HomeMy WebLinkAbout8.1 Amendments to the First-Time Homebuyer Loan Program Guidelinesr
DUBLIN
CALIFORNIA
STAFF REPORT
CITY COUNCIL
Agenda Item 8.1
DATE: September 3, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Linda Smith, City Manager
SU B.ECT: Amendments to the First Time Homebuyer Loan Program Guidelines
Prepared by: Jason Earl, Senior Management Analyst
EXECUTIVE SUMMARY:
The City Council will consider amendments to the First Time Homebuyer Loan Program
Guidelines. The proposed changes are intended to increase the use of the program and to ensure it
is compatible with other loan programs. The proposed changes include: 1) lowering the interest
rate to 3 percent; 2) lowering the required minimum downpayment to 3 percent; 3) increasing the
maximum loan amount to 20 percent of the purchase price for below market rate and market rate
units and increasing the not -to -exceed loan amount to $100,000; 4) allowing subordination of the
City's lienholder position when other government homebuyer assistance programs are utilized in
conjunction with a City loan; and 5) making other minor edits and clarifications to the text of the
program.
STAFF RECOMMENDATION:
Adopt the Resolution Amending the First Time Homebuyer Loan Program Guidelines, and approve
the budget change.
FINANCIAL IMPACT:
As proposed, the budget for the loan program would be increased from $320,000 to $500,000, to
account for the higher proposed loan limit for the First Time Homebuyer Loan Program. There is
sufficient money available in the City's Affordable Housing Fund to accommodate the budget
change.
DESCRIPTION:
The City Council adopted the First Time Homebuyer Loan Program (FTHLP) in 2006 (Resolution
31-06). The program addressed a 2003 Housing Element policy that the City should provide
financial assistance and education for first-time homebuyers. The creation of the FTHLP was also
included in the City Council Goals and Objectives in Fiscal Year 2005-06. Since then, the City
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Council has periodically approved amendments to the program. This includes changing the
interest rate from a variable rate to 3.5 percent in 2007 (Resolution No. 107-07) and setting the
maximum loan at 10 percent of the market -rate sales price, and up to 15 percent of the below
market rate sales price and a not -to -exceed loan amount of $40,000 in 2011 (Resolution No. 23-
11)
The FTHLP provides financial assistance in the form of a deferred loan to income -qualified first-
time homebuyers. With a deferred loan, no principal or interest payments are due during the life
of the loan which is paid off when the property is sold or refinanced. The FTHLP can be used by
income -qualified households to purchase market -rate or below -market -rate (BMR) units. The
FTHLP currently requires that applicants meet the following:
• Secure a primary home loan through a lending institution.
• Successfully complete a City -approved First Time Homebuyer class.
• Use a fixed mortgage of 40 years or less.
• Make a minimum downpayment of 3.5 percent of the purchase price.
• Have a household income that does not exceed Moderate Income.
• Have $250,000 or less in assets.
• Have not owned any real property in the last three years.
• Occupy the home as a primary residence.
• Have a minimum FICO credit score of at least 620.
• Meet citizenship requirements.
• Have a debt -to -income ratio (including housing costs and unsecured debt) that cannot
exceed 45 percent.
The City of Dublin Strategic Plan for Fiscal Years 2024 - 2026 includes Strategy 3: Housing
Inclusivity and Affordability which includes the following two objectives:
• Objective A: Implement the goals, policies and programs in the 2023-2031 Housing
Element; and
• Objective C: Support programs that facilitate homeownership such as the First Time
Homebuyer Loan Program.
In addition, the 2023-2031 Housing Element includes Program E.7 which indicates the City will
review the FTHLP for opportunities to broaden the use of the program and to ensure compatibility
with similar loan programs.
Staff reviewed the existing FTHLP, researched loan programs in other communities, and
considered how to structure the FTHLP to better align with County and State programs. Based on
this review, Staff is proposing modifications to the FTHLP to increase the use of the program and
enable more residents to become first-time homebuyers.
Analysis
The City has issued 67 loans totaling $2,382,649, and 28 of those loans totaling $1,035,112 have
been repaid since the inception of the FTHLP. Of the total loans, 59 have been for below -market -
rate (BMR) properties, and eight have been for market -rate properties. Two FTHLP loans were for
very -low-income households, two loans were for low-income households, and 63 loans were for
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moderate -income households.
In more recent years, the loan program has been underutilized. For example, there have only been
eight new loans in the last five years. There appears to be a variety of reasons the program has not
been used as much in recent years, including historically low interest rates, increasing home
prices, and compatibility issues with County and State financing programs. It is worth noting that
the City has seen an uptick in loan activity in the last fiscal year, which also coincides with
increasing interest rates. Table 1 shows the loans that have been issued by fiscal year.
Table 1- First Time Homebuyer Loan Program by Fiscal Year
Loan Start Number of Loans
Date Issued
Total
Amount of
Loans Issued
FY2006-07
3
$136,454
FY2007-08
15
$469,456
L FY2008-09 8
$292,851
FY2009-10 2
$69,595
pFY2010-11
4 $134,200
FY2011-12
11 $365,713
FY2012-13
9 $317,492
FY2013-14 5 $196,888
FY2014-15 0
FY2015-16 1 $40,000
FY2016-17 0
FY2017-18 1 $40,000
FY2018-19 0
FY2019-20 2 $80,000
FY2020-21 0
FY2021-22 1 $40,000
FY2022-23
1 $40,000
FY2023-24
4 $160,000
Totals
67 $2,382,649
Staff reviewed the terms of similar loan programs in surrounding cities. Table 2 below compares
the City of Dublin's program terms with those of other surrounding communities.
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Table 2 - City Comparison of First Time Homebuver Loan Programs
City
Interest
Rate
Loan
Term in
years
Max Loan
Amt
BMR Unit
(% of price)
Max Loan
Amt Market
Rate Unit
(% of price)
Max Loan
Amt
($)
Min Down
payment
required
(% of price)
Dublin
3.5%
30
15%
10%
$40,000
3.5%
Concord
0.0%
15
20%
20%
$40,000
3.0%
Danville
N/A
N/A
N/A
N/A
N/A
N/A
Fremont
N/A
N/A
N/A
N/A
N/A
N/A
Hayward
N/A
N/A
N/A
N/A
N/A
N/A
Livermore - BEGIN
3.0%
30
20%
20%
$30,000
3.0%
Livermore -
CalHome
3.0%
30
20%
20%
$60,000
3.0%
Livermore -
Non-CalHome
(MAP)
3.0%
20
20%
20%
$60,000
3.0%
Pleasanton
0.0%
30
20%
20%
$100,000
3.0%
Alameda County -
AC Boost
0.0%
30
10%
50%
$210,000
0.0%
San Ramon
N/A
N/A
N/A
N/A
N/A
N/A
Walnut Creek -
not BEGIN
0.0%
45
17%
17%
$65,000
3.0%
Walnut Creek -
BEGIN
1.0%
30
20%
20%
Not
specified
3.0%
Napa
1.0%
30
30%
30%
$150,000
1.0%
Average
1.4%
31
20%
20%
$ 83,000
2.8%
Recommended Amendments
Based on the evaluation of the programs of other agencies, Staff recommends the following
changes to Dublin's program.
• Lower the interest rate from 3.5 percent to 3 percent. This would make Dublin's FTHLP
more comparable to programs in other cities in the Tri-Valley and surrounding areas. It
would also help first-time homebuyers build more equity over time because they would
accrue less interest which must be paid when they pay off their loan.
• Lower the minimum downpayment from 3.5 percent to 3 percent. This aligns with other
similar programs such as the Alameda County AC Boost program. Similarly, conventional
loans require a minimum downpayment of 3 percent, and VA loans require zero
downpayment. This change is also comparable to the downpayment required by loan
programs offered in peer communities. Additionally, research has shown that higher down
payments make it harder for minorities to enter the housing market. Lowering the down
payment requirement provides increased and more equitable opportunities for
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homeownership.
• Increase the loan amount as a percentage of purchase price from 15 percent to 20 percent
for BMR properties and from 10 percent to 20 percent for market -rate properties and
increase the not -to -exceed loan amount from $40,000 to $100,000. In 2011 the maximum
loan amount was set at $40,000, which was approximately 8 percent of the then current
median home price in Dublin of $462,000. Currently, the median home price in Dublin is
$1.3 million, more than double the former median housing price. Increasing the maximum
loan amount to $100,000 would be approximately 8 percent of the cost, keeping up with
housing inflation. Similarly, the cities of Pleasanton and Napa both offer a maximum loan
amount of $100,000 or more.
• Allow the City loan position to be subordinated behind the primary mortgage and other
public downpayment assistance programs to be in a third or fourth lienholder position.
Lienholder position is the order of seniority in which the law recognizes a lender's claims
against a property and determines the sequence of repayment in the event of a foreclosure.
Typically, the primary lender is in the first lienholder position. The FTHLP requires the City
loan to be in the second lienholder position. However, buyers often seek to layer in
financial assistance from more than one loan assistance program, such as Alameda County
Boost, the California Housing Finance Authority (Ca1HFA), or other County, State and
Federal government loan programs. These loan programs have rigid subordination
requirements that often conflict with the City second lienholder position. Therefore, Staff
recommends amending the FTHLP to allow the City loan position to be subordinated
behind the primary mortgage and other public downpayment assistance programs to allow
the City to be in a third or fourth lienholder position when County, State, or governmental
downpayment assistance programs require the second and/or third lienholder position.
Allowing the City's subordination will allow buyers to access the FTHLP and County, State
and Federal loan programs to layer in more assistance, enabling more buyers to afford a
home purchase.
• Make other non -substantive edits and clarifications to the text. The FTHLP Guidelines have
received minor and non -substantive edits such as grammatical and formatting updates.
These changes can be seen in the redline version of the guidelines (Attachment 3). In
addition, clarification has been added to align with current practices, such as establishment
of administrative fees and program income limits being set by the California Department of
Housing and Community Development (HCD), limiting the primary loan to a term of 30
years, and updating the preference point program.
A resolution approving the proposed amendments to the First Time Homebuyer Loan Program
Guidelines is included as Attachment 1, with the amended Guidelines included as Attachment 2.
Attachment 3 provides the proposed amendments in redline format where underlined text is
proposed to be added and text with a strikethrough is proposed to be deleted.
FTHLP Buyer Scenarios
Below are several scenarios of how the FTHLP loan may be used and what home prices the loan
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would enable potential buyers to purchase.
In the first set of scenarios, a couple buying a condominium or townhouse would have the
following purchasing limits based on an Adjusted Median Income (AMI) of 100 or 120. These
scenarios are for a FTHLP buyer who provides a 3 percent down payment and applies for the full
$100,000 loan.
Median Income - AMI of 100
Family of 2 First Time As of
Homebuyers 8/14/2024
Median income - Annual Income
$124,550
Assumes HOA Dues, Property Taxes and
Homeowners Insurance
30-year term at 6% interest
Buyer puts 3% down and gets $100k in FTHLP
funds
Maximum Home Purchase Price of $541,650
Moderate Income - AMI of120
Family of 2 First Time As of
Homebuyers 8/14/2024
Moderate income - Annual Income $149,500
Assumes HOA Dues, Property Taxes and
Homeowners Insurance
30-year term at 6% interest
Buyer puts 3% down and gets $100k in FTHLP
funds
Maximum Home Purchase Price
of
$647,770
In the second set of scenarios, a family of four buying a single-family residence would have the
following purchasing limits based on an Adjusted Median Income (AMI) of 100 or 120. These
scenarios are for a FTHLP buyer who provides a 3 percent down payment and applies for the full
$100,000 loan.
Median Income - AMI of 100
Family of 4 First Time As of
Homebu ers 8/14/2024
Median Income - Annual Income
$155,700
Assumes HOA Dues, Property Taxes and
Homeowners
Insurance
30-year term at 6% interest
Buyer puts 3% down and gets $100k in FTHLP
funds
Maximum Home Purchase Price
of
$674,140
STRATEGIC PLAN INITIATIVE:
Moderate Income - AMI of120
Family of 4 First Time As of
Homebu ers 8/14/2024
Median Income - Annual Income
$186,850
Assumes HOA Dues, Property Taxes and
Homeowners Insurance
30-year term at 6% interest
Buyer puts 3% down and gets $100k in FTHLP
funds
Maximum Home Purchase Price of $806,600
Strategy 3: Housing Inclusivity and Affordability
Objective A: Implement the goals, policies, and programs in the 2023-2031 Housing Element.
Objective C: Support programs that facilitate homeownership such as the First Time Home Buyer
Loan Program.
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ENVIRONMENTAL DETERMINATION:
The California Environmental Quality Act (CEQA), together with State Guidelines and City of
Dublin CEQA Guidelines and Procedures require that certain projects be reviewed for
environmental impacts and that environmental documents be prepared. The proposed
Amendments are exempt from the requirements of CEQA pursuant to CEQA Guidelines Section
15061(b)(3) as the amendments would not result in any physical changes and it can be seen with
certainty that the amendments would not have a significant effect on the environment, and the
amendments do not involve any commitment to any specific project.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
The City Council Agenda was posted.
ATTACHMENTS:
1) Resolution Amending the First Time Homebuyer Loan Program Guidelines
2) Exhibit A to the Resolution - First Time Homebuyer Loan Program Guidelines
3) Redline Version of Amendments to the First Time Homebuyer Loan Program Guidelines
4) Budget Change
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Attachment I
RESOLUTION NO. XX — 24
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AMENDING THE FIRST TIME HOMEBUYER LOAN PROGRAM GUIDELINES
WHEREAS, the City of Dublin Strategic Plan for Fiscal Years 2024-26 includes Objective
3A to implement the goals, policies and programs in the 2023-2031 Housing Element and
Objective 3C to support programs that facilitate homeownership such as the First Time
Homebuyer Loan Program; and
WHEREAS, the City of Dublin 2023-2031 Housing Element includes Program E.7: First
Time Homebuyer Loan Program indicating the City will review the FTHLP and update as
opportunities become available to expand the program and ensure compatibility with similar loan
programs; and
WHEREAS, a goal of the Housing Element is to expand housing opportunities for all
segments of Dublin's population; and
WHEREAS, on March 21, 2006, the City Council approved a First Time Homebuyer Loan
Program (FTHLP); and
WHEREAS, on June 19, 2007, and March 1, 2011, the City Council approved amendments
to the First Time Homebuyer Loan Program Guidelines to update practices and procedures,
change the interest rate from a variable rate to 3.5 percent (Resolution No. 107-07), and establish
the maximum loan at 10 percent of market rate sales price or 15 percent of below market rate
sales price, and a maximum loan amount not to exceed $40,000 in 2011 (Resolution No. 23-11);
and
WHEREAS, on September 2, 2014, the City Council approved changes to the First Time
Homebuyer Loan Program Guidelines to improve the management and administration of the First
Time Homebuyer Loan Program; and
WHEREAS, pursuant to California Environmental Quality Act (CEQA) and CEQA
Guidelines Section 15378(b)(4), revising the First -Time Homebuyer Loan Program Guidelines is
not a project and would not result in any physical changes it can be seen with certainty that the
amendments would not have a significant effect on the environment, and the amendments do not
involve any commitment to any specific project, therefore, exempt from the requirements of CEQA;
and
WHEREAS, a Staff Report was submitted to the City Council recommending approval of
amendments to the First Time Homebuyer Loan Program Guidelines; and
WHEREAS, on September 3, 2024, the City Council met to consider the Amendments to
the First Time Homebuyer Loan Program Guidelines; and
WHEREAS, on September 3, 2024, the City Council did hear and use independent
judgment and considered all said reports, recommendations and testimony.
Reso. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 1 of 2 8
NOW, THEREFORE, BE IT RESOLVED that the Dublin City Council hereby adopts the
amended First Time Homebuyer Loan Program Guidelines attached hereto as Exhibit A.
PASSED, APPROVED AND ADOPTED this 3rd day of September 2024, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Reso. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 2 of 2 9
Attachment 2
DUBLIN
CALIFORNIA
City of Dublin
Housing Division
100 Civic Plaza
Dublin, CA 94568
925-833-6610
Housinglnfo@dublin.ca.gov
www.dublin.ca.gov/housing/fthlp
GU
SEPTEMBER 2024
Attachment 2
TABLE OF CONTENTS
1 INTRODUCTION
2 DEFINITION OF TERMS
3 LOAN TERMS
3.1 Overview of Loan Terms
3.2 Financing Requirements
3.2.1 Acceptable Primary Loan Products
3.2.2 Prohibited Primary Loan Products and Unacceptable Mortgage Features
3.2.3 Down Payment
3.3 Property Inspection Reports
3.4 Recorded Loan Documents
3.4.1 Loan Documents for Below Market Rate Homes
3.4.2 Loan Documents for Market Rate Homes
3.5 Equity Share
3.5.1 Below Market Rate Units
3.5.2 Market Rate Units
4 HOUSEHOLD QUALIFICATIONS
4.1 Household Qualifications
4.2 Description of Qualification Requirements
4.2.1 Household Income
4.2.2 Credit Score
4.2.3 Homebuyer Education Program
4.2.4
Debt to Income Ratio
4.2.5 Preference Points
5 PROCEDURES
5.1 Loan Application, Approval, and Funding Procedures
1
2
5
5
6
6
6
6
7
7
7
7
7
7
7
9
9
10
10
13
13
13
13
15
15
5.2 Pre -Qualification 16
First Time Homebuyer Loan Program Guidelines
September3, 2024
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Attachment 2
TABLE OF CONTENTS
5.3 BMR Unit Refinancing
5.4 Loan Payoffs
6 EXCEPTIONS
EXHIBITS
Exhibit 1 Sample Loan, Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (for loans on
Below Market Rate homes)
Exhibit 2 Sample Deed of Trust, Assignment of Rents, Fixture Filing, and Security Agreement (for loans on Below Market
Rate homes)
Exhibit 3 Sample Secured Promissory Note (for loans on Below Market Rate homes)
Exhibit 4 Sample Loan and Equity Share Agreement (for loans on Market Rate homes)
Exhibit 5 Sample Deed of Trust, Assignment of Rents, Fixture Filing and Security Agreement (for loans on Market Rate
homes)
Exhibit 6 Sample Secured Promissory Note (for loans on Market Rate homes)
LIST OF TABLES
TABLE 1. LOAN TERMS AND REQUIREMENTS
TABLE 2. APPLICANT HOUSEHOLD QUALIFICATIONS
TABLE 3. PROGRAM INCOME LIMITS BY HOUSEHOLD SIZE (2024)
TABLE 4. ANNUAL INCOME CALCULATIONS BY PAY FREQUENCY
LIST OF FIGURES
FIGURE 1. LOAN APPLICATION PROCESS
FIGURE 2. LOAN PAYOFF PROCESS
FIGURE 3. EXCEPTION REQUEST PROCEDURE
LIST OF EXAMPLES
Example 1. Equity Share Calculation
Example 2. Determining Income with Assets
5
9
10
12
15
17
18
8
13
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First Time Homebuyer Loan Program Guidelines
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Attachment 2
1 INTRODUCTION
The City of Dublin (City) First Time Homebuyer Loan Program (Program, FTHLP) provides financial assistance,
in the form of a deferred loan, to income -qualified first time buyers who wish to buy a home in the City.
These FTHLP Guidelines (Guidelines) describe loan terms, eligibility requirements, and procedures. Users of
these Guidelines are encouraged to seek their own legal counsel to aid in understanding the requirements of the
FTHLP. For any general questions regarding the Program or these Guidelines, users may call the City's Housing
Division at (925) 833-6610.
The effective date of these Guidelines is September 3, 2024. The City will review and, to the extent necessary,
update these Guidelines annually. The City Manager may approve minor revisions, interpretations, or
clarifications to these Guidelines. Any such revision, interpretation, or clarification shall become effective when
posted on the City's website.
Non -Discrimination
All persons have the right to file a written application for a mortgage loan. An eligible Borrower is a person (or
persons) who is obligated to the repayment of a loan by the signing of the note. Loans to corporations,
partnerships, or syndications are not acceptable.
The City does not discriminate in granting or denying loans or in setting terms and conditions of a loan, with
regard to race, color, age, religion, gender, marital status, sexual orientation, national origin, or ancestry of the
Applicant; nor with regard to the racial or ethnic composition of the neighborhood, geographic areas surrounding
the property or with regard to income derived from any public assistance program.
First Time Homebuyer Loan Program Guidelines
1
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Attachment 2
2 DEFINITION OF TERMS
As used in these Guidelines, the following terms shall be defined as follows:
Administration Fees:
• The City Council shall, by resolution, establish a fee charged by the City to the loan recipient for the
underwriting, processing, and serving of the approved loan.
• A reimbursement fee charged by the City to the Applicant at the time of application for a credit report.
The fee amount varies based on actual cost.
Fees may be adjusted from time to time by the City.
Applicant: A household that has submitted an application for a loan under the City's First Time Homebuyer Loan
Program.
Area Median Income (AMI): The Area Median Income adjusted for household size as published annually for
Alameda County by the California Department of Housing and Community Development (HCD).
Below Market Rate (BMR) Units: A Below Market Rate or BMR Unit is a unit that is reserved for sale to Low -
or Moderate -Income households. BMR Units have restrictions recorded against them to ensure they remain
affordable for a set period of time. For additional information regarding BMR Units in the City, refer to the
Guidelines to the Inclusionary Zoning Regulations Ordinance.
Borrower: A household that has been approved for or has received an FTHLP loan.
Ca1HFA: The California Housing Finance Agency.
City: The City of Dublin.
City Council: The legislative body of the City of Dublin.
City Staff: An employee or designee of the City of Dublin responsible for actions related to the Program or these
Guidelines.
First Time Homebuyer: A person who has not owned any interest in real property during the three-year period
prior to the date of the household's loan application, including without limitation, real property in which a
household member's name appears on the title regardless of whether the member's interest in such property
results in a financial gain, such property is located in another state or country, or the member has occupied such
property as his or her primary residence. If any person has had his or her name on the title of a property, but the
property was sold more than three years ago from the date of application, the person is considered a First Time
Homebuyer.
Gross Household Income: All income, from whatever source derived, of all adult household members (18 years
of age and older), whether or not such income is exempt from federal income tax. Refer to Section 4.2.1 for a list
of income sources and exceptions.
Guidelines: These First Time Homebuyer Loan Program Guidelines.
HCD: The California Department of Housing and Community Development.
First Time Homebuyer Loan Program Guidelines
2
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Attachment 2
2 DEFINITION OF TERMS
HOA: Homeowners Association.
Homebuyer Class: A United States Department of Housing and Urban Development, Fannie Mae, or City -
approved course designed to provide basic education for First Time Homebuyers. Refer to the City's website
(https://www.dublin.ca.gov/housing/education) for organizations that may offer this course. The date on the
completion certificate for the class must be within six months of the date of application for a Loan.
Housing Expenses: Principal, interest, private mortgage insurance, taxes, insurances, and HOA dues.
HUD: The United States Department of Housing and Urban Development.
Immediate Family Member: A mother, father, brother, sister, child, grandparent, or grandchild.
Legal Resident: A citizen or other national of the United States or a qualified alien as defined by the Federal
Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
Loan Committee: The Loan Committee is appointed from time to time by the City Manager and generally
consists of senior staff from the City's Community Development and Finance Departments as well as a
representative from the City Manager's office. The Loan Committee reviews loan applications and approves,
conditionally approves, or denies loan applications. Decisions require a two-thirds vote.
Low Income: Total Household Income that is 51% to 80% of Area Median Income (AMI), adjusted for actual
household size.
Maximum Income: The Maximum Income for the Moderate Income category determined periodically by HCD
based on AMI. See Section 4.2.1 of these Guidelines for Maximum Incomes.
Moderate Income: Total Household Income that is 81% to 120% of AMI, adjusted for actual household size.
Preference Points: Points assigned to persons employed in the City of Dublin, public service employees working
for a public agency within the City of Dublin, Dublin residents, Seniors (62+), Veterans, persons who are
permanently disabled (with written verification from a physician or show receipt of Supplemental Security
Income or Social Security Disability Insurance), persons who are Immediate Family Members of a Dublin
resident, and persons who are required to relocate from a Dublin residence due to demolition of the residence or
conversion of the residence from a rental to an ownership unit. Persons with Preference Points are given priority
over other Qualified Households in the disbursement of loan funds.
Principal Residence: The place where a person resides on a substantially full-time basis during not less than 10
months per year. Children attending college and not living at home as their Principal Residence may not be
counted as a household member.
Program: Activities related to the City of Dublin First Time Homebuyer Loan Program.
Qualified Household: A "Qualified Household" means an Applicant household that satisfies the requirements
listed in Section 4 of these Guidelines.
Senior: A person 62 years of age or older for the purpose of qualifying for Preference Points.
Total Household Income: All Gross Household Income and assets received (as calculated pursuant to Section
4.2.1).
September3, 2024
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First Time Homebuyer Loan Program Guidelines
15
Attachment 2
2 DEFINITION OF TERMS
Veteran: A person who served in the active military, naval, or air service and who was discharged or released
therefrom under conditions other than dishonorable, for the purpose of qualifying for Preference Points.
First Time Homebuyer Loan Program Guidelines
4
September 3, 2024
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Attachment 2
3 LOAN TERMS
3.1 Overview of Loan Terms
The terms, requirements, and conditions for loans approved through the FTHLP are outlined in Table 1 and
described further below.
Table 1. Loan Terms and Requirements
Term or Requirement
Below Market Rate Homes
Market Rate Homes
Loan Amount
Up to zo% of the purchase price, with a
maximum of saoo,000.
Up to zo% of the home purchase price,
with a maximum of $ioo,000.
Interest Rate
3%, simple interest
Loan Term
3o year, deferred payment
Repayment
Repayment of principal and interest is due
upon the sale of the property, upon the
formal filing and recording of a notice of
default, or the expiration of the loan term
(whichever is earliest).
Repayment of principal and interest or
equity share is due upon the sale of the
property, payoff, or refinance of the first
mortgage, upon the formal filing and
recording of a notice of default, or the
expiration of the loan term (whichever is
earliest).
Equity Share
Loans on BMR homes are subject to an
equity share provision only upon the first
sale of the home following the expiration of
the restricted affordability period.
Upon the events described in "Repayment"
above, Borrowers of loans for market rate
properties are subject to a payment of
either accrued interest or equity share,
whichever is greater. See Section 3.5 for a
description of equity share.
Prepayment
Borrower(s) may prepay the Loan at any time without penalty (provided that the payment
covers the principal as well as the accrued interest or equity share).
Acceptable Primary
Mortgages
See Section 3.2.
Position on Title/Layered
Financing
The City must be in second position on title, behind only a primary mortgage, except when
the borrower is also using other similar County, State, or governmental programs, such as
the Alameda County AC Boost, CaIHFA, etc., that require a second position on title, at
which time the City may subordinate in a third or fourth position on title. Borrowers may
utilize assistance loans other than those listed above, but they must be subordinate to the
City's FTHLP loan.
Co -Signatories (not
allowed)
The loan shall contain no co -signatories. Only the approved Borrower's name(s) may be on
the deed.
Fees
Applicants are subject to the following fees:
Fee for a credit check, due at the time of application (reimbursement, based on actual
cost).
Fee established by City Council resolution for loan underwriting, processing, and servicing,
due upon close of escrow.
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Attachment 2
3 LOAN TERMS
Use of Loan Funds
Loan funds may be used for down payment assistance and to pay for non -recurring closing
costs associated with the home purchase. Loans may not be used for repairs, room
additions, or non -real property purchases.
Property Eligibility
Properties must be located in the City of Dublin and may be a single-family home,
condominium, or a manufactured home (subject to secondary market eligibility
requirements).
Inspection Reports
The Applicant must provide home and pest inspection reports (see Section 3.3).
3.2 Financing Requirements
All Applicants must be able to secure a primary home loan through a lending institution. Applicants may use a
lender of their choice, provided that the lender adheres to the City's Guidelines for acceptable loan products.
Applicants must provide a pre -approval letter, truth in lending statement, and good faith estimate from their
chosen lender at the time of application for a FTHLP loan.
3.2.1 Acceptable Primary Loan Products
The City reserves the right to deny a loan or reject loan products for primary loans if the City believes in its sole
discretion that there is a stronger likelihood that the loan product would potentially result in loss of loan funds due
to the purchasers' inability to comply with the terms of the loan.
Following is a nonexclusive list of the loan products that are generally acceptable to the City. The list is not
intended to be exhaustive, and other loan products may be evaluated upon request.
Acceptable Primary Mortgage Loan Products
• Fixed mortgages up to 30 years
• Maximum 100% combined loan to value
3.2.2 Prohibited Primary Loan Products and Unacceptable Mortgage Features
The following loan products and mortgage features are generally unacceptable to the City:
• Interest -only loans
• Negative amortizing loans
• Adjustable rate loans
• Balloon payment loans
• Lines of credit that exceed the resale price of the unit
• Stated income loans
• Excessive points and fees (more than what is typical of the market at the time)
3.2.3 Down Payment
The Borrower is required to make a minimum down payment of at least 3% of the sales price. Funds must be
placed into escrow prior to the close of escrow and must come from acceptable sources and be verified and
properly documented per Federal Housing Administration guidelines.
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Attachment 2
3 LOAN TERMS
3.3 Property Inspection Reports
The Applicant must obtain and provide pest inspection and home inspection reports for the property from licensed
professionals. The pest inspection report must confirm that the structure is sound and any noted pest infestations
must be resolved as recommended in the report. The home inspection report must cover all major systems,
including, but not limited to, electrical, plumbing, drainage, the foundation, paint, and appliances. Reports should
be provided to the City as early as possible during the escrow period to ensure funding and a timely close of
escrow.
3.4 Recorded Loan Documents
The City will prepare and the Borrower will sign a set of documents that describe agreed -upon loan terms and
ongoing Program requirements. These documents will be executed at the close of escrow and recorded on the
property's title. City Staff will discuss the basic provisions of these documents with the Borrower(s) at the in -
person consultation prior to the close of escrow; however, Borrowers should review these documents thoroughly
prior to signing.
3.4.1 Loan Documents for Below Market Rate Homes
Sample loan documents for FTHLP loans on BMR Units are provided in Exhibits 1, 2, and 3. Documents include
the Loan, Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (Exhibit 1), Deed
of Trust, Assignment of Rents, Fixture Filing and Security Agreement (Exhibit 2), and Secured Promissory Note
(Exhibit 3). BMR Units are also subject to the provisions described in the Guidelines to the Inclusionary Zoning
Regulations Ordinance.
