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HomeMy WebLinkAbout0177C - CALIFORNIA HOUSING FINANCE AGENCY - SELF HELP PROGRAM Calif Hsng Fin Agency CHFA Subord Financing/Resale Restr 1st 10 homes Self-Help Pgrm CALIFORNIA HOUSING FINANCE AGENC AGREEMENT 177 LOCALITY/CHFA R532, 6-1-88 SUBORDINATE FINANCING/RESALE RESTRICTION This Locality/CHFA Subordinate Financing/Resale Restriction Agreement (the "CHFA Agreement") is made and entered into on 19_, by and between the California Housing Finance Agency (the "CHFA") a public instrumentality and a political subdivision of the State of California, and Cormimity Pe2svelocrmt Agency (the "Locality") . of the City of Palm So=as RECITALS A. CHFA intends to make a commitment to provide low-interest primary mortgage financing (the "CHFA Loan(s) ") to facilitate the acquisition by low- and moderate-income borrowers (the "Borrower(s) ") of single family homes located in Citv of Palm Sorincs , Riverside County, California and more particularly described as follows (the "Home(s) ") : DE�sert llicthland Estates Tract, lots 4163,168,179,190,191,197,210,267,270,272- a.k.a. Assessor's Bleck/Parcel 383-1,383-6 ,383-17,385--5 ,335-6,391-5,393-11, 301--6,381-19,381-9 B. The Locality intends to provide additional financial assistance for such acquisition and/or to impose certain restrictions on the transfer of ownership or possession of the Homes as provided in those certain documents attached hereto and incorporated herein by this reference (collectively the "Locality Documents") . C. In order to ensure that the Locality Documents do not (1) impose an excessively high risk of loan default on CHFA, or (2) frustrate CHFA's public purpose of helping the Borrower(s) acquire the benefits of home ownership, CHFA has required the Locality to give assurances that the Locality Documents are consistent with certain CHFA policies as set forth in that certain policy statement entitled "California Housing Finance Agency, Subordinate Lien and Resale Restriction Policy" attached hereto and incorporated herein by this reference (the "CHFA Policies") . D. The parties hereto intend to satisfy the aforementioned requirement of CHFA by entering into this CHFA Agreement. NOW, THEREFORE, the parties hereto agree as follows: 1. Locality Documents . The Locality represents and warrants that all of the financing documents and/or restrictions which will be imposed on the Borrowers or the Homes by the Locality in connection with the provision of its financial assistance are included in the documents described herein as the "Locality Documents. " 2 . Consistency with CHFA Policies. Locality represents and warrants that it has reviewed the CHFA Policies and that the Locality Documents are, or by this CHFA Agreement shall become, consistent with the CHFA U01333 -1- 3/9/88 R-2 Policies. Locality agrees that at all times it shall administer its rights under the Locality Documents in a manner which is consistent with the CHFA Policies. 3 . Amendment. The Locality Documents shall hereby be deemed to be amended to be consistent with the CHFA Policies to the extent that they are otherwise inconsistent therewith. Other than by this CHFA Agreement and the Locality/Borrower Agreement referred to in paragraph 5 below, the Locality Documents shall not be amended without the written consent of CHFA. 4 . Attorney Review. The Locality represents and warrants that it has employed an attorney to review the Locality Documents and CHFA Policies and that such attorney has signed the "Locality Attorney" provision below. 5. Locality/Borrower Agreement. The Locality represents and warrants that it has reviewed that certain agreement entitled "California Housing Finance Agency, Locality/Borrower, Subordinate financing/Resale Restriction Agreement" attached hereto and incorporated herein by this reference (the "Locality/Borrower Agreement") . The Locality shall implement this CHFA Agreement by entering into the Locality/Borrower Agreement with each Borrower prior to subjecting the Borrower or the Home to the Locality Documents. 6. Enforceability. This CHFA Agreement shall be for the benefit of and enforceable by any of the Borrower(s) , and shall bind and benefit the parties hereto, and their respective successors and assigns. 7 . Attorney Fees. In any proceeding to enforce this CHFA Agreement, the prevailing party shall be entitled to receive from the other party reasonable attorneys fees and costs. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date set forth above. CHFA: /LQI/�_ LOCALITY: By: ,; LY_F?