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CC Resolution 1989-026^#8 RESOLUTION MO. 89-26 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA APPROVING A PROGRAM FOR THE FURNISHING OF ASSISTANCE FOR AFFORDABLE HOUSING AND AUTHORIZING THE EXPENDITURE OF FUNDS OF THE LA QUINTA REDEVELOPMENT AGENCY PURSUANT TO SUCH PROGRAM WHEREAS, the La Quinta Redevelopment Agency the *Agency") is in the process of implementing the Redevelopment Plan for Redevelopment Project No 1 as adopted by City of La Quinta Ordinance No. 24 the project); and WHEREAS, the Redevelopment Plan the Redevelopment Plan'*) for the Project provides that certain funds are to be made available to improve and expand the supply of low- and moderate-income housing, in conformity with the provisions of Section 33334.2 of the California Health and Safety Code; and WHEREAS, the Redevelopment Plan provides for the provision by the Agency of certain public improvements; and WHEREAS, the City of La Quinta the City") has taken certain steps toward the establishment and implementation of an assessment district the District"), which will provide certain sewer and related infrastructure improvements the Improvements") of benefit to residents of the Project Area of the Project; and WHEREAS, although the Improvements will be of benefit once completed, the imposition of an assessment to defray the cost of such Improvements would create a burden for certain residents of the affected area, particularly those of limited means; and WHEREAS, the Agency proposes to provide certain assistance to defray the cost of the assessment by the District for the benefit of persons who gualify due to income or who covenant to provide affordable housing for a fifteen-year period the Minimum Period"); and WHEREAS, the program for the provision of such assistance the Program"), is described in the Statement of the La Quinta Redevelopment Agency Assessment Subsidy Program the Statement"), which is attached hereto as Exhibit A", and which, together with all Attachments thereto, is incorporated herein by reference; and BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 WHEREAS, the provision of the Improvements will benefit the Project Area; and WHEREAS, there is no other reasonable means available to the community to finance the Improvements; and WHEREAS, the implementation of the Program will benefit the Project Area and the community; NOW, THEREFORE, the City Council of the City of La Quinta does resolve as follows: 1. The City Council finds and determines that: a) the provision of the Improvements will benefit the Project Area; b) there is available to the Community no other reasonable means of financing the Improvements than that set forth in the Statement, and c) the Minimum Period is the greatest feasible time for the restrictions on affordability to remain in effect, given i) the limited amount of assistance being made available and ii) the need for voluntary participation to achieve the objectives of the Program. 2. The City approves the Program'*, as described in the Statement, and consents that the Chairman and Executive Director are authorized to execute on behalf of the Agency all documents necessary and proper to effectuate the provisions of the Program, as described in the Statement. PASSED, APPROVED AND ADOPTED this 21st day of February 1989 by the following vote: AYES: Council Members Bohnenberqer, Bosworth, Rushworth Sniff, Mayor Pena NOES: None ABSE*: None ABSTAIN: None 02/15/89 3312n/2338/UO 2- BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 STATEMENT OF THE LA QUINTA REDEVELOPMENT AGENCY ASSESSMENT SUBSIDY PROGRAM Proaram Puroose The La Quinta Redevelopment Agency acknowledges that the Cove community lacks and/or is in need of infrastructure improvements, and that these deficiencies adversely affect housing conditions. Additionally, the Agency has determined that it is vital that such infrastructure improvements be made to enable the Agency and the City of La Quinta to increase and improve the supply of affordable very low, low and moderate income housing that is located in the area. Therefore, the Agency and the City will jointly institute and finance a public improvements program utilizing an assessment district with improvements funded by 1915 Act Improvement Bonds. Although the contemplated infrastructure improvements will benefit those persons of very low, low or moderate income living in the area, the imposition of the assessments may create financial difficulties. In an effort to achieve needed public improvements to increase and improve the community's supply of affordable housing and to alleviate any financial hardship, the Agency is establishing the following Assessment Subsidy Program to maintain the affordability of the community's housing stock. The Assessment Subsidy Program for Low and Moderate Income Households will provide the funding mechanism to enable the Agency and the City to utilize the 1915 Act Improvement Bonds to pay for needed infrastructure improvements while maintaining the affordable housing for very low, low and moderate income residents. The Program will initially be limited to qualifying persons or households within the proposed Assessment District No.88-i Assessment District). If successful, it may be made available to other qualifying areas of the community; however, no commitment has been made to extend the availability of the Program beyond the scope described in this Statement. Definitions The meaning of the various terms, as used herein, shall be as follows: Annual Assessment Payment" means the annual levy of principal and interest that would be charged against the property through the enactment of the Assessment District. Assessment District" means the district formed under the Improvement Act of 1915 through which bonds are issued to fund the construction of public improvements. Assessment Payment" means the total of the annual installments of principal and interest that would be levied against the property through the enactment of the Assessment District. Assessment Subsidv" means the financial assistance the Agency provides towards