3.4.2 Loan Documents for Market Rate Homes
Sample loan documents for FTHLP loans on market rate units are provided in Exhibits 4, 5, and 6. Documents
include the Loan and Equity Share Agreement (Exhibit 4), Deed of Trust, Assignment of Rents, Fixture Filing
and Security Agreement (Exhibit 5), and Secured Promissory Note (Exhibit 6).
3.5 Equity Share
3.5.1 Below Market Rate Units
BMR Units are not subject to an equity share provision upon resale or prepayment or in the occurrence of default;
however, BMR Units must pay an equity share to the City upon the first sale of the property following the
expiration of the restricted resale period. This requirement is described in the Guidelines to the Inclusionary
Zoning Regulations Ordinance and in the Loan, Occupancy, Refinancing, and Resale Restriction Agreement with
Option to Purchase (Exhibit 1).
3.5.2 Market Rate Units
Upon the sale of the property, repayment of the loan (due to a refinance or as an optional prepayment), or the
occurrence of any default event, the Borrower must pay the City the loan principal as well as the greater of the
accrued simple interest or an equity share. The equity share is based on the amount of the FTHLP loan in
proportion to the value of the property and the amount by which the property has increased in value, based on an
appraisal or resale purchase contract. The calculation is described in detail in the Loan and Equity Share
Agreement in Exhibit 4 and demonstrated in a sample calculation in Example 1.
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Attachment 2
3 LOAN TERMS
Example 1. Equity Share Calculation
The Borrower purchased a property for $700,00o and the City provided an FTHLP loan of $70,000. The loan amount
($70,000) is equivalent to io% of the sale price.
The Borrower sells the property 20 years later for $i,ioo,000. The property has appreciated by $400,000 ($i,ioo,000 -
$700,000 = $400,000).
The City portion of the increased value is io%, which equals $40,000 ($400,000 X io% = $4o,000).
If the $40,00o City share is greater than the accrued simple interest on the loan, the Borrower would owe the City a total
of $iio,000 ($70,00o in principal and $40,00o in equity share).
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First Time Homebuyer Loan Program Guidelines
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Attachment 2
4 HOUSEHOLD QUALIFICATIONS
4.1 Household Qualifications
A household must meet the requirements stated in Table 2 to qualify for a Loan. Section 4.2 provides additional
detail on certain requirements.
Table 2. Applicant Household Qualifications
Qualification Requirement
Description
Income
The household's Total Household Income must not exceed the income limit
set forth in Section 4.2.1.
Assets
The household may have no more than $250,00o in total assets, excluding
pensions and federally approved pre-tax savings accounts.
First -Time Homebuyer
No member of the household may have owned any interest in real property
during the three-year period prior to the household's BMR Unit application
date.
Owner Occupancy
The household will occupy the unit as its Principal Residence within 6o days
of the close of escrow on the unit.
Homebuyer Education
All title holders of the property must take a HUD or Fannie Mae -approved or
City -approved First Time Homebuyer class and receive a certificate of
completion. The certificate of completion must be dated within one year of
the date of application.
Credit
All Applicants have a minimum FICO credit score of 62o (see Section 4.2.2)
and must not have filed for bankruptcy in the last three years. Persons with
records of deeds -in -lieu of foreclosure or judicial or non -judicial foreclosure
are subject to a seven-year waiting period before they may be considered for
an FTHLP loan.
Residency/Citizenship
All household members must be either a citizen or national of the United
States or a qualified alien defined by the federal Personal Responsibility and
Work Opportunity Reconciliation Act of 1996.
Loan Preapproval
Homebuyers must be preapproved for a home loan that conforms to the
requirements established in Section 3.2.
Debt to Income Ratio
Homebuyers' proposed debt (based on current liabilities and proposed
housing payment) may not exceed 45% of the household's monthly income
(see Section 4.2.4).
Applicant households may request exceptions to qualification requirements. Procedures for exception requests are
described in Section 6.
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Attachment 2
4 HOUSEHOLD QUALIFICATIONS
4.2 Description of Qualification Requirements
4.2.1 Household Income
4.2.2.2 Maximum Total Household Income
To be eligible for a FTHLP loan, the Applicant's Total Household Income must not exceed the current Moderate -
Income limit. Total Household Income means the household's Gross Household Income (see Section 4.2.1.2)
plus assets calculated pursuant to Section 4.2.1.4. Maximum Income is determined annually by HCD based on
Area Median Income. Table 3 shows the Maximum Income limits for Alameda County for 2024.
Table 3. Program Income Limits by Household Size (2024)
Household Size
Income Limit
1 person
$i3o,8o0
2 persons
$149,500
3 persons
si68,15o
4 persons
si86,850
5 persons
$201,800
6 persons
s216,750
7 persons
$231,700
8 persons
$246,650
Source: HCD State Income Limits for Moderate -Income Households, 2024
4.2.1.2 Gross Household Income
Gross Household Income means all income from all adult household members (18 years of age and older) derived
from all sources as provided in the Internal Revenue Code (Title 26, Subtitle A, Chapter 1, Subchapter B, Part I,
Section 61), whether or not such income is exempt from federal income tax. Such income includes, but is not
limited to, the following:
• Compensation received from an employer. Compensation includes, but is not limited to, salary, overtime
pay, and other pay
• Other pay can include, but is not limited to, compensation for special working conditions or one-time pay-
out of unused vacation and sick leave
• Alimony, spousal, and child support
• Cash
• Pensions, if at an age where pension is being received as income
• Public benefits including, but not limited to, CalWorks, Social Security Income, and disability income
• All interest, dividends, and royalties
• Income derived from private businesses
• Rental income
• Income from pensions
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Attachment 2
4 HOUSEHOLD QUALIFICATIONS
• Compensation for services rendered including fees, fringe benefits, commissions, tips, and bonuses
• Stipend received for participation in a mentor, learning, or education opportunity
• Gains from dealings in private and/or commercial property
• Gambling winnings
• Annuities, life insurance, and endowment contracts
• Income from discharge of indebtedness
• Gross partnership contributions or distributions
• Income from an interest in an estate or trust
For purposes of determining Gross Household Income, each person 18 years of age or older must present all of
the following:
• A complete set of federal and state income tax returns for the past three years, including all schedules
(signed and dated) and W-2 forms (in the case where taxes have not been filed for any of the past three
years, a letter of verification of non -filing from the Internal Revenue Service is required).
• Four most recent and consecutive pay stubs.
• Three recent and consecutive statements for all financial accounts, including, but not limited to, savings
accounts, checking accounts, retirement accounts, 401(k) accounts, stock accounts, and other accounts
held in the Applicant(s) name(s), whether held individually or together.
If a household member is self-employed, in addition to the information above, the member must submit profit and
loss statements for the past three years (if applicable), and a current profit and loss statement for the year.
Exceptions:
1. Gross Household Income does not include income earned by a household member who is between the ages of
18 and 26 and meets both of the following criteria:
• Is claimed as a dependent of a household member on such member's federal income taxes.
• Is a full-time student (12+ units; school transcript must be provided).
2. Gross Household Income does not include payments to a household member from a governmental fund if all
of the following requirements are satisfied:
• The payments are based on the recipient's or the recipient's family's financial need.
• The payments do not represent compensation for services rendered.
• The payments are part of a governmental housing subsidy program including, but not limited to, Housing
Choice Voucher (Section 8) federal housing assistance payments.
4.2.1.3 Income Calculation
a. Wage and Salary. If an Applicant is a full-time employee (usually 30 to 40 hours per week) or an employee
with consistent regular hours or income, or income with overtime or adjustments as a regular part of their job,
one of the formulas listed in Table 4 will be used to determine the Applicant's salary. Bonuses, commissions,
and limited overtime may be calculated into the annual income calculation. In the case of unclear income or
income that is somewhat difficult to calculate, please contact the City. The City will make the final
determination as to which income calculation formula to use.
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Attachment 2
4 HOUSEHOLD QUALIFICATIONS
Table 4. Annual Income Calculations by Pay Frequency
Pay Frequency
Annual Income Calculation
Monthly
Monthly income amount x 12
Twice Monthly
Twice monthly income amount x 24
Biweekly
Biweekly income amount x 26
Weekly
Weekly income amount x 52
Hourly
Hourly income x 4o (or whatever normal hours per week may be) x 52
b. Variable Income. For Applicants who are part-time employees or employees with variable hours every pay
period (or variable hours less than 40 hours per week), inconsistent income or hours, frequent overtime,
bonuses and commissions, etc., their annual salary will be calculated using year-to-date income, plus the
previous year's income (from same income source or employer), divided by the number of months reviewed
(UP TO BUT NOT EXCEEDING 12 MONTHS) times 12 to arrive at their annual income. If there is no
previous year income from the same employer, or the job was started mid -year, the current income year to
date using the calculation explained in (b) above will be used. If an Applicant works consistently 40 hours per
week and has occasional or regular overtime, the calculation listed in (b) above will be used to calculate
income.
c. Inconsistent or Temporary Change in Income Due to a Temporary Circumstance. If an Applicant has a
temporary situation (seven months or less) that makes income calculation difficult, a verification of
employment may be used to calculate the Applicant's income based on a normal annual time period. Or, the
income may be calculated based on the person's hourly rate times their normal working hours (as shown in
item (b) above).
d. Self -Employed or Non -Corporation. A self-employed Applicant is also considered to have variable income.
Gross annual income calculations will be based on the previous two years' net income shown on Schedule C
of the federal income tax returns, plus net income before taxes from the Applicant's signed, year-to-date
Profit and Loss Statement, divided by the appropriate number of months (NOT TO EXCEED 12 MONTHS)
times 12 to arrive at the annual income.
4.2.1.4 Assets
An asset test will be applied to all Applicants to determine whether they satisfy the income requirements. If an
Applicant has assets that exceed $30,000, the following amounts will be added to the Applicant's Gross
Household Income to determine the household's Total Household Income:
• 10% of all assets valued at between $30,001 and $130,000
• 30% of all assets valued over $130,000
The maximum assets allowed are $250,000. Households with assets in excess of $250,000 will be disqualified.
Assets include, but are not limited to, cash, all savings and checking accounts, stocks, bonds, real estate, gifts, and
other sources of money. Pensions and federally approved retirement savings accounts, such as IRAs, Roth IRAs,
and 401ks, are excluded; however, retired Applicants who receive income from their retirement account must
include such income as Gross Household Income on their application. Example 2 illustrates the calculation for
determining income with assets.
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Attachment 2
4 HOUSEHOLD QUALIFICATIONS
Example 2. Determining Income with Assets
Example 2.A A household of 3 earns sioo,000 a year and has $150,00o in total household assets
$150,000 - $30,000 = $120,000 (which is less than $13o,000)
io% of $120,000 = $12,000
New Total Household Income: sioo,000 + $12,000 = $112,000
Example 2.B A household of 4 earns $150,00o a year and has $200,00o in total household assets
$200,000 - $30,000 = $170,000 (which is more than s13o,o00)
io% of s13o,000 = $13,000
3o% of balance of $40,000 = $12,000
New Total Household Income: $150,000 + $13,000 + s12,000 = $175,000
4.2.2 Credit Score
A credit check will be conducted on all adults (other than dependents) in the household. Applicants must have
sufficient creditworthiness to qualify. Creditworthiness means that:
1. All household individuals shall have a minimum of seven years since Chapter 7 or Chapter 13 bankruptcy
discharge date and/or foreclosure or short sale and evidence of reestablished credit is provided.
2. All persons appearing on the mortgage shall have a minimum FICO credit rating of 620 points from all
three credit agencies.
4.2.3 Homebuyer Education Program
Borrower(s) must successfully complete a HUD, Fannie Mae-, or City -approved First Time Homebuyer class
prior to the close of escrow and must provide the City with evidence of completion. The completion date must be
within one year of the proposed date of loan funding.
4.2.4 Debt to Income Ratio
Applicant(s) must have a debt to income ratio of no greater than 45%. This is determined by calculating the
Applicants' monthly debt obligations, including (but not limited to) estimated monthly housing expenses, car
payments, and other loan obligations and comparing it to the Applicants' monthly Household Income.
Student loan debt may be excluded from the monthly debt obligation calculation if the Applicant can provide
documentation that repayment of the loan is deferred for a period of at least three years from the application date.
4.2.5 Preference Points
The Preference Point system provides priority to certain households who are deemed to have a priority need for
housing in Dublin. Priority criteria are shown in Table 5. Loans may be approved for households who are not
eligible for any Preference Points.
Preference Points vary based on category and do not distinguish between adults and children. See Table 5 for
details and requirements. If two persons in the household qualify for Preference Points for the same category, the
maximum preference points for that category would be two points. For example, if a husband and wife are both
employed in Dublin, the couple receives only 2 Preference Points for being employed in Dublin. However, if two
Seniors make up a household, they would be entitled to only 1 Preference Point, as that category has a maximum
of one preference point for household.
Preference Points
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Attachment 2
4 HOUSEHOLD QUALIFICATIONS
Priority
Points
Proof Required
Employed in Dublin
3 points
maximum,
one per
household
member
Copy of recent pay stub establishing employment in Dublin;
If self-employed in Dublin, then the business must have a current City
business license.
Must have been employed within the City of Dublin for at least six
months.
Public service employee in
Dublin*
1 per
household
Copy of recent pay stub or letter from employer, on company
letterhead, establishing public service in Dublin; or
For a newly hired teacher at a state -accredited school, who will be
working in Dublin, a copy of employment contract; and
A letter from employer confirming employment and employer
contact information.
Resides in Dublin
3 points
maximum
one per
household
member
Copy of utility bill (PG&E or water), showing the Applicant with a
Dublin address; or
Copy of a current rental agreement.
Must have been a resident of the City of Dublin for at least one-year.
Seniors (62 and over)
1 per
household
A valid state driver license; or
A valid state identification card (with photo); or
A valid passport.
Permanently disabled
1 per
household
Doctor's note confirming that Applicant is permanently disabled; or
Other verification from a state agency establishing permanent
disability status; or
Verification of receipt of SSI or SSDI.
Veteran
1 per
household
A military department record of service such as an original military
service record or certified copy. The document must contain the
length, time, and character of the service.
Has an immediate family member
who is a Dublin resident
1 per
household
Copy of utility bill (PG&E or water), showing the immediate family
member with a Dublin Address; or
Copy of the immediate family member's current rental agreement; and
Copy of birth certificates for self and immediate family member,
establishing relationship; or
Other legal document establishing relationship.
Must move because housing is to
be demolished or converted to
condo
1
Letter from apartment owner or management firm verifying the
imminent condominium conversion or demolition of the unit; and
Confirmation from the City's Community Development Department.
* A public service employee is a person who is employed by a public agency such as the City of Dublin, a firefighter or police officer assigned to work in
Dublin, BART, DSRSD, or USPS working in Dublin.
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First Time Homebuyer Loan Program Guidelines
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Attachment 2
5 Procedures
5.1 Loan Application, Approval, and Funding
Procedures
The following are the general steps for qualifying for and
finalizing a loan (see Figure 1 for an overview):
1. Review qualification requirements. Potential
Applicants should review these Guidelines and
confirm that they meet established qualification
requirements (see Section 4).
2. Pre -qualify with a lender. Potential Applicants
should work with a lender of their choosing to get
pre -qualified to purchase a home. Potential
financing must meet the requirements described in
Section 3. This will be necessary for preparing a
complete application and will give the buyers a
clear understanding of the amount of money they
are eligible to borrow for a home purchase. The
City is available to speak with lenders to clarify
Program terms and requirements.
3. Homebuyer education. Potential Applicants must
complete a First Time Homebuyer Class (see
Section 4.2.3)
4. Execute a purchase contract. Potential
Applicants should work with a real estate agent to
find a desirable home for sale in the City. Homes
may be BMR Units (most available BMR Units
are listed on the City's website) or market rate
properties. Prepare an offer and execute a purchase
agreement on the home of your choosing.
5. Submit a FTHLP application. Prepare and
submit a complete FTHLP application packet to
the City's Housing Division. Be sure to include
supporting documentation for income and asset
verification (contact City Staff or view the City's
website for an application package). The
application should be submitted at least four weeks
prior to the scheduled close of escrow.
6. City Staff/Loan Committee review and
qualification determination. The City will make
every effort to review the application and
qualification materials and determine eligibility
within 10 working days of receipt of a complete
Figure i. Loan Application Process
1. Review qualification requirements (see Section
4)
*.
2. Pre -qualify for a primary home loan (see
financing requirements in Section 3)
3. Complete a homebuyer education class
(see Section 4.2.3)
*.
4. Choose a home in Dublin and execute a
purchase contract
\/
5. Submit an FTHLP application
t
6. City review and qualification, within 10 days of
receipt of complete application
7. If qualified, meet with the City
8. City provides escrow instructions and releases
funds and submits loan documents when
requirements are met
*.
9. Borrower signs City documents at close of
escrow
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Attachment 2
5 PROCEDURES
application. The application will be considered by City Staff in the Housing Division (to determine
application completeness and basic qualification) and the City's Loan Committee. If approved, the City
will send the Applicant a conditional approval letter. Applicants who are determined to be ineligible will
receive a denial letter.
7. Buyer consultation. All adult members of the approved Borrower household must schedule and
complete a consultation with City Staff to discuss loan terms, restrictions, and ongoing requirements. At
the meeting, Borrowers will review and sign a truth in lending statement and a good faith estimate.
8. Loan documents. Following completion of the consultation, City Staff will prepare escrow instructions
and submit them to the escrow officer. The instructions will describe the documentation the City will
need in order to prepare loan agreements and fund the loan. Documents will include (but may not be
limited to) a title report, home and pest inspection reports, an appraisal, and documents regarding the
primary loan.
9. Sign paperwork. Following receipt of required paperwork from the escrow company, the City will
prepare the appropriate loan documents for the Borrower to sign at closing (see Section 3.4). Once the
Borrower has signed, the paperwork will be delivered to the City for signature. The City will forward this
paperwork as well as a request for notice of default on the Borrower's primary loan to the escrow officer
for recordation.
10. Monitoring and correspondence. The Borrower must complete annual surveys to the City and should
contact City Staff with any questions. Any default on the signed agreements may result in the City calling
the loan due immediately. Borrowers must contact the City when contemplating a sale or refinance.
5.2 Pre -Qualification
The City will accept applications for preliminary review and pre -qualification. This review will confirm that the
Applicant meets the qualifications described in Section 4, with the exception of the debt -to -income ratio, which
cannot be determined until the City is provided with an estimate of monthly housing costs for a specific home.
Applications for pre -qualification are subject to costs to reimburse the City's direct cost to obtain a credit report.
Pre -qualification applications are reviewed by City Staff in the Housing Division but are not reviewed by the
Loan Committee. Following the review, City Staff will issue a letter of eligibility. Note that Program funding is
limited and a letter of eligibility does not guarantee that funds will be available to the Applicant if/when they are
requested.
5.3 BMR Unit Refinancing
BMR Unit Borrowers may keep the FTHLP loan intact through a refinance, provided that the new loan meets City
standards. BMR Unit Borrowers must notify the City of their intent to refinance and follow the refinance
procedures outlined in the Guidelines to the Inclusionary Zoning Regulations Ordinance.
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Attachment 2
5 PROCEDURES
5.4 Loan Payoffs
Market rate home Borrowers must pay off the FTHLP loan
in the event of a refinance or resale and have the option to
prepay the loan at any time. BMR Unit Borrowers must
pay off the FTHLP loan in the event of a resale and have
the option to pay off the loan during a refinance or may
choose to prepay the loan at any time. An overview of the
payoff process is outlined in Figure 2.
The following are the general steps for the loan payoff
process (see Figure 2 for an overview):
1. Provide notice and documentation. The
Borrower must provide the City with the
following:
a. A written notification of the Borrower's
intended action.
b. A current property appraisal or a resale
purchase contract.
Figure 2. Loan Payoff Process
1. Notify the City of your intended action
(refinance, resale, or prepayment) and required
information
2. The City prepares a payoff demand and
provides it to the escrow officer
t7
3. Repayment funds are disbursed to the City at
the close of the transaction
*.
4. The City releases loan -related restrictions from
the property
c. The name and contact information of the escrow officer managing the transaction, as well as an
escrow number.
2. City prepares payoff demand. The City will calculate the accrued interest and equity share, if
applicable, and prepare a payoff demand for the greater of the two. The equity share calculation is
described in Section 3.5. The City will provide a copy of the payoff demand to the Borrower and submit
the demand to the escrow officer.
3. Funds disbursed to the City. The escrow officer will disburse repayment funds to the City as stated in
the payoff demand upon the close of the transaction.
4. Release and reconveyance. The City will prepare appropriate documents to release the loan documents
(as described in Section 3.4) from the property.
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Attachment 2
6 Exceptions
Any applicant believing that his/her situation warrants an
exception to any part of these Guidelines due to
circumstances outside of his/her household's control, such
as refugee status, special needs, or other hardships or
special circumstances, may request an exception by
submitting a written letter to the City prior to submitting
an application of any kind. The exception request
procedure is outlined in Figure 3.
The exception request must specify which particular
guideline or requirement the household cannot meet for
reasons beyond their control or other valid reasons, and/or
describe the household's unique circumstances which
warrant one or more specific exceptions to be identified in
the letter, referencing the page(s) and section(s) of these
Guidelines and/or application form related to the request.
Figure 3. Exception Request Procedure
1. Review requirements and regulations
2. Submit exceptions request letter to the City
3. City Staff (Housing Division and/or Loan
Committee) review and response (within 10 days)
Exceptions related to disabilities (reasonable
accommodations) may be requested according to this procedure, with a brief description of the exception(s)
needed due to the Applicant's disability. Such requests will be handled in accordance with the City's reasonable
accommodations policy and these Guidelines.
Exceptions will be considered by City Staff, including authorized persons in the Housing Division and/or
members of the Loan Committee. The City will provide a letter response within 10 calendar days, stating whether
the requested exception can be granted in full or part and the reason for such decision.
First Time Homebuyer Loan Program Guidelines
18
September3, 2024
30
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
Recording requested by and when
recorded mail to:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder's Use
LOAN, OCCUPANCY, REFINANCING AND RESALE RESTRICTION AGREEMENT
WITH OPTION TO PURCHASE
City of Dublin First -Time Homebuyer Program
(Inclusionary Units)
NOTICE: THIS DOCUMENT CONTAINS RESTRICTIONS ON THE USE, SALE
AND REFINANCING OF THIS PROPERTY.
This Loan, Occupancy, Refinancing and Resale Restriction Agreement with Option to Purchase (this
"Agreement") is entered into as of Date of Signing and Borrower(s) Name (collectively, "Owner") regarding certain
improved real property located at Property Address, Dublin, California 94568, and further described in Exhibit A
attached hereto (the "Property").
RECITALS
WHEREAS, to further its goal of creating affordable home ownership opportunities for low- and moderate -
income persons and families, the City has initiated a First -Time Homebuyers Program (the "Program") pursuant to
which the City provides deferred payment loans to assist first-time buyers to purchase homes in the City of Dublin at a
restricted below -market price;
WHEREAS, Owner qualifies as an eligible low- or moderate -income purchaser under the Program, has
certified that Owner intends to live in the Property as an owner occupant, and has agreed to maintain the Property as
Owner's Principal Residence (as defined below);
WHEREAS, pursuant to the Program (i) Owner will purchase the Property at a below -market price, and (ii)
City will provide a low -interest, deferred payment loan (the "Loan") to Owner upon the terms and conditions set forth
herein. The Loan will be evidenced by a Secured Promissory Note executed by Owner and dated as of the date hereof
(the "Note") and secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing executed by
Owner, dated as of the date hereof, and recorded against the Property substantially concurrently herewith in the Official
Records of Alameda County (the "Deed of Trust");
WHEREAS, in order to maintain and preserve the Property as housing affordable to low- and moderate -
income households consistent with the goals of the Program, it is necessary to restrict the use and resale of the
Property through imposition of the occupancy and resale restrictions set forth herein. These restrictions are intended
to prevent initial and subsequent purchasers from using the Property for purposes incompatible with the Program and
realizing unwarranted gains from sales of the Property at unrestricted prices. The restrictions set forth in this Agreement
Exhibit 1_FTHLP BMR LORRA-2024 Page 1 Rev 812024
31
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
"Owner" is defined in the preamble to this Agreement.
"Permitted Transfer" is defined in Section 4.3.1.
"Principal Residence" means the place where a person resides on a substantially full-time basis
during not less than ten (10) months per year.
"Program" is defined in the Recitals.
"Property" is defined in the preamble to this Agreement.
"Resale Restrictions" means collectively, the restrictions upon the sale price of the Property as set
forth in Sections 4.1, 4.3, 12 and 13 and the requirement that the Property may only be conveyed to an Eligible
Household, a permitted transferee or the City as more particularly set forth in Section 4.1.
"Term of the Resale Restrictions and Option" means in perpetuity/ 55 years/ 30 years
commencing upon the date the unit was placed into service as an inclusionary unit (original owner's date of signing).
"Transfer" is defined in Section 4.3.
2. Loan. City has agreed to provide a loan in the amount of loan amount written dollars ($00,000) (the "Loan")
upon the terms and conditions set forth in the City Documents to assist Owner to purchase the Property. Owner
acknowledges that the City Documents provide for, among other requirements, owner -occupancy requirements,
restrictions on assignment of the Loan, and restrictions on refinancing of the Property. As more particularly set forth
herein and in the Note, the Loan terms include the following:
(a) Interest Rate. Interest accrues on the principal balance of the Loan commencing upon the
date of origination of the Note at the rate of three percent (3%) simple interest per annum.
(b) Loan Term; Due on Sale. The entire principal balance of the Loan together with all interest
and other sums accrued pursuant to the City Documents is due and payable in full in one lump sum upon the
earliest of: (i) the thirtieth (30'h) anniversary of the date of the Note, (ii) the sale, or other transfer of the
Property (other than as permitted pursuant to the City Documents), or (iii) the refinancing of any senior
mortgage secured by the Property which results in "cash out" to Owner, or (iv) the occurrence of an Event of
Default.
(c) Due Upon Refinancing: The Loan is payable in full upon the refinancing of any mortgage
secured by the Property in violation of the City Documents or upon the encumbrance of the Property in
violation of the City Documents. Section 4.4 of this Agreement provides further information regarding
restrictions on the refinancing and encumbrance of the Property.
(d) Prepayment. The Loan may be prepaid in full at any time without penalty or premium
provided that all interest and other sums payable pursuant to the City Documents are paid in full. The City's
option to purchase the Property pursuant to this Agreement and the resale, occupancy and other restrictions
set forth in this Agreement survive the repayment or prepayment of the Loan.
(e) Occupancy and Resale Restrictions. The restrictions on the resale price of the Property,
the occupancy restrictions, and City's option to purchase the Property (as more fully described below) shall
continue for in perpetuity/ 55 years/ 30 years commencing upon the date the unit was placed into service
Exhibit 1_FTHLP BMR LORRA-2024 Page 3 Rev 812024
32
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
as an inclusionary unit (original owner's date of signing), regardless of any prepayment or repayment of
the Loan.
3. Owner Representations, Warranties and Covenants. Owner hereby represents, warrants and covenants that
all of the following are true: (i) the financial and other information provided to City in order to qualify to purchase the
Property is true and correct as of the Effective Date; (ii) Owner is a first time homebuyer as described in the City of
Dublin First -Time Homebuyer Program Guidelines; and (iii) Owner will fully cooperate by promptly providing to the City
all information requested by the City to assist in monitoring Owner's compliance with this Agreement.
3.1 Maintenance and Insurance Requirements
3.3.1 Maintenance.
(1) The Owner shall maintain the Property, including landscaping, in good repair and in a neat,
clean and orderly condition (and, as to landscaping, in a healthy condition) and in accordance with all
applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and
other governmental agencies and bodies having or claiming jurisdiction and all their respective
departments, bureaus, and officials. Owner will not commit waste or permit deterioration of the Property,
and shall make all repairs and replacements necessary to keep the Property in good condition and repair.
Failure by the Owner to maintain the Property shall constitute a default under this Agreement for which
the City may exercise the remedies provided to City hereunder, including without limitation, the City
Option to purchase the Property.
(2) In the event that the Owner breaches any of the covenants contained in this Section 3.1 and
such default continues fora period of ten (10) days after written notice from the City with respect to graffiti,
debris, waste material, and general maintenance or thirty (30) days after written notice from the City with
respect to landscaping and building improvements, then in addition to any other remedy City may have
at law or in equity, City shall have the right to enter the Property and perform or cause to be performed
all such acts and work necessary to cure the default. Pursuant to such right of entry, the City shall be
permitted (but is not required) to enter the Property and perform all acts and work necessary to protect,
maintain, and preserve the improvements and landscaped areas, and to attach a lien on the Property, or
to assess the Property, in the amount of the expenditures arising from such acts and work of protection,
maintenance, and preservation by the City and/or costs of such cure, which amount shall be promptly
paid by the Owner to the City, plus an administrative charge equal to fifteen percent (15%) of the cost of
such work upon demand.
3.3.2 Insurance. The Owner shall maintain a standard all risk property insurance policy equal to
the replacement value of the Property (adjusted every five (5) years by appraisal, if requested by City)
naming the City and its elected and appointed officers, officials, employees, representatives and agents
as additional insureds. Additional insurance requirements are set forth in the Deed of Trust. The Owner
shall provide the City with evidence of required insurance coverage upon City's request.
4. Program Requirements.
4.1 Affordability Restrictions. Owner hereby covenants and agrees that during the Term of the Resale
Restrictions and Option, the Property shall be sold or otherwise transferred only in accordance with the terms and
conditions set forth herein and only to (i) Eligible Households at a price not to exceed the Adjusted Resale Price, (ii) a
permitted transferee pursuant to Section 4.3.1, or (iii) the City pursuant to the exercise of the Option or otherwise in
accordance with the terms hereof.