/, Catu*1uLtty TI-adevelornerlt Agency of the Name Ken Williams By Title: Single Family Program Name � ^ Administrator Title: CA) 4ik rnAo LOCALITY ATTORNEY: By signing below, the undersigned represents that he/she is licensed to practice law in California, has reviewed the Locality Documents and CHFA Policies described herein, and is of the opinion th'attt the Lo3iality Documents are consistent with the CHFA Policies���L% i.Oiviir'IUNIT REQEV. Name: T. Brent Hawkins _ , aW U01333 -2- 3/9/88 C.«FORNIA HOUSING FINANCE AGWY R-1 SUBORDINATE LIEN & RESALE RESTRICTION POLICY The Agency shares a common goal with local government in attempting to create affordable homeownership opportunities for low and moderate income Californians. By joining its efforts to those of local government the Agency hopes that the common goal can be achieved more effectively. The combining of the Agency low interest first mortgage loans with local secondary financing and resale control arrangements is not always a perfect fit, however, and such arrangements must be reviewed to ensure that they are compatible with the Agency 'prudent lender" and 'public purpose" concerns. As a prudent lender, the Agency needs to avoid arrangements which create an excessive risk of loan default or otherwise impair its loan security. Such arrangements include those which (1) impose excessive financial burdens on the borrower, (2) discourage the borrower from paying back the loan, and (3) discourage the borrower from maintaining and improving the home. In order to achieve its public purpose of creating homeownership opportunities, the Agency needs to avoid arrangements which unfairly infringe on the benefits of homeownership. One of the key benefits of homeownership is the owner's right to share in the appreciation of the home. Where local government has contributed to the affordability of the home, it is not unfair for them to receive something in return, as well. The locality may provide for this return on investment in a variety of ways, including requiring repayment of the funds with interest, sharing in the appreciation of the home when it is sold, and imposing mechanisms for keeping it affordable to subsequent low income buyers. What is a fair return to the locality will vary with each deal but should always bear some fair relationship to the value of the locality's contribution to the affordability of the home. Accordingly, the following are the basic parameters within which all subordinate financing and resale control arrangements should comply: 1. The loan and/or grant must be made either by a public body or a non-profit organization. 2 . The documents and terms should be simple enough for the borrower to understand. 3 . Any and all agreements must be subordinate to the CHFA Deed of Trust and the foreclosure of the CHFA Deed of Trust must extinguish any such agreements. 1121 "L" STREET. 7TH FLOOR SACRAMENTO, CALIFORNIA 95814-3974 (916) 322-3991 Page 2 R-1 4. Any and all agreements must be approved by the mortgage loan insurer. 5. If a loan is involved, the following limitations apply: -(a) The loan interest rate must be simple and must not exceed the rate of the CHFA loan. (b) No loan related fees may be financed within the loan. Closing costs may only be financed in the loan to the extent allowed by the mortgage insurer. (c) The loan repayment schedule shall not; when considered with the repayment schedule of the CHFA loan, exceed the underwriting ratios used by CHFA, its loan originators and mortgage insurers in qualifying the borrower for the loan. 6. If the locality intends to share in the appreciation of the home the following limitations apply: (a) Generally the locality's share of appreciation of the home must bear some reasonable relationship to the value of its contribution to the affordability of the home. (b) The locality may receive a return of their contribution (whether in the form of a loan or a grant) plus the portion of the appreciation which is attributable to the contribution. (This includes not only cash contributions, but also non-cash contributions which enabled the borrower to purchase the home at below its fair market value. ) The share of the appreciation which is 'attributable to the contribution" means the percentage that the contribution bore to the fair market value of the home at purchase. Thus, if the contribution was $10, 000 and the home was worth $100, 000, then the locality should be able to recoup the $10, 000 contribution (plus interest if a loan) plus 10% of the appreciation of the home. Notwithstanding the foregoing, in no event shall the locality's share of the appreciation of the home include any appreciation attributable to improvements made to the home subsequent to the borrower's acquisition of the home. The appreciation of the home is determined after deducting any borrower borne expenses of sale. Page 3 R-1 7 . In no event shall the borrower's obligations under the CHFA loan, plus locality loan, plus grant repayment, plus shared appreciation arrangements exceed the fair market value of the home. The locality shall forgive principal and interest, limit it's rights to require the repayment of any grants and to share in the appreciation of the home as necessary to avoid the result. 