assessment payments. Affordable Housing Cost" means that total housing cost shall not exceed 25% of the person's or household's Gross Income, except that in the case of a very low income person or household, Affordable Housing Cost shall mean not less than 15% and no greater than 25% of their Gross Income. Total housing cost includes: 1) the principal and interest on a Mortgage loan including any rehabilitation loans and any loan insurance fees associated therewith, 2) property rental payments, 3) property taxes and assessments, 4) fire and casualty insurance covering replacement value of 1 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 property/improvements, 5) property maintenance and repairs, 6) a reasonable allowance for utilities, 7) homeowner association fees, and 7) space rent if the housing unit is situated on rented land. Affordable Unit" means a dwelling unit maintained by an Owner whose Affordable Housing Cost" is within the Program guidelines previously defined. Additionally, the Gross Income of the qualified household shall not exceed 120% of the median income during the period of program participation. Covenant of Affordability" or covenant means a document recorded against the participating property that stipulates that the housing unit shall remain available at an Affordable Housing Cost to persons or families of very low, low or moderate income for a minimum period of fifteen years. Over the life of the covenant, household incomes will be allowed to rise to a level of 120% of median income, adjusted annually, and remain in compliance with the Covenant of Affordability. Minimum Period" means the continuous time period commencing with the recording of the Covenant of Affordability and ending on the fifteenth anniversary thereafter, in which the program participant maintains an Affordable Unit as defined by the definitions of the Program. Reoavment Amount" means the pro-rata share of the Assessment Payment calculated by dividing the total Assessment Payment plus interest expense by the number of years as originally set forth in the Covenant of Affordability multiplied by the number of years remaining to run on the Covenant of Affordability as of the time payment becomes due to the Agency. Example: Assessment Payment $1,500.00 + Interest Expense* Number of years set forth in the Covenant 15 Property has been owned for 5 years 10 years remain under the Covenant $1500 + Interest Expense* /15 X 10 $1,000 + Interest Expense* * The amount of interest expense shall be the lesser ot i) 12% simple interest per annum or ii) the highest interest rate that may lawfully be charged by a redevelopment agency. Elderly Household" means a household in which the head of household or spouse is 62 years or older. Gross Income" means the total of all annual income of any nature from any source derived, including, but not limited to, salaries, wages, dividends, interest, capital gains, rents, income from operation of a farm or business, income from the sale or exchange of property, gifts, inheritances, Social Security payments, other retirement benefits, welfare benefits, alimony and support payments and any other thing of economic value of the entire household less the following: 1. 10% of the total income for an Elderly Household, and/or 2. recurring, extraordinary medical expenses medical expenses that exceed 3% of Gross Income, and are not compensated for or covered by insurance or other sources, such as public assistance or tort recovery. \Iaq**a\$*bsidy 2 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 Mortgage" means a mortgage deed, a deed of trust, or any other instrument which constitutes a lien on real property. Net Assets*' means all real and personal property of any character which an owner or rental household owns or has an interest in, including stocks, bonds, and savings accounts. For Owner occupants this excludes the real property within the Assessment District. *Owner" means persons or families owning and/or occupying real property which is included in the Assessment District and successors in interest or the legally appointed representatives of such person or persons. Particioant*' means an owner of a dwelling which pariticipates in the Program. Program' mean the Assessment Subsidy Program as set forth in this Statement of the La Quinta Redevelopment Agency Assessment Subsidy Program Assessment District No.88-i). Rental Household" means a person, persons or family that occupies a dwelling unit for which they compensate a landlord or owner for use of the dwelling. Very Low. Low and Moderate Income Households' means persons or families whose Gross Incomes are respectively defined as not exceeding 50%, 80% and 100% of area median income the median income of a geographic area of the State, as annually estimated by the United Stated Department of Housing and Urban Development HUD) pursuant to Section 8 of the United States Housing Act of 1937, adjusted for family size). Initial Agencv Assistance" means the initial payment of Agency Assistance to a Participant pursuant to the Program. Applicable Anniversarv Date" means the second anniversary of the provision of the Initial Agency Assistance and each second anniversary date thereafter during the Minimum Period. Certification of Elicibility" means an affidavit, to be provided by the property owner and renter upon application to the Program and biannually during the minimum period, which states that the participant qualifies for the Assessment Subsidy Program. Conditions to Assistance" means all of the following, which must be satisfied on a continuous basis throughout the Minimum Period: i) the Unit is maintained as an Affordable Unit; ii) Certification(s) of Eligibility are provided in accordance with the Program: iii) the Covenant of Affordability is recorded and remains in full force and effect; iv) the use of the property subject to the Covenant of Affordability conforms to the Redevelopment Plan;and v) the use of the property conforms to the nondiscrimination limitation set forth in Section 33436 of the California Health & Safety Code. Description The Agency pursuant