City Council set forth below. BE IT FURTHER RESOLVED that, based on information and analysis set forth in the above Recitals and contained in the Staff Report accompanying this Resolution, the City Council hereby finds and determines pursuant to Health and Safety Code Section 33334.2(g) that the use of moneys from the Ilousing Fund to fund an agreement with Marin Housing for administration and enforcement of the Program will be of benefit to the Project Area and the program of redevelopment pursuant to the Redevelopment Plan. BE IT FURTHER RESOLVED that the City Council hereby approves allocation of Eighty Thousand Dollars ($80,000) of Housing Fund monies to fund an agreement between the City and Marin Housing for management and enforcement of the Program. BE IT FURTHER RESOLVED that the City Council hereby authorizes the City Manager to execute an agreement with Marin Housing for Fiscal Year 2009-10 for comprehensive services to manage the Program for a set fee of Seventy Thousand Dollars ($70,000), and for additional payment of sums up to Ten Thousand Dollars ($10,000) for enforcement services, in a form to be approved by the City Attorney. BE IT FURTHER RESOLVED that this Resolution shall take immediate effect upon adoption. I, ESTHER C. BEIRNE, City Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council held on the 19`x' day of October, 2009, by the following vote, to wit: AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Miller & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None 1ZSM�� e— - �-4 - ESTHER C. BEIRNE , City Clerk MARtN HOUSING Making Housing More Affordable Memorandum of Understanding This Memorandum of Understanding ("MOU") is entered into as of July 1, 2007, between the Housing Authority of the County of Marin (the "Housing Authority") and The City of San Rafael (the "Jurisdiction") with respect to the administration of the Below Market Rate Homeownership Program (the "BMR Program"). This MOU shall define all of the policies and procedures which shall govern the pre -development planning, consulting services, initial sale, monitoring, resale and refinance of each unit within the Jurisdiction that is administered by Marin Housing through the BMR Program (the "BMR Unit"). The Housing Authority and the jurisdiction agree as follows: 1. BMR Program Fees. The Housing Authority shall be paid for services and activities provided in support of the BMR Program with respect to the Jurisdiction's BMR Units according to the attached Exhibit A --BMR Program Fee Schedule. The Fee Schedule shall be reviewed and revised annually by the parties to this MOU. 2. Term of MOU. Regardless of the term of the resale restrictions recorded with the BMR Unit, the term of this MOU shall be for two years from the date of this MOU, with an option to renew for subsequent years, upon the written approval of both parties to this MOU. 3. Notices. Notices shall be sent to the following addresses: Housing Authority: Housing Authority of the County of Marin Attention: Executive Director 4020 Civic Center Drive San Rafael, CA 94903-4173 Jurisdiction: City of San Rafael Kenneth Nordhoff, City Manager P.O. Box 151560 San Rafael, CA 94915-1560 4. Authority responsibilities. The Housing Authority shall utilize the following documents prepared by Goldfarb and Lipman and approved by Housing Authority and Jurisdiction for all BMR unit sales that occur within the contract term: • Resale and Refinancing Restriction Agreement and Option to Purchase (2005) • Buyer's u/sciosure Statement — Marin County Below Market Rate Home Ownership Program (2005) 1 of 10 6/25/2007 Attachment 1 • Housing Authority Deed of Trust and Security Agreement securing the Resale and Refinancing Restriction Agreement and Option to Purchase (2005), with Administrative Checklist • Below Market Rate Housing Agreement, three party agreement by and between the Authority, Jurisdiction, and Developer. The Housing Authority staff shall record or cause to be recorded the Resale and Refinancing Restriction Agreement and Option to Purchase, and the Housing Authority Deed of Trust on each property at the close of escrow. The Authority shall provide the initial unit pricing information for the Below Market Rate Housing Agreement pursuant to the affordability requirements established by the Jurisdiction. The Authority shall be responsible for maintaining and updating all BMR program documents including the documents listed above, to assure program compliance with applicable mortgage loan programs, including Fannie Mae and CalHFA. Authority staff will consult with Jurisdiction regarding lender requests to modify or subordinate Authority documents. 