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2012-382826l RECORDED AT THE REQUEST Of I'HIC,AGCI TM-E C(--' WHEN RECORDED PLEASE MAIL TO: City of Encinitas 505 S. Vulcan Avenue Encinitas, California 92024 Attn: Housing Administrator 1 ?PLC!'=; i ooca zoiz-oaszszs 1111111 III II III IIII I nhl III IIYI IIYI VIII VIII VIII II III IIII IN JUL 02, 2012 8:00 AM 3 521 OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE Ernest J Dronenburg, Jr , COUNTY RECORDER FEES 0.00 WAYS 2 PAGES: 10 FIRST AMENDMENT TO CITY OF ENCINITAS MEMORANDUM OF RESTRICTIVE COVENANTS AND REGULATORY AGREEMENT This First Amendment to City of Encinitas Memorandum of Restrictive Covenants and Regulatory Agreement, effective May 2012, is made and entered into by and between the City of Encinitas (the "Lender"), and Iris Apartments CIC, LP, a California limited partnership (the "Borrower") RECITALS A. Borrower owns the real property located in the City of Encinitas, County of San Diego, State of California (hereinafter the "Property") described in Attachment A, which is attached hereto and made a part hereof B Borrower and Lender entered into that certain City of Encinitas Memorandum of Restrictive Covenants and Regulatory Agreement, dated April 20, 2012, recorded in the Official Records of San Diego County as Instrument No 2012-0242543 (the "Regulatory Agreement") in connection with financial assistance from Lender to Borrower for a twenty (20) unit affordable multifamily housing project (hereinafter the "Project") to be constructed and operated on the Property C Borrower and Lender acknowledge and agree that Borrower incorrectly listed the affordability requirements for the Project in the Regulatory Agreement. D Borrower and Lender now desire to amend the Regulatory Agreement to reflect the affordability requirements for the Project agreed to by Borrower and Lender in connection with Borrower's original application for Lender's financial assistance for the Project and Lender's approval of such application. AGREEMENT NOW, THEREFORE, the parties hereto agree as follows: 1 Amendment to Recital E of the Re ug l~y Agreement. Recital E of the Regulatory Agreement is hereby amended and restated in its entirety as follows. "All references to the Project in this Regulatory Agreement that apply to rents, reporting, and operating procedures shall apply to those units of the Project restricted under this Regulatory Agreement." 2. Amendment to Section I.A. of the Regulatory Agreement. Section 1(A) of the Regulatory Agreement is hereby amended and restated in its entirety as follows. "A. The Borrower, and such successors and assignees as the Lender shall approve in writing, shall utilize eleven (11) of the twenty (20) units located on the Property solely for the purpose of providing affordable housing to low- and very low- 64987\ 416505tvt61994\4148097v1 3522 income persons as defined in 24 CFR § 92.2. One (1) three-bedroom unit will be reserved for occupancy by a resident manager and will be restricted as an affordable housing unit. The Borrower, and such successors and assignees as the Lender shall approve in writing, shall utilize no less than eleven (11) units located on the Property solely for the purpose of providing affordable housing to low- and very low-income persons as defined in 24 CFR § 92.2 pursuant to the provisions of this Regulatory Agreement (the "HOME Assisted Units"). The following income restrictions apply to occupants of the HOME Assisted Units. Three (3) of the eleven (11) HOME Assisted Units (the "HIGH HOME Rent limit units"), comprised of two (2) two- bedroom units and one (1) three-bedroom units, shall be occupied by low-income households whose gross annual incomes, at the time of initial occupancy, do not exceed sixty percent (60%) of the Area Median Income ("AMP") for San Diego County, California, as calculated by the California Tax Credit Allocation Committee ("TCAC"). Not less than eight (8) of the remaining HOME Assisted Units (the "LOW HOME Rent limit units"), comprised of five (5) two-bedroom and three (3) three-bedroom units shall be occupied by very low-income households whose gross annual incomes, at the time of initial occupancy, do not exceed fifty percent (50%) of the AMI for San Diego County, California, as calculated by the TCAC Said covenant shall continue in effect in perpetuity Project completion is defined as the date that the household characteristics of the HOME Assisted Units are entered into the Integrated Disbursement and Information System maintained by HUD The Program statutory minimum Period of Affordability is twenty (20) years after the Project completion date. The Lender has imposed an extended Period of Affordability and a compliance period in perpetuity, pursuant to the terms of this Regulatory Agreement." 