to Section 33334.2 of the California Health and Safety Code, a portion of the Community Redevelopment Law) will utilize tax increment funds to provide subsidies to, or for the benefit of, low and moderate income households residing in the Cove community and are part of the Assessment District see map for District boundaries). Upon the establishment of the Assessment District, the Agency will disseminate information on the Assessment Subsidy Program to owner occupied and/or rental single family housing occupied by very low, low and 3 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 moderate income persons. Households interested in assistance are required to make application to the Agency through the Executive Director) for the subsidy payment. Agency staff will review the applications and determine eligibility based upon established criteria. If an application is approved, the Agency staff will facilitate the payment of the determined subsidy amount from the Agency to the fiscal agent responsible for the collection of the assessment payments. The subsidy payment will be made in the form of a one time lump sum payment that will equal the applicant's total assessment payments. Eligibility The Assessment Subsidy Program is available to all qualified very low, low and moderate income persons and households who are within the boundaries of the Assessment District. The provision of subsidies is also subject to the availability of funds. Applying property owners must meet the following requirements in order to qualify for participation: a. The real property for which assessment subsidy is sought must be developed with a housing unit or a housing unit that is under construction. Only one property per owner is eligible to receive a subsidy. b. The person's or households' Gross Income must meet the requirements for Very Low, Low and Moderate Income Households. The City of La Quinta's median income for a family of four, as established by the United States Department of Housing and Urban Development HUD) for 1988, is $30,300. The median income for the City is taken from HUD's established median income for the Riverside San Bernardino Metropolitan Statistical Area__ which is adjusted for family size and is update annually). Based upon this median income, the following table depicts the eligible income levels for the Assessment Subsidy Program. Income Categorv 1 Person 2 Persons 3 Persons 4 Persons Very Low $10,800 $12,350 $13,900 $15,450 Low 17,000 19,400 21,800 24,250 Moderate 21,210 24,240 27,270 30,300 Income Category 5 Persons 6 Persons 7 Persons 8 Persons VeryLow $16,700 $17,900 $19,150 $20,400 Low 25,750 27,300 28,800 30,300 Moderate 32,194 34,088 35,981 37,875 c. The person's or household's total housing cost, when combined with the annual Assessment Payment, exceeds the established Affordable Housing Cost for his/her household's annual Gross Income. d. The value of the owner or renter occupied household's Net Assets may not exceed $100,000, excluding the value of the property being assessed and two automobiles. e. The owner must record a Covenant of Affordability. f. In the case of a Rental Household, the property owner must agree to record a Covenant cf Affordability that maintains affordable rents for the duration of the Covenant. The Agency will monitor rent levels from time to time. * 4 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 Amount of Subsidy For qualifying households the Agency will subsidize the full amount of the Assessment Payment. Covenant of Affordability The Assessment Subsidy Program will be funded from the La Quinta Redevelopment Agency's Low and Moderate Income Housing fund. The California Redevelopment Law, which governs the use of this fund, requires the recordation of deed covenants against properties that benefit from the expenditure of these funds. The covenants are to ensure the continued affordability of the housing unit. The recordation of a deed restriction in the form of a Covenant of Affordability will be required. This Covenant of Affordability will require that the housing unit shall remain affordable to Very Low, Low or Moderate Income Households for fifteen 15) years for both owner-occupied units and rental units. Over the life of the covenant, household incomes will be allowed to rise to a evel of 120% of median income, adjusted annually, and remain in compliance with the Covenant of Affordability. Acceleration of the Covenant of Affordability In the event the unit is to be sold, provided that the affected unit and property) has been operated on a continuous basis with all of the Conditions of Assistance, the Agency will agree to defer receipt of the Repayment Amount in the event the prospective buyer executes and records or otherwise agrees to be bound by and remain subject to the Covenant of Affordability for the remainder of the Minimum Period. Subordination of the Covenant of Affordability The Covenant of Affordability shall contain a lien upon the participating property; such lien in favor of the Agency shall be subordinate to all deeds of trust or similar instruments recorded in favor of a bank, savings and loan association or other similar institutional lender securing repayment of the participant. Assessment Subsidy Repavment The Assessment Subsidy may require repayment if one on the following occurs during the period the covenant is in effect: 1. The housing unit is sold or rented at a cost that is no longer affordable to Very Low, Low or Moderate Income Households; or 2. The unit is sold; or 3. The income level of the qualified household exceeds 120% of median income, adjusted annually. The Repayment Amount will become due and payable should any of the three circumstances described above occur. The repayment period i.e., the period during which repayment shall * 5 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 be made) shall be no longer than immediately for rental properties and five 5) years for owner- occupied and single-family residences. The Repayment Amount shall be all due and payable upon the first to occur of: I) any failure C one or more of the Conditions to Assistance; or