5. Jurisdiction Responsibilities. Each jurisdiction will be responsible for executing and recording the initial three -party (Authority, Jurisdiction, and Developer) Below Market Housing Agreement. The Authority will provide the template to Jurisdiction. 6. Priorities and Preferences in the Selection of Buyers. The Housing Authority will utilize a lottery system to select prospective buyers from among all BMR applicants. The Housing Authority will utilize a standard definition of live/work in Marin County as a priority in the selection of prospective buyers for any BMR Unit. If the jurisdiction desires to implement any other priorities or preferences in the selection of buyers for any BMR Unit, the jurisdiction must assume all of the duties associated with the selection of the buyer for the BMR Unit. The Housing Authority will not participate in any buyer selection or qualification that requires the use of any other priority or preference system. 7. Exercise of Option Pursuant to Resale Restriction and Option to Purchase. The Housing Authority will notify the Jurisdiction in writing within five working days of receiving information that an "Option Event", as defined by the Resale Restriction Agreement, has occurred. The written notification shall include the nature of the Option Event, the current resale price, and any other information that will assist the Jurisdiction in deciding the proper course of action. Within ten working days of receipt of such notice by the Authority, the Jurisdiction will provide written instructions to the Authority to: a) exercise the Option; or b) assign Jurisdiction the option to purchase the BMR unit, with the Jurisdiction assuming responsibility to enforce the Resale Restriction Agreement and Deed of Trust; or c) file a Notice of Abandonment If the Jurisdiction requests the Authority to exercise the Option, the Authority will: a) fund the sale through available resources; or b) utilize the funds collected through resales to purchase the unit, or c) the Jurisdiction will provide the Housing Authority with a short term loan to complete the purchase event. 2of10 6/25/2007 For the CITY OF SAN RAFAEL: Authorize,Cato NAME f G. For MARI USING: BARBARA COLLINS, Executive Director 3of10 DATE D 6/25/2007 Exhibit A BMR Program Fee Schedule Effective July 1, 2007 Annual Participation Fee. The Jurisdiction shall pay to the Housing Authority an annual participation fee proportional to the Jurisdiction's share of BMR units administered by the Housing Authority. The fee will be based on the actual cost of total program operation by the Housing Authority, and will not increase over the course of this agreement. The annual participation fee will include all services set forth in Exhibit B, except consultant fees resulting from option events, or administrative fees to be borne by BMR owners. Exceptions will be charged at actual cost to Marin Housing and the jurisdiction will be provided with an estimate of those costs. Jurisdictions will be invoiced on an annual basis. Invoices shall reflect all administrative sales fee proceeds from BMR sales in that Jurisdiction, and this amount shall be deducted from the annual invoice. Separate fees for Additional Fee Services shall be billed separately to the Jurisdiction on an event basis. See Exhibit B for a list of services included in Annual Retainer Corte Madera County Larkspur Mill Valley San Anselmo San Rafael Tiburon TOTAL BMR Units 31 91 25 25 3 117 24 316 % of Inventory 1 9% 29%1 8%1 8% 1% 37%1 8% 100% % of Operating 1 $18,528.88 $54,391.221 $14,942.641 $14,942.64 $1,793.12 $69,931.571$14,344.94 $188,875.00 4of10 6/25/2007 Exhibit B BMR Program Scope of Services Marin Housing Authority ("Authority") agrees to provide at no additional cost to the Jurisdiction all administrative duties necessary for the initial sale and resale of BMR units and program administration noted or referenced in this section. • Efficient and professional coordination of BMR initial sale and resale activities. Refer to Exhibit C 'BMR Re -Sale Services' for more detail. • Administration of the BMR lottery list and system • Provide first-time Homebuyer Counseling regarding mortgages, refinancing, and HOA's • Process refinancing and subordination requests from owners of BMR units • Create and distribute an annual newsletter to BMR participants • Annual monitoring of at least one third of existing BMR units to verify current owner for compliance with the Resale Restrictions (e.g., continuing owner occupancy, property upkeep, not over -encumbering the property, etc.) • Provide biannual status reports to the Jurisdiction on BMR sales activity and related inventory information (e.g., BMR owner demographics, current affordability levels, number of BMR resales, sales fees, etc.) • Respond to routine inquiries from BMR owners, lenders, realtors and developers