4.2 Principal Residence Requirement. Owner covenants and agrees that Owner shall occupy the
Property as Owner's Principal Residence throughout the period of time that Owner owns the Property, and shall not
Exhibit 1_FTHLP BMR LORRA-2024 Page 4 Rev 812024
33
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
rent or lease the Property or portion thereof during the Term of the Resale Restrictions and Option. Owner shall
occupy the Property as Owner's Principal Residence within sixty (60) days of close of escrow for the Property. Owner
shall be considered as occupying the Property as a Principal Residence if the Owner is living in the Property for at least
ten (10) months out of each calendar year. Upon request of City made from time to time, Owner shall provide a written
certification to the City, in form provided by City, that Owner is occupying the Property as Owner's Principal Residence
and that Owner is not renting or leasing the Property to another party, and shall provide such documents and other
evidence as City may reasonably request to verify compliance with the requirements of this Section. During the Term
of the Resale Restrictions and Option, successor owners of the Property shall be obligated to use the Property as such
successor's Principal Residence for the duration of the successor's ownership.
4.3 Restrictions on Transfer and Resale. Except as provided in Section 4.3.1, throughout the Term of
the Resale Restrictions and Option, the Property may only be sold or otherwise conveyed only to Eligible Households
at a price not to exceed the Adjusted Resale Price. As more particularly described in Section 13, the Adjusted Resale
Price may not exceed the Affordable Unit Cost. There shall be no Transfer of the Property without City's certification
that the transferee is an Eligible Household and that the Property is being transferred at a price not to exceed the
Adjusted Resale Price. "Transfer" means any sale, assignment or transfer, voluntary or involuntary, of any interest in
the Property. Any sale or other Transfer of the Property in violation of the requirements of this Section is prohibited
and shall constitute an Event of Default and an Option Event entitling City to exercise its Option to purchase the
Property.
4.3.1 Permitted Transfers. Provided that the transferee assumes, within 30 days following written
request by City, all of Owner's duties and obligations under this Agreement pursuant to a written assumption
agreement in a form acceptable to City, or at City's election, execution of an agreement substantially similar
to this Agreement, the following transfers ("Permitted Transfers") of title to the Property, or of any estate or
interest therein shall not trigger the exercise of the Option and shall not be considered Option Events: (i) a
transfer by devise or inheritance to Owner's spouse or domestic partner following the death of Owner; (ii) a
transfer by Owner to a spouse or domestic partner where the spouse or domestic partner becomes the co-
owner of the Property; (iii) the transfer of title to a spouse as part of a divorce or marriage dissolution
proceeding; and (iv) a transfer by Owner into an inter vivos trust in which the Owner is a beneficiary; provided
however, in every case: (a) written notice of each such transfer shall be provided to City, and (b) Owner shall
continue to occupy the Property as his or her principal place of residence (except where the transfer occurs
pursuant to subsection (i) or (iii) above, in which event the transferee shall owner -occupy the Property).
Notwithstanding any Permitted Transfer, the Option shall remain effective with respect to the Property for the
duration of the Term of the Resale Restrictions and Option.
For purposes of this section, "domestic partner" shall mean two unmarried people, at least eighteen (18) years
of age, who have lived together continuously for at least one year and who are jointly responsible for basic
living expenses incurred during their domestic partnership. Domestic partners may not be persons related to
each other by blood or adoption such that their marriage would be barred in the state of California. For
purposes of this section, an individual shall be considered a domestic partner of Owner upon presentation of
an affidavit or other acceptable evidence by Owner to the City.
4.3.2 Inheritance. In the event a Transfer occurs by devise or inheritance due to death of the
Owner, the administrator of the Owner's estate or the person inheriting the Property shall provide written
notice to the City of the Owner's death within thirty (30) days of the date of death, and the following procedures
shall apply:
(i) If the person inheriting the Property (the "Inheriting Owner") is the child or stepchild of the
deceased Owner (an "Inheriting Child"), he or she shall provide the City with documentation that he or she is
the child or stepchild of the deceased Owner together with income information, to be verified by the City, so
that the City may determine if the Inheriting Child is an Eligible Household. If the Inheriting Child fails to
Exhibit 1_FTHLP BMR LORRA-2024 Page 5 Rev 812024
34
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
provide required documentation of his or her relationship to the Owner or financial information, he or she shall
be deemed not to qualify as an Inheriting Child and/or Eligible Household, as applicable. If the Inheriting Child
qualifies as an Eligible Household, he or she shall succeed to the Owner's interest and obligations under this
Agreement, the City Note, and the City Deed of Trust, and new documents shall be executed between the
Inheriting Child and the City and recorded against the Property. If the Inheriting Child fails to qualify as an
Eligible Household, he or she shall be required to Transfer the Property to an Eligible Household at a price
not exceeding the Adjusted Resale Price, pursuant to the procedures set forth in this Agreement and the City
may exercise its Option; provided however, the Inheriting Child may occupy the Property for up to twelve (12)
months provided that the Inheriting Child remains in compliance with the requirements of this Agreement and
the Deed of Trust.
(ii) If the Inheriting Owner is not the child or stepchild of the deceased Owner, he or she shall Transfer
the Property to an Eligible Purchaser at a price not exceeding the Adjusted Resale Price, pursuant to the
procedures set forth in this Agreement, and the City may exercise its Option. In this event, the Inheriting
Owner shall provide the City with a Notice of Intent to Transfer within sixty (60) days of the date of death of
the Owner.
(iii) Failure of an Inheriting Owner to follow the procedures and file the notices described in this
Section 4.3.2 shall constitute an Event of Default under this Agreement, and the City may then exercise any
of the remedies set forth in this Agreement or available to City under law or equity, including, without limitation,
exercise of the City Option.
4.3.3 Changes to Title. Notwithstanding Sections 4.3.1 and 4.3.2 above, Owner shall obtain City's
written approval prior to making any changes to the title of the Property, including but not limited to, the
addition or deletion of the names of any person to or from title to the Property.
4.4 Restrictions on Financing Secured by Property. Owner shall permit no mortgage, deed of trust or
other security instrument to be recorded against the Property other than the following: (i) a fixed rate conventional
mortgage with a term of up to 30 years, (ii) any California Housing Finance Agency ("CaIHFA") product; (iii) the City
Documents, (iv) other loan products approved by City, and (v) encumbrances permitted pursuant to Sections 4.4.1
through 4.4.3.
4.4.1 Initial Financing. Owner's aggregate purchase money financing for the Property ("Initial
Financing") shall not exceed an amount equal to one hundred percent (100%) of the Base Resale Price
calculated as provided in Section 12.
4.4.2 Junior Loans. Mortgage loans or equity lines of credit junior in lien priority to the Deed of
Trust are not permitted, except when expressly approved by the City in writing. The City shall only approve
junior mortgage loans or equity lines of credit as follows:
the loan or equity line of credit does not cause the Property's loan to value ratio
(calculated by comparing the total debt secured by the Property to the Adjusted Resale Price of the
Property ) to exceed 100%.
ii. the proceeds of such loan or equity line of credit are used only for Eligible Capital
Improvements; and
the total outstanding balance of principal and any accrued interest on all loans
secured by the Property does not exceed the Adjusted Resale Price.
Exhibit 1_FTHLP BMR LORRA-2024 Page 6 Rev 812024
35
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
In the event that the encumbrance of the Property by a junior mortgage results in "cash out" to Owner in
violation of this Agreement, the Loan shall be due and payable.
4.4.3 Restrictions on Refinancing. Any prepayment and refinance of the Initial Financing shall
not be permitted unless expressly approved by the City in writing, and the City may approve such refinancing
only if all of the following conditions are met:
the refinance reduces Owner's interest rate and monthly payments of principal and
interest on the Initial Financing or shall be used to finance Eligible Capital Improvements;
ii. the refinance does not cause the principal amount of all debt secured by the
Property to exceed the then outstanding balance (plus refinancing and closing costs) of the Initial
Financing plus the cost of any Eligible Capital Improvements that shall be made by Owner;
the refinance does not result in Owner receiving any cash from the refinance
except for Eligible Capital Improvements;
iv. the refinance does not cause the Property's loan to value ratio (calculated by
comparing the total debt secured by the Property to the Adjusted Resale Price of the Property) to
exceed 100% if the Owner does not receive any cash from the refinance or 97% if the Owner receives
cash from the refinance for Eligible Capital Improvements.
v. the total outstanding balance of principal and any accrued interest on all loans
secured by the Property does not exceed the Adjusted Resale Price.
In the event that the refinancing of any senior mortgage secured by the Property results in "cash out" to Owner
in violation of this Agreement, the Loan shall be due and payable.
For purposes of this Section 4.4, the Adjusted Resale Price shall be calculated by the City pursuant to Section
13 of this Agreement as of the earlier of (a) the date on which the deed of trust or mortgage securing the new mortgage
is filed for recordation in the Official Records of the County of Alameda, or (b) the date the City receives Notice of Intent
to Transfer pursuant to Section 7.1)
5. Grant of Option to Purchase; Assignment of Option. Owner hereby grants to the City an option ("Option") to
purchase the Property at the Adjusted Resale Price upon the occurrence of an Option Event, subject to the terms and
conditions contained herein. The City may assign the Option to another government entity, a non-profit affordable
housing provider, or a person or family who qualifies as an Eligible Household. The assignment of the Option shall not
extend any time limits contained herein with respect to the Option exercise period or the period within which the
Property must be purchased following exercise of the Option.
6. Events Giving Rise to Right to Exercise Option. The City shall have the right to exercise the Option upon the
occurrence of any of the following events (each, an "Option Event"):
(a) Receipt of a Notice of Intent to Transfer;
(b) Any actual, attempted or pending sale, conveyance, transfer, lease or other attempted disposition of
the Property or of any estate or interest therein, except as provided in Section 4.3.1;
(c) Any actual, attempted or pending encumbrance of the Property, including without limitation by
mortgage, deed of trust, judgment lien, mechanics lien, or tax or other lien, except as provided in
Section 4.4 and the subsections thereof;
Exhibit 1_FTHLP BMR LORRA-2024 Page 7 Rev 812024
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Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
(d) Recordation of a notice of default and/or notice of sale pursuant to California Civil Code section 2924
(or successor provisions) under any deed of trust or mortgage with a power of sale encumbering the
Property;
(e) Commencement of a judicial foreclosure proceeding regarding the Property;
(f) Execution by Owner of any deed in lieu of foreclosure transferring ownership of the Property;
(g) Commencement of a proceeding or action in bankruptcy, whether voluntary or involuntary, pursuant
to Title 11 of the United States Code or any other bankruptcy statute, or any other insolvency,
reorganization, arrangement, assignment for the benefit of creditors, receivership or trusteeship,
concerning the Owner; or
(h) The occurrence of an Event of Default as described in Section 23.1.
7. Notice of Intended Transfer; Consent to Transfer; Exercise of Option.
7.1 Notice of Intent to Transfer. If Owner desires to sell, convey, transfer, lease, encumber or otherwise
convey the Property or any estate or interest therein (other than pursuant to Sections 4.3.1, 4.4.1 through 4.4.3), Owner
shall deliver written notice to City of such intent ("Notice of Intent to Transfer") by certified mail not less than 45 days
prior to the date of such proposed sale, conveyance, transfer, lease, encumbrance or disposition. The Notice of Intent
to Transfer shall state the street address of the Property, Owner's full name or names, the address and telephone
number at which Owner may be contacted if not at the Property; and shall be delivered personally or deposited in the
United States mail, postage prepaid, certified -return receipt requested, addressed to the City of Dublin, 100 Civic Plaza,
Dublin, California 94568, Attn: Housing Division. The Notice of Intent to Transfer shall be in substantially the form
attached hereto as Exhibit B or such substitute form in use by City at such time. In the case of a proposed sale of the
Property to an identified prospective purchaser, the Owner shall submit to the City, together with the Notice of Intent to
Transfer, a copy of the prospective purchaser's income certification, and all other information reasonably requested by
City to establish that the prospective purchaser is an Eligible Household, in a form approved by the City, along with the
income certification to be provided to any lender making a loan to the prospective purchaser, a copy of the proposed
sales contract and all related documents setting forth the terms of sale, the name of the title company and escrow
information. The City or its authorized designee may require the prospective purchaser to provide documentation
evidencing and supporting the income and other financial information contained in the certifications.
7.2. Notice of Exercise. Upon the occurrence of any Option Event, the City may exercise its Option by
delivering, within the time period specified in Section 7.4, notice ("Notice of Exercise") to Owner of City's intent to
exercise the Option. The Notice of Exercise may be in the form attached hereto and incorporated herein as Exhibit C
or in such other form as the City may from time to time adopt. The Notice of Exercise shall be delivered by deposit in
the United States mail, postage prepaid, first-class, addressed to Owner at the Property, or at such other address as
may be indicated on the Notice of Intent to Transfer, and delivery shall be deemed effective five (5) calendar days
following the date of deposit. If the Option Event relates to the potential foreclosure of a mortgage, then the City shall
also deliver the Notice of Exercise to the mortgagee or beneficiary under such mortgage, at such mortgagee's or
beneficiary's address of record in the Official Records of Alameda County and the City shall not complete the purchase
of the Property if the default is cured within the time periods permitted by law.
7.3 Notice of Consent to Transfer. If the Option Event involves a transfer of the Property and the City
does not exercise the Option, the City may consent to the transfer ("Consent to Transfer") provided all of the following
requirements are satisfied: (i) the proposed purchaser qualifies as an Eligible Household; (ii) the sale of the Property
is at a price not to exceed the Adjusted Resale Price; (iii) the proposed purchaser executes a Disclosure Statement in
Exhibit 1_FTHLP BMR LORRA-2024 Page 8 Rev 812024
37
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
the form attached hereto as Exhibit D or such other form or forms as may be promulgated by the City; (iv) the proposed
purchaser executes an agreement substantially similar to this Agreement in a form approved by the City and such
substitute agreement is recorded in the Official Records of Alameda County concurrently with the close of escrow for
the sale of the Property (provided however, the Term of the Resale Restrictions and the Option will be for that portion
of such term remaining as of the date of close of escrow for the sale of the Property to the prospective purchaser); (v)
if the proposed purchaser will be obtaining a Program loan, the proposed purchaser executes and delivers a promissory
note in form approved by City and the proposed purchaser executes a deed of trust substantially in the form of the
Deed of Trust in a form approved by the City and such deed of trust is recorded concurrently with the close of escrow
for the sale of the Property; and (vi) if the proposed purchaser will not be obtaining a Program loan, the proposed
purchaser executes a Performance Deed of Trust in form provided by City and such Performance Deed of Trust is
recorded concurrently with the close of escrow for the sale of the Property. The Performance Deed of Trust will secure
the performance of the resale, refinancing, and occupancy restrictions set forth herein, the other obligations of the
Property owner, and the obligation for payment of the City's Equity Share in connection with the first sale of the Property
following the expiration of the Term of the Resale Restrictions and Option.
If the prospective purchaser (i) fails to qualify as an Eligible Household, or (ii) fails to execute and deliver any of the
required documents specified above within the time period set forth in the Consent to Transfer, then the Consent to
Transfer shall expire, and the City may, at its option, either notify Owner of the disqualification, thereby entitling Owner
to locate another purchaser who qualifies as Eligible Household, or City may exercise the Option, as if no Consent to
Transfer had been delivered.
7.4 Time Period for Notice. The City shall deliver a Consent to Transfer, if applicable, not later than thirty
(30) days after the date that it receives notification of an Option Event. The City shall deliver a Notice of Exercise, if
applicable, on or before the date which is the later to occur of the following: (i) thirty (30) days after the date that the
City receives notification of an Option Event or (ii) fifteen (15) days after a Consent to Transfer has expired; provided,
however, that if the City delivers a Notice of Exercise to Owner upon occurrence of an Option Event described in
Paragraphs 3.c.iv, 3.c.v, or 3.c.vi, the City shall deliver the Notice of Exercise on or before sixty (60) days after the date
that the City receives notice of the Option Event, and the City or its assignee shall close escrow for the purchase of the
Property no later than 90 days after the date the City receives notification of such Option Event, unless extended by
mutual agreement of Owner and the City. For purposes of computing commencement of the delivery periods, the City
shall be deemed to have received notification of an Option Event on the date of delivery of a Notice of Intent to Transfer,
pursuant to the terms of Paragraph 17 below or on the date it actually receives notice of default, summons and
complaint or other pleading, or other writing specifically stating that an Option Event has occurred. The City shall have
no obligation to deliver a Notice of Exercise or Consent to Transfer, and the applicable time period for exercise of the
Option shall not commence to run, unless and until the City has received notification of an Option Event in the manner
specified in this subparagraph. If there is a stay or injunction imposed by court order precluding the City from delivering
its Consent to Transfer or Notice of Exercise within the applicable time period, then the running of such period shall
cease until such time as the stay is lifted or the injunction is dissolved and the City has been given written notice
thereof, at which time the period for delivery of a Consent to Transfer or Notice of Exercise shall again begin to run.
7.5 No Waiver. If the City in its sole discretion determines not to exercise the Option in any particular
instance, or fails to deliver a Notice of Exercise or Consent to Transfer within the time periods set forth in Section 7.4,
such determination or failure shall not affect City's rights to exercise the Option upon the occurrence of any future
Option Event.
7.6 Payment of Excess Sale Proceeds.
7.6.1 Upon Sale in Violation of Agreement. If Owner sells or otherwise transfers the Property in
violation of the price restrictions set forth herein, and if City chooses not to exercise its Option, then City shall
be entitled to receive from Owner without any deduction, offset or recoupment, one hundred percent (100%)
of the difference (the "Excess Sale Proceeds") between (a) the actual sales price net of reasonable and
Exhibit 1_FTHLP BMR LORRA-2024 Page 9 Rev 812024
38
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
customary real estate commissions paid (such commissions not to exceed six percent (6%) of the actual sales
price), and (b) the Adjusted Resale Price, calculated as of the earlier of (i) the date of close of escrow for the
sale of the Property to the third party, or (ii) the date the City receives Notice of Intent to Transfer pursuant to
Section 7.1. This amount shall be a debt of Owner to City and shall be evidenced by the Note in addition to
all other sums payable pursuant to the Note, and shall be secured by the Deed of Trust. Owner acknowledges
that City shall have no obligation to reconvey the Deed of Trust or this Agreement unless and until the Excess
Sale Proceeds are paid to City. City shall use the Excess Sale Proceeds for affordable housing programs.
The Owner acknowledges that the formula used to determine the amount of the Excess Sale Proceeds is
intended to cause Owner to receive the same or less net sale proceeds from the unrestricted sale of the
Property as Owner would have received if the Property had been sold to an Eligible Household at the price
permitted pursuant to this Agreement.
7.6.2 Upon Foreclosure. If the Property is sold at a foreclosure sale and the proceeds of such
sale are distributed to Owner, any surplus of proceeds remaining after payment of the senior liens and
encumbrances on the Property shall be distributed as follows: that portion of the surplus up to, but not to
exceed, the net amount Owner would have received pursuant to Sections 12 and 13 had the City exercised
its Option on the date of such sale shall be distributed to Owner, and the balance of such surplus, if any, shall
be distributed to the City.
8. Right to Reinstatement. If the Option Event is the recordation of a notice of default, then the City shall be
deemed to be Owner's successor in interest under California Civil Code Section 2924c (or successor section) solely
for purposes of reinstatement of any mortgage on the Property that has led to the recordation of the notice of default.
As Owner's deemed successor in interest, the City shall be entitled to pay all amounts of principal, interest, taxes,
assessments, homeowners' association fees, insurance premiums, advances, costs, attorneys' fees and expenses
required to cure the default. If the City exercises the Option, then any and all amounts paid by the City pursuant to this
Section shall be treated as Adjustments to the Base Resale Price for the Property, as defined in Section 13, below.
9. Inspection of Property. After receiving a Notice of Intent to Transfer or delivering a Notice of Exercise, the City
shall be entitled to inspect the Property one or more times prior to the close of escrow to determine the amount of any
Adjustments to the Base Resale Price. Before inspecting the Property, the City shall give Owner not less than forty-
eight (48) hours written notice of the date, time and expected duration of the inspection. The inspection shall be
conducted between the hours of 9:00 a.m. and 5:00 p.m., Monday through Friday, excluding court holidays, unless the
parties mutually agree in writing to another date and time. Owner shall make the Property available for inspection on
the date and at the time specified in the City's request for inspection.
10. Escrow. Promptly after delivering a Notice of Exercise, the City shall open an escrow with a title company of
City's choosing. Close of escrow shall take place on the date which is the later to occur of the following: (a) sixty (60)
days after a Notice of Exercise has been delivered, or (b) ten (10) days after Owner has performed all acts and executed
all documents required for close of escrow; provided however, if the City exercises the Option upon the occurrence of
an Option Event described in Sections 6(d) — (f) close of escrow shall take place no later than 90 days after the date
the City receives notification of such Option Event. Prior to the close of escrow, the City shall deposit into escrow, the
Adjusted Resale Price and all escrow fees and closing costs to be paid by City. Commissions (not to exceed 6% of
the actual sales price), costs and title insurance premiums shall be paid pursuant to the custom and practice in the
County of Alameda at the time of the opening of escrow, or as may otherwise be provided by mutual agreement. Owner
agrees to perform all acts and execute all documents reasonably necessary to effectuate the close of escrow and
transfer of the Property to the City.
11. Proceeds of Escrow; Removal of Exceptions to Title. Prior to close of escrow, Owner shall cause the removal
of all exceptions to title to the Property that were recorded after the Effective Date with the exception of (i) non -
delinquent taxes for the fiscal year in which the escrow closes, which taxes shall be prorated as between Owner and
City as of the date of close of escrow, (ii) quasi -public utility, public alley, public street easements, sidewalks, and rights
Exhibit 1_FTHLP BMR LORRA-2024 Page 10 Rev 812024
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Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
of way of record, and (iii) such other liens, encumbrances, reservations and restrictions as may be approved in writing
by City ("Permitted Exceptions"). The purchase price deposited into escrow by the City shall be applied first to the
payoff of the permitted encumbrances (as described in Section 4.4 and the subsections thereof) recorded against the
Property in order of lien priority, and thereafter to the payment of Owner's share of escrow fees and closing costs. Any
amounts remaining after the purchase price has been so applied, if any, shall be paid to Owner upon the close of
escrow. If the purchase price is insufficient to satisfy all liens and encumbrances recorded against the Property, the
Owner shall deposit into escrow such additional sums as may be required to remove such liens and encumbrances.
In the event that the City agrees to proceed with close of escrow prior to the date that Owner has caused all exceptions
to title other than Permitted Exceptions to be removed, then Owner shall indemnify, defend and hold City harmless
from any and all costs expenses or liabilities (including attorneys' fees) incurred or suffered by City that relate to such
exceptions and their removal from title to the Property.
12. Base Resale Price. Prior to adjustment pursuant to Section 13 the base resale price ("Base Resale Price") of
the Property shall be the lesser of:
(a) Indexed Value. The Indexed Value of the Property means the original price paid by the Owner for
acquisition of the Property which the Parties agree is the sum of sale amount written dollars
($000,000) (the "Base Price"), increased (but not decreased) by an amount, if any, equal to the Base
Price multiplied by the percentage increase in the Area Median Income between the Effective Date
and the date that the City receives notification of an Option Event.
(b) Fair Market Value. The Fair Market Value of the Property means the value of the Property as
determined by a qualified appraiser, certified by the State of California, selected and paid for by
Owner and approved in writing by the City. Nothing in this Section shall preclude the Owner and
the City from establishing the Fair Market Value by mutual agreement instead of by appraisal.
13. Adjustments to Base Resale Price. Subject to the Affordable Unit Cost restriction described in subsection (d)
below, the Base Resale Price shall be increased or decreased, as applicable, by the following adjustment factors
("Adjustments"):
(a) Capital Improvements. An increase for Eligible Capital Improvements (as defined in Section 14)
made to the Property, but only if the amount of such improvements has been previously approved in
writing by the City after Owner has submitted original written documentation of the cost to the City
for verification. The amount of the Adjustment shall equal the original cost of any such Eligible
Capital Improvements.
(b) Damage. A decrease by the amount necessary to repair damage to the Property, if any, and to place
the Property into saleable condition as reasonably determined by the City upon City's exercise of its
Option hereunder, including, without limitation, amounts attributed to cleaning; painting; replacing
worn carpeting and draperies; making necessary structural, mechanical, electrical and plumbing
repairs; and repairing or replacing built-in appliances and fixtures. Owner covenants to, at Owner's
expense, maintain the Property in the same condition as in existence on the date of City's Notice of
Exercise, reasonable wear and tear excepted.
(c) Advances by the City. A decrease in an amount equal to the sum of all costs advanced by the City
for the payment of mortgages, taxes, assessments, insurance premiums, homeowner's association
fees and/or associated late fees, costs, penalties, interest, attorneys' fees, pest inspections, resale
inspections, fixing violations of applicable building, plumbing, electric, fire, or other codes, and other
expenses related to the Property, which Owner has failed to pay or has permitted to become
delinquent.
Exhibit 1_FTHLP BMR LORRA-2024 Page 11 Rev 812024
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Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
(d) Adjusted Resale Price Not to Exceed Affordable Unit Cost. The Base Resale Price as adjusted by
the factors set forth in this Section 13, is herein referred to as the "Adjusted Resale Price."
Notwithstanding any other provision hereof to the contrary, in no event shall the Adjusted Resale
Price exceed the Affordable Unit Cost.
14. Eligible Capital Improvements. In the exercise of reasonable discretion in accordance with the Guidelines to
the Inclusionary Ordinance Regulations adopted by the City from time to time, the City will approve capital
improvements that will improve adverse health and safety conditions. To receive such approval, the Owner must
submit evidence to the City showing the purpose and cost of the capital improvements. If the City approves the capital
improvements they shall be deemed "Eligible Capital Improvements."
15. Priority of this Agreement and Effectiveness of the Option.
(a) Recordation. This Agreement shall be recorded in the Official Records of Alameda County on or as
soon as practicable after the Effective Date. The Option shall have priority over any subsequent sale,
conveyance, transfer, lease, or other disposition or encumbrance of the Property, or of any estate or
interest therein, and in the event of exercise of the Option by City, the City shall take the Property
subject only to Permitted Exceptions. As further described in Section 16, the exercise of the Option
by the City at any time and from time to time shall not extinguish the Option or cause a merger of the
Option into any estate or other interest in the Property, and the Option shall continue to exist and be
effective with respect to the Property against any and all subsequent owners exercisable by City in
accordance with the terms and conditions hereof.
(b) Request for Notice of Default. The City shall file a Request for Notice of Default for recordation in the
Official Records of Alameda County promptly upon execution of this Agreement (see Exhibit E).
(c) Subordination. The City agrees that in order to assist qualified purchasers to secure purchase money
financing for the acquisition of the Property, the City will enter into a subordination agreement with a
senior purchase money lender to subordinate this Agreement under such terms as the City and the
senior purchase money lender shall negotiate. Any subordination agreement to be executed by City
shall include notice and cure rights for City regarding any defaults in the mortgage to which the City
is subordinating.
16. Survival of Option Upon Transfer.
(a) In General. The City's right to exercise the Option shall survive any transfer of the Property by Owner.
Each transferee, assignee or purchaser of the Property during the Term of the Resale Restrictions
and Option shall be required to assume the obligations hereunder or to execute an agreement
substantially in the form of this Agreement; provided however, any such new agreement shall specify
that the term of the Option and the resale, refinancing and other restrictions set forth herein shall
endure for the number of years remaining in the Term of the Resale Restrictions and Option as of
the date of any such transfer, assignment, or sale. The City may exercise the Option at any time
during the Term of the Resale Restrictions and Option upon the occurrence of an Option Event,
regardless of whether the Property is owned, possessed or occupied by (i) an Eligible Household,
(ii) a successor, transferee, assignee, heir, executor, or administrator of an Eligible Household,
including a debtor -in -possession, debtor or trustee pursuant to Title 11 of the United States Code, or
(iii) any person owning, possessing or occupying the Property who does not meet the eligibility
criteria established by the City under the Program. Notwithstanding the foregoing, the Option shall
not survive (a) the sale and transfer of the Property to a third -party purchaser under a judicial or non -
judicial foreclosure or a deed -in -lieu of foreclosure pursuant to a mortgage or deed of trust recorded
against the Property senior in priority to this Agreement, provided that the City has received timely
Exhibit 1_FTHLP BMR LORRA-2024 Page 12 Rev 812024
41
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
notice of such Option Event and has failed to either reinstate the mortgage or deed of trust or
complete the purchase of the Property pursuant to the exercise of the Option prior to the date of the
foreclosure sale, or (b) the recordation of an instrument conveying Owner's interest in the Property
to the City or its assignee.
(b) CaIHFA Mortgages. If Owner has acquired the Property using financing secured by a mortgage held
by the California Housing Finance Agency (CaIHFA), then the Option shall automatically terminate if
title to the Property is transferred by a foreclosure conducted on behalf of CaIHFA or by a deed -in -
lieu of such foreclosure, or if the insured mortgage is assigned to CaIHFA, provided that the City has
received timely notice of such Option Event (which notice may include a notice of default recorded
pursuant to California Civil Code Section 2924 or successor provision).
17. Voidable Transfers. Any actual or attempted sale, conveyance, transfer or other disposition of the Property
or of any estate or interest therein, in violation of the terms and conditions of this Agreement, shall be voidable at the
election of the City.
18. Limits on Liability. In no event shall the City become liable or obligated in any manner to Owner by reason of
the assignment of this Agreement or the Option, nor shall City be in any way liable or obligated to Owner for any failure
of the City's assignee to consummate a purchase of the Property or to comply with the terms of this Agreement or the
Option, or any escrow instructions or agreement for the purchase of the Property.
19. Insurance Proceeds and Condemnation Awards. If the Property is destroyed and insurance proceeds are
distributed to Owner instead of being used to rebuild the Property, or, in the event of condemnation, if the proceeds
thereof are distributed to Owner, any surplus of proceeds remaining after payment of the senior liens and Permitted
Encumbrances shall be distributed as follows: that portion of the surplus up to, but not to exceed, the net amount Owner
would have received pursuant to Sections 12 and 13 had the City exercised its Option on the date of the destruction
or the condemnation valuation date shall be distributed to Owner, and the balance of such surplus, if any, shall be
distributed to the City.
20. Covenants Running with the Land.
A. Owner hereby subjects the Property to the covenants and restrictions set forth in this Agreement.
Owner hereby declares its express intent that the covenants and restrictions set forth herein shall be deemed covenants
running with the land and shall pass to and be binding upon all parties having any interest in the Property throughout
the Term of the Resale Restrictions and Option. Each and every contract, deed, lease or other instrument covering,
conveying or otherwise transferring the Property or any interest therein, as the case may be, shall conclusively be held
to have been executed, delivered and accepted subject to this Agreement regardless of whether the other party or
parties to such contract have actual knowledge of this Agreement.