ii) the sale for assignment of the property; the date upon which either such event shall first occur shall constitute the Due Date." UPON FULL PAYMENT THE COVENANT OF AFFORDABILITY SHALL BE RECINDED. Monitoring of Elipibility Program participants will be required to complete a Certification of Eligibility form on a biannual basis. Owner-occupants will be required to state that their Gross Income does not exceed 120% of the median Gross Income for the Riverside/San Bernardino Primary Metropolitan Statistical area. Certification of Eligibility for owners of rental property will include notification to the Agency when there is a change in tenancy. The Gross Income of the original and subsequent tenants shall not exceed 120% of the median Gross Income for the Riverside/San Bernardino Primary Metropolitan Statistical Area. Additionally, the rental unit must remain at an Affordable Housing Cost" to the tenant. AoDlication and Application Process All interested property owners are required to submit the following: 1) A completed application along with:Federal tax returns for the two previous years, the name and address of any dependent's employer, a most recent pay stub, a monthly mortgage stub, a most recent property tax bill and most recent utility bill and 2) A completed Certification of Eligibility Form. Applications for owner occupied and renter occupied units are enclosed as well as Certification of Eligibility Forms. Upon approval of the application, the participant is required to execute the Covenant of Affordability. A complete description of the Program is available at the office listed below. Please send completed applications and written inquiries to: City Managers Office City of La Quinta 78-105 Calle Estado La Quinta, California 92253 * 6 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 ATTACHMENT NO. 1 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO LA QUINTA REDEVELOPMENT AGENCY Attention: Executive Director 78-105 Calle Estado P. 0. Box 1504 La Quinta, California 92253 Space above for recorder.] This Agreement is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. LA QUINTA REDEVELOPMENT AGENCY By: Its: Dated: 1989 LA QUINTA REDEVELOPMENT PROJECT NO. 1 LA QUINTA, CALIFORNIA COVENANT OF AFFORDABILITY OWNER OCCUPIED) THIS AGREEMENT is entered into this day of 1989, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic the Agency"), and a the tFarticipant"), with reference to the following: A. The Participant is fee owner of record of that certain real property the Property") located in the City of La Quinta, County of Riverside, State of California legally described in the attached Exhibit A". BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 B. The Property is within the La Quinta Redevelopment Project Area No. 1 the Project") in the City of La Quinta and is subject to the provisions of the Redevelopment Plan for the Project adopted by Ordinance No. on 198 by the City Council of the City of La Quinta. C. The Agency has, by its Resolution No. adopted on the Resolution"), promulgated a program for the provision of certain designated assistance by the Agency in connection with the assurance that certain properties are maintained in such a manner and subject to such conditions and limitations that they will increase and improve the community's supply of low- and moderate-income housing available at affordable housing cost, pursuant to Section 33334.2 of the California Health & Safety Code. Such program, as defined with greater particularity in the Resolution including those matters incorporated therein by reference), shall be referred to herein as the Programt1. Except as otherwise expressly provided in this Agreement, all terms shall have the same meaning as set forth in the Resolution, including all Attachments thereto. NOW, THEREFORE, THE AGENCY AND THE PARTICIPANT AGREE AS FOLLOWS: 1. The Participant shall have the right and it covenants and agrees on behalf of its successor and assigns, to use the Property for the following purposes only: Participant shall maintain on the Property on a continuous basis throughout the period commencing with the recording of this Agreement and ending on the fifteenth anniversary thereafter the Minimum Period") a dwelling unit which shall remain available at affordable housing cost in accordance with the terms of the Program an Affordable Unit"). The Participant agrees that it shall reside at the Property throughout the Minimum Period. Prior to or concurrent with the furnishing of the Initial Agency Assistance'1 and on each Applicable Anniversary Date" during the the Minimum Period, the Participant shall execute and provide to the Agency a Certification of Eligibility" substantially in the form referenced in the Resolution. It is understood that the dwelling on the Property will qualify as an Affordable Housing Unit only so long as the Participant has an income of less than one hundred twenty percent 120%) of the annual median household income for the Riverside-San Bernadino Primary Metropolitan Statistical Area as such income levels are established and amended from time to time pursuant to Section 8 of the UnitedStates Housing Act of 1937 and published by the State Department of Housing and Community Development in the California Administrative Code. 02-15-89 3286n/2338/OO 2 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 2. The Participant, on behalf of itself and its successors, assigns, and each successor in interest to the Property or any part thereof, hereby covenants and agrees: a) To use, devote, and maintain the Property and each part thereof, for the purposes and the residential uses specified in the Redevelopment Plan. b) Not to discriminate upon the basis of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer or rental, or in the use, occupancy, tenure, or enjoyment of the Property or any improvements thereon, or of any part thereof. Each and every deed, lease, and contract entered into with respect to the Property shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1) In deeds: The grantee herein covenants by and for itself, it successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2) In leases: The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of sex, marital status, race, color, creed, religion, national origin, or ancestry, in the leasing, renting, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or 02-15-89 3286n/2338/00 3 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." 