8. To the extent that the agreement restricts the borrower's right to sell or otherwise transfer the property, the lender may create a preemptive right to purchase the property in itself or a third party and may restrict the sales price, but may not otherwise restrict the borrower's right to freely alienate the home. This preemptive right must be exercised and the sale consumated within a reasonable period of time (generally not to exceed 120 days but subject to extensions for Borrower caused delays) or it must be forever terminated. The restricted sales price must not be less than the fair market value of the home minus the repayment of the grant and minus the locality's share of the appreciation of the home as provided in paragraphs 6 and 7 above. 3/8j 88 . R-3 CALIFORNIA HOUSING FINANCE AGENCY LOCALITY/BORROWER SUBORDINATE FINANCING/RESALE RESTRICTION AGREEMENT This Locality/Borrower Subordinate Financing/Resale Restriction Agreement (the 'Agreement') is made and entered into on , 19_, by and between (the 'Borrower') and (the 'Locality') . RECITALS A. The Borrower intends to acquire that certain single family residence located in , County, California and more particularly described as follows (the 'Property") : B. The California Housing Finance Agency (the 'CHFA') intends to provide low-interest primary mortgage financing (the 'CHFA Loan") for such acquisition. C. The Locality intends to provide additional financial assistance for such acquisition and/or to impose certain restrictions on the transfer of ownership or possession of the Property as provided in the following documents (collectively the 'Locality Documents') : D. In order to ensure that the Locality Documents do not (1) impose an excessively high risk of loan default on CHFA, or (2) frustrate CHFA's public purpose of helping the Borrower acquire the benefits of home ownership, CHFA has required the parties to give assurances that the Locality Documents are consistent with certain CHFA policies as set forth in paragraph 1 below (the 'CHFA Policies') . E. The parties hereto intend to satisfy the aforementioned requirement of CHFA by entering into this Agreement. NOW, THEREFORE, the parties hereto agree as follows: 1. Locality Documents. All of the financing documents and/or restrictions which will be imposed on the Borrower or the Property by the Locality in connection with the provision of its financial assistance shall be included in the documents described herein as the 'Locality Documents. ' 2 . CHFA Policies. Following are the CHFA Policies with respect to Locality-imposed subordinate financing and/or resale restrictions: U01085 -1- 3/9/88 • R-3 (a) The financial assistance contemplated by the Locality Documents must be contributed by either a public body or a nonprofit organization. (b) The Locality Documents must be subordinate to the CHFA deed of trust and the foreclosure of the CHFA deed of trust must extinguish the applicability of the Locality Documents to the Property. (c) The- Locality Documents must be approved by the mortgage insurer of the CHFA Loan. (d) If a loan is involved, the following limitations shall apply: (1) The loan interest rate must be simple and must not exceed the rate of the CHFA Loan. (2) No loan-related fees may be financed within the loan. Closing costs may only be financed in the loan to the extent allowed by the mortgage insurer. (3) The loan repayment schedule shall not, when considered with the repayment schedule of the CHFA Loan, exceed the underwriting ratios used by CHFA, its loan originators and mortgage insurers in qualifying the borrower for the loan. (These ratios are specific to each loan and can be obtained by contacting the originating lender of the CHFA Loan) . (e) If the Locality intends to share in the appreciation of the Property, the following limitations shall apply: (1) Generally, the Locality's share of the appreciation of the Property shall bear some reasonable relationship to the value of the Locality's contribution to the affordability of the Property. (2) Specifically, the Locality may receive a return of its contribution (whether in the form of a loan or a grant) plus the portion of the appreciation which is attributable to the contribution. (This includes not only cash contributions, but also non-cash contributions which enable the Borrower to purchase the Property at below its fair market value. ) The share of the appreciation which is 'attributable to the contribution" means the percentage that the contribution bore to the fair market value of the Property at