regarding how the BMR program works, how the resale restrictions work, how to determine affordability, how to apply for capital improvements, what is the resale procedure, what is the policy on renting, matters dealing with inheritance and changes on title, etc. • Available 'on call' to meet with the Jurisdiction and prospective developers to discuss the locality's inclusionary requirements and how they can be met through the BMR Program, and explain how to determine a specific 'affordable' sales price to be applied to a general income level target • Provide current Median Household Income information to Jurisdictions and prospective developers and explain the nuances of Income Limits, Median Income, the relationship between them, and how they are typically used to determine affordability • Consult with Jurisdictions and instruct attorneys regarding Option Events including over - encumbrance, default, death, inheritance, and rental allowances • Administer the American Dream Downpayment Initiative • Apply for funding and administer Mortgage Credit Certificate Program • Administer Marin City Downpayment Assistance Program • Administer other housing assistance programs provided by Jurisdictions 5of10 6/25/2007 Additional Fee Services to Jurisdiction • Jurisdiction agrees to pay the direct cost of legal or other outside service fees arising from an option event. Fee Services applicable to BMR Owners and/or Applicants (not to be borne by Jurisdiction) • Incidental BMR Program Fees • BMR Lottery Application: The application fee for individuals to enter the lottery for BMR units that are sold by Marin Housing shall be an annual fee $50 for the calendar year, payable at the time of submitting an application. • BMR Resale Price Valuation: The fee for preparing a BMR Resale Price Valuation shall be $50, payable by the owner, in advance. • Capital Improvements: There shall be no fee for inspecting and approving the value of capital improvements to be added to the BMR Resale Price in advance or at the time of upgrade. Requests for capital improvement adjustments to the BMR Resale Price at the time of sale shall carry a $100 fee. The Housing Authority will not consider any capital improvements that total less than $1,000 and that the Housing Authority has not approved in writing. 6of10 6/25/2007 Exhibit C BMR Re -Sale Services MHA receives letter from BMR Owner ("Seller") notifying MHA of Owner's Intent to Sell. 2. MHA calculates BMR Re -Sale Price as of date of receipt of letter (worksheet & cover letter) and sends to Seller within 5 days; and prepares list for "Receipt of Documents" for later use. 3. MHA sends Seller an acknowledgement letter confirming BMR Re -Sale Price and proposed schedule to complete the re -sale transaction; and advises seller to order Resale Inspection from City if Code Regulations state that City requires; and ask Seller to send us copy. 4. MHA contacts local jurisdiction to inform them of resale and determine if locality wants to do anything other than re -sell to a qualified first-time homebuyer. 5. MHA advises Jurisdiction of any additional costs related to title, recording fees, and legal costs. 6. MHA makes an appointment and performs an inspection of the BMR unit to review condition of the unit, assess any capital improvements to be factored into the price as well as any necessary repairs or adjustments to the price, and reviews details of the re -sale process with the Seller; and requests HOA disclosure documents from seller (see detailed below in #7). 7. MHA orders Contractor's Inspection (to be charged to Seller out of close of escrow). Contractor's Inspection will prevent last-minute complaints by Buyer, after close of escrow. 8. MHA contracts for any repairs or replacement items with a licensed, insured, general contractor. MHA will secure three competitive bids to complete the work. 9. MHA orders from Condo Certs (cost to be charged out of close of escrow to seller) HOA Disclosure Docs, including Real Estate Transfer Disclosure Statement and "Request For Response" from Management Co, and requests from Se//ertheir HOA disclosure documents, minutes, etc; lists them on a Receipt for Documents index; performs a review of documents and does any necessary follow-up to verify that the packet is complete. (MHA) meets later with Buyer, who signs for receipt of docs, including Natural Hazard Disclosure Report and Earthquake Safety Booklet. 10. MHA order Natural Hazard Disclosure Report. 11. MHA conducts outreach and marketing; establishes deadline for applications; sets date for lottery. 12. MHA orders Preliminary Title Report from the title company and a Structural Pest Control Report from a local termite inspection company. MHA reviews both reports and contacts HOA, if necessary, regarding follow-up on repairs. 