3) In contracts: There shall be no discrimination against or segregation of, any persons, or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land.1' c) To comply on a continuing basis with the Conditions to Assistance as set forth in the Resolution which is on file with the Agency as a public record and is incorporated herein by reference. In the event i) the Participant ceases to meet the income limitations set forth in paragraph 1, above, or ii) the Participant fails to satisfy on a continuous basis throughout the Minimum Period one or more of the Conditions to Assistance, or iii) there is a voluntary or involuntary sale or transfer of the Affordable Unit or the Property, then the Repayment Amount" shall be payable to the Agency as set forth in the Resolution. 3. The Participant grants to the Agency a lien on the Site to secure the payment of the 1Repayment Amount" pursuant to the Resolution. The foregoing lien shall be subordinate to deeds of trust in favor of institutional lenders securing repayment of the indebtedness of the Participant, as inore fully set forth in the Resolution. 4. The Repayment Amount shall be all due and payable upon the first to occur of: i) any failure of one or more of the Conditions to Assistance; or ii) the sale or assignment of the property, which date shall constitute the Due Date". The foregoing due on" clause constitutes a material inducement to the creation of the Program by the Agency and the provision of the Agency Assistance. Agency and the Participant are aware of the Garn-St. Germain Depository Institutions Act of 1982 concerning circumstances upon which due on clauses may O2-lS-*9 3286n/2338/OO 4 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 be enforced. However, the sole purpose of provision of Agency Assistance" is to increase and improve the community's supply of affordable housing. Funds for the Program are dispersed pursuant to California Health and Safety Code Sections 33334.2 and 33334.3, as amended, which recommend equity sharing" as a means of protecting any Agency investment. Also, Civil Code Section 711.5 expressly permits acceleration of the due on" obligations under certain of the circumstances provided herein. If the Agency had to assume the risk that it could not require payment of the Repayment Amount upon transfer to person or persons who do not meet the criteria of the Program, the Agency could not establish this Program upon the beneficial financial terms and conditions presently provided. Therefore, the Agency and the Participant expressly intend that any judicial decisions, statutes or laws limiting the enforceability of the due on" clauses described in this Covenant of Affordability shall not be applicable to this transaction. 5. There shall be no discrimination against or segregation of any person, or groups of persons, on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the property or any part thereof, nor shall the Participant, its successors, assigns, or successors in interest to the Property or any part thereof, or any person claiming under or through them, establish part thereof, or any person claiming under or through them; establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of owners, tenants, lessees, sublessees, or vendees of the Property or any part thereof. 6. The covenants and agreements established in this Agreement shall, without regard to technical classification and designation, be binding on the Participant and any successor in interest to the Property, or any part thereof, for the benefit of and in favor of the Agency, its successor and assigns, and the City of La Quinta. Except as set forth in the following sentences, the covenants contained in paragraphs 2(a) and 2(c) of this Agreement shall remain in effect until the expiration date of the Redevelopment Plan). The covenants against discrimination contained in paragraph 2(b) and 5), shall remain in perpetuity. The covenants in paragraphs 1, 3 and 4 pertaining to the Affordable Unit(s) remain in effect at all times until the completion of the Minimum Period. 02-15-89 3286n/2338/00 5 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 IN WITNESS WHEREOF, the Agency and the Participant have executed this Agreement. Dated: L'A QUINTA REDEVELOPMENT AGENCY By: Chairman AGENCY" ATTEST: Secretary Dated: By: *PARTICIPANT" 02-15-89 3286n/2338/OO 6 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 STATE OF CALIFORNIA ss. COUNTY OF RIVERSIDE On 1989, before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence) to be the person who executed this instrument as the Chairman of the LA *UINTA REDEVELOPMENT AGENCY and acknowledged to me that the LA QUINTA REDEVELOPMENT AGENCY executed it. Signature of Notary Public SEAL) STATE OF CALIFORNIA ss. COUNTY OF RIVERSIDE FORM OF NOTARY TO BE INSERTED) 02-15-89 3286n/2338/OO BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 EXHIBIT A't The Property To Be Inserted) 02-15-89 3286n/2338/00 EXHIBIT **A" BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 ATTACHMENT NO. 2 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO LA QUINTA REDEVELOPMENT AGENCY Attention: Executive Director 78-105 Calle Estado P. 0. Box 1504 La Quinta, California 92253 Space above for recorder.] This Agreement is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. LA QUINTA REDEVELOPMENT AGENCY By: Its: Dated: 1989 LA QUINTA REDEVELOPMENT PROJECT NO. 1 LA QUINTA, CALIFORNIA COVENANT OF AFFORDABILITY RENTAL) THIS AGREEMENT is entered into this day of 1989, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic the Agency"), and a the t'Participant"), with reference to the following: A. The Participant is fee owner of record of that certain real property the Property") located in the City of La Quinta, County of