purchase. Thus, if the contribution was $10, 000 and the Property was worth $100, 000, then the Locality may recoup the $10, 000 contribution (plus interest if a loan) plus 10% of the appreciation of the Property. Notwithstanding the foregoing, in no event shall the Locality's share of the appreciation of the Property include any appreciation attributable to improvements made to the Property subsequent to the Borrower's acquisition of it. The appreciation of the Property is determined after deducting any borrower-borne expenses of sale. (f) In no event shall the Borrower's obligations under the CHFA Loan, plus Locality loan, plus grant repayment, plus shared appreciation arrangements exceed the fair market value of the Property. The Locality U01085 -2- 3/9/88 R-3 shall forgive principal and interest, limit its rights to require the repayment of any grants and to share in the appreciation of the Property as necessary to avoid such a result. (g) To the extent that the Locality Documents restrict the Borrower's right to sell or otherwise transfer the Property, the Locality may create a preemptive right to purchase the Property in itself or a third party and may restrict the sales price, but may not otherwise restrict the Borrower's right to freely alienate the property. This preemptive right must be exercised and the sale consummated within a reasonable period of time (generally not to exceed 120 days but subject to extension for Borrower-caused delays) or it shall be forever terminated. The restricted sales price shall not be less than the fair market value of the Property minus the repayment of the grant and minus the Locality's share of the appreciation of the Property as provided in paragraphs (e) and (f) above. 3 . Consistency with CHFA Policies. Locality represents and warrants that the Locality Documents are, or by this Agreement shall become, consistent with the CHFA Policies. Locality agrees that at all times it shall administer its rights under the Locality Documents in a manner which is consistent with the CHFA Policies. 4 . Amendment. The Locality Documents shall hereby be deemed to be amended to be consistent with the CHFA Policies to the extent that they are otherwise inconsistent therewith. Other than by this Agreement, the Locality Documents shall not be amended without the written consent of CHFA. 5. Enforceability. This Agreement shall be for the benefit of and enforceable by CHFA, and shall bind and benefit the parties hereto, and their respective successors and assigns. 6. Attorney Fees. In any proceeding to enforce this Agreement, the prevailing party, including CHFA, shall be entitled to receive from the other party reasonable attorneys fees and costs. 7 . Incorporation Into Locality Documents. This Agreement shall be . expressly incorporated, by reference and/or by attachment, into each of the Locality Documents and shall be placed of record in the official records of the county in which the Property is located. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date set forth above. BORROWER: LOCALITY: By Name Title: U01085 -3- 3/9/88 • • 021688 pp''ff �V, AGREEMENT THIS AGREEMENT is entered into this day of e_/ , 1988 , by and between the COMMUNITY REDE- VELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic (the "Agency" ) , and the COACHELLA VALLEY HOUSING COALITION, a California non-profit corporation (the "Coalition") . RECITALS A. The Agency and the Coalition entered into an Agreement, dated September 2, 1987 (the "Program Agree- ment" ) , providing for the development by the Coalition of a self-help housing program (the "Self-Help Housing Program") within the City of Palm Springs (the "City" ) with certain financial assistance by the Agency in order to provide an increased supply of low and moderate income housing within the City. B. Pursuant to Section 10 of the Program Agreement, prior to .final approval by the Agency of the use of additional funding described in Section 6 thereof by the Coalition, the Agency and the Coalition shall jointly develop and agree to provisions to ensure the ongoing affordability of the housing developed under the Self-Help Housing Program. AGREEMENTS NOW, THEREFORE, THE AGENCY AND THE COALITION AGREE AS FOLLOWS: 1 . The "Covenants Respecting Ongoing Affordability, " attached hereto as Exhibit A and incorporated herein by reference, shall be applicable to all housing developed as part of the Self-Help Housing Program pursuant to the Program Agreement . • 2. No real property designated for development as part of the Self-Help Housing Program pursuant to the Program Agreement shall be sold or conveyed except by grant deed containing the provisions set forth in the Covenants Respecting Ongoing Affordability. 