13. MHA performs lottery (generally within one week of Notice to Sell) to select list of prospective buyers from among all eligible applicants utilizing Access database and random number generator software program. 14. MHA sends out a letter with the lottery results to the top 10 to 15 names and invites those applicants to an Open House to be conducted by the Seller on a specified weekend. The letter describes follow-up procedures if the applicant is interested, and lists the required documentation the applicant will need to bring to the interview. 7of10 6/25/2007 15. MHA logs and tracks confirmation of interest from the applicants and schedules appointments for eligibility interviews with those who ranked highest in the lottery. 16. MHA conducts an eligibility interview to screen the applicant for BMR program eligibility and applicant's ability to qualify for financing. MHA provides an overview of the BMR Program, the Resale Restrictions and financing options. MHA also reviews with the applicant a pro forma financial analysis of the purchase transaction (typically runs 2 to 3 hours per interview session). 17. MHA contacts the applicant's lender to verify feasibility of the proposed financing and any outstanding issues (e.g., credit/debt issues, funds available for down payment and closing, gift funds, required documentation, etc.); and remains in contact regarding pre -approval for financing. 18. Once an applicant has been determined eligible and has provided evidence of loan pre - approval, MHA draws up a Standard Residential Purchase Agreement, which is signed in a one -on one session with MHA, first by the Buyer and then by the Seller. The Purchase Agreement includes the proposed terms of the Buyer's financing and establishes the proposed date for the close of escrow. Attachments to the Purchase Agreement include the BMR Program Transaction Fee Disclosure and the BMR Buyer's Disclosure Statement, and any Addendum regarding Buyer/Seller credits, if applicable. Make sure that Buyer understands family inheritance rules before signing Disclosure. MHA gives Buyer a general presentation all of the required disclosure documents, lists them on a Receipt for Documents index, and gives to Buyer, who signs for receipt of each item. 19. MHA sends via Registered Mail the "Exercise of Option" letter, within 60 days of receipt of owner's "Notice to Sell". 20. MHA provides copies of the signed Purchase Agreement (including any Addenda), Contact Sheet, Preliminary Title Report, Resale Restrictions and Buyer Eligibility Letter to the Lender. 21. MHA forwards Buyer's initial deposit of 3% of the purchase price to the Title Company along with Escrow Instructions, Contact Sheet, and the original executed Resale Restriction documents to be recorded at the close of escrow. 22. MHA receives Mortgage Credit Certificate application forms completed by the Buyer and the Lender and MHA issues an MCC Commitment Letter confirming reservation of an MCC allocation for that specific transaction. This process may periodically alternate with the use of American Dream funds administration. 23. MHA interviews and qualifies at least one additional applicant (next in line from the lottery) to fill a back-up position should the selected Buyer drop out for any reason or fail to obtain final loan approval. 24. MHA continues to follow up with the Buyer, Seller, Lender and the Title Company to coordinate final steps, resolve any outstanding issues and see the transaction through to a successful close of escrow. 25. MHA does final walk-thru with Buyer 3 days prior to close of escrow; while Seller is responsible for any applicable repairs. 26. MHA coordinates with Seller to bring keys to MHA and we give keys to Buyer at the close of escrow. 27. MHA receives BMR post -loan -closing documents from the Title Company (BMR Sales Transaction Fee, HUD -1 Settlement Statement, recording information for the Resale Restriction documents, Request for Notice of Default, etc.). 8of10 6/25/2007 28. MHA receives MCC post -loan -closing documents from the Lender and issues the MCC. 29. MHA updates both the BMR and the MCC databases and the relevant files to document the BMR re -sale transaction and the newly issued MCC. *** American Dream or MCC will be explained to applicant, as available. 