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4 <br />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 twenty years. The <br />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 <br />improvements will be reviewed by the County. Refinancing for debt consolidation will not <br />be permitted. The loan may not be refinanced or assumed without the prior consent of <br />the County. There should be no additional encumbrances against the property during the term <br />of the Loan without the prior consent of the County. <br />~ecaRture/Resale Provisions <br />All financial contributions provided by the County will be provided as a deferred second <br />loan secured by a forty (40) year Deed of Trust and Promissory Note, forgivable at the end <br />of 40 years. This Deed of Trust and Promissory Note shall constitute a lien on the <br />Property; subordinate only to private construction financing or permanent first mortgage <br />financing. <br />The period of affordability will be 99 years and each individual housing unit will be <br />secured by a Declaration of Restrictive Covenants that will incorporate a right of First <br />refusal that may be exercised by a sponsoring non-profit organization and/or Orange <br />County. <br />The non-profit organization 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 <br />to anon-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 their interest in the <br />Property only to a qualified homebuyer, i.e., aloes-income household, one whose combined <br />income does not exceed SO% of the area median household income by family size, as <br />determined by the U.S. Department of Housing and Urban Development at the time of the <br />transfer, to use as their principal residence. <br />However, if the property is sold during the term of affordability to anon-qualified <br />homebuyer to be used as their principal residence, the net sales proceeds (sales price less <br />selling costs and 1°` mortgage payoff) or "equity", after repayment, if required by the Note <br />and Deed of Trust, of the initial County contribution, will be divided 50/SO by the seller of <br />the Property and the County. If the initial County contribution does not have to be repaid <br />because the sale occurs more than forty years after the County contribution is made, then <br />the seller of the Property and the County will divide the entire equity realized from the <br />sale. <br />