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HomeMy WebLinkAbout1995-12 Approving and Adopting the TOV Residential Employee Mortgage Loan ProgramRESOLUTION NO. i2 SERIES OF '1995 A RESOLUTION APPROVING AND ADOPTING THE TOWN OF VAIL RESIDENTIAL EMPLOYEE MORTGAGE LOAN PROGRAM WHEREAS, the Town Council of the Town of Vail and FirstBank of Vail have engaged in discussions and planning to provide a loan program which will permit residents to secure loans on residential property in an amount of up to ninety (90%) percent of the property's value; and WHEREAS, the Town of Vail is hereby committing up to $250,000 to fund the program; and WHEREAS, the program will require deed restrictions and ownership guidelines for these employee housing units which will iae known as Type A Employee Housing Units; and WHEREAS, the results of this effort are identified in the Master Mortgage Loan Agreement, the Deposit Account Assignment and Security Agreement, and the Town of Vail Deed Restric#lons and Guidelines far Type A Employee Housing Units. NOW, THEREFORE, be it resolved by the Town Council of the Town of Vail, Colorado that: 1. The Master Mortgage Loan Agreement, the Deposit Account Assignment and Security Agreement, and the Town of Vail Deed Restrictions and Guidelines For Type A Employee Housing Units attached to this Resolution as Exhibits A, B, and C are hereby approved and adopted. 2. The Town Manager and Town staff are hereby authorized to take afi actions necessary to implement and administer the Residential Employee Mortgage Loan Program and to make such changes in the agreements and guidelines as are necessary to effect the purposes of this program. 3. This resolution shall take effect immediately upon its passage. INTRODUCED, READ, APPROVED AND ADOPTED this 2nd day of May, 1995. r Margar t A. Osterfoss, Mayor Hllt~l: Df~r ~O~I~7~' fcc~~~ Hoily~L. McCutcheon, Town Clerk Z t0 ~ 4f r $-~t..~-f ~ \ i C'.IRESOLU84.12 Resolution No. 12, Series of 1995 MASTER MORTGAGE LOAN AGREEMENT This agreement is entered into this _ day of , 199_, by and between the Town of Vaii (the "Town"), FirstBank of Vail (fhe "Bank"), and {individually or collectively referred to as the "Borrower"}. Recitals A. Borrower has applied to Bank for a mortgage loan in the amount of $ {the Loan") in connection with Town's current Residential Employee Mortgage Loan Program {the Program"). In the event Bank determines to make the Loan, Borrower will use the proceeds of the Loan to purchase a residential dwelling located on the real property more speci~caily described in Exhibit A attached here#o and incorporated herein (the "Property"}. Borrower has previously been determined by Town to be a Qualified Buyer as defined in the current Program guidelines. The Property is a Qualified Dwelling Unit as defined below. B. As one of the requirements of the Program, Borrower mus# agree to the imposition of various restrictions upon the use, transfer and marketability of the Property. This agreement contains such restrictions and, when fully executed, shall be recorded in fhe real estate records of Eagle County, Colorado. The restrictions in this agreement shall be treated and interpreted as binding covenants which run with the Property. C. Providing that Borrower meets and is willing to abide by the credit standards imposed by Bank as welt as the requirements and qualifications required by Town under the Program, Bank is willing to make the Loan to Borrower. ACCORDINGLY, the parties hereby covenant and agree as follows: 1. mmlatov.fbv Definitions. As used in this agreement, the following wards and phrases shall have the indicated meanings consistent with the context: 1.1 "Qualified Dwelling Unit" means any single or multi-family residential dwelling or condominium unit located within the boundaries of fhe Town and which is capable of fee simple ownership. 1.2 "Qualified Buyer" means an individual who has been determined by the Town to meet the income, employment, residency and o#her qualifications set forth in the Town of Vail Housing Guidelines as adopted and amended from time to time by Town and which are in effect at the time of closing of the sale from Owner to Borrower. 1.3 "Owner" means the person{s} or entity which will convey the "Property" to Borrower a# the closing. 1.4 "Account",means the savings deposit or certifcate of deposit account maintained by Town at Bank for the purpose of complying with the credit support feature of the Program. 1.5 "Loan Documents" shall mean the Note, fhe Deed of Trust, the Assignment of Rents, this agreement and all other instruments executed in connection with the Loan. 4195 Exhibit A i.6 "Deed of Trust" means the deed of trust or mortgage executed ~y Borrower encumbering the Property in favor of Bank in order to secure the Loan. 1.7 "Assignment of Rents" means the instrument executed by Borrower assigning any rental income or revenue from the Property in favor of Bank in order to secure the Loan. 1.8 "Program Documents" shall mean the documents executed by Borrower and Town which relate in any fashion to the Program and Barrowe~s compliance obligations under the Program. 