B. The Owner and the City hereby declare their understanding and intent that: (i) the covenants and
restrictions contained in this Agreement shall be construed as covenants running with the land pursuant to California
Civil Code Section 1468 and not as conditions which might result in forfeiture of title by Owner; (ii) the burden of the
covenants and restrictions set forth in this Agreement touch and concern the Property in that the Owner's legal interest
in the Property may be rendered less valuable thereby; and (iii) the benefit of the covenants and restrictions set forth
in this Agreement touch and concern the land by enhancing and increasing the enjoyment and use of the Property by
Eligible Households who may purchase the Property, the intended beneficiaries of such covenants and restrictions.
C. All covenants and restrictions contained herein without regard to technical classification or
designation shall be binding upon Owner for the benefit of the City and such covenants and restrictions shall run in
favor of such parties for the entire period during which such covenants and restrictions shall be in force and effect,
Exhibit 1_FTHLP BMR LORRA-2024 Page 13 Rev 812024
42
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
without regard to whether the City is an owner of any land or interest therein to which such covenants and restrictions
relate.
21. Owner's Acknowledgement of Resale Restriction.
Owner hereby acknowledges and agrees that:
A. Owner hereby subjects the Property to certain restrictions, and limits the price for which Owner may sell
the Property and the persons to whom Owner may sell the Property. The resale price limitations, and other provisions
contained in this Agreement, restrict the full benefits of owning the Property; Owner may not enjoy the same economic
or other benefits from owning the Property that Owner would enjoy if this Agreement did not exist.
B. Absent the provisions of the Program and the provisions of this Agreement, the Property could not be
made available to Eligible Households, including Owner, at an affordable price.
C. Owner has read and understands all of the provisions of this Agreement. Owner accepts and agrees to
the provisions of this Agreement and understands that this Agreement (including without limitation the effectiveness of
the Resale Restrictions and the City's Option) will remain in full force in perpetuity despite any Transfer of the Property.
D. OWNER UNDERSTANDS THAT THE DETERMINATION OF THE MAXIMUM AFFORDABLE RESALE
PRICE OF THE PROPERTY TO AN ELIGIBLE HOUSEHOLD CAN BE MADE ONLY AT THE TIME OF THE
PROPOSED TRANSFER, TAKING INTO CONSIDERATION INCREASES IN MEDIAN INCOME, MORTGAGE
INTEREST RATES, PROPERTY TAXES AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED
AND THAT THE SALES PRICE PERMITTED HEREUNDER MAY NOT INCREASE OR DECREASE IN THE SAME
MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS AGREEMENT. OWNER
FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE SALES PRICE OF THE PROPERTY THE
PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO ELIGIBLE
HOUSEHOLDS AT AFFORDABLE HOUSING COST. THE MAXIMUM RESTRICTED RESALE PRICE WILL ALMOST
CERTAINLY BE LESS THAN OTHER SIMILAR PROPERTIES THAT HAVE NO RESTRICTIONS.
*initialed by Owner(s)*
22. Equity Share Payable Upon First Transfer After Expiration of Restrictions and Option. The restrictions set
forth in this Agreement and the Option shall remain in effect for a period of fifty-five (55) years commencing on the
Effective Date. Notwithstanding the expiration of such conditions at the end of such term, upon the first transfer of the
Property occurring after the expiration of the Term of the Resale Restrictions and Option, Owner (or Owner's successor
in interest) shall pay to City an amount (the "City's Equity Share") equal to twenty-five percent (25%) of the difference
between (a) the actual sales price net of reasonable and customary real estate commissions paid (such commissions
not to exceed six percent (6%) of the actual sales price), and (b) the Adjusted Resale Price as determined for the date
of the expiration of the Term of the Resale Restrictions and Option. The City 's Equity Share shall be paid to the City
concurrently with close of escrow for the sale of the Property, or upon Owner's receipt of the sale proceeds, whichever
shall first occur. The requirement to pay the City's Equity Share shall survive the expiration of the Term of the Resale
Restrictions and Option. Following completion of a sale and payment of the City's Equity Share in compliance with this
Section 22, this Agreement shall terminate, and City shall release and reconvey this Agreement.
23. Default and Remedies.
23.1 Events of Default. The following shall constitute the occurrence of an Event of Default hereunder, and
shall entitle City to exercise the Option or to pursue any other remedy provided herein or at law or in equity:
Exhibit 1_FTHLP BMR LORRA-2024 Page 14 Rev 812024
43
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
(i) Owner's failure to use the Property as Owner's Principal Residence;
(ii) The sale, conveyance, or other transfer of the Property (including a foreclosure sale) if the
remaining ownership interest of the Owner in the Property is less than fifty percent (50%), except
as provided in Section 4.3.1.
(iii) A default occurs under the terms of a senior deed of trust and such default is not cured within
sixty (60) days following the recordation of notice of default under the senior deed of trust.
(iv) Owner refinances the Property in violation of this Agreement.
(v) Owner fails to observe or perform any covenant, condition, or agreement to be observed or
performed by Owner pursuant to the City Documents, including but not limited to failure to pay
indebtedness, failure to pay property taxes, or failure to maintain insurance, and such breach
remains uncured beyond the expiration of any applicable cure period.
23.2 Specific Performance. Owner acknowledges that any breach in the performance of its obligations
under this Agreement shall cause irreparable harm to the City. Owner agrees that the City is entitled to equitable relief
in the form of specific performance, including without limitation, upon City's exercise of the Option, and that an award
of damages shall not be adequate to compensate the City for Owner's failure to perform according to the terms of this
Agreement.
23.3. Other Remedies. City shall be entitled to pursue any other remedy provided for at law or equity, all
of which shall be cumulative, including without limitation, the acceleration of the Note, and the pursuit of any remedy
available pursuant to the City Documents, including foreclosure of the Deed of Trust.
24. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement
shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address
as a Party may designate by written notice delivered to the other Party in accordance with this Section. All such notices
shall be sent by:
a. personal delivery, in which case notice shall be deemed delivered upon receipt;
b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two
(2) business days after deposit, postage prepaid in the United States mail;
c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after
deposit with such courier; or
d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a
transmission report is generated reflecting the accurate transmission thereof.
City: City of Dublin
c/o Housing Division
100 Civic Plaza
Dublin, California 94568
Owner:
Borrower(s)
Mailing Address
Dublin, CA 94568
Exhibit 1_FTHLP BMR LORRA-2024 Page 15 Rev 812024
44
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
25. General Provisions.
a. Attorneys' Fees. If either party initiates legal proceedings to interpret or enforce its rights under this
Agreement, the prevailing party in such action shall be entitled to an award of reasonable attorneys' fees and costs in
additions to any other recovery to which it is entitled under this Agreement.
b. No Joint Venture; No Third -Party Beneficiary. No joint venture or other partnership exists or is created
between the Parties by virtue of this Agreement. Except as expressly stated herein, this Agreement is not intended to
benefit any third party.
c. Successors; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the
parties to this Agreement and their respective heirs, executors, administrators, successors and assigns. City shall
have the right to assign any or all of its rights and obligations under this Agreement without the consent of Owner.
d. Entire Agreement; Amendment. This Agreement together with the Note and the Deed of Trust
constitutes the entire agreement of the parties with respect to the subject matter hereof, and supersedes any and all
other prior negotiations, correspondence, understandings and agreements with respect thereto. There are no
representations, promises, agreements or other understandings between the parties relating to the subject matter of
this Agreement that are not expressed herein. This Agreement may be modified only by an instrument in writing
executed by the parties or their respective successors in interest.
e. Survival; No Merger. All of the terms, provisions, representations, warranties and covenants of the
parties under this Agreement shall survive the close of escrow of any sale of the Property and shall not be merged in
any deed transferring the Property.
f. Authority and Execution. Each party represents and warrants that it has full power and authority to
enter into this Agreement and to undertake all of its obligations hereunder, that each person executing this Agreement
on its behalf is duly and validly authorized to do so.
g. Severability. The invalidity or unenforceability of any term or provision of this Agreement shall not
impair or affect the remainder of this Agreement, and the remaining terms and provisions hereof shall not be invalidated
but shall remain in full force and effect.
h. Waiver; Modification. No waiver or modification of this Agreement or any covenant, condition, or
limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith. No
evidence of any waiver or modification shall be offered or received in evidence in any proceeding, arbitration, or
litigation between the parties arising out of or affecting this Agreement or the rights or obligations of any party
hereunder, unless such waiver or modification is in a duly executed writing. The provisions of this section may not be
waived except as herein set forth. A waiver or breach of any covenant, condition or provision of this Agreement shall
not be deemed a waiver of any other covenant, condition or provision hereof.
Construction. The section headings and captions used in this Agreement are for convenience of
reference only and shall not modify, define, limit or amplify any of the terms or provisions hereof. This Agreement
shall not be construed as if it had been prepared by one of the parties, but rather as if both parties have prepared it.
j. Governing Law. This Agreement shall in all respects be governed by and construed in accordance
with the laws of the State of California.
k. Time of the Essence. Time is of the essence in this Agreement as to each provision in which time is
an element of performance.
Exhibit 1_FTHLP BMR LORRA-2024 Page 16 Rev 812024
45
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
I. Further Assurances. Each party will, upon reasonable request of the other party, execute,
acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and
documents as may be reasonably necessary in order to fulfill the intent and purpose of this Agreement.
m. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original,
and all which together shall constitute one and the same instrument.
SIGNATURES ON FOLLOWING PAGE
Exhibit 1_FTHLP BMR LORRA-2024 Page 17 Rev 812024
46
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
ATTEST:
City Clerk
OWNER(S):
Borrower
CITY:
City of Dublin, a California municipal corporation
City Manager
SIGNATURES MUST BE NOTARIZED
Exhibit 1_FTHLP BMR LORRA-2024 Page 18 Rev 812024
47
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
NOTARY ACKNOWLEDGEMENT
[To be inserted]
Exhibit 1_FTHLP BMR LORRA-2024 Notary Acknowledgment
48
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
CERTIFICATE OF ACCEPTANCE
(Pursuant to Government Code §27281)
This is to certify that the interest in real property conveyed by the Resale Restriction Agreement and Option
to Purchase dated Date of signing from Borrowers to the City of Dublin, a California municipal corporation,
is hereby accepted by the undersigned office or agent on behalf of the City of Dublin pursuant to authority
conferred by the Resolution No. 24-87 dated April 13, 1987; and the grantee consents to recordation thereof
by its duly authorized officer.
Dated:
City Manager
Attest:
City Clerk
Exhibit 1_FTHLP BMR LORRA-2024 City Certificate of Acceptance
49
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
EXHIBIT A
LEGAL DESCRIPTION [Insert Here]
Exhibit 1_FTHLP BMR LORRA-2024 Exhibit A: Legal Description
50
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
To: City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Clerk
Date:
EXHIBIT B
FORM OF NOTICE OF INTENT TO TRANSFER
Re: Notice of Intent to Transfer
Pursuant to the terms of the Resale Restriction Agreement and Option to Purchase, dated date of signing, the
undersigned Owner(s), Borrower(s), hereby give(s) notice of his/her/their intent to transfer the property located at
Property Address, Dublin, California 94568 (the "Property"). Owner may be contacted at the Property or at the
following address:
Email:
Telephone:
If applicable: The proposed transfer of the Property is to the following person(s):
Name:
Address:
Telephone:
The proposed transfer is (check one):
❑ Sale
Other Specify:
Owner(s) signature(s):
Signature Signature
Print Name Print Name
Exhibit 1 FTHLP BMR LORRA-2024 Exhibit B: Notice of Intent to Transfer
51
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
Date:
To (Owner/Transferee):
Address:
EXHIBIT C
FORM OF NOTICE OF EXERCISE
Re: Notice of Exercise
The City of Dublin (" City") hereby gives notice that it is exercising its option to purchase the real property located at
Property Address, Dublin, California 94568. The option has been granted to the City pursuant to the Loan,
Occupancy, Refinancing and Resale Restriction Agreement with Option to Purchase executed by and between Owner
and the City dated as of Date of Signing and recorded on as Instrument No. 201XXXXXXX (the City
has assigned its option to purchase the real property to ).
An escrow for the purchase will be opened with Title Company.
Dated: CITY OF DUBLIN
By:
Its:
Exhibit 1 FTHLP BMR LORRA-2024 Exhibit C: Notice of Exercise
52
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
EXHIBIT D
FORM OF DISCLOSURE STATEMENT
THERE ARE RESTRICTIONS ON THE SALE AND REFINANCING OF THE PROPERTY YOU ARE BUYING.
EXCEPT FOR A TRANSFER OF THE PROPERTY TO THE CITY OF DUBLIN ("CITY") FOLLOWING EXERCISE OF
CITY'S OPTION TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN "ELIGIBLE HOUSEHOLD" AT A
PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE WHICH IS CAPPED AT AN "AFFORDABLE UNIT
COST." THIS MEANS THAT YOU MAY NOT SELL THE PROPERTY FOR MARKET VALUE TO WHOMEVER YOU
LIKE.
IN ADDITION, THIS PROPERTY IS REQUIRED TO BE OWNER -OCCUPIED AND MAY NOT BE LEASED OR
RENTED TO THIRD PARTIES.
THESE RESTRICTIONS WILL BE IN EFFECT UNTIL 30 years/ 55 years from original owner's signing date or
perpetually.
ANY SALE OF THE PROPERTY IN VIOLATION OF THE RESTRICTIONS SET FORTH IN THE LOAN, OCCUPANCY,
REFINANCING AND RESALE RESTRICTION AGREEMENT WITH OPTION TO PURCHASE ("RESALE
RESTRICTION AGREEMENT") WHICH HAS BEEN RECORDED AGAINST THE PROPERTY, SHALL BE VOIDABLE
AT THE ELECTION OF THE CITY, AND SHALL ENTITLE THE CITY TO EXERCISE ITS OPTION TO PURCHASE
THE PROPERTY.
TO DETERMINE WHO AN ELIGIBLE HOUSEHOLD IS, AND WHAT THE ADJUSTED RESALE PRICE AND
AFFORDABLE UNIT COST ARE, YOU SHOULD CONTACT THE HOUSING DIVISION OF THE CITY OF DUBLIN.
YOU SHOULD READ THE RESALE RESTRICTION AGREEMENT. YOU MAY OBTAIN A COPY FROM THE CITY
OF DUBLIN OR FROM THE ESCROW COMPANY.
YOU SHOULD ALSO BE AWARE THAT A DEED OF TRUST HAS BEEN RECORDED AGAINST THE PROPERTY
TO ENSURE COMPLIANCE WITH THE RESALE RESTRICTION AGREEMENT. YOU MAY OBTAIN COPIES OF
THE DEED OF TRUST FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY.
IN CONNECTION WITH THE PURCHASE OF THIS PROPERTY, YOU WILL BE REQUIRED TO ASSUME THE
OWNER'S OBLIGATIONS UNDER THE RESALE RESTRICTION AGREEMENT OR TO EXECUTE A
SUBSTANTIALLY SIMILAR DOCUMENT.
I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS.
Borrower Borrower
Exhibit 1 FTHLP BMR LORRA-2024 Exhibit D: Disclosure Statement
53
Attachment 2
EXHIBIT 1. LOAN, OCCUPANCY, REFINANCING, AND RESALE RESTRICTION
AGREEMENT WITH OPTION TO PURCHASE
EXHIBIT E
FORM OF REQUEST FOR NOTICE OF DEFAULT
Recording requested by and when
recorded mail to:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Escrow Number:
Loan Number:
(Space Above This Line For Recorder's Use Only)
REQUEST FOR NOTICE UNDER SECTION 2924b CIVIL CODE
In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default
and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No. 201XXXXXXX recorded
concurrent herewith in the Official Records of Alameda County, California, and describing land therein as
Address, Dublin, California 94568:
(See attached legal description)
Executed by Owner(s), as Trustor, in which Bank is named as Lender, with Trustee as Trustee, and
Beneficiary as Beneficiary, be mailed to the City of Dublin, 100 Civic Plaza, Dublin, California 94568, Attn.:
City Manager
By:
City Manager
NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO
THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW
REQUEST MUST BE RECORDED.
Exhibit 1_FTHLP BMR LORRA-2024 Exhibit E: Request for Notice of Default
54
Attachment 2
EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
Recording requested by and when
recorded mail to:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder's Use
DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING AND SECURITY
AGREEMENT
City of Dublin First -Time Homebuyer Program
(lnclusionary Units)
THERE ARE RESTRICTIONS ON THE USE OF THE PROPERTY ENCUMBERED BY THIS DEED OF TRUST.
THERE ARE LIMITATIONS ON THE EXTENT TO WHICH THIS PROPERTY MAY BE ENCUMBERED BY
JUNIOR FINANCING AND UPON TRUSTOR'S RIGHTS TO REFINANCE EXISTING MORTGAGES. THE
SALE OF THIS PROPERTY IS LIMITED TO INCOME -ELIGIBLE HOUSEHOLDS AT A RESTRICTED PRICE
PURSUANT TO THE CITY OF DUBLIN FIRST-TIME HOMEBUYER PROGRAM. CERTAIN OBLIGATIONS
OF THE TRUSTOR SURVIVE THE REPAYMENT OF THE LOAN SECURED BY THIS INSTRUMENT.
This Deed of Trust, Assignment of Rents, Fixture Filing and Security Agreement ("Deed of Trust") is
made as of DATE ("Effective Date") by BORROWER (collectively, "Trustor") to TITLE COMPANY (the "Trustee")
whose business address is TITLE COMPANY ADDRESS for the benefit of The City of Dublin a municipal
corporation ("Beneficiary").
WHEREAS, Trustor is the owner of the real property located at PROPERTY ADDRESS in the City of
Dublin, Alameda County, California, 94568 and more particularly described in Exhibit A attached hereto and
incorporated herein;
WHEREAS, to assist Trustor in the acquisition of such property, Beneficiary provided a low -interest,
deferred payment loan in the original principal amount of LOAN AMOUNT 00/100 Dollars ($00.00) (the "Loan")
funded by Beneficiary's First -Time Homebuyer Program;
WHEREAS, in connection with the Loan, Trustor and Beneficiary entered into a Loan, Occupancy,
Refinancing and Resale Restriction Agreement with Option to Purchase dated as of the Effective Date and
recorded in the Official Records of Alameda County substantially concurrently herewith (the "Resale Restriction
Agreement"), and Trustor executed and delivered to Beneficiary a Secured Promissory Note dated as of the
Effective Date (the "Note"); and
WHEREAS, among other provisions, the Resale Restriction Agreement provides that (i) the Property
may be sold only to an Eligible Household at a restricted affordable price (as such terms are defined in the
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AGREEMENT
Resale Restriction Agreement, (ii)Trustor and subsequent owners of the Property are obligated to use the
Property as their Principal Residence (as defined in the Resale Restriction Agreement); (iii) there are restrictions
on the ability of Trustor and subsequent Property owners to encumber and refinance the Property; (iv)
Beneficiary has an option to purchase the Property upon the occurrence of specified events, including without
limitation, the occurrence of an Event of Default under the Resale Restriction Agreement or the receipt of a
Notice of Intent to Transfer the Property (as defined in the Resale Restriction Agreement); and (v) an equity
share is payable to Beneficiary upon the first sale or other conveyance of the Property following the expiration
of the term of the resale price restrictions.
NOW THEREFORE, to secure repayment of the Loan and the full and timely performance of Trustor's
obligations under the Note and the Resale Restriction Agreement, it is agreed as follows.
1. Grant in Trust. Trustor, in consideration of the indebtedness herein recited and the trust herein created,
hereby irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee in trust for the benefit
of Beneficiary, with power of sale and right of entry and possession, all of Trustor's right, title and interest now
held or hereafter acquired in and to the following: (a) all of that certain real property located at PROPERTY
ADDRESS in Dublin, California in the County of Alameda and the State of California, which is more particularly
described in Exhibit A, attached hereto and incorporated herein by this reference(the "Land"); (b) all buildings,
improvements and fixtures now or hereafter erected on the Property and all replacements and additions thereto
("Improvements"); (c) all easements, rights of way, appurtenances and other rights used in connection with the
Property or as a means of access thereto ("Appurtenances"); (d) all fixtures now or hereafter attached to or used
in and about the Property or the Improvements or hereafter located or constructed on the Property, and all
renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be
attached to the Improvements in any manner ("Fixtures and Equipment"); and (e) all leases, subleases, licenses
and other agreements relating to use or occupancy of the Property ("Leases") and all rents or other payments
which may now or hereafter accrue or otherwise become payable to or for the benefit of Trustor ("Rents")
(whether or not such Leases and Rents are permitted pursuant to the Resale Restriction Agreement).
All of the above -referenced Property, Improvements, Appurtenances, Fixtures and Equipment, Leases and
Rents are herein referred to collectively as the "Property."
2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance
of all of the following (the "Secured Obligations"): (i) all present and future indebtedness evidenced by the Note
(including all principal, interest, shared appreciation and all other amounts payable pursuant to the Note) and all
amendments, modifications, extensions and renewals of the Note; (ii) all present and future obligations of Trustor
set forth in this Deed of Trust or in the Resale Restriction Agreement; (iii) all additional present and future
obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether
existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all
modifications, supplements, amendments, renewals, and extensions of any of the foregoing, whether evidenced
by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary
to protect Beneficiary's interests under this Deed of Trust. Certain obligations set forth in the Resale Restriction
Agreement survive the repayment of the Note, and this Deed of Trust secures such surviving obligations, which
include, without limitation: the restrictions upon resale price and refinancing set forth in the Resale Restriction
Agreement, and the obligation to pay an equity share payment to Beneficiary upon the first sale of the Property
following the expiration of the resale price restrictions set forth in the Resale Restriction Agreement.
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EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and
unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of the
Property. This is an absolute assignment and not an assignment for security only. Subject to the prohibition on
the lease or rental of the Property as set forth in the Resale Restriction Agreement, Beneficiary hereby confers
upon Trustor a license to collect and retain such rents, royalties, issues, profits, revenue, income and proceeds
as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such
Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without
regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent,
or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof,
and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply
the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, to any
indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents,
royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not
Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the
collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default
occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as
permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to
exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity,
including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary,
in person or by agent, takes actual possession of the Land and Improvements, Beneficiary shall not be deemed
to be a "mortgagee in possession," shall not be responsible for performing any obligation of the lessor under any
Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any
part of it , and unless due solely to the willful misconduct or gross negligence of Beneficiary, shall not be
responsible for any dangerous or defective condition of the Property or any negligence in the management,
repair or control of the Property.
4. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions
of the Uniform Commercial Code ("UCC") with respect to all of the Property constituting fixtures, is being
recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment
which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees
that this Deed of Trust is to be filed in the real estate records of Alameda County and shall also operate from the
date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC.
This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil
and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and
Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. The full name of Trustor
and the mailing address of Trustor are set forth in Section 9.7 of this Deed of Trust.
5. TRUSTOR REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1. Trustor's Estate. Trustor represents and covenants that Trustor is lawfully seized of the estate
hereby conveyed and has the right to grant and convey the Property. Trustor agrees to warrant and defend
generally the title of the Property against all claims and demands subject to any declarations, easements, or
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EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
restrictions listed in the schedule of exceptions to coverage in any title insurance policy insuring Beneficiary's
interest in the Property.
5.2 Repayment of Sums Owed under Note and Resale Restriction Agreement.
Trustor will promptly pay to Beneficiary when due all sums payable under the Note and the Resale
Restriction Agreement, including all principal, interest and other sums payable thereunder.
5.3 Performance of Covenants. Trustor will observe and perform all of Trustor's covenants and
agreements set forth in the Resale Restriction Agreement, the Note, this Deed of Trust and all other instruments
secured by the Property.
5.4 Maintenance of the Property. Trustor agrees (a) to keep the Property in good repair and in
decent, safe, sanitary, tenantable condition and repair and permit no waste thereof; (b) not to commit or suffer
to be done or exist on or about the Land any condition causing the Property to become less valuable; (c) to
repair, restore or rebuild promptly any buildings or improvements on the Land that may become damaged or be
destroyed while subject to the lien of this Deed of Trust; (d) to comply with all applicable laws, ordinances and
governmental regulations affecting the Property or requiring any alteration or improvement thereof, and not to
suffer or permit any violations of any such law, ordinance or governmental regulation, nor of any covenant,
condition or restriction affecting the Property; and (e) not to initiate or acquiesce in any change in any zoning or
other land use or legal classification which affects any of the Property without the Beneficiary's written consent.
If there arises a condition in contravention of this Section, and if the Trustor has not cured such condition within
thirty (30) days after receiving a Beneficiary notice of such a condition, then in addition to any other rights
available to the Beneficiary, the Beneficiary shall have the right (but not the obligation) to perform all acts
necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property
to recover its cost of cure.
5.5 Appear and Defend. Trustor shall appear in and defend any action or proceeding purporting to
affect the Property or the rights or powers of the Beneficiary or Trustee, and shall pay all costs and expenses,
including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in
which the Beneficiary or Trustee may appear, and in any suit brought by the Beneficiary to foreclose this Deed
of Trust.
5.6 Charges; Liens. Trustor shall pay prior to delinquency all taxes, assessments, and other
charges, fines, and impositions affecting the Property directly to the payee thereof. Upon request of Beneficiary,
Trustor shall promptly furnish to Beneficiary copies of all notices of such amounts due and shall promptly furnish
to Beneficiary receipts evidencing all such payments made. Trustor shall pay when due each obligation secured
by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber
all or part of the Property or any interest therein, whether or not such lien, charge or encumbrance is or would
be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, charge or assessment
so long as Trustor is actively contesting its validity in good faith and by appropriate legal proceedings which will
operate to prevent the enforcement of the lien or forfeiture of the Property or any part thereof. Trustor shall post
security for the payment of such contested claims as may be requested by the Beneficiary.
5.7 Insurance. Trustor shall keep the Land and the Improvements insured by a standard all-risk
property insurance policy in an amount equal to the replacement value of the Property with loss payable to the
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AGREEMENT
Beneficiary. The insurance carrier providing such insurance shall be licensed to do business in the State of
California and may be chosen by Trustor, subject to approval by Beneficiary. All insurance policies and renewals
thereof will be in a form acceptable to the Beneficiary, and will include a standard mortgagee clause with standard
lender's endorsement in favor of the holder of any senior lien and the Beneficiary as their interests may appear
and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated
agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the Beneficiary, or its
designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts
of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the Beneficiary
or its designated agent. The Beneficiary, or its designated agent, may make proof of loss if not made promptly
by Trustor. The Beneficiary shall receive thirty (30) days advance written notice of the cancellation, expiration or
termination or any material change in the coverage afforded by any of the insurance policies required under this
Section.
Unless otherwise permitted by the Beneficiary in writing, insurance proceeds, subject to the rights of the
holder of any senior lien, will be applied to restoration or repair of the Property damaged. If the Property is
abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent, within thirty (30)
days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim
for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the insurance
proceeds at the Beneficiary's option either to restoration or repair of the Property or to pay amounts due under
the Resale Restriction Agreement and the Note.
If the Property is acquired by the Beneficiary, all right, title and interest of Trustor in and to any insurance
policy and in and to the proceeds thereof resulting from damage to the Property prior to the sale or acquisition
will pass to the Beneficiary to the extent of the sums secured by this Deed of Trust immediately prior to such
sale or acquisition, subject to the rights of the holder of any senior lien.
Renewal policies and any replacement policies, together with premium receipts satisfactory to the
Beneficiary, shall be delivered to the Beneficiary at least thirty (30) days prior to the expiration of existing policies.
Neither Trustee nor the Beneficiary shall by reason of accepting, rejecting, approving or obtaining insurance
incur any liability for the existence, nonexistence, form or legal sufficiency of such insurance, or solvency of any
insurer for payment of losses.
5.8 Use of Property. Trustor shall not permit or suffer the use of any of the Property for any purpose
other than as a single family residential dwelling.
6. IT IS MUTUALLY AGREED THAT:
6.1. Protection of Beneficiary's Security. If Trustor fails to perform the covenants and agreements
contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects
Beneficiary's interest in the Property, including, but not limited to, eminent domain, insolvency, code
enforcement, arrangements or proceedings involving a bankrupt or decedent, foreclosure of any mortgage
secured by the Property or sale of the Property under a power of sale of any instrument secured by the Property,
then Beneficiary, at Beneficiary's option, upon notice to Trustor, may make such appearance, disburse such
sums and take such action as is necessary to protect Beneficiary's interest, including, but not limited to, the
purchase of insurance, disbursement of reasonable attorney's fees and entry upon the Property to make repairs.
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EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
Any amounts disbursed by Beneficiary pursuant to this Section, with interest thereon, shall become additional
indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and Beneficiary agree to other terms of
payment, such amounts shall be payable upon notice from Beneficiary to Trustor requesting payment thereof,
and shall bear interest from the date of disbursement at the highest rate permissible under applicable law.
Nothing contained in this Section shall require Beneficiary to incur any expense or take any action hereunder.
6.2 Inspection. Beneficiary or its agent may make or cause to be made reasonable entries upon
and inspections of the Property. Beneficiary shall give Trustor notice at the time of or prior to any such inspection
specifying reasonable cause for the inspection
6.3 Awards and Damages. All judgments, awards of damages, settlements and compensation
made in connection with or in lieu of (a) taking of all or any part of or any interest in the Property by or under
assertion of the power of eminent domain, (b) any damage to or destruction of the Property or any part thereof
by insured casualty, and (c) any other injury or damage to all or any part of the Property, are hereby assigned
to and shall be paid to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to collect
and receive any such sums and is authorized to apply them in whole or in part upon any indebtedness or
obligation secured hereby, in such order and manner as the Beneficiary shall determine at its option. The
Beneficiary shall be entitled to settle and adjust all claims under insurance policies provided under this Deed of
Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it
in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered
by the Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose for its
disposition. Application of all or any part of the amounts collected and received by the Beneficiary or the release
thereof shall not cure or waive any default under this Deed of Trust. If the Property is abandoned by Trustor, or
if, after notice by Beneficiary to Trustor that the condemnor offers to make an award or settle a claim for
damages, Trustor fails to respond to Beneficiary within thirty (30) days after the date such notice is mailed,
Beneficiary is authorized to collect and apply the proceeds, at Beneficiary's option, either to restoration or repair
of the Property or to the sum secured by this Deed of Trust.