3 Amendment to Section 1.13 of the Regulatory Agreement. Section 1 B of the Regulatory Agreement is hereby amended and restated in its entirety as follows. "B Notwithstanding the covenant in paragraph A above, upon foreclosure of the Program debt or transfer in lieu of foreclosure, the Lender, at its sole discretion, may reduce the perpetual affordability period to the Program statutory minimum Period of Affordability of twenty (20) years. Any reduction in the affordability period must be done in writing. If the Period of Affordability is reduced, the three (3) HIGH HOME Rent limit units, as designated in paragraph A above, would continue to be occupied by low-income households whose annual incomes do not exceed sixty percent (60%) of the AMI for San Diego County, California. If the Period of Affordability is reduced, the rents charged for the eight (8) remaining HOME Assisted Units, the LOW HOME Rent limit units as designated in paragraph A above, including the monthly allowance for the utilities and services (excluding telephone) to be paid by the tenant, shall remain at the LOW HOME Rent limit described below and be continually occupied by very low-income households whose gross annual incomes, at the time of initial occupancy, do not exceed fifty percent (50%) of the AMI for San Diego County, California. Income shall be determined in accordance with 24 CFR Part 5, as defined at 24 CFR § 5.609 Said covenant shall continue in effect for the Program statutory minimum Period of Affordability of twenty (20) years after the project completion." 4 Amendment to Section 1.D of the Regulato!3~ Agreement. Section 1.13 of the Regulatory Agreement is hereby amended and restated in its entirety as follows. "D Notwithstanding the covenant in paragraph C above, upon foreclosure or transfer in lieu of foreclosure, pursuant to the HOME requirements at 24 CFR § 92.252(b), the Lender, at its sole discretion, may reduce the minimum Period of Affordability to twenty (20) years. Any reduction in the affordability period must be done in writing. If the Period of Affordability is reduced, the rents charged for not less eight (8) of the HOME Assisted Units, as designated in paragraph A above, including the monthly allowance for the utilities and services (excluding telephone) to be paid by the tenant, shall remain at the LOW HOME Rent limit. Rent charged for the remaining three (3) HOME Assisted Units, as designated in paragraph A above, shall not be more than the lesser of (1) the Section 8 Fair Market Rent for a comparable unit as established by HUD under 24 CFR § 888 111, or (2) the rent established by HUD under 24 CFR § 92.252 for a unit occupied by a family whose gross annual income is less than or equal to sixty percent (60%) of the Area Median Income (the "High HOME Rent") Said covenant shall continue in effect for the statutory minimum Period of Affordability of twenty (20) years after project completion." 5 References. All references to the Regulatory Agreement from and after the date hereof shall be to the Regulatory Agreement as amended by this Amendment. 64987\ 416505ivi61994\4148097v1 2 3523 6 Full Force and Effect. Except as amended hereby, each and all of the terms and conditions of the Regulatory Agreement shall be and hereby are republished and reaffirmed by the parties hereto and shall remain in full force and effect during its term. 7 Successors and Assians. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 8. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [Signature Page Follows Immediately] 64987\ 416505ivi61994\4148097vl 3 3524 IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written. BORROWER: IRIS APARTMENTS CIC, LP, a California limited partnership By CIC Iris Apartments, LLC, a California limited liability company, its Administrative General Partner LENDER: CITY OF ENCINITAS By Gus na, City anager s'E AT74clk E 0 By- Chelsea Investment Corporation, a California corporat' , its Manager By Cheri Hoffman President By Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner BY' • Robert Laing Executive Director/President 64987\ 416505ivi61994\4148097v1 3525 STATE OF CALIFORNIA ) ss. COUNTY OFSj f) b-LeC~ ) Onj~ay,,~9,, 2012 before me, ~ Y- LE) (here insert name of the officer), Notary Public, personally appeared P o i" 1 who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the Wthin instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. of Notary Public J. EISOLD 0 O'A COMM #1824168 o NOTARY PUBLIC-CALIFORNIA H SAN DIEGO COUNTY [Seal] My commission Expires NOVEMBER 23 2012 64987\416505 1 v I 3526 STATE OF CALIFORNIA ) ss. COUNTY OF Z ) y~, 2012 before(here insert name of the officer), Notary Public, personally appeared On Ma PZ ' f ~f f /~tr,7r , who proved to me on the basis of satisfactory evidence to be the person(ttwhose name(s) is/are-subscribed to the within instrument and acknowledged to me that he/she4hey executed the same in.liis/her/thzir- authorized capacity(, and that by4tis/her44emir signature( on the instrument the person(s); or the entity upon behalf of which the person7M acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. G. R. WITHERS Signature of Notary Public Commission #t 1903166 Q-- Notary Public - California San Diego County M Comm. Ex ores Se 6, 2014 [Seal] 64987\4165051v1 6 3527 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of 'SAAJ !~lE6c) On J_ufijE I before me, Date / Here Insert ame and Title of the Officer personally appeared Name(s) of Signer(s) GINA FRANCES ZENNS Commission # 1878445 i Notary Public - California = San Diego County M Comm. Expires Jan 29, 2014 who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/a;@ subscribed to the within instrument and acknowledged to me that he/sheA.Key executed the same in his/weir authorized capacity(iss), and that by his/her419eir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal Signature Place Notary Seal Above ' Signature of Notary Pu OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document rf4sT . rfi1 NDt~EN I -n- CIFV i F Inc ~n:, i 9°~ rrCr~":' ~,~vc f t Title or Type of Document: tF f~CS 7- R1CTI11 C0• ei'l ;17r +v0 &'L- `44-r-Z 1 46/(LEYv Document Date IY)A7 -9- Number of Pages: L-1 6 F-t Signer(s) Other Than Named Above CH t k f f f C t FrY14 k_; . -k(} 6 LP-T- ) 4 / AL 6 Capacity(ies) Claimed by Signer(s) Signer's Name U V, tu,+ ❑ Individual ❑ Corporate Officer - Title(s) ❑ Partner - ❑ Limited ❑ General ❑ Attorney in Fact • ❑ Trustee Top of thumb here ❑ Guardian or Conservator .F1 Other Signer Is Representing: Signer's Name ❑ Individual ❑ Corporate Officer - Title(s) _ ❑ Partner - ❑ Limited ❑ Gene ❑ Attorney in Fact i ❑ Trustee ❑ Guardian or Cof ❑ Other- Signer representing: Top of thumb here ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotary.org Item #5907 Reorder Call Toll-Free 1-800-876-6827 3528 ATTACHMENT A PROPERTY DESCRIPTION Real property in the City of Encinitas, County of San Diego, State of California, described as follows: Assessor's Parcel Number (APN): 265-100-55 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT I OF CITY OF ENCINITAS T.M. 02-233, IN THE CITY OF ENCIKITAS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 15501, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JANUARY 5, 2007. 64987\4165051v1 3529 ACKNOWLEDGEMENT OF SUBORDINATION The undersigned, Citibank, N.A., a national banking association ("Citibank"), is the mortgagee under that certain Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated effective as of April 1, 2012, recorded in the Official Records of San Diego County on April 25, 2012 as Instrument No. 2012-0242544 ("Deed of Trust'), made by Iris Apartments CIC, LP, a California limited partnership (the "Borrower"), as mortgagor, in connection with a loan in the maximum principal amount of $4,500,000 (the "Citibank Load'). Citibank acknowledges that the Deed of Trust shall remain subject and inferior in priority to (i) that certain City of Encinitas Memorandum of Restrictive Covenants and Regulatory Agreement, dated April 20, 2012, recorded in the Official Records of San Diego County as Instrument No 2012-0242543, and (ii) the First Amendment to City of Encinitas Memorandum of Restrictive Covenants and Regulatory Agreement, to which this Acknowledgement of Subordination is attached, provided, however, that certain Subordination and Intercreditor Agreement dated as of April 1, 2012, recorded in the Official Records of San Diego County as Instrument No 2012-0242548, made by and between Citibank and the Lender, shall remain in full force and effect. C iTTRANK N A By. Richard Gerwitz Vice President 64987\4165051v1 STATE OF t?A+4FORNtA 9 (.I L_ ) j COUNTY OF ss. 3530 before here insert name of the officer), Notary Public, personally appeared me On ftry-~Q12 ( who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. wLi I certify under PENALTY OF PERJURY under the laws of the State of Oa4fomis that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public [Seal] ,,tw1101600"0' • NOTARY* ' PUBLIC • #01TA615S5874 SI0N MY COMn EXPIRES •,1112(112014 • O • 64987\4165051v1