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Loan Limitations <br />All loans provided under this program should not exceed 30% of the house sales price. The loan <br />shall be either a deferred payment loan or an amortized loan over a period of forty (40) years. <br />The loan shall be secured by a Deed of Trust and Promissory Note subordinate only to the first <br />mortgage loan. Primarily, loan refinancing to lower interest rates and for home improvements <br />will be reviewed by the County. Refinancing for debt consolidaxion will not be permitted. The <br />loan may not be refinanced or assumed without the prior consent of the County. There should be <br />no additional encumbrances against the property during the term of the Loan without the prior <br />consent of the County. <br />Reca~ture/Resale Provisions <br />All financial contributions provided by the County will be provided as a deferred second loan <br />secured by a forty (40) year Deed of Trust and Promissory Note, forgivable at the end of 40 <br />years. This Deed of Trust and Promissory Note shall constitute a lien on the Property; <br />subordinate only to private construction financing or permanent first mortgage financing. <br />The period of affordability will be 99 years and each individual housing unit will be secured by a <br />Declaration of Restrictive Covenants that will incorporate a right of first refusal that may be <br />exercised by a sponsoring non-profit organization and/or Orange County. <br />The non-profit organiza.tion and/or the County as applicable retains full responsibility for <br />compliance with the affordability requirement for assisted units throughout the term of <br />affordability, unless affordability restrictions are terminated due to the sale of the Property to a <br />non-qualified buyer. <br />If the buyer no longer uses the Property as a principal residence or is unable to continue <br />ownership, then the buyer must sell, transfer, or otherwise dispose of the Property only to a <br />qualified homebuyer, i.e., a low-income household, one whose combined income does not <br />exceed 80% of the area median household income by family size, as determined by the U.S. <br />Department of Housing and Urban Development at the time of the transfer, to use as their <br />principal residence. <br />However, if the property is sold during the term of affordability to a non-qualified homebuyer, <br />the Right of First Refusal provision of the New and Existing First-Time Homebuyer Program <br />portion of the County's Long-Term Housing Affordability Policy must be followed and the net <br />sales proceeds (sales price less selling costs and 1 st mortgage payof fl or "equity", after <br />repayment, if required by the Note and Deed of Trust, of the initial County contribution, will be <br />divided 50/50 by the seller of the Property and the County. If the initial County contribution <br />does not have to be repaid because the sale occurs more than forty years after the County <br />contribution is made, then the seller of the Property and the County will divide the entire equity <br />realized from the sale. <br />2 cmmrevgd.doc <br />04/11/00 <br />