6.4 Prohibition on Transfers of Interest. With the exception of the transfers permitted pursuant
to Section 6.9 below, if all or any part of the Property or an interest therein is sold or transferred by Trustor
without Beneficiary's prior written consent, Beneficiary may, at Beneficiary's option, declare all sums secured by
this Deed of Trust to be immediately due and payable. If Beneficiary exercises such option to accelerate,
Beneficiary shall mail Trustor notice of acceleration in accordance with Sections 7.2 and 9.7 hereof. Such notices
shall provide a period of not less than 30 days from the date the notice is mailed within which Trustor may pay
the sums declared due. If Trustor fails to pay such sums prior to the expiration of such period, Beneficiary may,
without further notice or demand on Trustor, invoke any remedies permitted by Section 7.2(a) hereof.
6.5 Sale or Forbearance. No sale of the Property, forbearance on the part of Beneficiary or
extension of the time for payment of the indebtedness hereby secured shall operate to release, discharge, waive,
modify, change or affect the liability of Trustor either in whole or in part.
6.6 Beneficiary's Rights to Release. Without affecting the liability of any person for payment of
any indebtedness hereby secured (other than any person released pursuant hereto), including without limitation
any one or more endorsers or guarantors, and without affecting the lien hereof upon any of the Property not
released pursuant hereto, at any time and from time to time without notice: (a) Beneficiary may in its sole
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AGREEMENT
discretion: (i) release any person now or hereafter liable for payment of any or all such indebtedness, (iii) extend
the time for or agree to alter the terms of payment of any or all of such indebtedness, and (iii) release or accept
additional security for such indebtedness, or subordinate the lien or charge hereof; and (b) Trustee, acting
pursuant to the written request of the Beneficiary, may reconvey all or any part of the Property, consent to the
making of any map or plot of the Land, join in granting any assessment thereon, or join in any such agreement
of extension or subordination.
6.7 Reconveyance. Upon payment of all sums secured by this Deed of Trust, Beneficiary shall
request Trustee to reconvey the Property and shall surrender this Deed of Trust and all notes evidencing
indebtedness secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty
and without charge to the person or persons legally entitled thereto. Such person or persons shall pay all costs
of recordation, if any. The recitals in the reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof.
6.8 Requirement of Owner -Occupancy. Trustor shall occupy the Property as Trustor's principal
place of residence in accordance with the Resale Restriction Agreement.
6.9 Permitted Transfers. The following transfers shall not be deemed to be a default hereunder:
(a) The transfer of the Property to the surviving joint tenant by devise, descent or operation of the
law, on the death of a joint tenant.
(b) A transfer of the Property where the spouse or domestic partner of Trustor becomes a co-owner
of the Property.
(c) A transfer of the Property resulting from a decree of dissolution of marriage, legal separation or
from an incidental property settlement agreement by which the spouse of Trustor becomes an owner of the
Property.
(d) A transfer to an inter vivos or living trust in which the Trustor is and remains the beneficiary of
the trust and the occupant of the Property.
(e) A sale, conveyance, or other transfer when following such sale, conveyance or transfer, the
original Trustor retains ownership of at least 50% of the Property.
(f) A transfer to an Eligible Household (as defined in the Resale Restriction Agreement) in
accordance with Section 4.3.1 of the Resale Restriction Agreement.
7. EVENTS OF DEFAULT
7.1 Events of Default. Any one or more of the following events shall constitute a default under this
Deed of Trust:
(a) Failure to use the Property as Trustor's Principal Residence in violation of the Resale
Restriction Agreement;
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(b) The sale, conveyance, or other transfer of the Property (including a foreclosure sale),
if following such sale, conveyance or transfer, Trustor's remaining ownership interest
in the Property is less than fifty percent (50%), except as provided in Section 6.9.
(c) An event of default arises under any other loan secured by the Property and such
default remains uncured following the expiration of any applicable cure period.
(d) Trustor encumbers or refinances the Property in violation of the Resale Restriction
Agreement.
(e) Trustor fails to observe or perform any other covenant, condition, or agreement to be
observed or performed by Trustor pursuant to the Note, the Resale Restriction
Agreement or this Deed of Trust, including without limitation, the failure to pay any sum
due pursuant to any such document.
(f)
Trustor declares bankruptcy or makes an assignment of assets for the benefit of
creditors.
7.2 Acceleration and Sale.
(a) Default; Remedies. Upon Trustor's breach of any covenant or agreement of Trustor
under the Note, the Resale Restriction Agreement or this Deed of Trust (including without limitation, Trustor's
encumbrance or refinancing of the Property in violation of the foregoing agreements) Beneficiary shall mail notice
to Trustor as provided in Section 9.7 hereof specifying: (i) the nature of the breach; (ii) the action required to
cure such breach; (iii) a date no less than thirty (30) days from the date the notice is mailed to Trustor by which
such breach must be cured; and (iv) that failure to cure such breach on or before the date specified in the notice
may result in acceleration of the Loan and the sale of the Property. The notice shall further inform Trustor of
Trustor's right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of a
default or any other defense of Trustor to acceleration and sale. If the breach is not cured on or before the date
specified in the notice, Beneficiary at Beneficiary's option may: (a) declare all of the sums secured by this Deed
of Trust to be immediately due and payable without further demand and may invoke the power of sale; (b)
commence an action to foreclose this Deed of Trust as a mortgage; and (c) pursue any other remedy permitted
under California law. Beneficiary shall be entitled to collect from the Trustor, or from the proceeds of the sale of
the Property, all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph,
including, but not limited to, reasonable attorneys' fees.
(b) Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the sums
secured by this Deed of Trust, Trustor will have the right to have any proceedings begun by Beneficiary to
enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Property pursuant to
the power of sale contained in this Deed of Trust or at any time prior to entry of the judgment enforcing this Deed
of Trust if: (1) Trustor pays Beneficiary all sums which would be then due under this Deed of Trust and the Note,
had no acceleration occurred; (2) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in
enforcing the covenants and agreements of Trustor contained in this Deed of Trust, remedies including, but not
limited to, reasonable attorneys' fees; and (3) Trustor takes such action as Beneficiary may reasonably require
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EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property and Trustor's obligation to pay
the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this
Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had
occurred.
(c) Sale. After delivery to Trustee of a Notice of Default and Demand for Sale and after the
expiration of such time and the giving of such notice of default and sale as may then be required by law, and
without demand on Trustor, Trustee shall sell the Property at the time and place of sale fixed by it in said notice
of sale, at public auction to the highest bidder for cash in lawful money of the United States of America, payable
at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such
time and place of sale and from time to time thereafter may postpone such sale by public announcement at the
time and place fixed by the preceding postponement. Any person, including Trustor, Trustee or the Beneficiary,
may purchase at such sale. Upon such sale by Trustee it shall deliver to such purchaser its deed conveying the
Property so sold, but without any covenant or warranty expressed or implied. The recitals in such deed of any
matters or facts shall be conclusive proof of their truthfulness. Upon sale by Trustee and after deducting all costs,
expenses and fees of Trustee, Trustee shall apply the proceeds of sale to the payment of the indebtedness
hereby secured, including without limitation the indebtedness evidenced by the Note, any advances made or
costs or expenses paid or incurred by Beneficiary under this Deed of Trust, any indebtedness evidenced by any
other instrument hereby secured, and all other sums then secured hereby, including without limitation, payment
of interest, Excess Sale Proceeds and an equity share as provided in the Resale Restriction Agreement and the
Note, in such order as the Beneficiary shall direct; and then the remainder, if any, shall be paid to the person or
persons legally entitled thereto.
(d) Assignment of Rents; Appointment of Receiver; Beneficiary in Possession. Upon
acceleration under Section 7.2(a) or abandonment of the Property, Beneficiary (in person, by agent or by
judicially appointed receiver) shall be entitled to enter upon, take possession of and manage the Property and
to collect the rents of the Property (if any) including those past due. All rents collected by Beneficiary or the
Receiver shall be applied first to payment of the costs of management of the Property and collection of rents
including, but not limited to, receiver's fees, premiums on receiver's bonds and reasonable attorney's fees, and
then to the sums secured by this Deed of Trust. Beneficiary and the receiver shall be liable to account only for
those rents actually received. The provisions of this paragraph and Section 7.2(a) shall operate subject to the
claims of prior lien holders.
7.3 Remedies Cumulative; No Waiver. No exercise of any right or remedy by the Beneficiary or
Trustee hereunder shall constitute a waiver of any other right or remedy herein contained or provided by law,
and no delay or forbearance by the Beneficiary or Trustee in exercising any such right or remedy hereunder
shall operate as a waiver thereof or preclude the exercise thereof in any continued or subsequent default
hereunder. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy
under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently,
independently or successively.
7.4 Trustee Substitution. The irrevocable power to appoint a substitute trustee or trustees
hereunder is hereby expressly granted to the Beneficiary, to be exercised at any time hereafter, without
specifying any reason therefore, by filing for record in the office where this Deed of Trust is recorded a deed of
appointment, and said power of appointment of successor trustee or trustees may be exercised as often as and
FTH BMR DEED SAMPLE Page 9 of 11 Rev 812024
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Attachment 2
EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
whenever the Beneficiary deems advisable. The exercise of said power of appointment, no matter how often,
shall not be deemed an exhaustion thereof, and upon recording of such deed or deeds of appointment, the
trustee or trustees so appointed shall thereupon, without further act or deed of conveyance, succeed to and
become fully vested with identically the same title and estate in and to the Property hereby conveyed and with
all the rights, powers, trusts and duties of the predecessor in the trust hereunder, with the like effect as if originally
named as trustee or as one of the trustees.
8. SUBORDINATION. This Deed of Trust shall be subordinate to the liens of the senior deeds of trust to
be recorded against the Property, and any deed of trust held by the California Housing Finance Agency.
9. MISCELLANEOUS PROVISIONS
9.1 Successors and Assigns. The covenants and agreements contained in this Deed or Trust
shall bind, and the benefit and advantages hereunder shall inure to, the respective heirs, executors,
administrators, successors and assigns of the parties; provided however, nothing in this Section is intended to
or shall modify any restrictions on assignment set forth herein or in the Note or Resale Restriction Agreement.
As used herein, the words "the Beneficiary" means the present Beneficiary or any future owner or holder,
including a pledgee of the indebtedness secured hereby.
9.2 Headings; Gender, Number. The captions and headings used in this Deed of Trust are
inserted only for convenience of reference and in no way define, limit, or describe the scope or intent of this
Deed of Trust, or of any particular provision thereof, or the proper construction thereof. Wherever used, the
singular number shall include the plural, and the plural the singular, and the use of any gender shall be applicable
to all genders.
9.3 Approvals in Writing. Except as otherwise specifically provided herein, whenever any
approval, notice, direction, consent, request or other action by the Beneficiary is required or permitted under this
Deed of Trust, such action shall be in writing.
9.4 Joint and Several Obligations. If more than one person has executed this Deed of Trust as
Trustor, the obligations of all such persons hereunder shall be joint and several.
9.5 Severability. If any provision of this Deed of Trust shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
9.6 Indemnification. Trustor agrees to indemnify, defend (with counsel approved by Beneficiary)
and hold the Beneficiary, its elected and appointed officers, officials, agents and employees ("Indemnitees")
harmless from and against any and all losses, damages, claims, actions, demands, judgments, penalties, costs
and expenses (including reasonable attorneys' fees) and liabilities (all of the foregoing, collectively "Claims")
which the Indemnitees may sustain or suffer directly or indirectly as a result of or arising in connection with (i)
Trustor's failure to perform any obligations as and when required by the Note, the Resale Restriction Agreement,
or this Deed of Trust, (ii) the failure at any time of any of Trustor's representations and warranties made in
connection with the Loan to be true and correct, or (iii) any action or omission by Indemnitees in connection with
FTH BMR DEED SAMPLE
Page 10 of 11 Rev 812024
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Attachment 2
EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
this Deed of Trust, except to the extent any such Claim arises due to the gross negligence or willful misconduct
of Indemnitees.
9.7 Notices. Except for any notice required under applicable law to be given in another manner (a)
any notice to Trustor provided for in this Deed of Trust shall be given by mailing such notice by certified mail
directed to the Property Address or any other address Trustor designates by notice to Beneficiary as provided
herein; and, (b) any notice to Beneficiary shall be given by certified mail, return receipt requested, to Beneficiary's
mailing address stated herein or to such other address as Beneficiary may designate by notice to Trustor as
provided herein. Any notice provided for in this Deed of Trust shall deem to have been given to Trustor or
Beneficiary when given in the manner designated herein.
Beneficiary: City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Treasurer
Trustor: BORROWER
MAILING ADDRESS
Dublin, CA 94568
9.8 Beneficiary Statement. Beneficiary may collect a fee for furnishing the beneficiary statement
in an amount not to exceed the amount as provided by Section 2943 of the Civil Code of California.
9.9 Governing Law. This Deed of Trust shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.
TRUSTOR
BORROWER
SIGNATURES MUST BE NOTARIZED.
FTH BMR DEED SAMPLE Page 11 of 11 Rev 812024
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Attachment 2
EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
NOTARY ACKNOWLEDGMENT
[Insert Here]
66
Attachment 2
EXHIBIT 2. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
Exhibit A: LEGAL DESCRIPTION
[Insert here]
67
Attachment 2
EXHIBIT 3. SECURED PROMISSORY NOTE
NOTICE TO BORROWER: THIS DOCUMENT CONTAINS PROVISIONS RESTRICTING USE
OF THE PROPERTY, REFINANCING, AND ASSUMPTIONS
SECURED PROMISSORY NOTE
City of Dublin First -Time Homebuyer Program
(lnclusionary Units)
Loan No.: ##-##
Loan Amount: $00.00
Together with Excess Sale Proceeds
and Equity Share
Borrower
Property Address
Dublin, California 94568
Date: Date
FOR VALUE RECEIVED, the undersigned, Borrower as appear on deed (collectively,
"Borrower") promises to pay to THE CITY OF DUBLIN, a municipal corporation ("Lender") at 100
Civic Plaza, Dublin, California 94568, or such other place as Lender may from time to time designate
by written notice to Borrower, in lawful money of the United States, the principal sum of Loan
Amount Written 00/100 Dollars ($00.00), together with simple interest accruing at the rate of three
percent (3%) per annum from the date of this Note until paid in full, plus (i) any amount payable to
Lender pursuant to Section 7.6 of the Resale Restriction Agreement (defined below) and (ii) any
amount payable to Lender pursuant to Section 22 of the Resale Restriction Agreement. This Secured
Promissory Note (this "Note") is secured by that certain Deed of Trust, Assignment of Rents, Fixture
Filing and Security Agreement (the "Deed of Trust") dated as of the date hereof, executed by
Borrower and recorded against the Property (defined below) in the Official Records of Alameda
County. In addition to securing Borrower's obligation to repay the sums payable pursuant to this
Note, the Deed of Trust secures Borrower's obligations set forth in that certain Loan, Occupancy,
Refinancing and Resale Restriction Agreement with Option to Purchase (the "Resale Restriction
Agreement") dated as of the date hereof, executed by Borrower and Lender, and recorded against
the Property.
1. Purpose of Loan. Borrower is purchasing the residential real property located at Property
Address in the City of Dublin, Alameda County, California (the "Property") as more particularly
described in Exhibit A of the Deed of Trust. Lender has provided a loan in the principal amount of
this Note (the "Loan") to Borrower pursuant to Lender's First -Time Homebuyer Program. The Resale
Restriction Agreement restricts the resale price of the Property and provides that Borrower is
obligated to pay Excess Sale Proceeds (as defined in Section 7.6 of the Resale Restriction
Agreement) to Lender if the Property is sold at a price greater than the restricted price. The Resale
Restriction Agreement also provides that upon the first sale of the Property following the expiration
of the resale price restrictions, a share of the appreciation (the "City's Equity Share") as defined in
Section 22 of the Resale Restriction Agreement) is payable to Lender. This Note evidences
FTH BMR PROMISSORY NOTE SAMPLE -1- Rev 812024
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Attachment 2
EXHIBIT 3. SECURED PROMISSORY NOTE
Borrower's obligation to pay to Lender: (i) the principal sum of this Note and the interest accrued
thereon, (ii) any Excess Sale Proceeds owed to Lender pursuant to Section 7.6 of the Resale
Restriction Agreement, and (iii) any City's Equity Share payable by Borrower pursuant to Section 22
of the Resale Restriction Agreement.
2. Loan Repayment. The entire outstanding principal balance of this Note, together with
accrued interest and all other sums due hereunder, shall be due and payable in full in one lump sum
upon the earliest to occur of: (i) the thirtieth (30th) anniversary of the date of this Note, (ii) the sale,
transfer, lease or encumbrance of all or any interest in the Property (other than as permitted pursuant
to the Deed of Trust and the Resale Restriction Agreement), (iii) the refinancing of any senior
mortgage secured by the Property or the encumbrance of the Property with junior financing which
results in "cash out" to Borrower in excess of the cost of Eligible Capital Improvements approved by
City in accordance with the Resale Restriction Agreement, or (iv) the occurrence of an Event of
Default.
3. Due on Sale; Restrictions on Refinancing and Assumption. This Note is payable in full
upon sale or refinancing of the Property (except as permitted pursuant to the Resale Restriction
Agreement), and may not be assumed except under the limited circumstances set forth in Section
4.3.1 of the Resale Restriction Agreement.
4. Events of Default; Acceleration of Payment. An Event of Default permitting Lender to
declare all sums payable hereunder (including, as applicable, any Excess Sale Proceeds and the
City's Equity Share) immediately due and payable and to exercise all remedies available to Lender
pursuant to the Resale Restriction Agreement and the Deed of Trust shall arise upon the occurrence
of any of the following:
(a) Borrower fails to use the Property as Borrower's Principal Residence in accordance
with the Resale Restriction Agreement;
(b) The sale, transfer, conveyance, lease or encumbrance of the Property in violation
of the Resale Restriction Agreement or the Deed of Trust;
(c) An event of default arises under any other loan secured by the Property and such
default remains uncured following the expiration of any applicable cure period;
(d) Borrower refinances the Property in violation of the Resale Restriction Agreement;
(e) Borrower fails to pay when due any sum payable pursuant to this Note and such
failure remains uncured fifteen (15) days beyond the due date for such payment; or
(f)
An Event of Default arises under the Deed of Trust or the Resale Restriction
Agreement and remains uncured beyond any applicable cure period.
5. Default Rate of Interest. Upon the occurrence of an Event of Default, the interest rate
payable hereunder shall increase to the rate of ten percent (10%) per annum commencing upon the
date of such Event of Default.
FTH BMR PROMISSORY NOTE SAMPLE -2- Rev 812024
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Attachment 2
EXHIBIT 3. SECURED PROMISSORY NOTE
6. Application of Payments. All payments received on account of this Note shall be applied
first to accrued interest, next to the reduction of principal, and the remainder shall be applied to
Excess Sale Proceeds and City's Equity Share (to the extent applicable).
7. Attorney's Fees. Borrower agrees to pay all costs and expenses, including reasonable
attorney's fees, which Lender may incur in the collection or enforcement of this Note, whether or not
suit is filed.
8. No Offset; Borrower's Waivers. Borrower hereby waives any rights of offset it now has or
may hereafter have against Lender, its successors and assigns, and agrees to make the payments
called for hereunder in accordance with the terms of this Note. Borrower hereby waives diligence,
presentment, protest, and demand, and notice of protest, notice of dishonor and notice of
nonpayment of this Note, and expressly waives any rights to be released by reason of any extension
of time or change in terms of payment, or change, alteration or release of any security given for the
payments hereof, and expressly waives the right to plead any and all statutes of limitation as a
defense to any demand on this Note.
9. Notices. Except as may be otherwise specified herein, any approval, notice, direction,
consent, request or other action by the Lender shall be in writing and shall be communicated to the
Borrower at the address of the Property, or at such other place or places as the Borrower shall
designate to the Lender in writing, from time to time, for the receipt of communications from the
Lender. Mailed notices shall be deemed delivered and received five (5) working days after deposit
in the United States mail in accordance with this provision.
Lender: City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Treasurer
Borrower: Borrower
Mailing Address
Dublin, CA 94568
10. Prepayment. Borrower may prepay this Note in full at any time without premium or penalty,
so long as Borrower pays the entire outstanding principal balance together with the interest accrued
thereon and all other sums payable hereunder.
11. Governing Law. This Note shall be construed in accordance with and be governed by the
laws of the State of California.
12. Severability. If any provision of this Note shall be held by a court of competent jurisdiction
to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
13. No Waiver by Lender; Remedies Cumulative. No waiver of any breach, default or failure
of condition under the Note, the Resale Restriction Agreement, or the Deed of Trust shall be implied
from Lender's failure or delay in declaring a default or exercising any of Lender's rights or remedies
FTH BMR PROMISSORY NOTE SAMPLE -3- Rev 812024
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Attachment 2
EXHIBIT 3. SECURED PROMISSORY NOTE
with respect to such breach, default or failure, or from any previous waiver of any similar or unrelated
breach, default or failure, nor shall acceptance by Lender of any payment hereunder constitute a
waiver of Lender's right to require prompt payment of any remaining amounts owed. Without limiting
the generality of the foregoing, Lender's failure or delay in declaring any amount due hereunder shall
not constitute a waiver of Lender's right to declare such sum due for the same or any subsequent
event that triggers Borrower's payment obligations hereunder. Any waiver of any term or provision
of the Note, the Resale Restriction Agreement, or the Deed of Trust, or any of the obligations secured
thereby must be made in writing and shall be limited to the express written terms of such waiver. The
rights and remedies of the parties hereunder are cumulative, and the exercise or failure to exercise
one or more of such rights or remedies by either party shall not preclude the exercise by it, at the
same time or different times, of any right or remedy for the same default or any other default.
14. Joint and Several Obligations. If this Note is executed by more than one person as
Borrower, the obligations of each shall be joint and several.
15. Assignment by Lender; Successors and Assigns. Lender may assign its rights to receive
the proceeds under this Note to any person or entity, and upon notice to Borrower of such
assignment, all payments shall be made to the assignee. The promises and agreements herein
contained shall bind and inure to the benefit of, as applicable, the respective heirs, executors,
administrators, successors and assigns of the parties; provided however, Borrower may not assign
this Note without Lender's written consent except in accordance with the Resale Restriction
Agreement and the Deed of Trust.
16. Entire Agreement; Amendments in Writing. This Note, together with the Resale
Restriction Agreement and the Deed of Trust sets forth the entire understanding and agreement of
Borrower and Lender with respect to the subject matter hereof. Any amendment to this Note must
be in writing signed by both Lender and Borrower.
17. Non -liability for Negligence, Loss or Damage. Borrower acknowledges and agrees that
the relationship between Borrower and Lender is solely that of borrower and lender, and that Lender
neither undertakes nor assumes any responsibility for or duty to Borrower to select, review, inspect,
supervise, pass judgment on or inform Borrower of the quality, adequacy or suitability of the Property
or any other matter. Lender owes no duty of care to protect Borrower against negligent, faulty,
inadequate or defective building or construction, or any condition of the Property, and Borrower
agrees that neither Borrower nor any of Borrower's heirs, successors or assigns
shall ever claim, have or assert any right or action against Lender for any loss, damage or other
matter arising out of or resulting from any condition of the Property.
FTH BMR PROMISSORY NOTE SAMPLE -4- Rev 812024
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Attachment 2
EXHIBIT 3. SECURED PROMISSORY NOTE
Executed as of the date first written above.
BORROWER
Borrower Date
FTH BMR PROMISSORY NOTE SAMPLE -5- Rev 812024
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Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
Recording requested by and when
recorded mail to:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder's Use
LOAN AND EQUITY SHARE AGREEMENT
City of Dublin First -Time Homebuyer Program
(Market -Rate Units)
NOTICE TO BORROWER: THIS DOCUMENT CONTAINS PROVISIONS RESTRICTING USE OF THE
PROPERTY, REFINANCING, AND ASSUMPTIONS
This Loan and Equity Share Agreement (this "Agreement") is entered into as of Date, ("Effective
Date") by and between the City of Dublin, a municipal corporation ("City") and Borrower(s) (collectively,
"Borrower") regarding certain improved real property located at Property Address, Dublin, California 94568
and further described in Exhibit A attached hereto (hereinafter the "Property").
RECITALS
WHEREAS, to further its goal of creating affordable home ownership opportunities for first-time
homebuyers whose household income does not exceed 120% of the Alameda County median income, the
City has initiated a First -Time Homebuyer Program (the "Program"), pursuant to which City provides deferred
payment loans to assist first-time buyers to purchase a home in the City of Dublin;
WHEREAS, Borrower qualifies as an Eligible Homebuyer under the Program, has certified that
Borrower intends to live in the Property as an owner occupant, and has agreed to maintain the Property as
Borrower's Principal Residence (as defined below);
WHEREAS, City has agreed to provide a loan to Borrower upon the terms and conditions set forth
herein which loan shall be evidenced by a Secured Promissory Note executed by Borrower and dated as of
the date hereof (the "Note") and secured by a Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing executed by Borrower, dated as of the date hereof, and recorded substantially concurrently
herewith in the Official Records of Alameda County (the "Deed of Trust"); and
WHEREAS, in order to fulfill the goals of the Program and maintain the City's ability to assist first-
time homebuyers, it is necessary to restrict the use of the Property and under certain circumstances, to
require payment of an equity share upon resale of the Property. These restrictions are intended to prevent
purchasers from using the Property for purposes incompatible with the Program. The terms and conditions
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 -1- Rev 812024
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Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
set forth in this Agreement are intended to ensure that the Program loan is used for housing affordable to
Eligible Homebuyers.
NOW THEREFORE, in consideration of the benefits received by the Borrower and the public
purposes served by the Program, Borrower and City agree as follows.
1. Definitions. As used in this Agreement, the following terms shall have the meanings set forth
below. Additional terms are defined in the Recitals and text of this Agreement.
(a) "Borrower" is defined in the preamble to this Agreement.
(b) "Eligible Homebuyer" means a homebuyer whose income does not exceed One
Hundred and Twenty percent (120%) of the Area Median Income adjusted for household size as
published by the California Department of Housing and Community Development ("HCD") for
the County of Alameda/Federal Housing Administration (115% AMI) and who otherwise meets
the requirements of the Program.
(c) "City Documents" means collectively, this Agreement, the Note and the Deed of
Trust.
(d) "Program" is defined in the Recitals.
(e) "Property" is defined in the preamble to this Agreement.
(f) "Principal Residence" shall mean the place where the Borrower resides on a
substantially full-time basis, for not less than ten (10) months per calendar year.
2. Loan Terms. City has agreed to provide a loan in the amount of amount dollars ($00,000)
(the "Loan") upon the terms and conditions set forth in the City Documents to assist Borrower to purchase
the Property. Borrower acknowledges that the City Documents provide for, among other requirements,
owner -occupancy requirements, restrictions on assignment of the Loan, and a requirement that under certain
circumstances, Borrower shall pay to City a share of appreciation of the Property. As more particularly set
forth herein and in the Note, the Loan terms include the following:
(a) Interest Rate. Interest shall accrue on the principal balance of the Loan
commencing upon the date of origination of the Note at the rate of three percent (3%) simple interest
per annum. As set forth in Section 5 below, Borrower shall be obligated to pay the greater of the
accrued interest or the Equity Share.
(b) Repayment; Due on Sale or Refinancing. The entire principal balance of the Loan
together with all interest and other sums accrued pursuant to the City Documents (including without
limitation, the Interest or Equity Share payable pursuant to Section 5) shall be due and payable in
full upon the date (the "Due Date") which is the earliest of: (i) the thirtieth (30th) anniversary of the
date of the Note, (ii) the sale, transfer, lease or encumbrance of all or any interest in the Property
(other than as permitted pursuant to the Deed of Trust and this Agreement), (iii) the occurrence of
an Event of Default, or (iv) the refinancing or repayment in full of any senior mortgage secured by
the Property.
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
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Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
(c) Term of this Agreement. This Agreement shall continue in effect until the entire
principal balance of the Loan together with all interest and other sums accrued pursuant to the City
Documents (including without limitation, the Interest or Equity Share payable pursuant to Section 5)
is paid in full.
(d) Prepayment. The Loan may be prepaid in full at any time without penalty or premium
provided that all sums payable pursuant to the City Documents are paid in full, including without
limitation, the Interest or Equity Share payable pursuant to Section 5.
3. Borrower Representations, Warranties and Covenants. Borrower hereby represents,
warrants and covenants that all of the following are true: (i) the financial and other information provided to
City in order to qualify to purchase the Property is true and correct as of the Effective Date; (ii) Borrower shall
occupy the Property as his or her principal place of residence throughout the period during which the Loan
is outstanding, (iii) Borrower is a first-time homebuyer as described in the City of Dublin First -Time
Homebuyer Program Guidelines; and (iv) Borrower will fully cooperate by promptly providing to the City all
information requested by the City to assist in monitoring Borrower's compliance with this Agreement.
4. Occupancy of Property. Borrower covenants and agrees that Borrower shall occupy the
Property as Borrower's principal place of residence throughout the term of the Loan, and shall not rent or
lease the Property or portion thereof during the term of the Loan. Borrower shall be considered as occupying
the Property as Borrower's principal residence if Borrower is living in the Property for at least ten (10) months
out of each calendar year. Borrower shall annually provide a written certification to the City, in form provided
by City, that Borrower is occupying the Property as Borrower's principal place of residence and that Borrower
is not renting or leasing the Property to another party, and shall provide such documents and other evidence
as City may reasonably request to verify compliance with the requirements of this Section.
5. Equity Share or Interest. On the Due Date (as defined in Section 2(b)), in addition to repaying
the principal amount of the Loan, Borrower shall pay the greater of: (i) simple interest accruing on the
outstanding principal balance of the Loan at the rate of three percent (3%) per year commencing upon the
date of the Note and continuing until paid in full; or (ii) an equity share calculated in accordance with the
formula set forth below (the "Equity Share"). Interest for any partial year during the term of the Note shall be
calculated on the basis of a 365-day year. The Equity Share shall be considered contingent interest on the
principal amount of the Loan.
The Equity Share shall be equal to the sum resulting from dividing the original principal amount of
the Loan by the Original Purchase Price and then multiplying that percentage by the Appreciation Amount.
"Original Purchase Price" means the purchase price paid by Borrower to purchase the
Property. The parties agree that the Original Purchase Price equals the sum of amount dollars
($000,000).