Riverside, State of California legally described in the attached Exhibit t'A". BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 B. The Property is within the La Quinta Redevelopment Project Area No. 1 the Project") in the City of La Quinta and is subject to the provisions of the Redevelopment Plan for the Project adopted by Ordinance No. on 198 by the City Council of the City of La Quinta. C. The Agency has, by its Resolution No. adopted on the 1Resolution"), promulgated a program for the provision of certain designated assistance by the Agency in connection with the assurance that certain properties are maintained in such a manner and subject to such conditions and limitations that they will increase and improve the community's supply of low- and moderate-income housing available at affordable housing cost, pursuant to Section 33334.2 of the California Health & Safety Code. Such program, as defined with greater particularity in the Resolution including those matters incorporated therein by reference), shall be referred to herein as the Program". Except as otherwise expressly provided in this Agreement, all terms shall have the same meaning as set forth in the Resolution. NOW, THEREFORE, THE AGENCY AND THE PARTICIPANT AGREE AS FOLLOWS: 1. The Participant shall have the right and it covenants and agrees on behalf of its successor and assigns, to use the Property for the following purposes only: Participant shall maintain on the Property on a continuous basis throughout the period commencing with the recording of this Agreement and ending on the fifteenth anniversary therefter the 1Minimum Period'9) a dwelling unit which shall remain available at affordable housing cost in accordance with the terms of the Program an Affordable Unit"). The Participant agrees that it shall rent the Affordable Unit on the Property as Affordable Housing Cost, as defined in the Program. The Affordable Unit shall be rented only to persons or families with an income less than one hundred twenty percent 120%) of the annual median household income for the Riverside-San Bernardino Primary Metropolitan Statistical Area as such income levels are established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 and published by the State Department of Housing and Community Development in the California Administrative Code. The Participant shall obtain from each current and subsequent renter of such units a Certification of Eligibility" substantially in the form referenced in the 02-15-89 3285n/2338/OO 2 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 Resolution. The Participant shall notify the Agency in writing in the event of any change of tenants. The Participant also agrees, should it sell the Property or the Affordable Unit therein, to include in each deed of conveyance in a form satisfactory to Agency with respect to the Affordable Unit a covenant requiring that upon resale of such Unit within the Minimum Period that the subsequent purchaser(s) shall maintain the Affordable Unit at Affordable Housing Cost and that subsequent tenants shall qualify as Very Low, Low or Moderate Income Households renting such Unit(s) at Affordable Housing Cost pursuant to the Program. 2. The Participant, on bchalf ot itself andits successors, assigns, and each successor in interest to the Property or any part thereof, hereby covenants and agrees: a) To use, devote, and maintain the Property and each part thereof, for the purposes and the residential uses specified in the Redevelopment Plan. b) Not to discriminate upon the basis of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer or rental, or in the use, occupancy, tenure, or enjoyment of the Property or any improvements thereon, or of any part thereof. Each and every deed, lease, and contract entered into with respect to the Property shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1) In deeds: YThe grantee herein covenants by and for itself, it successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land. 02-15-89 3285n/2338/00 3 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 2) In leases: The lessee herein covena* and for itself, its successors and assi*.L and all persons claiming under or throUg* them, and this 1ease Is made and accepted Upon and Subject to the followi*g COnditions: That there shall be no discrimination agains* or segregati0* of any person or group of persons, on account of sex, marItal status, race, color, creed, religi0*, national origin, or ancestry, In the leasing, renting, Subleasing, transferr**g, use, occupancy, tenure, or enjoyme** of the land herein leasc* fl*r shall the lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregat*0* wIth reference to the selection, location, number, Use or occupancy of tenants, lessees, Sublessees, subtenants, or vendees in the land herein leased." 3) In contracts: There shall be no discrimination again5* or segregat*0* of, any persons, or group of persons on account of sex, marital status, race, color, creed, religi0*, national origi*, or ancestry In the sale, lease, rental, Sublease, transfer, Use, occupancy, tenure or en]oyme** of the land, nor shall the transferee Itself or any person claiming under or throug* It, establish or permit any such practice or practices of discrimination or segregat*0* with reference to the selection, locatIon number, Use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." c) To comply on a continulflg basi5 wIth the Conditions to ASsistance** as set forth in the Resolution WhIch is on file with the Agency as a public record and is incorporated herein by reference. In the event i) the Participant fails to satisfy on a continuous basis through0** the Minimum Period one or more of the Conditions to Assistance or ii) there is a voluntary or involunta sale or transfer of ry the Property, the Repayment Amount shall be payabl* to the Agency as set forth in the Reso*ution. 3. The Participant grant8 to the Agency a lien on the Site to secure the paymen* of the Repayme** Amount" pursuant to the Resolution. The foregoing lien shall be subordInate to deeds of trust in favor of institutional lenders securing O2*15*89 3285n/2338/00 4 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 repayment of the indebtedness of the Participant, as more fully set forth in the Resolution. 