9 of 10 6/25/2007 Agreement for BMR Program Portfolio Management This Agreement for BMR Program Portfolio Management (the "Agreement") is entered into as of October 20, 2009, between the Housing Authority of the County of Marin (the "Authority") and the City of San Rafael ("Jurisdiction") with respect to the Portfolio Management of Jurisdiction's Below Market Rate Homeownership Program (the "BMR Program"). This Agreement shall define all of the policies and procedures which shall govern the pre - development planning, consulting services, initial sale, monitoring, resale and refinance of each unit within Jurisdiction that is administered by the Authority through the BMR Program (the "SMR Unit"). There are currently 116 BMR units located within Jurisdiction, which constitutes 36 % of the Marin County BMR portfolio. THE AUTHORITY AND THE JURISDICTION AGREE AS FOLLOWS: I. RETAINER FEE PROGRAM MANAGEMENT SERVICES: In consideration for Jurisdiction's payment of an Annual Retainer of $69,931.57 (or $597 per unit, per year) (see Exhibit A), the Authority shall provide the following services to Jurisdiction: A. SALE AND RESALE SERVICES to cause the sale or resale of Jurisdiction's BMR Units as follows: i. Meet with Jurisdiction and prospective developers to describe (1) Jurisdiction's inclusionary housing requirements; (2) how those requirements can be satisfied through the BMR Program; and (3) how to determine a specific "affordable" sales price to be applied to a general income level target. ii. Establish the initial for -sale unit pricing information for the Below Market Rate Housing Agreement pursuant to the affordability requirements established by Jurisdiction, and conduct resale price evaluations for existing BMR Units. iii. Advertise the BMR Program and BMR Units for sale or resale to the general public through e-mail blasts and/or mailers to community service providers, lenders, the Authority BMR data base, BMR Unit Open Houses, and the Authority website. iv. Record or cause to be recorded the Resale and Refinancing Restriction Agreement and Option to Purchase, the Authority Deed of Trust and Security Agreement and the Notice of Affordability Restrictions on each property prior to close of escrow. Below Market Rate Portfolio Management Agreement Page 1 coo [P%I v. Consult with Jurisdiction regarding lender requests to modify or subordinate Authority documents and obtain consent from Jurisdiction prior to agreeing to any such modification or subordination. vi. Utilize the following documents, and obtain all necessary signatures thereon, in connection with all BMR Unit sales and resales during the term of this Agreement: 1. Resale and Refinancing Restriction Agreement and Option to Purchase (2005); 2. Buyer's Disclosure Statement — Marin County Below Market Rate Home Ownership Program (2005); 3. Authority Deed of Trust and Security Agreement securing the Resale and Refinancing Restriction Agreement and Option to Purchase (2005), with Administrative Checklist; and 4. Below Market Rate Housing Agreement (a three -party agreement by and among the Authority, Jurisdiction, and the Developer/Contractor. 5. Notice of Affordability Restrictions vii. Maintain and update all BMR Program documents including (but not limited to) the documents listed above, for program compliance with all state and federal laws and all applicable mortgage loan programs, including, but not limited to, Fannie Mae, FHA and Ca1HFA. viii. Subject to availability, provide down payment assistance to the BMR buyers. Programs may include, but shall not be limited to, the Mortgage Credit Certificate Program (MCC), ADDI, HOME and any programs that may be funded by Jurisdiction. ix. Provide or cause to provide by sellers the repair or upgrading of BMR Units to Housing Quality Standards (HQS) to increase BMR Units marketability for sale or re -sale. (excludes "Option -Exercised" units.) X. Establish Priorities and Preferences in the Selection of Buyers by: 1. Pre -qualifying BMR Program Applicants upon application submittal; 2. Utilizing a lottery system to select prospective buyers from among all qualifying BMR Program applicants; and 3. Utilizing the standard definition of live/work in Marin County adopted by the Authority in 2007 as a priority in the selection of prospective buyers for any BMR Unit. B. PROVIDE BMR PROGRAM MONITORING SERVICES as follows: Below Market Rate Portfolio Management Agreement Page 2 i. Provide annual monitoring of no less than one-third of Jurisdiction's existing BMR Units to verify the existing BMR owners' compliance with the Resale Restrictions Agreement (e.g., continuing owner occupancy, no subleasing, no refinancing, no over -encumbrances, etc.). ii. Provide semi-annual status reports to Jurisdiction on BMR sales activity, refinancing activity, and other related information (e.g., BMR owner demographics, current affordability levels, number of BMR resales and fees collected by the Authority on those resales, highlights and concerns, etc.). C. PROVIDE INFORMATION AND EDUCATION as follows: i. Provide Jurisdiction, BMR program participants, and lenders with information concerning resale procedures, BMR Unit resale