"Fair Market Value" means the greater of: (a) the contract sale price or the actual price paid
for the Property (whichever is greater) by a bona fide third party purchaser in an arms length
transaction, or (b) the fair market value of the Property as determined by an appraiser certified and
licensed by the State of California, selected by Borrower and approved by City.
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
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Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
"Appreciation Amount" means the amount calculated by subtracting the Original Purchase
Price and the Cost of Eligible Capital Improvements (as defined in Section 5.1) from the Fair Market
Value.
As an illustration, if the Original Purchase Price was $400,000 and the principal amount of the Loan
was $40,000, then the percentage of appreciation that the Borrower would owe would be $400,000
divided by $40,000 = 10%. If upon resale the Fair Market Value of the Property is $600,000 and the
Cost of Eligible Capital Improvements is $25,000, then the Appreciation Amount would be $600,000
minus $25,000 minus $400,000 = $175,000. The Equity Share payable by the Borrower would 10%
of $175,000 = $17,500.
5.1 Eligible Capital Improvements. For purposes of calculating the Equity Share
pursuant to Section 5, the "Cost of Eligible Capital Improvements" means the original actual cost of
capital improvements made to the Property (i.e., improvements that add to the value of the home,
prolong its useful life, or adapt it to new uses) only if (i) the work to install or construct the capital
improvements has been performed with and pursuant to all required permits, and (ii) the cost of the
capital improvements has been verified by City in writing no later than sixty (60) days following
completion of the work. City agrees that it shall issue such written verification to Borrower within ten
(10) business days following City's receipt of all reasonably required documentation including copies
of permits and proof of payment for the construction or installation of the capital improvements.
Exhibit B attached hereto includes a list of capital improvements that will be accepted by City.
Borrower may wish to consult Internal Revenue Service Publication 523 (2006) for additional
information regarding capital improvements.
6. Assignment. The City may assign any or all of its rights and obligations under this
Agreement, the Note, or the Deed of Trust, to any person or entity without the consent of Borrower, and after
such assignment, references to the City herein shall be references to the assignee. Borrower may not assign
any of its rights or obligations under this Agreement, the Note, or the Deed of Trust to any person or entity
without the express prior written consent of the City.
7. Subordination/CaIHFA Held Mortgage. This Agreement shall be subordinate to the lien of
any purchase money deed of trust recorded contemporaneously herewith and any deed of trust recorded
against the Property for the benefit of the California Housing Finance Agency. City agrees that in order to
assist qualified purchasers to secure purchase money financing for the acquisition of the Property, the City
will enter into a subordination agreement with a senior purchase money lender to subordinate this Agreement
under such terms as the City and the senior purchase money lender shall negotiate. Any subordination
agreement to be executed by City shall include notice and cure rights for City regarding any defaults in the
mortgage to which the City is subordinating.
8. Default and Remedies. An Event of Default shall arise hereunder upon the occurrence of
any of the following:
(a) Borrower's representations made in this Agreement or in Borrower's application for the Loan
are determined to be materially false or misleading.
(b) Borrower fails to use the Property as Borrower's Principal Residence;
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
76
Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
(c) The sale, conveyance, or transfer of the Property (including a sale under a deed of trust in
the event of foreclosure) if following such sale, conveyance or transfer, Borrower's remaining
ownership interest in the Property is less than fifty percent (50%) except as permitted
pursuant to Section 6.9 of the Deed of Trust.
(d) An event of default arises under any other loan secured by the Property and such default
remains uncured following the expiration of any applicable cure period;
(e) Borrower fails to pay when due any sum payable pursuant to the Note or this Agreement,
and such failure remains uncured fifteen (15) days beyond the due date for such payment;
(f)
(g)
A lien is recorded against the Property other than the lien of a bona fide first mortgage loan
or junior loan approved by City;
An Event of Default arises under the Deed of Trust or the Note and remains uncured beyond
any applicable cure period; or
(h) Borrower declares bankruptcy or makes an assignment of assets for the benefit of creditors.
Upon the occurrence of an Event of Default, City may exercise any remedies available under law or
in equity, including without limitation, any or all of the following, none of which shall be an exclusive remedy:
(a) Declare the Loan immediately due and payable without further demand and accelerate
payments due under the Note;
(b) Invoke the power of sale under the Deed of Trust;
(c) Apply to a court of competent jurisdiction for such relief at law or in equity as may be
appropriate; and
(d) Declare a default under the Note and Deed of Trust and pursue all City remedies under such
documents.
9. Notices. Except as otherwise specified in this Agreement, all notices required to be sent
pursuant to this Agreement shall be made by personal delivery or by deposit in the United States mail, first-
class, postage prepaid, and shall be deemed to have been delivered and received on the date of personal
delivery or five (5) days after deposit in the mail, if sent to the following address:
City: City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: Housing Division
Borrower: Name
Mailing Address
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
77
Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
Dublin, CA 94568
10. Attorneys' Fees. If either party initiates legal proceedings to interpret or enforce its rights
under this Agreement, the prevailing party in such action shall be entitled to an award of reasonable attorneys'
fees and costs in additions to any other recovery to which such party is entitled under this Agreement.
11. Nonliability for Negligence, Loss or Damage. Borrower acknowledges and agrees that the
relationship between Borrower and City is solely that of a borrower and the administrator of a loan program,
and that City neither undertakes nor assumes any responsibility for or duty to Borrower to select, review,
inspect, supervise, pass judgment on or inform Borrower of the quality, adequacy or suitability of the Property
or any other matter. City owes no duty of care to protect Borrower against negligent, faulty, inadequate or
defective building or construction, or any condition of the Property, and Borrower agrees that neither Borrower
nor any of Borrower's heirs, successors or assigns shall ever claim, have or assert any right or action against
City for any loss, damage or other matter arising out of or resulting from any condition of the Property.
12. Governing Law. This Agreement shall be construed in accordance with and be governed by
the laws of the State of California.
13. Severability. If any provision of this Agreement shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
14. No Waiver; Remedies Cumulative. No waiver of any breach, default or failure of condition
under the City Documents, shall be implied from City's failure or delay in declaring a default or exercising any
of City's rights or remedies with respect to such breach, default or failure, or from any previous waiver of any
similar or unrelated breach, default or failure. Any waiver of any term or provision of the City Documents must
be made in writing and shall be limited to the express written terms of such waiver. The rights and remedies
of the parties hereunder are cumulative, and the exercise or failure to exercise one or more of such rights or
remedies by either party shall not preclude the exercise by it, at the same time or different times, of any right
or remedy for the same default or any other default.
15. Joint and Several Obligations. If this Agreement is executed by more than one person as
Borrower, the obligations of each shall be joint and several.
16. Entire Agreement; Amendments in Writing. This Agreement, together with the Note and the
Deed of Trust sets forth the entire understanding and agreement of Borrower and City with respect to the
subject matter hereof. Any amendment to this Agreement must be in writing signed by both City and
Borrower.
SIGNATURES ON NEXT PAGE
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
78
Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
ATTEST:
City Clerk
BORROWER
Borrower
CITY
City of Dublin, a California municipal corporation
City Manager
SIGNATURES MUST BE NOTARIZED.
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
79
Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
NOTARY ACKNOWLEDGMENT
[Insert Here]
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
80
Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
EXHIBIT A: LEGAL DESCRIPTION
[Insert here]
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
81
Attachment 2
EXHIBIT 4. LOAN AND EQUITY SHARE AGREEMENT
EXHIBIT B: EXAMPLES OF CAPITAL IMPROVEMENTS
(Based upon Internal Revenue Service Publication 523.)
Improvements. These add to the value of the home, prolong its useful life, or adapt it to new uses. The cost of
additions and other improvements is added to the owner's basis in the property.
Examples.
Putting a recreation room or another bathroom in an unfinished basement, putting up a new fence, putting in new
plumbing or wiring, putting on a new roof, or paving an unpaved driveway are improvements. An addition to the house,
such as a new deck, a sunroom, or a new garage, is also an improvement.
The following chart lists some other examples of improvements.
Additions
Bedroom
Bathroom
Deck
Garage
Porch
Patio
Heating & Air Conditioning
Heating system
Central air conditioning
Furnace
Duct work
Central humidifier
Filtration system
Plumbing
Lawn & Grounds Septic system
Landscaping Water heater
Driveway Soft water system
Walkway Filtration system
Fence
Retaining wall Interior
Sprinkler system Improvements
Swimming pool Built-in appliances
Kitchen modernization
Miscellaneous Flooring
Storm windows, doors Wall-to-wall carpeting
New roof
Central vacuum Insulation
Wiring upgrades Attic
Satellite dish Walls
Security system Floors
Pipes and duct work
Improvements no longer part of home. The adjusted basis does not include the cost of any improvements that are
replaced and are no longer part of the home.
Exhibit 4_FTHMR_Loan-and-Equity-Agmt-2024 Rev 812024
82
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
Recording requested by and when
recorded mail to:
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder's Use
DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING AND SECURITY AGREEMENT
City of Dublin First -Time Homebuyer Program
(Market -Rate Units)
THERE ARE RESTRICTIONS ON THE USE OF THE PROPERTY ENCUMBERED BY THIS DEED OF
TRUST. THERE ARE LIMITATIONS ON THE EXTENT TO WHICH THIS PROPERTY MAY BE
ENCUMBERED BY JUNIOR FINANCING AND UPON TRUSTOR'S RIGHTS TO REFINANCE EXISTING
MORTGAGES
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING AND SECURITY
AGREEMENT ("Deed of Trust") is made as of Date of signing ("Effective Date") by Borrower(s) Name
(collectively, "Trustor") to City of Dublin (the "Trustee") whose business address is 100 Civic Plaza, Dublin,
California 94568, for the benefit of THE CITY OF DUBLIN a municipal corporation ("Beneficiary").
WHEREAS, Trustor is the owner of the real property located at Property Address in the City of
Dublin, Alameda County, California, and more particularly described in Exhibit A attached hereto and
incorporated herein;
WHEREAS, to assist Trustor in the acquisition of such property, Beneficiary provided a deferred
payment loan in the original principal amount of Loan Amount Written dollars ($00,000) (the "Loan") funded
by Beneficiary's First -Time Homebuyer Program;
WHEREAS, in connection with the Loan, Trustor and Beneficiary entered into a Loan and Equity
Share Agreement dated as of the Effective Date and recorded in the Official Records of Alameda County
substantially concurrently herewith (the "Loan Agreement") and Trustor executed and delivered to Beneficiary
a Secured Promissory Note dated as of the Effective Date (the "Note");
WHEREAS, among other provisions, the Loan Agreement provides that during the term of the Loan:
(i)Trustor is obligated to use the Property as Trustor's Principal Residence (as defined in the Loan
Agreement); (ii) there are restrictions on Trustor's ability to encumber the property and to refinance the
existing loans secured thereby; and (iii) upon repayment of the Loan and upon the occurrence of specified
Exhibit 5_FTHMR_Deed-of-Trust-2024 -1- Rev 812024
83
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
events, Trustor is obligated to pay to Beneficiary a sum equal to the greater of interest accrued on the Loan
or an Equity Share (as defined in the Loan Agreement).
NOW THEREFORE, to secure repayment of the Loan and the full and timely performance of
Trustor's obligations under the Note and the Loan Agreement, it is agreed as follows.
1. Grant in Trust. Trustor, in consideration of the indebtedness herein recited and the trust herein
created, hereby irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee in trust for
the benefit of Beneficiary, with power of sale and right of entry and possession, all of Trustor's right, title and
interest now held or hereafter acquired in and to the following: (a) all of that certain real property located at
Property Address in Dublin, California in the County of Alameda and the State of California, which is more
particularly described in Exhibit A, attached hereto and incorporated herein by this reference (the "Land"); (b)
all buildings, improvements and fixtures now or hereafter erected on the Property and all replacements and
additions thereto ("Improvements"); (c) all easements, rights of way, appurtenances and other rights used in
connection with the Property or as a means of access thereto ("Appurtenances"); (d) all fixtures now or
hereafter attached to or used in and about the Property or the Improvements or hereafter located or
constructed on the Property, and all renewals or replacements thereof or articles in substitution therefor,
whether or not the same are, or shall be attached to the Improvements in any manner ("Fixtures and
Equipment"); and (e) all leases, subleases, licenses and other agreements relating to use or occupancy of
the Property ("Leases") and all rents or other payments which may now or hereafter accrue or otherwise
become payable to or for the benefit of Trustor ("Rents") (whether or not such Leases and Rents are permitted
pursuant to the Loan Agreement).
All of the above -referenced Property, Improvements, Appurtenances, Fixtures and Equipment, Leases and
Rents are herein referred to collectively as the "Property."
2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and
performance of all of the following (the "Secured Obligations"): (i) all present and future indebtedness
evidenced by the Note (including all principal, interest, shared appreciation and all other amounts payable
pursuant to the Note) and all amendments, modifications, extensions and renewals of the Note; (ii) all present
and future obligations of Trustor set forth in this Deed of Trust or in the Loan Agreement; (iii) all additional
present and future obligations of Trustor to Beneficiary under any other agreement or instrument
acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations
are, secured by this Deed of Trust; (iv) all modifications, supplements, amendments, renewals, and
extensions of any of the foregoing, whether evidenced by new or additional documents; and (v)
reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under
this Deed of Trust.
3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and
unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of
the Property. This is an absolute assignment and not an assignment for security only. Subject to the
prohibition on the lease or rental of the Property as set forth in the Loan Agreement, Beneficiary hereby
confers upon Trustor a license to collect and retain such rents, royalties, issues, profits, revenue, income and
proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of
any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor
and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in
person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property
Exhibit 5 FTHMRDeed-of-Trust-2024
-2- Rev 812024
84
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due
and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable
attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine.
Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does
not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking
possession of the Property, the collection of such rents, issues, and profits, and the application thereof as
aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done
pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the
Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee
and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any
of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale
granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession
of the Land and Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not
be responsible for performing any obligation of the lessor under any Lease, shall not be liable in any manner
for the Property, or the use, occupancy, enjoyment or operation of any part of it , and unless due solely to
the willful misconduct or gross negligence of Beneficiary, shall not be responsible for any dangerous or
defective condition of the Property or any negligence in the management, repair or control of the Property.
4. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the
provisions of the Uniform Commercial Code ("UCC") with respect to all of the Property constituting fixtures,
is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and
equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants
and agrees that this Deed of Trust is to be filed in the real estate records of Alameda County and shall also
operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable
provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals
or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to
be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC.
The full name of Trustor and the mailing address of Trustor are set forth in Section 9.7 of this Deed of Trust.
5. TRUSTOR REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 Trustor's Estate. Trustor represents and covenants that Trustor is lawfully seized of the
estate hereby conveyed and has the right to grant and convey the Property. Trustor agrees to warrant and
defend generally the title of the Property against all claims and demands subject to any declarations,
easements, or restrictions listed in the schedule of exceptions to coverage in any title insurance policy
insuring Beneficiary's interest in the Property.
5.2 Repayment of Sums Owed under Note and Loan Agreement. Trustor will promptly pay
to Beneficiary when due all sums payable under the Note and the Loan Agreement, including all principal,
interest and shared appreciation required by the Note. The Note contains the following provisions concerning
payment of interest and shared appreciation:
[On the Due Date], in addition to repaying the principal amount of this Note, Borrower shall pay
the greater of: (i) simple interest accruing on the outstanding principal balance of the Loan at the rate
of three percent (3%) per year commencing upon the date of this Note until paid in full ("Interest");
or (ii) an equity share calculated in accordance with the formula set forth below (the "Equity Share").
Exhibit 5 FTHMRDeed-of-Trust-2024
-3- Rev 812024
85
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
Interest for any partial year during the term of this Note shall be calculated on the basis of a 365-day
year. The Equity Share shall be considered contingent interest on the principal due hereunder.
The Equity Share shall be equal to the sum resulting from dividing the original principal amount
of the Loan by the Original Purchase Price and then multiplying that percentage by the Appreciation
Amount.
"Original Purchase Price" means the purchase price paid by Borrower to purchase the
Property. The parties agree that the Original Purchase Price equals the sum of Sale Amount Written
dollars ($000,000).
"Fair Market Value" means the greater of: (a) the contract sale price or the actual price paid for
the Property (whichever is greater) by a bona fide third party purchaser in an arms length transaction,
or (b) the fair market value of the Property as determined by an appraiser certified and licensed by
the State of California, selected by Borrower and approved by Lender.
"Appreciation Amount" means the amount calculated by subtracting the Original Purchase
Price and the Cost of Eligible Capital Improvements (as defined in Section 5.1 of the Loan
Agreement) from the Fair Market Value.
As an illustration, if the Original Purchase Price was $400,000 and the principal amount of the Loan
was $40,000, then the percentage of appreciation that the Borrower would owe would be $400,000
divided by $40,000 = 10%. If upon resale the Fair Market Value of the Property is $600,000 and the
Cost of Eligible Capital Improvements is $25,000, then the Appreciation Amount would be $600,000
minus $25,000 minus $400,000 = $175,000. The Equity Share payable by the Borrower would 10%
of $175,000 = $17,500.
5.3 Performance of Covenants. Trustor will observe and perform all of Trustor's covenants
and agreements set forth in the Loan Agreement, the Note, this Deed of Trust and all other instruments
secured by the Property.
5.4 Maintenance of the Property. Trustor agrees (a) to keep the Property in good repair and
in decent, safe, sanitary, tenantable condition and repair and permit no waste thereof; (b) not to commit or
suffer to be done or exist on or about the Land any condition causing the Property to become less valuable;
(c) to repair, restore or rebuild promptly any buildings or improvements on the Land that may become
damaged or be destroyed while subject to the lien of this Deed of Trust; (d) to comply with all applicable laws,
ordinances and governmental regulations affecting the Property or requiring any alteration or improvement
thereof, and not to suffer or permit any violations of any such law, ordinance or governmental regulation, nor
of any covenant, condition or restriction affecting the Property; and (e) not to initiate or acquiesce in any
change in any zoning or other land use or legal classification which affects any of the Property without the
Beneficiary's written consent. If there arises a condition in contravention of this Section, and if the Trustor
has not cured such condition within thirty (30) days after receiving a Beneficiary notice of such a condition,
then in addition to any other rights available to the Beneficiary, the Beneficiary shall have the right (but not
the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other
encumbrance against the Property to recover its cost of cure.
Exhibit 5 FTHMRDeed-of-Trust-2024
-4- Rev 812024
86
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
5.5 Appear and Defend. Trustor shall appear in and defend any action or proceeding purporting
to affect the Property or the rights or powers of the Beneficiary or Trustee, and shall pay all costs and
expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or
proceeding in which the Beneficiary or Trustee may appear, and in any suit brought by the Beneficiary to
foreclose this Deed of Trust.
5.6 Charges; Liens. Trustor shall pay prior to delinquency all taxes, assessments, and other
charges, fines, and impositions affecting the Property directly to the payee thereof. Upon request of
Beneficiary, Trustor shall promptly furnish to Beneficiary copies of all notices of such amounts due and shall
promptly furnish to Beneficiary receipts evidencing all such payments made. Trustor shall pay when due each
obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber
or appear to encumber all or part of the Property or any interest therein, whether or not such lien, charge or
encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay
any tax, charge or assessment so long as Trustor is actively contesting its validity in good faith and by
appropriate legal proceedings which will operate to prevent the enforcement of the lien or forfeiture of the
Property or any part thereof. Trustor shall post security for the payment of such contested claims as may be
requested by the Beneficiary.
5.7 Insurance. Trustor shall keep the Land and the Improvements insured by a standard all-risk
property insurance policy in an amount equal to the replacement value of the Property with loss payable to
the Beneficiary. The insurance carrier providing such insurance shall be licensed to do business in the State
of California and may be chosen by Trustor, subject to approval by Beneficiary. All insurance policies and
renewals thereof will be in a form acceptable to the Beneficiary, and will include a standard mortgagee clause
with standard lender's endorsement in favor of the holder of any senior lien and the Beneficiary as their
interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to
hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly
furnish to the Beneficiary, or its designated agent, the original insurance policies or certificates of insurance,
all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to
the insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its designated agent,
may make proof of loss if not made promptly by Trustor. The Beneficiary shall receive thirty (30) days advance
written notice of the cancellation, expiration or termination or any material change in the coverage afforded
by any of the insurance policies required under this Section.
Unless otherwise permitted by the Beneficiary in writing, insurance proceeds, subject to the rights of
the holder of any senior lien, will be applied to restoration or repair of the Property damaged. If the Property
is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent, within thirty
(30) days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle
a claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the
insurance proceeds at the Beneficiary's option either to restoration or repair of the Property or to pay amounts
due under the Loan Agreement and the Note.
If the Property is acquired by the Beneficiary, all right, title and interest of Trustor in and to any
insurance policy and in and to the proceeds thereof resulting from damage to the Property prior to the sale
or acquisition will pass to the Beneficiary to the extent of the sums secured by this Deed of Trust immediately
prior to such sale or acquisition, subject to the rights of the holder of any senior lien.
Exhibit 5 FTHMRDeed-of-Trust-2024
-5- Rev 812024
87
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
Renewal policies and any replacement policies, together with premium receipts satisfactory to the
Beneficiary, shall be delivered to the Beneficiary at least thirty (30) days prior to the expiration of existing
policies. Neither Trustee nor the Beneficiary shall by reason of accepting, rejecting, approving or obtaining
insurance incur any liability for the existence, nonexistence, form or legal sufficiency of such insurance, or
solvency of any insurer for payment of losses.
5.8 Use of Property. Trustor shall not permit or suffer the use of any of the Property for any
purpose other than as a single family residential dwelling.
6. IT IS MUTUALLY AGREED THAT:
6.1. Protection of Beneficiary's Security. If Trustor fails to perform the covenants and
agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially
affects Beneficiary's interest in the Property, including, but not limited to, eminent domain, insolvency, code
enforcement, arrangements or proceedings involving a bankrupt or decedent, foreclosure of any mortgage
secured by the Property or sale of the Property under a power of sale of any instrument secured by the
Property, then Beneficiary, at Beneficiary's option, upon notice to Trustor, may make such appearance,
disburse such sums and take such action as is necessary to protect Beneficiary's interest, including, but not
limited to, the purchase of insurance, disbursement of reasonable attorney's fees and entry upon the Property
to make repairs. Any amounts disbursed by Beneficiary pursuant to this Section, with interest thereon, shall
become additional indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and Beneficiary
agree to other terms of payment, such amounts shall be payable upon notice from Beneficiary to Trustor
requesting payment thereof, and shall bear interest from the date of disbursement at the highest rate
permissible under applicable law. Nothing contained in this Section shall require Beneficiary to incur any
expense or take any action hereunder.
6.2 Inspection. Beneficiary or its agent may make or cause to be made reasonable entries upon
and inspections of the Property. Beneficiary shall give Trustor notice at the time of or prior to any such
inspection specifying reasonable cause for the inspection
6.3 Awards and Damages. All judgments, awards of damages, settlements and compensation
made in connection with or in lieu of (a) taking of all or any part of or any interest in the Property by or under
assertion of the power of eminent domain, (b) any damage to or destruction of the Property or any part thereof
by insured casualty, and (c) any other injury or damage to all or any part of the Property, are hereby assigned
to and shall be paid to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to
collect and receive any such sums and is authorized to apply them in whole or in part upon any indebtedness
or obligation secured hereby, in such order and manner as the Beneficiary shall determine at its option. The
Beneficiary shall be entitled to settle and adjust all claims under insurance policies provided under this Deed
of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred
by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and
recovered by the Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose
for its disposition. Application of all or any part of the amounts collected and received by the Beneficiary or
the release thereof shall not cure or waive any default under this Deed of Trust. If the Property is abandoned
by Trustor, or if, after notice by Beneficiary to Trustor that the condemnor offers to make an award or settle
a claim for damages, Trustor fails to respond to Beneficiary within thirty (30) days after the date such notice
is mailed, Beneficiary is authorized to collect and apply the proceeds, at Beneficiary's option, either to
restoration or repair of the Property or to the sum secured by this Deed of Trust.
Exhibit 5 FTHMRDeed-of-Trust-2024
-6- Rev 812024
88
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
6.4 Prohibition on Transfers of Interest. With the exception of the transfers permitted pursuant
to Section 6.9 below, if all or any part of the Property or an interest therein is sold or transferred by Trustor
without Beneficiary's prior written consent, Beneficiary may, at Beneficiary's option, declare all sums secured
by this Deed of Trust to be immediately due and payable. If Beneficiary exercises such option to accelerate,
Beneficiary shall mail Trustor notice of acceleration in accordance with Sections 7.2 and 9.7 hereof. Such
notices shall provide a period of not less than 30 days from the date the notice is mailed within which Trustor
may pay the sums declared due. If Trustor fails to pay such sums prior to the expiration of such period,
Beneficiary may, without further notice or demand on Trustor, invoke any remedies permitted by Section
7.2(a) hereof.
6.5 Sale or Forbearance. No sale of the Property, forbearance on the part of Beneficiary or
extension of the time for payment of the indebtedness hereby secured shall operate to release, discharge,
waive, modify, change or affect the liability of Trustor either in whole or in part.
6.6 Beneficiary's Rights to Release. Without affecting the liability of any person for payment
of any indebtedness hereby secured (other than any person released pursuant hereto), including without
limitation any one or more endorsers or guarantors, and without affecting the lien hereof upon any of the
Property not released pursuant hereto, at any time and from time to time without notice: (a) Beneficiary may
in its sole discretion: (i) release any person now or hereafter liable for payment of any or all such
indebtedness, (iii) extend the time for or agree to alter the terms of payment of any or all of such indebtedness,
and (iii) release or accept additional security for such indebtedness, or subordinate the lien or charge hereof;
and (b) Trustee, acting pursuant to the written request of the Beneficiary, may reconvey all or any part of the
Property, consent to the making of any map or plot of the Land, join in granting any assessment thereon, or
join in any such agreement of extension or subordination.
6.7 Reconveyance. Upon payment of all sums secured by this Deed of Trust, Beneficiary shall
request Trustee to reconvey the Property and shall surrender this Deed of Trust and all notes evidencing
indebtedness secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty
and without charge to the person or persons legally entitled thereto. Such person or persons shall pay all
costs of recordation, if any. The recitals in the reconveyance of any matters or facts shall be conclusive proof
of the truthfulness thereof.
6.8 Requirement of Owner -Occupancy. Until such time as all sums payable pursuant to the
Note are paid in full, Trustor shall occupy the Property as Trustor's principal place of residence in accordance
with the Loan Agreement.
6.9 Permitted Transfers. The following transfers shall not be deemed to be a default hereunder:
(a) The transfer of the Property to the surviving joint tenant by devise, descent or operation of
the law, on the death of a joint tenant.
(b) A transfer of the Property where the spouse or domestic partner of Trustor becomes a co-
owner of the Property.
Exhibit 5 FTHMRDeed-of-Trust-2024
-7- Rev 812024
89
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
(c) A transfer of the Property resulting from a decree of dissolution of marriage, legal separation
or from an incidental property settlement agreement by which the spouse of Trustor becomes an owner of
the Property.
(d) A transfer to an inter vivos or living trust in which the Trustor is and remains the beneficiary
of the trust and the occupant of the Property.
(e) A sale, conveyance, or other transfer when following such sale, conveyance or transfer, the
original Trustor retains ownership of at least 50% of the Property.
7. EVENTS OF DEFAULT
7.1 Events of Default. Any one or more of the following events shall constitute a default under
this Deed of Trust:
(a) Failure to use the Property as Trustor's Principal Residence in violation of the Loan
Agreement;
(b) The sale, conveyance, or other transfer of the Property (including a foreclosure
sale), if following such sale, conveyance or transfer, Trustor's remaining ownership
interest in the Property is less than fifty percent (50%), except as provided in Section
6.9.
(c) An event of default arises under any other loan secured by the Property and such
default remains uncured following the expiration of any applicable cure period.
(d) Trustor encumbers or refinances the Property in violation of the Loan Agreement.
(e) Trustor fails to observe or perform any other covenant, condition, or agreement to
be observed or performed by Trustor pursuant to the Note, the Loan Agreement or
this Deed of Trust, including without limitation, the failure to pay any sum due
pursuant to any such document.
(f)
Trustor declares bankruptcy or makes an assignment of assets for the benefit of
creditors.
7.2 Acceleration and Sale.
(a) Default; Remedies. Upon Trustor's breach of any covenant or agreement of Trustor
under the Note, the Loan Agreement or this Deed of Trust (including without Iimitation,Trustor's encumbrance
or refinancing of the Property in violation of the foregoing agreements), Beneficiary shall mail notice to Trustor
as provided in Section 9.7 hereof specifying: (i) the nature of the breach; (ii) the action required to cure such
breach; (iii) a date no Tess than thirty (30) days from the date the notice is mailed to Trustor, by which such
breach must be cured; and (iv) that failure to cure such breach on or before the date specified in the notice
may result in acceleration of the Loan and the sale of the Property. The notice shall further inform Trustor of
Trustor's right to reinstate after acceleration and the right to bring a court action to assert the nonexistence
of a default or any other defense of Trustor to acceleration and sale. If the breach is not cured on or before
Exhibit 5 FTHMRDeed-of-Trust-2024
-8- Rev 812024
90
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
the date specified in the notice, Beneficiary at Beneficiary's option may: (a) declare all of the sums secured
by this Deed of Trust to be immediately due and payable without further demand and may invoke the power
of sale; (b) commence an action to foreclose this Deed of Trust as a mortgage; and (c) pursue any other
remedy permitted under California law. Beneficiary shall be entitled to collect from the Trustor, or from the
proceeds of the sale of the Property, all reasonable costs and expenses incurred in pursuing the remedies
provided in this paragraph, including, but not limited to, reasonable attorneys' fees.
(b) Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the
sums secured by this Deed of Trust, Trustor will have the right to have any proceedings begun by Beneficiary
to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Property
pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of the judgment
enforcing this Deed of Trust if: (1) Trustor pays Beneficiary all sums which would be then due under this Deed
of Trust and the Note, had no acceleration occurred; (2) Trustor pays all reasonable expenses incurred by
Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of
Trust, remedies including, but not limited to, reasonable attorneys' fees; and (3) Trustor takes such action as
Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the
Property and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired.
Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby will remain
in full force and effect as if no acceleration had occurred.