4. The Repayment Amount shall be all due and payable upon the first to occur of i) any failure of one or more of the Conditions to Assistance; or ii) the sale or assignment of the property, which date shall constitute the Due Date". The foregoing due on11 clause constitutes a material inducement to the creation of the Program by the Agency and the provision of the Agency Assistance. Agency and the Participant are aware of the Garn-St. Germain Depository Institutions Act of 1982 concerning circumstances upon which due on clauses may be enforced. However, the sole purpose of provision of Agency Assistance11 is to increase and improve the community's supply of affordable housing. Funds for the Program are dispersed pursuant to California Health and Safety Code Sections 33334.2 and 33334.3, as amended, which recommend equity sharing" as a means of protecting any Agency investment. Also, Civil Code Section 711.5 expressly permits acceleration of the due on" obligations under certain of the circumstances provided herein. If the Agency had to assume the risk that it could not require payment of the Repayment Amount upon transfer to person or persons who do not meet the criteria of the Program, the Agency could not establish this Program upon the beneficial financial terms and conditions presently provided. Therefore, the Agency and the Participant expressly intend that any judicial decisions, statutes or laws limiting the enforceability of the due on" clauses described in this Covenant of Affordability shall not be applicable to this transaction. 5. There shall be no discrimination against or segregation of any person, or groups of persons, on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the property or any part thereof, nor shall the Participant, its successors, assigns, or successors in interest to the Property or any part thereof, or any person claiming under or through them, establish part thereof, or any person claiming under or through them; establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of owners, tenants, lessees, sublessees, or vendees of the Property or any part thereof. 6. The covenants and agreements established in this Agreement shall, without regard to technical classification and designation, be binding on the Participant and any successor in interest to the Property, or any part thereof, for the benefit of and in favor of the Agency, its successor and assigns, and 02-15-89 3285n/2338/00 5 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 the City of La Cuinta. Except as set forth in the following sentences, the covenants contained in paragraphs 2(a) and 2(c) of this Agreement shall remain in effect until the expiration date of the Redevelopment Plan). The covenants against discrimination contained in paragraph 2(b) and 5), shall remain in perpetuity. The covenants in paragraphs 1, 3, and 4 pertaining to the Affordable Unit(s) remain in effect at all times until the completion of the *inimum Period. IN WITNESS WHEREOF, the Agency and the Participant have executed this Agreement. Dated: LA QUINTA REDEVELOPMENT AGENCY By: Chairman AGENCYt' ATTEST: Secretary Dated: By: PARTICIPANT" O2-15-*9 3285n/2338/OO 6 BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 STATE OF CALIFORNIA 55. COUNTY OF RIVERSIDE On 1989, before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence) to be the person who executed this instrument as the Chairman of the LA QUINTA REDEVELOPMENT AGENCY and acknowledged to me that the LA QUINTA REDEVELOPMENT AGENCY executed it. Signature of Notary Public SEAL) STATE OF CALIFORNIA ss. COUNTY OF RIVERSIDE FORM OF NOTARY TO BE INSERTED) 02-15-8g 3285n/2338/OO BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 EXHIBIT A" The Property To Be Inserted) 02-15-89 3285n/2338/00 EXHIBIT A" BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 ATTACHMENT NO. 3 CERTIFICATION OF ELIGIBILITY Owner) Part I General Information 1. Project Name 2. Project Location 3. Name of Lender Part II Unit Information 7. Unit 8. Number of 9. Mortgage 10. Number of Address Bedrooms Payment Occupants Part III Affidavit of Purchaser I, and I, I 85 applicants for Agency Assistance* pursuant to the Program' as adopted by Resolution No. of the La Quinta Redevelopment Agency the Agency"), do hereby represent and warrant as follows: A. My/Our) adjusted income anticipated total annual income) does not exceed one hundred twenty percent l20*) of the median gross income for the Riverside/San Bernardino Primary Metropolitan Statistical Area as such income levels are established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 and published by the State Department of Housing and Community Development in the California Administrative Code. I/We) understand that the applicable median gross income is $___________ The following computation includes all income I/we) anticipate receiving for the 12-month period * beginning on the date I/we) execute Covenants of Affordability" or the date on which I/we) will initially occupy such unit, whichever is earlier. BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 1. For the purchaser and all family members include: a) amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation, wor*ers compensation and severance pay before payroll deductions) b) net income from business or profession or rental of property without deduction for repayment of debts or expansion of business) c) interest and dividends d) periodic receipts such as social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions or gifts from persons not occupying the unit e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes f) regular and special pay and allowances of a member of armed services whether or not living in the dwelling) who is head of the family or spouse Subtotal a) f) Less: portion of above items which are income of a family member who is less than 18 years old or a full-time student Total Eligible Income g) Other assets; estimated value Note: the Agency has established a limitation upon maximum assets allowable for participation in the Program) 02-15-89 3320n/2017/48 2- BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 Note: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; government benefits to a veteran for education; special pay to a serviceman head of family away from home and under hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; relocation payments under Title II of Uniform Relocation Assistance and Real Property Acguisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience. 