restrictions, refinancing, determination of affordability, capital improvements, and interpretation of the BMR restrictions including owner occupancy and inheritance issues. ii. Provide, or cause to be provided, counseling workshops to first-time home buyers, including, but not limited to, information concerning qualifications, mortgages, refinancing, fair housing, and HOA's. iii. Provide current Median Household Income information to Jurisdiction and prospective developers and provide details concerning Income Limits and Median Income, the relationship between those factors, and how those factors typically are used to determine affordability. iv. Provide or cause to be provided semi-annual newsletters to BMR participants and other stakeholders, and a web -site with the most current information on affordable housing programs in Marin County. II. BMR PROGRAM VIOLATION ENFORCEMENT SPECIALIST SERVICES: A. Should the Authority, in the course of Program Management Services (section I. above), identify program violations by any of the BMR Owners, the Authority's BMR Program Enforcement Specialist ("Enforcement Specialist") shall immediately contact the BMR Owner to demand correction of their violation(s). The Enforcement Specialist, with the consent of the Jurisdiction, will enforce the BMR Resale Restrictions Agreement (RRA) to secure and preserve the BMR Unit for the Jurisdiction and enforce compliance with the BMR Program until such time as the violation has been cured. Below Market Rate Portfolio Management Agreement Page 3 B. Within ten (10) business days of the Enforcement Specialist's determination of the existence of a BMR Program Violation, the Enforcement Specialist shall: document such violation in the BMR Owner file, provide written notice to Jurisdiction, and send, by Certified Mail, a demand that the BMR Owner meet with the Enforcement Specialist or immediately cure the violation. The Enforcement Specialist shall require that this meeting occur no later than ten (10) business days from mailing of said written demand. Should the BMR Owner fail to meet with the Enforcement Specialist, fail to cure the violation, or not respond to the Notification, the Enforcement Specialist may, with Jurisdiction's consent, engage the Authority's litigation counsel ("law firm") according to Paragraph III. below. C. FEE TO AUTHORITY FOR BMR PROGRAM VIOLATION ENFORCEMENT SPECIALIST SERVICES: Enforcement Specialist services will be provided on a case-by-case basis only upon Jurisdiction's written consent. The Enforcement Specialist, an employee of the Authority, will bill to Jurisdiction an hourly rate of $75 per hour (billable in'/4 hour increments) with a maximum limit of $1,500 (or not to exceed 20 hours) per BMR Unit as a "Fee for Program Enforcement Services." The Enforcement Specialist will submit detailed monthly billings to Jurisdiction reflecting the services rendered by the Enforcement Specialist. No fees shall be billed to Jurisdiction in excess of the above maximum limit without Jurisdiction's prior written approval. III. BMR PROGRAM DEFAULT OPTION EVENT AND 3' PARTY LEGAL, SERVICES: A. LEGAL SERVICES IN THE EVENT OF BMR DEFAULT OPTION EVENTS In the event any BMR Unit violation cannot be cured, as set forth in Paragraph II. above, and said Unit is deemed in default per the terms of the RRA, or is threatened by any other legal proceedings, the Enforcement Specialist may, with Jurisdiction's prior written consent, refer the case to the Authority's litigation counsel. Said law firm shall represent the Authority in connection with Exercise of the Option and preservation of the BMR Unit for purposes of the BMR Program. The law firm will assist the Enforcement Specialist in providing legal opinions and advice, and representation in litigation. Enforcement Specialist will provide regular advice and notice to Jurisdiction concerning all litigation and pre- litigation activities. B. FEE TO AUTHORITY TO REIMBURSE 3RD PARTY LEGAL SERVICES FOR DEFAULT OPTION EVENTS: Below Market Rate Portfolio Management Agreement Page 4 The Enforcement Specialist will continue to provide services until such time as the Default has been settled or resolved, or the P party Legal Fees have reached a maximum of $5,000 in attorneys' fees and costs (to be billed on an hourly basis, with detailed billings to be provided to Jurisdiction), at which time Jurisdiction will be briefed on the recommended course of action and the Authority will proceed with no further legal action for said BMR Unit unless and until it receives written approval from Jurisdiction. C. FEE TO AUTHORITY FOR DEFAULT OPTION EVENT ENFORCEMENT SERVICES: Each month, the Enforcement Specialist will provide Jurisdiction with detailed hourly billing records (billable