(c) Sale. After delivery to Trustee of a Notice of Default and Demand for Sale and after
the expiration of such time and the giving of such notice of default and sale as may then be required by law,
and without demand on Trustor, Trustee shall sell the Property at the time and place of sale fixed by it in said
notice of sale, at public auction to the highest bidder for cash in lawful money of the United States of America,
payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public
announcement at such time and place of sale and from time to time thereafter may postpone such sale by
public announcement at the time and place fixed by the preceding postponement. Any person, including
Trustor, Trustee or the Beneficiary, may purchase at such sale. Upon such sale by Trustee it shall deliver to
such purchaser its deed conveying the Property so sold, but without any covenant or warranty expressed or
implied. The recitals in such deed of any matters or facts shall be conclusive proof of their truthfulness. Upon
sale by Trustee and after deducting all costs, expenses and fees of Trustee, Trustee shall apply the proceeds
of sale to the payment of the indebtedness hereby secured, including without limitation the indebtedness
evidenced by the Note, any advances made or costs or expenses paid or incurred by Beneficiary under this
Deed of Trust, any indebtedness evidenced by any other instrument hereby secured, and all other sums then
secured hereby, including without limitation, interest and shared appreciation as provided in the Note and
Loan Agreement, in such order as the Beneficiary shall direct; and then the remainder, if any, shall be paid
to the person or persons legally entitled thereto.
(d) Assignment of Rents; Appointment of Receiver; Beneficiary in Possession.
Upon acceleration under Section 7.2(a) or abandonment of the Property, Beneficiary (in person, by agent or
by judicially appointed receiver) shall be entitled to enter upon, take possession of and manage the Property
and to collect the rents of the Property (if any) including those past due. All rents collected by Beneficiary or
the Receiver shall be applied first to payment of the costs of management of the Property and collection of
rents including, but not limited to, receiver's fees, premiums on receiver's bonds and reasonable attorney's
fees, and then to the sums secured by this Deed of Trust. Beneficiary and the receiver shall be liable to
account only for those rents actually received. The provisions of this paragraph and Section 7.2(a) shall
operate subject to the claims of prior lien holders.
Exhibit 5 FTHMRDeed-of-Trust-2024
-9- Rev 812024
91
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
7.3 Remedies Cumulative; No Waiver. No exercise of any right or remedy by the Beneficiary
or Trustee hereunder shall constitute a waiver of any other right or remedy herein contained or provided by
law, and no delay or forbearance by the Beneficiary or Trustee in exercising any such right or remedy
hereunder shall operate as a waiver thereof or preclude the exercise thereof in any continued or subsequent
default hereunder. All remedies provided in this Deed of Trust are distinct and cumulative to any other right
or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised
concurrently, independently or successively.
7.4 Trustee Substitution. The irrevocable power to appoint a substitute trustee or trustees
hereunder is hereby expressly granted to the Beneficiary, to be exercised at any time hereafter, without
specifying any reason therefore, by filing for record in the office where this Deed of Trust is recorded a deed
of appointment, and said power of appointment of successor trustee or trustees may be exercised as often
as and whenever the Beneficiary deems advisable. The exercise of said power of appointment, no matter
how often, shall not be deemed an exhaustion thereof, and upon recording of such deed or deeds of
appointment, the trustee or trustees so appointed shall thereupon, without further act or deed of conveyance,
succeed to and become fully vested with identically the same title and estate in and to the Property hereby
conveyed and with all the rights, powers, trusts and duties of the predecessor in the trust hereunder, with the
like effect as if originally named as trustee or as one of the trustees.
8. SUBORDINATION. This Deed of Trust shall be subordinate to the lien of any purchase money deed
of trust recorded contemporaneously herewith and any deed of trust held by the California Housing Finance
Agency.
9. MISCELLANEOUS PROVISIONS
9.1 Successors and Assigns. The covenants and agreements contained in this Deed or Trust
shall bind, and the benefit and advantages hereunder shall inure to, the respective heirs, executors,
administrators, successors and assigns of the parties; provided however, nothing in this Section is intended
to or shall modify any restrictions on assignment set forth herein or in the Note or Loan Agreement. As used
herein, the words "the Beneficiary" means the present Beneficiary or any future owner or holder, including a
pledgee of the indebtedness secured hereby.
9.2 Headings; Gender, Number. The captions and headings used in this Deed of Trust are
inserted only for convenience of reference and in no way define, limit, or describe the scope or intent of this
Deed of Trust, or of any particular provision thereof, or the proper construction thereof. Wherever used, the
singular number shall include the plural, and the plural the singular, and the use of any gender shall be
applicable to all genders.
9.3 Approvals in Writing. Except as otherwise specifically provided herein, whenever any
approval, notice, direction, consent, request or other action by the Beneficiary is required or permitted under
this Deed of Trust, such action shall be in writing.
9.4 Joint and Several Obligations. If more than one person has executed this Deed of Trust
as Trustor, the obligations of all such persons hereunder shall be joint and several.
Exhibit 5 FTHMRDeed-of-Trust-2024
-10- Rev 812024
92
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
9.5 Severabilitv. If any provision of this Deed of Trust shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
9.6 Indemnification. Trustor agrees to indemnify, defend (with counsel approved by
Beneficiary) and hold the Beneficiary, its elected and appointed officers, officials, agents and employees
("Indemnitees") harmless from and against any and all losses, damages, claims, actions, demands,
judgments, penalties, costs and expenses (including reasonable attorneys' fees) and liabilities (all of the
foregoing, collectively "Claims") which the Indemnitees may sustain or suffer directly or indirectly as a result
of or arising in connection with (i) Trustor's failure to perform any obligations as and when required by the
Note, the Loan Agreement, or this Deed of Trust, (ii) the failure at any time of any of Trustor's representations
and warranties made in connection with the Loan to be true and correct, or (iii) any action or omission by
Indemnitees in connection with this Deed of Trust, except to the extent any such Claim arises due to the
gross negligence or willful misconduct of Indemnitees.
9.7 Notices. Except for any notice required under applicable law to be given in another manner
(a) any notice to Trustor provided for in this Deed of Trust shall be given by mailing such notice by certified
mail directed to the Property Address or any other address Trustor designates by notice to Beneficiary as
provided herein; and, (b) any notice to Beneficiary shall be given by certified mail, return receipt requested,
to Beneficiary's mailing address stated herein or to such other address as Beneficiary may designate by
notice to Trustor as provided herein. Any notice provided for in this Deed of Trust shall deem to have been
given to Trustor or Beneficiary when given in the manner designated herein.
Beneficiary: City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Treasurer
Trustor: Borrower
Mailing Address
Dublin, CA 94568
9.8 Beneficiary Statement. Beneficiary may collect a fee for furnishing the beneficiary
statement in an amount not to exceed the amount as provided by Section 2943 of the Civil Code of California.
9.9 Governing Law. This Deed of Trust shall be governed by the laws of the State of California.
Exhibit 5 FTHMRDeed-of-Trust-2024
-11- Rev 812024
93
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.
TRUSTOR
Borrower
SIGNATURES MUST BE NOTARIZED.
Exhibit 5_FTHMR_Deed-of-Trust-2024 -12- Rev 812024
94
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
NOTARY ACKNOWLEDGMENT
[Insert Here]
Exhibit 5 FTHMRDeed-of-Trust-2024
-13- Rev 812024
95
Attachment 2
EXHIBIT 5. DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING, AND SECURITY
AGREEMENT
Exhibit A: LEGAL DESCRIPTION
[Insert here]
Exhibit 5 FTHMRDeed-of-Trust-2024
-14- Rev 812024
96
Attachment 2
EXHIBIT 6. SECURED PROMISSORY NOTE
NOTICE TO BORROWER: THIS DOCUMENT CONTAINS PROVISIONS RESTRICTING USE OF THE
PROPERTY, REFINANCING, AND ASSUMPTIONS
SECURED PROMISSORY NOTE
City of Dublin First -Time Homebuyer Program
(Market Rate Units)
Loan No.: ##
Loan Amount: $00,000
Together with Excess Sale Proceeds
and Equity Share
Borrower
Property Address
Dublin, CA 94568
Date: Date
FOR VALUE RECEIVED, the undersigned, Borrower(s) (collectively, "Borrower") promises to pay
to THE CITY OF DUBLIN, a municipal corporation ("Lender") at 100 Civic Plaza, Dublin, California 94568, or
such other place as Lender may from time to time designate by written notice to Borrower, in lawful money
of the United States, the principal sum of amount dollars ($00,000) together with the greater of Interest or
Equity Share, each as defined below. This Secured Promissory Note (this "Note") is secured by that certain
Deed of Trust, Assignment of Rents, Fixture Filing and Security Agreement (the "Deed of Trust") dated as of
the date hereof, executed by Borrower and recorded against the Property (defined below) in the Official
Records of Alameda County. In addition to securing Borrower's obligation to repay the sums payable
pursuant to this Note, the Deed of Trust secures Borrower's obligations set forth in that certain Loan and
Equity Share Agreement ("Loan Agreement") dated as of the date hereof, executed by Borrower and Lender,
and recorded against the Property.
1. Purpose of Loan. Borrower is purchasing the residential real property located at Property Address
in the City of Dublin, Alameda County, California (the "Property") as more particularly described in Exhibit A
of the Deed of Trust. Lender has provided a loan in the principal amount of this Note (the "Loan") to Borrower
pursuant to Lender's First -Time Homebuyer Program. This Note evidences Borrower's obligation to pay to
Lender: (i) the principal sum of this Note, and (ii) the greater of Interest or the Equity Share determined
pursuant to Section 3 of this Note.
2. Loan Repayment. The entire outstanding principal balance of this Note, together with the greater of
Interest or Equity Share, and all other sums due hereunder, shall be due and payable in full in one lump sum
upon the date (the "Due Date") which is the earliest to occur of: (i) the thirtieth (30th) anniversary of the date
of this Note, (ii) the sale, transfer, lease or encumbrance of all or any interest in the Property (other than as
permitted pursuant to the Deed of Trust and the Loan Agreement), (iii) the refinancing or repayment in full of
any senior mortgage secured by the Property, or (iv) the occurrence of an Event of Default.
Exhibit 6_FTHMR_Promissory_Note-2024 -1- Rev 812024
97
Attachment 2
EXHIBIT 6. SECURED PROMISSORY NOTE
3. Equity Share and Interest. On the Due Date (as defined in Section 2), in addition to repaying the
principal amount of this Note, Borrower shall pay the greater of: (i) simple interest accruing on the outstanding
principal balance of the Loan at the rate of three percent (3%) per year commencing upon the date of this
Note until paid in full ("Interest"); or (ii) an equity share calculated in accordance with the formula set forth
below (the "Equity Share"). Interest for any partial year during the term of this Note shall be calculated on
the basis of a 365-day year. The Equity Share shall be considered contingent interest on the principal due
hereunder.
The Equity Share shall be equal to the sum resulting from dividing the original principal amount of
the Loan by the Original Purchase Price and then multiplying that percentage by the Appreciation Amount.
"Original Purchase Price" means the purchase price paid by Borrower to purchase the
Property. The parties agree that the Original Purchase Price equals the sum of amount dollars
($000,000).
"Fair Market Value" means the greater of: (a) the contract sale price or the actual price paid
for the Property (whichever is greater) by a bona fide third party purchaser in an arms length
transaction, or (b) the fair market value of the Property as determined by an appraiser certified and
licensed by the State of California, selected by Borrower and approved by Lender.
"Appreciation Amount" means the amount calculated by subtracting the Original Purchase
Price and the Cost of Eligible Capital Improvements (as defined in Section 5.1 of the Loan
Agreement) from the Fair Market Value.
As an illustration, if the Original Purchase Price was $400,000 and the principal amount of the Loan
was $40,000, then the percentage of appreciation that the Borrower would owe would be $400,000
divided by $40,000 = 10%. If upon resale the Fair Market Value of the Property is $600,000 and the
Cost of Eligible Capital Improvements is $25,000, then the Appreciation Amount would be $600,000
minus $25,000 minus $400,000 = $175,000. The Equity Share payable by the Borrower would 10%
of $175,000 = $17,500.
4. Due on Sale; Restrictions on Refinancing and Assumption. This Note is payable in full upon sale
or refinancing of the Property, and may not be assumed except under the limited circumstances set forth in
Section 6.9 of the Deed of Trust.
5. Events of Default; Acceleration of Payment. An Event of Default permitting Lender to declare all
sums payable hereunder immediately due and payable and to exercise all remedies available to Lender
pursuant to the Loan Agreement and the Deed of Trust shall arise upon the occurrence of any of the following:
(a) Borrower fails to use the Property as Borrower's Principal Residence in accordance with the
Loan Agreement;
(b) The sale, conveyance, or transfer of the Property (including a sale under a deed of trust in
the event of foreclosure) if following such sale, conveyance or transfer, Borrower's remaining
ownership interest in the Property is less than fifty percent (50%) except as permitted
pursuant to Section 6.9 of the Deed of Trust;
Exhibit 6_FTHMR_Promissory_Note-2024 -2- Rev 812024
98
Attachment 2
EXHIBIT 6. SECURED PROMISSORY NOTE
(c) An event of default arises under any other loan secured by the Property and such default
remains uncured following the expiration of any applicable cure period;
(d) Borrower refinances the Property in violation of the Loan Agreement;
(e) Borrower fails to pay when due any sum payable pursuant to this Note and such failure
remains uncured fifteen (15) days beyond the due date for such payment; or
(f)
An Event of Default arises under the Deed of Trust or the Loan Agreement and remains
uncured beyond any applicable cure period.
6. Default Rate of Interest. Upon the occurrence of an Event of Default, the interest rate payable
hereunder shall increase to the rate of ten percent (10%) per annum commencing upon the date of such
Event of Default.
7. Application of Payments. All payments received on account of this Note shall be applied first to
accrued Interest or the Equity Share, as applicable, and the remainder shall be applied to the reduction of
principal.
8. Attorney's Fees. Borrower agrees to pay all costs and expenses, including reasonable attorney's
fees, which Lender may incur in the collection or enforcement of this Note, whether or not suit is filed.
9. No Offset; Borrower's Waivers. Borrower hereby waives any rights of offset it now has or may
hereafter have against Lender, its successors and assigns, and agrees to make the payments called for
hereunder in accordance with the terms of this Note. Borrower hereby waives diligence, presentment, protest,
and demand, and notice of protest, notice of dishonor and notice of nonpayment of this Note, and expressly
waives any rights to be released by reason of any extension of time or change in terms of payment, or change,
alteration or release of any security given for the payments hereof, and expressly waives the right to plead
any and all statutes of limitation as a defense to any demand on this Note.
10. Notices. Except as may be otherwise specified herein, any approval, notice, direction, consent,
request or other action by the Lender shall be in writing and shall be communicated to the Borrower at the
address of the Property, or at such other place or places as the Borrower shall designate to the Lender in
writing, from time to time, for the receipt of communications from the Lender. Mailed notices shall be deemed
delivered and received five (5) working days after deposit in the United States mail in accordance with this
provision.
Lender: City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: City Treasurer
Borrower: Borrower
Mailing Address
Dublin, CA 94568
Exhibit 6_FTHMR_Promissory_Note-2024 -3- Rev 812024
99
Attachment 2
EXHIBIT 6. SECURED PROMISSORY NOTE
11. Prepayment. Borrower may prepay this Note in full at any time without premium or penalty, so long
as Borrower pays the entire outstanding principal balance together with the greater of accrued Interest or the
Equity Share as determined pursuant to Section 3 and all other sums payable hereunder.
12. Governing Law. This Note shall be construed in accordance with and be governed by the laws of
the State of California.
13. Severability. If any provision of this Note shall be held by a court of competent jurisdiction to be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
14. No Waiver by Lender; Remedies Cumulative. No waiver of any breach, default or failure of
condition under the Note, the Loan Agreement, or the Deed of Trust shall be implied from Lender's failure or
delay in declaring a default or exercising any of Lender's rights or remedies with respect to such breach,
default or failure, or from any previous waiver of any similar or unrelated breach, default or failure, nor shall
acceptance by Lender of any payment hereunder constitute a waiver of Lender's right to require prompt
payment of any remaining amounts owed. Without limiting the generality of the foregoing, Lender's failure
or delay in declaring any amount due hereunder shall not constitute a waiver of Lender's right to declare such
sum due for the same or any subsequent event that triggers Borrower's payment obligations hereunder. Any
waiver of any term or provision of the Note, the Loan Agreement, or the Deed of Trust, or any of the
obligations secured thereby must be made in writing and shall be limited to the express written terms of such
waiver. The rights and remedies of the parties hereunder are cumulative, and the exercise or failure to
exercise one or more of such rights or remedies by either party shall not preclude the exercise by it, at the
same time or different times, of any right or remedy for the same default or any other default.
15. Joint and Several Obligations. If this Note is executed by more than one person as Borrower, the
obligations of each shall be joint and several.
16. Assignment by Lender; Successors and Assigns. Lender may assign its rights to receive the
proceeds under this Note to any person or entity, and upon notice to Borrower of such assignment, all
payments shall be made to the assignee. The promises and agreements herein contained shall bind and
inure to the benefit of, as applicable, the respective heirs, executors, administrators, successors and assigns
of the parties; provided however, Borrower may not assign this Note without Lender's written consent except
in accordance with the Loan Agreement and the Deed of Trust.
17. Entire Agreement; Amendments in Writing. This Note, together with the Loan Agreement and the
Deed of Trust sets forth the entire understanding and agreement of Borrower and Lender with respect to the
subject matter hereof. Any amendment to this Note must be in writing signed by both Lender and Borrower.
18. Nonliability for Negligence, Loss or Damage. Borrower acknowledges and agrees that the
relationship between Borrower and Lender is solely that of borrower and lender, and that Lender neither
undertakes nor assumes any responsibility for or duty to Borrower to select, review, inspect, supervise, pass
judgment on or inform Borrower of the quality, adequacy or suitability of the Property or any other matter.
Lender owes no duty of care to protect Borrower against negligent, faulty, inadequate or defective building
or construction, or any condition of the Property, and Borrower agrees that neither Borrower nor any of
Borrower's heirs, successors or assigns shall ever claim, have or assert any right or action against Lender
for any loss, damage or other matter arising out of or resulting from any condition of the Property.
Exhibit 6_FTHMR_Promissory_Note-2024 -4- Rev 812024
100
EXHIBIT 6. SECURED PROMISSORY NOTE
Attachment 2
Executed as of the date first written above.
BORROWER
Borrower
Exhibit 6_FTHMR_Promissory_Note-2024 -5- Rev 812024
101
Attachment 3
CITY OF DUBLIN
First Time Homebuyer Loan Program Guidelines
September 32, 2o2 4
102
INTENTIONALLY LEFT BLANK
103
TABLE OF CONTENTS
1 INTRODUCTION 1
2 DEFINITION OF TERMS
LOAN TERMS 7
3.1 Overview of Loan Terms
7
3.2 Financing Requirements 8
3.2.1 Acceptable Primary Loan Products 8
3.2.2 Prohibited Primary Loan Products and Unacceptable Mortgage Features
3.2.3 Down Payment
3.3 Property Inspection Reports
3.4 Recorded Loan Documents
3.4.1 Loan Documents for Below Market Rate Homes
�.4.2 Loan Documents for Market Rate Homes
3.5 Equity Share
3.5.1 Below Market Rate Units
3.5.2 Market Rate Units
4 HOUSEHOLD QUALIFICATIONS
4.1 Household Qualifications
4.2 Description of Qualification Requirements
4.2.1 Household Income
4.2.2 Credit Score
4.2.3 Homebuyer Education Program
4.2.4 Debt to Income Ratio
4.2.5 Preference Points
PROCEDURES
5.1 Loan Application, Approval, and Funding Procedures
5.2 Pre -Qualification
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TABLE OF CONTENTS
5.3 BMR Unit Refinancing
5.4 Loan Payoffs
6 EXCEPTIONS
EXHIBITS
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Exhibit 1 Sample Loan, Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (for loans on
Below Market Rate homes)
Exhibit 2 Sample Deed of Trust, Assignment of Rents, Fixture Filing, and Security Agreement (for loans on Below Market
Rate homes)
Exhibit 3 Sample Secured Promissory Note (for loans on Below Market Rate homes)
Exhibit 4 Sample Loan and Equity Share Agreement (for loans on Market Rate homes)
Exhibit 5 Sample Deed of Trust, Assignment of Rents, Fixture Filing and Security Agreement (for loans on Market Rate
homes)
Exhibit 6 Sample Secured Promissory Note (for loans on Market Rate homes)
LIST OF TABLES
Table 1. Loan Terms and Requirements
Table 2. Applicant Household Qualifications
Table 3. Program Income Limits by Household Size (zo14)
Table 4. Annual Income Calculations by Pay Frequency
Table 5. Preference Points
LIST OF FIGURES
Figure 1. Loan Application Process
Figure 2. Loan Payoff Process
Figure 3. Exception Request Procedure
LIST OF EXAMPLES
Example 1. Equity Share Calculation
Example 2. Determining Income with Assets
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1 INTRODUCTION
The City of Dublin (City) First Time Homebuyer Loan Program (Program, FTHLP) provides financial assistance,
in the form of a deferred loan, to income -qualified first time buyers who wish to buy a home in the City.
These FTHLP Guidelines (Guidelines) describe loan terms, eligibility requirements, and procedures. Users of
these Guidelines are encouraged to seek their own legal counsel to aid in understanding the requirements of the
FTHLP. For any general questions regarding the Program or these Guidelines, users may call the City's Housing
Division at (925) 833-6610.
The effective date of these Guidelines is SeptemberSeptember 32, 2024-4. The City will review and, to the extent
necessary, update these Guidelines annually. The City Manager may approve minor revisions, interpretations, or
clarifications to these Guidelines. Any such revision, interpretation, or clarification shall become effective when
posted on the City's website.
Non -Discrimination
All persons have the right to file a written application for a mortgage loan. An eligible Borrower is a person (or
persons) who is obligated to the repayment of a loan by the signing of the note. Loans to corporations,
partnerships, or syndications are not acceptable.
We doThe City does not discriminate in granting or denying loans or in setting terms and conditions of a loan,
with regard to race, color, age, religion, gender, marital status, sexual orientation, national origin, or ancestry of
the Applicant; nor with regard to the racial or ethnic composition of the neighborhood, geographic areas
surrounding the property or with regard to income derived from any public assistance program.
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2 DEFINITION OF TERMS
As used in these Guidelines, the following terms shall be defined as follows:
Administration Fees:
• A $1,500 fee charged by the City to the loan recipientThe City Council shall, by resolution, establish a fee
charged by the City to the loan recipient for the for the underwriting, processing, and serving of the
approved loan_
.-A reimbursement fee charged by the City to the Applicant at the time of application for a credit report.
The fee amount varies based on actual cost.
• Fees -may -be -adjusted from time to time by the City.
Fees may be adjusted from time to time by the City.
Applicant: A household that has submitted an application for a loan under the City's First Time Homebuyer Loan
Program.
Area Median Income (AMI): The Area Median Income adjusted for household size as published annually for
Alameda County by the California Department of Housing and Community Development (HCD).
Below Market Rate (BMR) Units: A Below Market Rate or BMR Unit is a unit that is reserved for sale to Llow-
or Moderate -Income households. BMR Units have restrictions recorded against them to ensure they remain
affordable for a set period of time. For additional information regarding BMR Units in the City, refer to the
Guidelines to the Inclusionary Zoning Regulations Ordinance.
Borrower: A household that has been approved for or has received an FTHLP loan.
Ca1HFA: The California Housing Finance Agency.
City: The City of Dublin.
City Council: The legislative body of the City of Dublin.
City Staff: An employee or designee of the City of Dublin responsible for actions related to the Program or these
Guidelines.
First Time Homebuyer: A person who has not owned any interest in real property during the three-year period
prior to the date of the household's loan application, including without limitation, real property in which a
household member's name appears on the title regardless of whether the member's interest in such property
results in a financial gain, such property is located in another state or country, or the member has occupied such
property as his or her primary residence. If any person has had his or her name on the title of a property, but the
property was sold more than three years ago from the date of application, the person is considered a First Time
Homebuyer.
Gross Household Income: All income, from whatever source derived, of all adult household members (18 years
of age and older), whether or not such income is exempt from federal income tax. Refer to Section 4.2.1 for a list
of income sources and exceptions.
Guidelines: These First Time Homebuyer Loan Program Guidelines.
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2 DEFINITION OF TERMS
HCD: The California Department of Housing and Community Development.
HOA: Homeowners Association.
Homebuyer Class: A United States Department of Housing and Urban DevelopmentHUD, Fannie Mae, or City -
approved course designed to provide basic education for First Time Homebuyers. Refer to the City's website
(https://www.dublin.ca.gov/housing/educationO for organizations that may offer this course. The date on the
completion certificate for the class must be within six months of the date of application for a Loan.
Housing Expenses: Principal, interest, private mortgage insurance, taxes, insurances, and HOA dues.
HUD: The United States Department of Housing and Urban Development.
Immediate Family Member: A mother, father, brother, sister, child, grandparent, or grandchild.
Legal Resident: A citizen or other national of the United States or a qualified alien as defined by the Federal
Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
Loan Committee: The Loan Committee is appointed from time to time by the City Manager and generally
consists of senior staff from the City's Community Development and Finance Departments as well as a
representative from the City Manager's office. The Loan Committee reviews loan applications and approves,
conditionally approves, or denies loan applications. Decisions require a two-thirds vote.
Low Income: Total Household Income that is 51% to 80% of Area Median Income (AMI), adjusted for actual
household size.
Maximum Income: The Maximum Income for the Moderate Income category determined periodically by HCD
based on AMI. See Section 4.2.1 of these Guidelines for Maximum Incomes.
Moderate Income: Total Household Income that is 81 % to 120% of AMI, adjusted for actual household size.
Preference Points: Points assigned to persons employed in the City of Dublin, public service employees working
for a public agency within the City of Dublin, Dublin residents, Seniors (62+), Veterans, persons who are
permanently disabled (with written verification from a physician or show receipt of Supplemental Security
Income or Social Security Disability Insurance (SSDI)), persons who are Immediate Family Members of a
Dublin resident, and persons who are required to relocate from a Dublin residence due to demolition of the
residence or conversion of the residence from a rental to an ownership unit, and persons who are buying a
foreclosed or R al Estate Owned (REO) home. Persons with Preference Points are given priority over other
Qualified Households in the disbursement of loan funds.
Principal Residence: The place where a person resides on a substantially full-time basis during not less than 10
months per year. Children attending college and not living at home as their Principal Residence may not be
counted as a household member.
Program: Activities related to the City of Dublin First Time Homebuyer Loan Program.
Qualified Household: A "Qualified Household" means an Applicant household that satisfies the requirements
listed in Section 4 of these Guidelines.
Senior: A person 62 years of age or older for the purpose of qualifying for Preference Points.
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2 DEFINITION OF TERMS
Total Household Income: All Gross Household Income and assets received (as calculated pursuant to Section
4.2.1).
Veteran: A person who served in the active military, naval, or air service and who was discharged or released
therefrom under conditions other than dishonorable, for the purpose of qualifying for Preference Points.
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3 LOAN TERMS
3.1 Overview of Loan Terms
The terms, requirements, and conditions for loans approved through the FTHLP are outlined in Table 1 and
described further below.
Table 1. Loan Terms and Requirements
Term or Requirement
Below Market Rate Homes
Market Rate Homes
Loan Amount
Up to 201-5%ofthe purchase price, with a
maximum of sioo4e,000.
Up to zIo%ofthe home purchase price,
with a maximum of siooife,000.
Interest Rate
3 5%, simple interest
Loan Term
3o year, deferred payment
Repayment
Repayment of principal and interest is due
upon the sale of the property, upon the
formal filing and recording of a notice of
default, or the expiration of the loan term
(whichever is earliest).
Repayment of principal and interest or
equity share is due upon the sale of the
property, payoff, or refinance of the first
mortgage, upon the formal filing and
recording of a notice of default, or the
expiration of the loan term (whichever is
earliest).
Equity Share
Loans on BMR homes are subject to an
equity share provision only upon the first
sale of the home following the expiration of
the restricted affordability period.
Upon the events described in "Repayment"
above, Borrowers of loans for market rate
properties are subject to a payment of
either accrued interest or equity share,
whichever is greater. See Section 3.5 for a
description of equity share.
Prepayment
Borrower(s) may prepay the Loan at any time without penalty (provided that the payment
covers the principal as well as the accrued interest or equity share).
Acceptable Primary
Mortgages
See Section 3.2.
Position on Title/Layered
Financing
The City must be in second position on title, behind
the borrower is also using other similar County,
only a primary mortgage, except when
State, or governmental programs, such as
the Alameda County AC Boost, CaIHFA, etc., that require a second position on title, at
which time the City may subordinate in a third or fourth position on title. —Borrowers may
utilize other assistance loans other than those listed above, but they must be subordinate
to the City's FTHLP loan.
Co -Signatories (not
allowed)
The loan shall contain no co -signatories. Only the approved Borrower's name(s) may be on
the deed.
Fees
Applicants are subject to the following fees:
Flee for a credit check, due at the time of application
cost).
Fee- established by City Council resolution for
(reimbursement, based on actual
servicing, due upon close of escrow.
$1,50o fcc for loan
underwriting, processing, and
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3 LOAN TERMS
Use of Loan Funds
Loan funds may be used for down payment assistance and to pay for non -recurring closing
costs associated with the home purchase. Loans may not be used for repairs, room
additions, or non_ real property purchases.
Property Eligibility
Properties must be located in the City of Dublin and may be a single-family home,
condominium, or a manufactured home (subject to secondary market eligibility
requirements).
Inspection Reports
The Applicant must provide home and pest inspection reports (see Section 3.3).
3.2 Financing Requirements
All Applicants must be able to secure a primary home loan through a lending institution. Applicants may use a
lender of their choice, provided that the lender adheres to the City's Guidelines for acceptable loan products.
Applicants must provide a pre -approval letter, truth in lending statement, and good faith estimate from their
chosen lender at the time of application for a FTHLP loan.
3.2.1 Acceptable Primary Loan Products
The City reserves the right to deny a loan or reject loan products for primary loans if the City believes in its sole
discretion that there is a stronger likelihood that the loan product would potentially result in loss of loan funds due
to the purchasers' inability to comply with the terms of the loan.
Following is a nonexclusive list of the loan products that are generally acceptable to the City. The list is not
intended to be exhaustive, and other loan products may be evaluated upon request.