3 : " The Coalition shall be responsible for implement- ing the requirements of this Agreement, and shall provide the Agency with recorder' s endorsed copies of all grant deeds conveying real property subject to this Agreement . 4 . This Agreement implements Section 10 of the Program Agreement. IN WITNESS WHEREOF, the Agency and the Coalition have executed this Agreement as of the date first above written which shall be the date this Agreement was approved for execution by the Agency. COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS By Chairman ATTEST: Secretary COACHELLA VALLEY HOUSING COALITION By President ATTEST: Secretary 2072r:NM -2- • 042288 EXHIBIT "A" COVENANTS RESPECTING ONGOING AFFORDABILITY A. -Use of the Premises The Grantee, by and for himself or herself and any successors in interest, hereby covenants and agrees that for a period of thirty (30) years from the date of recorda- tion of this grant deed the real property conveyed hereby and any improvements thereon (the "Premises") shall be used solely for occupancy by persons and families of low and moderate income (herein "Eligible Households" ) . As used herein, the term "persons and families of low and moderate income" shall mean persons and families whose income does not exceed 120 percent of area median income (as annually estimated by the U.S. Department of Housing and Urban Development) , adjusted for family size in accordance with adjustment factors adopted and amended from time to time by the U.S. Department of Housing and Urban Development pursu- ant to Section 8 of the National Housing Act of 1937 . The foregoing covenant shall run with the land. B. Obligation to Refrain From Discrimination The Grantee, by and for himself or herself and any successors in interest, covenants and agrees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status , ancestry or national origin in the sale, lease, sublease, transfer, use, occu- pancy, tenure or enjoyment of the Premises , nor shall the Grantee himself or herself or any person claiming under or through him or her establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants , lessees , subtenants, sublessees of vendees of the Premises . The foregoing covenants shall run with the land and shall remain in effect in perpetuity. C. Form of Nondiscrimination and Nonsegregation Clauses The Grantee shall refrain from restricting the rental, sale or lease of the Premises on the basis of race, color, creed, religion, sea, marital status, ancestry or national origin of any person. All such deeds , leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses : 1. In deeds : "The grantee herein covenants by and for himself or herself, his or her heirs , execu- tors, administrators and assigns , and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sea, marital status , national origin or ancestry in the sale, lease, sublease, transfer , use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee himself or herself, or any per- son claiming under or through him or her, estab- lish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants , lessees , subtenants , sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 2 . In leases : "The lessee herein covenants by and for himself or herself, his or her heirs, executors , administrators and assigns , and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions : "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry, in the leasing, subleasing, transferring, use, occu- pancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants , lessees, subtenants, sublessees or vendees in the premises herein leased. " 3 . In contracts : "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, reli- gion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, -2- number, use or occupancy of tenants , lessees, subtenants , sublessees or vendees of the land. " D. Rights of Agency As used in this grant deed, "Agency" means and refers to the Community Redevelopment Agency of the City of Palm Springs , a public body, corporate and politic, and shall include any assignee of or successor to its rights, powers and responsibilities . The Grantee, by and for himself or herself and any successors in interest, covenants and agrees that for the period of time specified in Section A hereof there shall be no sale, lease, rental or other transfer of the Premises except after written notice thereof given to the Agency at least sixty (60) days prior thereto, which notice shall specify the terms and conditions of the proposed transfer, the identity of the proposed transferee and whether such proposed transferee is an Eligible Household. ANY SALE, LEASE, RENTAL OR OTHER TRANSFER OF THE PREMISES IN VIOLA- TION OF THIS COVENANT SHALL HE VOID. In the event of a sale of the Premises to a person or entity other than an Eligible Household, the Agency shall