in 1/4 hour increments) for services rendered in connection with default option event enforcement for Jurisdiction's individual BMR Units. Jurisdiction agrees to pay the Authority $75 per hour for these additional Enforcement Services to engage and manage the law firm actions in preserving and recovering the BMR Unit. D. BMR PROGRAM EXERCISE OF OPTION TO PURCHASE PURSUANT TO RESALE RESTRICTION AGREEMENT: In the event of an Exercise of Option to Purchase, the Authority shall: i. Notify Jurisdiction in writing within five (5) working days of the Enforcement Specialist's determination that an "Option Event", as defined by the Resale Restriction Agreement, has occurred; ii. The written notification shall include the nature of the Option Event, the current resale price, and any other information that will assist Jurisdiction in deciding the proper course of action including legal recommendations per paragraph III A above; iii. Within ten (10) working days of receipt of such notice by the Authority, Jurisdiction will provide written instructions to the Authority to exercise the Option; or assign Jurisdiction the option to purchase the BMR unit with Jurisdiction assuming responsibility to enforce the Resale Restriction Agreement and Deed of Trust and Security Agreement; or file a Notice of Abandonment; If the Jurisdiction requests that the Authority exercise the Option, the Authority shall: iv. Utilize the funds collected through resales within Jurisdiction, if any, to purchase the unit; or v. Jurisdiction will provide the Authority with a short term loan to complete the purchase event. Below Market Rate Portfolio Management Agreement Page 5 IV. BMR PROGRAM SALES MANAGEMENT AND 3 I PARTY BROKERAGE MANAGEMENT SERVICES: A. Based on previous BMR Unit sales and resales experience, the Authority may recommend that a BMR Unit being made ready for sale or resale would benefit from P party professional real estate brokerage services. Such additional services may not be engaged without Jurisdiction's prior written approval. The Authority shall provide a written justification when recommending such services to demonstrate the need for increased market exposure and/or add additional brokerage representation services above and beyond those already provided by the Authority as stated in Paragraph I.A iii above. B. BMR PROGRAM SALES MANAGEMENT FEE AND ADDITIONAL BROKERAGE SERVICES FEES: At close of Escrow, and from the closing proceeds, the Authority shall be entitled to receive a sales fee as set forth in the RRA. In most cases, the resale fee will be 2% Fee. In the event a 3`a party Broker is engaged per section IV A above, and earns a brokerage Fee, an additional 3% Sales Fee shall be paid to a listing broker and in the event of a selling broker causing the sale, a Fee shall be paid to the selling broker. Total sales fees for units that are sold through a P party broker shall not exceed six percent (6%); a maximum of 4 % to the outside brokers and 2% to the Authority. V. BMR PROGRAM HOME OWNER FEES TO AUTHORITY: A. BMR Program Lottery Application Fee — Each applicant interested in the BMR Program shall pay to the Authority an annual fee of $25 for the calendar year, payable to the Authority at the time of submitting an application. This fee entitles the prospective BMR Owner to obtain information about the program, requesting pre -qualification, lottery inclusion based on the family composition, and hands-on assistance in the next steps in the process. If the Applicant has completed a First Time Homeownership Counseling Workshop from a pre -approved provider prior to applying for the Lottery, the $25 fee will be waived. B. BMR Program Resale Price Valuation Fee - The Authority shall charge a fee of $50 for preparing a BMR Resale Price Valuation. This fee will be paid by the owner at the time of the request. This fee will only be charged to BMR Home Owners as this service is included in Jurisdiction's Program Management Fee. C. BMR Program Capital Improvements Evaluation Fee - The Authority shall charge a fee of $50 for the evaluation and approval of capital improvements to be added to the resale price. This fee shall be paid by the owner at the time of the request. The fee for this service shall be $100, if a physical inspection is required. The Authority will not consider any capital improvement evaluation request for improvements of less than $1,000. Below Market Rate Portfolio Management Agreement Page 6 VI. JURISDICTION RESPONSIBILITIES: Jurisdiction shall be responsible for the following: A. Executing and recording the initial three -party (Authority, Jurisdiction, and Developer/Contractor) Below Market Rate Housing Agreement; B. Meeting with Authority staff on an annual basis to review the asset