Acceptable Primary Mortgage Loan Products
• Fixed mortgages up to 3010 _years
• Maximum 100% combined loan to value
3.2.2 Prohibited Primary Loan Products and Unacceptable Mortgage Features
The following loan products and mortgage features are generally unacceptable to the City:
• Interest -only loans
• Negative amortizing loans
• Adjustable rate loans
• Balloon payment loans
• Lines of credit that exceed the resale price of the unit
• Stated income loans
• Excessive points and fees (more than what is typical of the market at the time)
3.2.3 Down Payment
The Borrower is required to make a minimum down payment of at least 34% of the sales price. Funds must be
placed into escrow prior to the close of escrow and must come from acceptable sources and be verified and
properly documented per Federal Housing Administration guidelines.
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3.3 Property Inspection Reports
The Applicant must obtain and provide pest inspection and home inspection reports for the property from licensed
professionals. The pest inspection report must confirm that the structure is sound and any noted pest infestations
must be resolved as recommended in the report. The home inspection report must cover all major systems,
including, but not limited to, electrical, plumbing, -aid drainage, as well as the foundation, paint, and appliances.
Reports should be provided to the City as early as possible during the escrow period to ensure funding and a
timely close of escrow.
3.4 Recorded Loan Documents
The City will prepare and the Borrower will sign a set of documents that describe agreed -upon loan terms and
ongoing Program requirements. These documents will be executed at the close of escrow and recorded on the
property's title. City Staff will discuss the basic provisions of these documents with the Borrower(s) at the in -
person consultation prior to the close of escrow; however, Borrowers should review these documents thoroughly
prior to signing.
3.4.1 Loan Documents for Below Market Rate Homes
Sample loan documents for FTHLP loans on BMR Units are provided in Exhibits 1, 2, and 3. Documents include
the Loan, Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (Exhibit 1), Deed
of Trust, Assignment of Rents, Fixture Filing and Security Agreement (Exhibit 2), and Secured Promissory Note
(Exhibit 3). BMR Units are also subject to the provisions described in the Guidelines to the Inclusionary Zoning
Regulations Ordinance.
3.4.2 Loan Documents for Market Rate Homes
Sample loan documents for FTHLP loans on market rate units are provided in Exhibits 4, 5, and 6. Documents
include the Loan and Equity Share Agreement (Exhibit 4), Deed of Trust, Assignment of Rents, Fixture Filing
and Security Agreement (Exhibit 5), and Secured Promissory Note (Exhibit 6).
3.5 Equity Share
3.5.1 Below Market Rate Units
BMR Units are not subject to an equity share provision upon resale or prepayment or in the occurrence of default;
however, BMR Units must pay an equity share to the City upon the first sale of the property following the
expiration of the restricted resale period. This requirement is described in the Guidelines to the Inclusionary
Zoning Regulations Ordinance and in the Loan, Occupancy, Refinancing, and Resale Restriction Agreement with
Option to Purchase (Exhibit 1).
3.5.2 Market Rate Units
Upon the sale of the property, repayment of the loan (due to a refinance or as an optional prepayment), or the
occurrence of any default event, the Borrower must pay the City the loan principal as well as the greater of the
accrued simple interest or an equity share. The equity share is based on the amount of the FTHLP loan in
proportion to the value of the property and the amount by which the property has increased in value, based on an
appraisal or resale purchase contract. The calculation is described in detail in the Loan and Equity Share
Agreement in Exhibit 4 and demonstrated in a sample calculation in Example 1.
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Example 1. Equity Share Calculation
The Borrower purchased a property for $z400,000 and the City provided an FTHLP loan of smo,000. The loan amount
($z4o,000) is equivalent to io% of the sale price.
The Borrower sells the property zo years later for $3. 3.600,000. The property has appreciated by $42oo,000 ($1a600,000
- smoo,000 = $42oo,000).
The City portion of the increased value is io%, which equals s 2o,000 ($42oo,000 X io% = $42o,000).
If the s 2o,000 City share is greater than the accrued simple interest on the loan, the Borrower would owe the City a
total of sii6o,000 ($zko,000 in principal and $42o,000 in equity share).
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4.2 Household Qualifications
A household must meet the requirements stated in Table 2 to qualify for a Loan. Section 4.2 provides additional
detail on certain requirements.
Table 2. Applicant Household Qualifications
Qualification Requirement
Description
Income
The household's Total Household Income must not exceed the income limit
set forth in Section 4.2.1.
Assets
The household may have no more than $25o,000 in total assets, excluding
pensions and federally approved pre-tax savings accounts.
First -Time Homebuyer
No member of the household may have owned any interest in real property
during the three-year period prior to the household's BMR Unit application
date.
Owner Occupancy
The household will occupy the unit as its Principal Residence within 63o days
of the close of escrow on the unit.
Homebuyer Education
All title holders of the property must take a HUD or Fannie Mae -approved or
City -approved First Time Homebuyer class and receive a certificate of
The be dated
completion. certificate of completion must within six months
one year of the date of application.
Credit
All Applicants have a minimum FICO credit score of 62o (see Section 4.2.2)
and must not have filed for bankruptcy in the last three years. Persons with
records of deeds -in -lieu of foreclosure or judicial or non -judicial foreclosure
are subject to a seven-year waiting period before they may be considered for
an FTHLP loan.
Residency/Citizenship
All household members must be either a citizen or national of the United
States or a qualified alien defined by the federal Personal Responsibility and
Work Opportunity Reconciliation Act of 1996.
Loan Preapproval
Homebuyers must be preapproved for a home loan that conforms to the
requirements established in Section 3.2.
Debt to Income Ratio
Homebuyers' proposed debt (based on current liabilities and proposed
housing payment) may not exceed 45% of the household's monthly income
(see Section 4.2.4).
Applicant households may request exceptions to qualification requirements. Procedures for exception requests are
described in Section 6.
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4.2 Description of Qualification Requirements
4.2.1 Household Income
4.2.2.2 Maximum Total Household Income
To be eligible for a FTHLP loan, the Applicant's Total Household Income must not exceed the current Moderate -
Income limit. Total Household Income means the household's Gross Household Income (see Section 4.2.1.2)
plus assets calculated pursuant to Section 4.2.1.4. Maximum Income is determined annually by HCD based on
Area Median Income. Table 3 shows the Maximum Income limitss for Alameda County for 2024-4.
Table 3. Program Income Limits by Household Size (202ir4)
Household Size
Income Limit
1 person
$130,80078,550
2 persons
$149,50089,750
3 persons
$i68,itoioi,000
4 persons
$186,850112,200
5 persons
s201,800121,200
6 persons
$216,75o13045o
7 persons
$231,700139,150
8 persons
$246,650148,1oo
Source: HCD State Income Limits for Moderate -Income Households, 20214
4.2.1.2 Gross Household Income
Gross Household Income means all income from all adult household members (18 years of age and older) derived
from all sources as provided in the Internal Revenue Code (Title 26, Subtitle A, Chapter 1, Subchapter B, Part I,
Section 61), whether or not such income is exempt from federal income tax. Such income includes, but is not
limited to, the following:
• Compensation received from an employer. Compensation includes, but is not limited to, salary, overtime
pay, and other pay
• Other pay can include, but is not limited to, compensation for special working conditions or one-time pay-
out of unused vacation and sick leave
• Alimony, spousal, and child support
• Cash
• Pensions, if at an age where pension is being received as income
• Public benefits including, but not limited to, CalWorks, Social Security Income, and disability income
• All interest, dividends, and royalties
• Income derived from private businesses
• Rental income
• Income from pensions
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• Compensation for services rendered including fees, fringe benefits, commissions, tips, and bonuses
• Stipend received for participation in a mentor, learning, or education opportunity
• Gains from dealings in private and/or commercial property
• Gambling winnings
• Annuities, life insurance, and endowment contracts
• Income from discharge of indebtedness
• Gross partnership contributions or distributions
• Income from an interest in an estate or trust
For purposes of determining Gross Household Income, each person 18 years of age or older must present all of
the following:
• A complete set of federal and state income tax returns for the past three years, including all schedules
(signed and dated) and W-2 forms (in the case where taxes have not been filed for any of the past three
years, a letter of verification of non -filing from the Internal Revenue Service is required).
• Four most recent and consecutive pay stubs.
• Three recent and consecutive statements for all financial accounts, including, but not limited to, savings
accounts, checking accounts, retirement accounts, 401(kK) accounts, stock accounts, and another other
accounts held in the Applicant(s) name(s), whether held individually or together.
If a household member is self-employed, in addition to the information above, the member must submit profit and
loss statements for the past three years (if applicable), and a current profit and loss statement for the year.
Exceptions:
1. Gross Household Income does not include income earned by a household member who is between the ages of
18 and 26 and meets both of the following criteria:
• Is claimed as a dependent of a household member on such member's federal income taxes.
• Is a full-time student (12+ units; school transcript must be provided).
2. Gross Household Income does not include payments to a household member from a governmental fund if all
of the following requirements are satisfied:
• The payments are based on the recipient's or the recipient's family's financial need.
• The payments do not represent compensation for services rendered.
• The payments are part of a governmental housing subsidy program including, but not limited to, Housing
Choice Voucher (Section 8) federal housing assistance payments.
4.2.2.3 Income Calculation
a. Wage and Salary. If an Applicant is a full-time employee (usually 30 to 40 hours per week) or an employee
with consistent regular hours or income, or income with overtime or adjustments as a regular part of their job,
one of the formulas listed in Table 4 will be used to determine the Applicant's salary. Bonuses, commissions,
and limited overtime may be calculated into the annual income calculation. In the case of unclear income or
income that is somewhat difficult to calculate, please contact the City. The City will make the final
determination as to which income calculation formula to use.
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Table 4. Annual Income Calculations by Pay Frequency
Pay Frequency
Annual Income Calculation
Monthly
Monthly income amount X 12
Twice Monthly
Twice monthly income amount x 24
Biweekly
Biweekly income amount x 26
Weekly
Weekly income amount x 52
Hourly
Hourly income x 4o (or whatever normal hours per week may be) x 52
b. Variable Income. For Applicants who are part-time employees or employees with variable hours every pay
period (or variable hours less than 40 hours per week), inconsistent income or hours, frequent overtime,
bonuses and commissions, etc., their annual salary will be calculated using year-to-date income, plus the
previous year's income (from same income source or employer), divided by the number of months reviewed
(UP TO BUT NOT EXCEEDING 12 MONTHS) times 12 to arrive at their annual income. If there is no
previous year income from the same employer, or the job was started mid -year, the current income year to
date using the calculation explained in (b) above will be used. If an Applicant works consistently 40 hours per
week and has occasional or regular overtime, the calculation listed in (b) above will be used to calculate
income.
c. Inconsistent or Temporary Change in Income Due to a Temporary Circumstance. If an Applicant has a
temporary situation (seven months or less) that makes income calculation difficult, a verification of
employment may be used to calculate the Applicant's income based on a normal annual time period. Or, the
income may be calculated based on the person's hourly rate times their normal working hours (as shown in
item (b) above).
d. Self -Employed or Non -Corporation. A self-employed Applicant is also considered to have variable income.
Gross annual income calculations will be based on the previous two years' net income shown on Schedule C
of the federal income tax returns, plus net income before taxes from the Applicant's signed, year-to-date
Profit and Loss Statement, divided by the appropriate number of months (NOT TO EXCEED 12 MONTHS)
times 12 to arrive at the annual income.
4.2.2.4 Assets
An asset test will be applied to all Applicants to determine whether they satisfy the income requirements. If an
Applicant has assets that exceed $30,000, the following amounts will be added to the Applicant's Gross
Household Income to determine the household's Total Household Income:
• 10% of all assets valued at between $30,001 and $130,000
• 30% of all assets valued over $130,000
The maximum assets allowed are $250,000. Households with assets in excess of $250,000 will be disqualified.
Assets include, but are not limited to, cash, all savings and checking accounts, stocks, bonds, real estate, gifts, and
other sources of money. Pensions and federally approved retirement savings accounts, such as IRAs, Roth IRAs,
and 401kICs, are excluded; however, retired Applicants who receive income from their retirement account must
include such income as Gross Household Income on their application. Example 2 illustrates the calculation for
determining income with assets.
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Example 2. Determining Income with Assets
Example 2.A A household of 3 earns sio5o,000 a year and has $i5o,000 in total household assets
$150,000 - $30,000 = $120,000 (which is less than s13o,o00)
io% of $120,000 = $12,000
New Total Household Income: sio5o,000 + $12,000 = $1162,000
Example 2.B A household of c3 earns sa5o,000 a year and has $200,00o in total household assets
$200,000 - $30,000 = $170,000 (which is more than $130,000)
io% of $130,000 = $13,000
30% of balance of $40,000 = $12,000
New Total Household Income: $150,000 + $13,000 + slz,000 = $i75,000
4.2.2 Credit Score
A credit check will be conducted on all adults (other than dependents) in the household. Applicants must have
sufficient creditworthiness to qualify. Creditworthiness means that:
1. All household individuals shall have a minimum of seven years since Chapter 7 or Chapter 13 bankruptcy
discharge date and/or foreclosure or short sale and evidence of reestablished credit is provided.
2. All persons appearing on the mortgage shall have a minimum FICO credit rating of 620 points from all
three credit agencies.
4.2.3 Homebuyer Education Program
Borrower(s) must successfully complete a HUD, Fannie Mae-, or City -approved First Time Homebuyer class
prior to the close of escrow and must provide the City with evidence of completion. The completion date must be
within six monthsone year of the proposed date of loan funding.
4.2.4 Debt to Income Ratio
Applicant(s) must have a debt to income ratio of no greater than 45%. This is determined by calculating the
Applicants' monthly debt obligations, including (but not limited to) estimated monthly housing expenses, car
payments, and other loan obligations and comparing it to the Applicants' monthly Household Income.
Student loan debt may be excluded from the monthly debt obligation calculation if the Applicant can provide
documentation that repayment of the loan is deferred for a period of at least three years from the application date.
4.2.5 Preference Points
The Preference Point system provides priority to certain households who are deemed to have a priority need for
housing in Dublin. Priority criteria are shown in Table 5. Loans may be approved for households who are not
eligible for any Preference Points.
Each household may only claim Preference Points vary based on category and do not distinguish between adults
and children. See Table 5 for details and requirements. If once for any given category. Even if two persons in the
household qualify for Preference Points for the same category, the maximum preference points for that category
would be two -points are only awarded for one person. For example, if a husband and wife are both employed in
Dublin, the couple receives only 23 Preference Points for being employed in Dublin. HowevertSimilarly, if two
Seniors make up a household, they would be entitled to only 1 Preference Point, as that category has a maximum
of one preference point for household.
First Time Homebuyer Loan Program Guidelines
15
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120
4 HOUSEHOLD QUALIFICATIONS
INTENTIONALLY LEFT BLANK
5eptember3, 2024
i6
First Time Homebuyer Loan Program Guidelines
121
4 HOUSEHOLD QUALIFICATIONS
Preference Points
Priority
Points
■ Proof Required
Employed in Dublin for at I ast 6
months
3 points
Copy of first and most recent pay stub establishing length of
mMaximum,
employment in Dublin;
one per
Letter from employer, on company Ietterh d, indicating
household
continuous employment for the past six months; or
member
If self-employed in Dublin, then the business must have a current
City business license for least 6 the time
at months at of
application.
Must have been employed within the City of Dublin for at least six
months.
Public service employee in
Dublin*
1 per
Copy of first and most recent pay stub establishing length of
household
employment; or
Copy of recent pay stub or (Letter from employer, on company
additional
letterhead, establishing public service in Dublinindicating
for the
continuous employment past six months; or
For a newly hired teacher at a state -accredited school, who will be
working in Dublin, a copy of employment contract; and
A letter from employer confirming employment and employer
contact information.
Has resided inResides in Dublin
3 points
Copy oftwe-utility bills (PG&E or water), onc from at I ast onc y ar
for at I ast one y ar
mMaximum,
bill both the Applicant
ago and onc most recent utility showing with
a Dublin address; or
Copy of a current rental agreement.
Must have been a resident of the City of Dublin for at least one-
one per
household
member
year.
Seniors (62 and over)
1 per
A valid state driver license; or
A valid state identification card (with photo); or
A valid passport.
household
Permanently disabled
1 per
Doctor's note confirming that Applicant is permanently disabled; or
Other verification from a state agency establishing permanent
disability status; or
Verification of receipt of SSI or SSDI.
household
Veteran
1 per
A military department record of service such as an original military
service record or certified copy. The document must contain the
length, time, and character of the service.
household
Has an immediate family member
1 per
Copy of utility bill (PG&E or water), showing the immediate family
who is a Dublin resident
household
member with a Dublin Address; or
Copy of the immediate family member's current rental agreement and
Copy of birth certificates for self and immediate family member,
establishing relationship; or
Other legal document establishing relationship.
First Time Homebuyer Loan Program Guidelines
17
September 3, 2024
122
4 HOUSEHOLD QUALIFICATIONS
Priority
Points
Proof Required
Must move because housing is to
be demolished or converted to
condo
1
Letter from apartment owner or management firm verifying the
imminent condominium conversion or demolition of the unit; and
Confirmation from the City's Community Development
Department.
Fared s df En Rn per-ty
I
A that the bank is the
sales contract showing selling property and
has the Applicant's
accepted purchase offer.
* A public service employee is a person who is employed by a public agency such as the City of Dublin, a firefighter or police officer assigned to work in
Dublin, BART, DSRSD, or USPS working in Dublin.
5eptember3, 2024
18
First Time Homebuyer Loan Program Guidelines
123
5 Procedures
5.1 Loan Application, Approval, and Funding
Procedures
The following are the general steps for qualifying for and
finalizing a loan (see Figure 1 for an overview):
1. Review qualification requirements. Potential
Applicants should review these Guidelines and
confirm that they meet established qualification
requirements (see Section 4).
2. Pre -qualify with a lender. Potential Applicants
should work with a lender of their choosing to get
pre -qualified to purchase a home. Potential
financing must meet the requirements described in
Section 3. This will be necessary for preparing a
complete application and will give the buyers a
clear understanding of the amount of money they
are eligible to borrow for a home purchase. The
City is available to speak with lenders to clarify
Program terms and requirements.
3. Homebuyer education. Potential Applicants must
complete a First Time Homebuyer Class (see
Section 4.2.3)
4. Execute a purchase contract. Potential
Applicants should work with a real estate agent to
find a desirable home for sale in the City. Homes
may be BMR Units (most available BMR Units
are listed on the City's website) or market rate
properties. Prepare an offer and execute a purchase
agreement on the home of your choosing.
5. Submit a FTHLP aApplication. Prepare and
submit a complete FTHLP application packet to
the City's Housing Division. Be sure to include
supporting documentation for income and asset
verification (contact City Staff or view the City's
website for an application package). The
application should be submitted at least four weeks
prior to the scheduled close of escrow.
6. City Staff/Loan Committee review and
qualification determination. The City will make
every effort to review the application and
qualification materials and determine eligibility
within 10 working days of receipt of a complete
Figure 1. Loan Application Process
1. Review qualification requirements (see Section
4)
2. Pre -qualify for a primary home loan (see
financing requirements in Section 3)
3. Complete a homebuyer education class
(see Section 4.2.3)
4. Choose a home in Dublin and execute a
purchase contract
5. Submit an FTHLP application
6. City review and qualification, within 10 days of
receipt of complete application
*,
7. If qualified, meet with the City
8. City provides escrow instructions and releases
funds and submits loan documents when
requirements are met
9. Borrower signs City documents at close of
escrow
1
First Time Homebuyer Loan Program Guidelines
19
September3, 2024
124
5 PROCEDURES
application. The application will be considered by City Staff in the Housing Division (to determine
application completeness and basic qualification) and the City's Loan Committee. If approved, the City
will send the Applicant a conditional approval letter. Applicants who are determined to be ineligible will
receive a denial letter.
7. In-persenBuyer consultation. All adult members of the approved Borrower household must schedule
and complete an in persona consultation with City Staff to discuss loan terms, restrictions, and ongoing
requirements. At the meeting, Borrowers will review and sign a truth in lending statement and a good
faith estimate.
8. Loan documents. Following completion of the consultation, City Staff will prepare escrow instructions
and submit them to the escrow officer. The instructions will describe the documentation the City will
need in order to prepare loan agreements and fund the loan. Documents will include (but may not be
limited to) a title report, home and pest inspection reports, an appraisal, and documents regarding the
primary loan.
9. Sign paperwork. Following receipt of required paperwork from the escrow company, the City will
prepare the appropriate loan documents for the Borrower to sign at closing (see Section 3.4). Once the
Borrower has signed, the paperwork will be delivered to the City for signature. The City will forward this
paperwork as well as a request for notice of default on the Borrower's primary loan to the escrow officer
for recordation.
10. Monitoring and correspondence. The Borrower must complete annual surveys to the City and should
contact City Staff with any questions. Any default on the signed agreements may result in the City calling
the loan due immediately. Borrowers must contact the City when contemplating a sale or refinance.
5.2 Pre -Qualification
The City will accept applications for preliminary review and pre -qualification. This review will confirm that the
Applicant meets the qualifications described in Section 4, with the exception of the debt -to -income ratio, which
cannot be determined until the City is provided with an estimate of monthly housing costs for a specific home.
Applications for pre -qualification are subject to costs to reimburse the City's direct cost to obtain a credit report.
Pre -qualification applications are reviewed by City Staff in the Housing Division but are not reviewed by the
Loan Committee. Following the review, City Staff will issue a letter of eligibility. Note that Program funding is
limited and a letter of eligibility does not guarantee that funds will be available to the Applicant if/when they are
requested.
5.3 BMR Unit Refinancing
BMR Unit Borrowers may keep the FTHLP loan intact through a refinance, provided that the new loan meets City
standards. BMR Unit Borrowers must notify the City of their intent to refinance and follow the refinance
procedures outlined in the Guidelines to the Inclusionary Zoning Regulations Ordinance.
September 3, 2024
20
First Time Homebuyer Loan Program Guidelines
125
5 PROCEDURES
5.4 Loan Payoffs
Market rate home Borrowers must pay off the FTHLP loan
in the event of a refinance or resale and have the option to
prepay the loan at any time. BMR Unit Borrowers must
pay off the FTHLP loan in the event of a resale and have
the option to pay off the loan during a refinance or may
choose to prepay the loan at any time. An overview of the
payoff process is outlined in Figure 2.
The following are the general steps for the loan payoff
process (see Figure 2 for an overview):
1. Provide notice and documentation. The
Borrower must provide the City with the
following:
a. A written notification of the Borrower's
intended action.
b. A current property appraisal or a resale
purchase contract.
Figure 2. Loan Payoff Process
1. Notify the City of your intended action
(refinance, resale, or prepayment) and required
information
2. The City prepares a payoff demand and
provides it to the escrow officer
t�
3. Repayment funds are disbursed to the City at
the close of the transaction
*.
4. The City releases loan -related restrictions from
the property
c. The name and contact information of the escrow officer managing the transaction, as well as an
escrow number.
2. City prepares payoff demand. The City will calculate the accrued interest and equity share, if
applicable, and prepare a payoff demand for the greater of the two. The equity share calculation is
described in Section 3.5. The City will provide a copy of the payoff demand to the Borrower and submit
the demand to the escrow officer.
3. Funds disbursed to the City. The escrow officer will disburse repayment funds to the City as stated in
the payoff demand upon the close of the transaction.
4. Release and reconveyance. The City will prepare appropriate documents to release the loan documents
(as described in Section 3.4) from the property.
First Time Homebuyer Loan Program Guidelines
21
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126
INTENTIONALLY LEFT BLANK
127
6 Exceptions
Any applicant believing that his/her situation warrants an
exception to any part of these Guidelines due to
circumstances outside of his/her household's control, such
as refugee status, special needs, or other hardships or
special circumstances, may request an exception by
submitting a written letter to the City prior to submitting
an application of any kind. The exception request
procedure is outlined in Figure 3.
The exception request must specify which particular
guideline or requirement the household cannot meet for
reasons beyond their control or other valid reasons, and/or
describe the household's unique circumstances which
warrant one or more specific exceptions to be identified in
the letter, referencing the page(s) and section(s) of these
Guidelines and/or application form related to the request.
Figure 3. Exception Request Procedure
1. Review requirements and regulations
2. Submit exceptions request letter to the City
_y
3. City Staff (Housing Division and/or Loan
Committee) review and response (within 10 days)
Exceptions related to disabilities (reasonable
accommodations) may be requested according to this procedure, with a brief description of the exception(s)
needed due to the Applicant's disability. Such requests will be handled in accordance with the City's reasonable
accommodations policy and these Guidelines.
Exceptions will be considered by City Staff, including authorized persons in the Housing Division and/or
members of the Loan Committee. The City will provide a letter response within 10 calendar days, stating whether
the requested exception can be granted in full or part and the reason for such decision.
First Time Homebuyer Loan Program Guidelines
23
September3, 2024
128
Attachment 4
CITY OF DUBLIN
FISCAL YEAR 2024-25
BUDGET CHANGE FORM
Budget Change Reference #:
City Council's Approval Required
From Un-Appropriated Reserves X
From Designated Reserves
Budget Transfer Between Funds
Other
DECREASE BUDGET AMOUNT
INCREASE BUDGET AMOUNT
Account
Amount
Account
Amount
Affordable Housing Fund - Housing - First Time
Homeowner Loans
29018100.66101
$180, 000
REASON FOR BUDGET CHANGE
Enhance the City's FTHLP by increasing the number of First Time Homebuyer Loan Program loans that the City can
provide. Funding will come from the Affordable Housing Fund Balance.
As Presented at the City Council Meeting
9/3/2024
129
Amendments to the First -Time
Homebuyer Loan Program Guidelines
City Council
September 3, 2024
DUBLIN
CALIFORNIA
130
Background
• 2006 City Council adopted the First Time
Homebuyer Loan Program (FTHLP)
• 200) Changed the interest rate from a
variable interest rate, to a fixed rate of
3.5%
• 201 I • Set maximum loan amount for
market rate at 10%, and below market
rate at 15% with a not to exceed loan
amount of $40,000
Background
• FTHLP provides deferred loan to income qualified
first-time homebuyers
— Household of Moderate Income (I2O%AMI) or below
— No principal or interest payment due
— Use to purchase market rate or below market rate unit
Background
City of Dublin Strategic Plan
• Strategy 3: Housing Inclusivity and Affordability
— Objective A: Implement the goals, policies and programs in the 2023-203 I Housing
Element
— Objective C: Support programs that facilitate homeownership such as the First Time
Homebuyer Loan Program
2023-2031 Housing Element
• Program E.7: Review FTHLP for opportunities to broaden use of the
program and to ensure compatibility with similar loan programs
Program Review
Loan History
• 67 loans issued totaling $2.4 million
• 28 loans repaid totaling $ I million
• 59 loans were for Below Market -Rate (BMR) properties
• 8 loans were for Market -Rate properties
Households Types
• 63 loans for moderate -income households
• 2 loans for low-income households
• 2 loans for very -low-income households
Program Review
• Program underutilized in recent years
—Historically low interest rates
— Increasing home prices
— Compatibility with other programs
• Uptick in activity in last fiscal year
— Coincides with increasing interest rates
FTHLP Peer Comparison
City
Interest
Rate
Loan Term in
years
Max Loan Amt
BMR Unit
(% of price)
Max Loan Amt
Market Rate Unit
(% of price)
Max Loan Amt
($)
Min Down
payment
(% of price)
Dublin
3.5%
30
15%
10%
$40,000
3.5%
Concord
0.0%
15
20%
20%
$40,000
3.0%
Livermore - BEGIN
3.0%
30
20%
20%
$30,000
3.0%
Livermore - CalHome
3.0%
30
20%
20%
$60,000
3.0%
Livermore -
Non-CalHome (MAP)
3.0%
20
20%
20%
$60,000
3.0%
Pleasanton
0.0%
30
20%
20%
$100,000
3.0%
Alameda County - AC
Boost
0.0%
30
10%
50%
$210,000
0.0%
Walnut Creek - not
BEGIN
0.0%
45
17%
17%
$65,000
3.0%
Walnut Creek - BEGIN
1.0%
30
20%
20%
Not specified
3.0%
Napa
1.0%
30
30%
30%
$150,000
1.0%
Average
1.4%
31
20%
20%
$ 83,000
2.8%
Recommendations for the FTHLP
• Lower the interest rate from 3.5% to 3%
• Lower the minimum downpayment from 3.5% to 3%
• Increase loan amount to 20% for market rate and BMR properties
• Increase the not -to -exceed loan amount from $40k to $ I OOk
• Allow the City loan position to be subordinated behind the primary
mortgage and other public downpayment assistance programs
• Minor edits and clarifications to the Guidelines
FTHLP Family of 2 Buyer Scenario
• Median Income —AMI of 100 • Moderate Income —AMI of 120
Family of 2 First Time Homebuyers
As o
8/14/202
Median income - Annual Income
$124,550
Assumes HOA Dues, Property Taxes and Homeowners
Insurance
30-year term at 6% interest
IBuyer puts 3% down and gets $100k in FTHLP funds
Maximum Home Purchase Price of $541,650
s of
Family of 2 First Time Homebuyers 8/14/2024
Moderate income - Annual Income
$149,500
Assumes HOA Dues, Property Taxes and
Homeowners Insurance
30-year term at 6% interest
v
Buyer puts 3% down and gets $100k in FTHLP funds
T
Maximum Home Purchase Price of $647,770
FTHLP Family of 4 Buyer Scenario
• Median Income —AMI of 100
As of
amity of irst Time Homebuyers 8/14/2024
Median Income - Annual Income
$155,700
Assumes HOA Dues, Property Taxes and Homeowners
Insurance
30-year term at 6% interest
I Buyer puts 3% down and gets $100k in FTHLP funds
Maximum Home Purchase Price of $674,140
• Moderate Income —AMI of 120
As of
amity of First Time Homebuyers 8/14/2024
Median Income - Annual Income
$186,850
Assumes HOA Dues, Property Taxes and
Homeowners Insurance
30-year term at 6% interest
I Buyer puts 3% down and gets $100k in FTHLP funds
Maximum Home Purchase Price of $806,600 1
1
139
Recommendation
Adopt the Resolution Amending the First Time Homebuyer Loan
Program Guidelines, and approve the budget change.
Questions
VM
DUBLIN
CALIFORNIA
141