2. As of the first day of occupancy of the unit following recordation of Covenants of Affordability a) either myself/ourselves) or at least one other occupant of the unit is not an individual enrolled as a full-time student during each of five 5) calendar months during the calendar year in which occupancy of the unit begins at an educational institution which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional on farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof or b) if all of the occupants of the unit will be individuals described in a), either myself/ourselves) or one other occupant of the unit is a husband or wife entitled to make a single return jointly of Federal income taxes. 3. This affidavit is made with the knowledge that it will be relied upon by the Agency to determine maximum income for eligibility and I/we) warrant that all information set forth in this Part III is true, correct and complete and based upon information I/we) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 4. I/We) will assist the Agency in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto copies of federal income tax returns for the past two years. 02-15-89 3320n/2017/48 3- BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 5. I/We) acknowledge that I/we) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of my/our) agreement with the Agency and will enable the Agency to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us. B. My/Our) housing expenses are limited to the following: 1. Base rent 2. Utilities 3. Other explain) I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Applicant SUBSCRIBED AND SWORN to before me this day of *otary Seal) Notary Public in and for the State of My Commission Expires: 02-15-89 3320n/2017/48 4- BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 INCOME VERIFICATION for employed persons) The undersigned employee has applied for Agency Assistance pursuant to a Program of the La Quinta Redevelopment Agency the Agency). Every income statement of a prospective purchaser must be verified. Please indicate below the empl*yees current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature Date Title I hereby grant permission to disclose my income to the Agency in connection with my proposed rental of a dwelling unit located in their project. Signature Date Please send to: 02-15-8g 3320n/2017148 5- BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 ATTACHMENT NO. 4 CERTIFICATION OF ELIGIBILITY Renter) Part I General Information 1. Project Name 2. Project Location 3. Landlord*s Name Part II Unit Information 7. Unit 8. Number of 9. Monthly 10. Number of Address Bedrooms Payment Occupants Part III Affidavit of Renter I, and I, as applicants for *Agency Assistance*' pursuant to the **Program as adopted by Resolution No. of the La Quinta Redevelopment Agency the *`Agency*), rental of a Low and Moderate Income Unit in the above-described Project, do hereby represent and warrant as follows: A. My/Our) adjusted income anticipated total annual income) does not exceed one hundred twenty percent 120%) of the median gross income for the Riverside/San Bernardino Primary Metropolitan Statistical Area as such income levels are established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 and published by the State Department of Housing and community Development in the California Administrative Code. I/We) understand that the applicable median gross income is $___________ The following computation includes all income I/we) anticipate receiving for the 12-month period beginning on the date I/we) execute a rental agreement for a Low or Moderate Income Unit or the date on which I/we) will initially occupy such unit, whichever is earlier. BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 1. This affidavit is made with the knowledge that it will be relied upon by the Landlord and the Agency to determine maximum income for eligibility and I/we) warrant that all information set forth in this Part III is true, correct and complete and based upon information I/we) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 2. I/We) will assist the Landlord and the Agency in obtaining any information or documents reguired to verify the statements made in this Part III and have attached hereto copies of federal income tax returns for the past two years. 3. I/We) acknowledge that I/we) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of my/our) agreement with the Landlord to rent the unit and will additionally enable the Agency to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us. B. My/our) housing expenses are limited to the following: 1. Base rent 2. Utilities 3. Other explain) I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Applicant SUBSCRIBED AND SWORN to before me this day of Notary Seal) Notary Public in and for the State of My Commission Expires: 3324n/2017/48 2- BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02 ^#8 INCOME VERIFICATION for employed persons) The undersigned employee has applied for Agency Assistance pursuant to a Program of the La Quinta Redevelopment Agency the Agency'). Every income statement of a prospective purchaser must be verified. Please indicate below the employee*s current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature Date Title I hereby grant permission to disclose my income to the Agency and the Seller in connection with my proposed rental of a dwelling unit located in their project. Signature Date Please send to: 3324n/2017/48 3- BIB] 07-21-1998-U01 10:57:52AM-U01 ADMIN-U01 CCRES-U02 89-U02 26-U02