management portfolio and BMR Program Portfolio Management Services; C. Assessing and promptly approving the Authority's request for payment of annual invoices for the BMR Program Management Services (per Paragraph I); monthly invoices for BMR Program Enforcement Specialist Services (per Paragraph II); BMR Program Default Option Event Litigation Fees and Enforcement Specialist Fees (per Paragraph III). The invoiced fees and related expenses shall be reimbursed by Jurisdiction within thirty (30) days of Authority's submission of detailed billings as required by this Agreement. Jurisdiction further agrees to assume all and any financial responsibility for any 3`d party legal services performed on Jurisdiction's behalf per this Agreement, so long as Jurisdiction's prior written approval is obtained prior to the provision of such services. D. Provide or cause to provide access to any and all Jurisdiction documentation necessary for the Authority to conduct its services, including but not limited to, documents recorded by Jurisdiction. VII. TERM OF AGREEMENT Regardless of the term of the BMR Resale Restrictions recorded with Jurisdiction's BMR Units, the term of this Agreement shall be for two (2) years from the date of this Agreement, with an option to renew for subsequent two (2) year terms, upon written approval of both parties to this Agreement. VIII. INTEGRATION CLAUSE This Agreement constitutes the entire agreement between the parties to this Agreement with respect to the subject matter of this Agreement, and there are no other terms, obligations, covenants, representations, statements, or conditions except as set forth in this Agreement. No change or amendment to this Agreement will be effective unless in writing and signed by the parties to this Agreement. Failure to insist upon strict compliance with any term or provision of this Agreement will not be deemed to be a waiver of any rights under a subsequent act or failure to act. This Agreement specifically supersedes all prior agreements between the parties. IX. CONSTRUCTION The parties to this Agreement have been represented by counsel in the negotiation and preparation of this Agreement, and this Agreement will be construed according to its fair Below Market Rate Portfolio Management Agreement Page 7 language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be employed in interpreting this Agreement. X. SEVERABILITY In the event that for any reason one or more of the provisions of this Agreement or its or their application to any person or circumstance is held to be invalid, illegal, or unenforceable in any respect or to any extent, such provisions will, nevertheless, remain valid, legal, and enforceable in all other respects and to such extent as may be permissible, and, in addition, any such invalidity, illegality, or unenforceability will not affect any other provision hereof, but this Agreement will be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. XI. NOTICES Notices shall be sent to the following addresses: Authority: Housing Authority of the County of Marin Attention: Executive Director 4020 Civic Center Drive San Rafael, CA 94903-4173 Jurisdiction: City of San Rafael Attention: Economic Development Director 1400 Fifth Avenue P.O. Box 151560 San Rafael, CA 94914-1560 Below Market Rate Portfolio Management Agreement Page 8 IN WITNESS WHEREOF, the Housing Authority of the County of Marin and the City of San Rafael, have executed this Contract as of the date first above written. The undersigned represent and warrant that he/ she has full power and authority to enter into this Contract and to bind each other in accordance with its terms. For the City of San Rafael: / i IR t Zy 1 � //Jolro Authorized Signatory: NAME DATE For the Housing Authority of the County of Marin: / 1 / q /10 Dan Nackerman, Executive Director DATE Approved as to Form: Approved a Form: County of Marin Housing Authority Counsel R&/ in ft . E s in, City Attorney City of San afael END OF AGREEMENT Below Market Rate Portfolio Management Agreement Page 9 Exhibit A BMR Program Fee Schedule Effective January 2, 2009 Annual Retainer The Jurisdiction as set below, shall pay to the Authority an Annual Retainer Fee, payable upon presentation of invoice. If the Annual Retainer is paid by the Jurisdiction, all services except legal, title, recording, enforcement and loan charges will be provided by Authority at no additional cost to the Jurisdiction. Exceptions have been identified in Section 2 of this Agreement. Corte San Madera County Larkspur Mill Valley Anselmo San Rafael Tiburon TOTAL JBMR Units 31 91 25 25 3 116 24 315 % of Inventory 9% 129% 8% 8% 1% 37% 8% 100% % of Operating $18,528.88 1$54,391.22 $14,942.64 $14,942.64 $1,793.12 $69,931.57 $14,344.94 $188,875.00