be entitled to demand immediate reimbursement from the Grantee or his or her successor in interest (the "Seller") , from and only to the extent of the "proceeds of the sale" (as defined below) , of an amount calculated as the sum of the following: (1) The amount of $ , which amount represents the financial investment of the Agency toward the development of and ownership opportunity created in the Premises; and (2) An amount equal to _ percent (_%) of the "appreciated value of the Premises" (as defined below) , which amount represents a return on the investment of the Agency identified in (1) , above, in the same proportion that its investment bore to the value of the Premises at the time of original purchase by and conveyance to the Grantee. The term "proceeds of the sale" shall mean the value of any and all consideration, however denominated, received or to be received by the Seller from the sale of the Premises after the payment of all mortgage or deed of trust debt . The "appreciated value of the Premises" shall mean the difference between (1) the purchase price paid by the Seller -3- for the Premises and (2) the value of any and all considera- tion, however denominated, received or to be received by the Seller from the sale of the Premises ; provided, however, that the "appreciated value of the Premises" shall be reduced by any amount determined to represent the amount by which any substantial structural or permanent fixed improvement (the cost of which was paid by the Seller and was not a part of the purchase price paid by the Seller for the Premises) has contributed to the value of the Premises at the time of sale ("Improvements Value" ) . The Improvements Value may either be agreed upon between the Agency and the Seller or, if they cannot agree, shall be established by appraisal . The following transfers of title or any interest therein are not subject to this Section D: transfer by gift, devise or inheritance to Seller ' s spouse or issue; taking of title by surviving joint tenant; transfer of title to spouse as part of divorce or dissolution proceed- ings ; acquisition of title or interest therein in conjunc- tion with marriage; or taking of title by foreclosure or deed in lieu of foreclosure. The Agency' s right to demand reimbursement as provided for in this Section D shall be exercised within one hundred twenty (120) days from the later to occur of (1) the close of escrow for such sale or (2) receipt by the Agency of written notice of such proposed sale as provided in this Section D, or shall be deemed to have expired, but only as to such sale. E. Effect of Covenants The Agency shall be deemed the beneficiary of the covenants running with the land contained herein for and in its own rights and for the purposes of protecting the interest of the community and other parties, public or pri- vate, in whose favor and for whose benefit the covenants running with the land have been provided. Such covenants shall run in favor of the Agency for the entire period dur- ing which such covenants shall be in force and effect, without regard to whether the Agency has been or is an owner of the Premises or any interest therein. The Agency, in the event of any breach of any such covenants, shall have the right to exercise any and all rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to encore the curing of such breach. No violation or breach of such covenants shall defeat or render invalid or otherwise impair the lien or charge of any mortgage, deed of trust or other financing or security -4- instrument entered into with respect to the Premises ;. provided, however, that in the event ownership of the Premises has vested in the holder of any mortgage, deed of trust or other security interest creating a lien or encum- brance on the Premises , the Agency, if it so desires , shall be entitled to a conveyance of the Premises from such holder upon payment to the holder of an amount equal to the sum of the following : 1. The unpaid mortgage, deed of trust or other security interest debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings) ; 2 . All expenses with respect to foreclosure; 3 . The net expenses, if any (exclusive of • general overhead) , incurred by the holder as a direct result of the subsequent management of the Premises; and 4 . An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency. F. Notices Notices required to be sent to the Agency hereunder shall be sent by certified mail, return receipt requested, to the following address : Executive Director Community Redevelopment Agency of the City of Palm Springs P.O. Box 1786 Palm Springs, CA 92263-1786 THE GRANTEE HEREBY SPECIFICALLY ACKNOWLEDGES AND AGREES TO BE BOUND BY THE COVENANTS RESPECTING ONGOING AFFORDABILITY CONTAINED HEREIN. By Grantee 2071r/NM -5-