1.9 "Program Guidelines" shall, mean the written requirements of Town far eligibility under the Program and all conditions relating to the use, occupancy and sale of any related residential dwelling by a Qualified Buyer. 2. Mortoape Loan to be Made by Bank. 2.1 Aporaisai and Amount of Loan. 2.1.1 The Loan shalt not exceed a principal amount which is equal to 9t7% of the purchase price or the appraised value (whichever is less) of the Property. !n order to determine the maximum principal amount of the Loan, Bank shall order an appraisal of the Property o be performed at the expense of Borrower by an appraiser selected by Bank. In the event the appraisal report values the . Property at less than the proposed purchase price, the appraisal report shall be conclusive for purposes of determining the maximum amount of the Loan. 2.1.2 A copy of the executed purchase agreement for the Property shall be delivered to Bank by Borrower. Bank will be entitled to contact parties to the purchase agreement and others in order to verify any aspect of the proposed purchase transaction, and Borrower specifically consents.to these actions and authorizes Bank to conduct such inquiries and obtain such information as Sank may deem appropriate. 2.2 Loan Approval and Closina. 2.2.1 Bank shall process the application of Borrower for the Loan under any residentia! mortgage loan plan offered by Bank which Bank deems suitable for use with the Program. Bank shall conduct a credit review and roves#igation of the collateral in order to determine whether Borrower meets the credit requirements of Bank. Upon compliance by Borrower with the requirements set forth in Section 2.3 below, Bank will lend to Borrower the sum of the "Loan"} for the purpose of enabling Borrower to acquire the Property. mmlatov.fbv 411195 2 2.2.2 The Loan shall be evidenced by a promissory note (the "Note"} executed by Borrower reflec#ing the repayment terms. The unpaid principal of the Note shall bear interest prior to acceleration or maturity at a fixed rate of percent per annum for the first five years of the Note and thereafter at a variable rate of interest equal to (the "Index") plus a margin of percent. The variable interest rate shall change and shall be calculated and imposed in the manner described in the Note. The terms of the Note shall be con#rolling in all respects. 2.2.3 Borrower agrees to pay to Bank an origination fee in the amoun# of percent of the amount of the principal amount of the Loan. The origination fee shall be paid on the date of the closing of the Loan. 2.2.4 Interest shall be calculated on the unpaid principal amount ofi the Note on the basis of a year consis#ing of 365 days, and interest shalt be paid for the actual number of days elapsed. 2.2.5 Notwithstanding anything to the contrary con#ained in any of the Loan Documents, the maximum interest rate under the Loan will never exceed (i} percent or (ii) the highest rate permitted from time to time by applicable law, whichever is less. 2.3 Collateral. 2.3.1 To secure performance of Borrower's obligations #o Bank under the Note and this agreement, Borrower will execute the Deed of Trust and any required rider thereto, the Assignment of Rents, any security agreement, financing statement, or other document which Bank deems necessary or appropriate. The lien of the Deed of Trust and the other collateral documents shall have priority over al[ other liens and encumbrances against the Property and any associated personal property. 2.3.2 As additional security for the Loan, Borrower hereby grants to Bank a security interest in all deposit accounts maintained by Borrower at any subsidiary bank of FirstBank Holding Company of Colorado, Inc. 2.4 Conditions Precedent. Bank shall not be obligated to make the Laan or disburse any funds under the Loan at any time until the following events have been performed or have occurred: 2.4.'I Borrower's creditworthiness is deemed acceptable by Bank, and Borrower has satisfied Bank's internal credit analysis. 2.4,2 The Town has certified to Bank that Borrower is a Qualified Buyer, tha# Borrower is otherwise eligible under the Program, and that the Property is a Qualified Dwelling Unit. mmlatov,fbv 4/4/95 3 s • 2.4.3 Borrower has satisfied ail the requirements of any mortgage loan commitment issued to Barrawer by Bank. 2.4.4 The appraisal report of the Property is deemed satisfactory by Bank in all respects. 2.4.5 An improvement location certificate or other suitable survey far the Property has been received and approved by Bank. 2.4.6 Borrower has obtained property and extended coverage insurance for the Property in the coverages and amounts required by Bank. 2.4.7 Owner and Barrawer have completed and delivered a satisfactory mechanic's lien affidavit to Bank relating to recent repairs or improvements upon the Property. 2.4.8 A title insurance company acceptable to Bank must have issued, at . the expense of Borrower; a commitment for an ALTA lender's extended coverage policy of title insurance in an amount and form satisfactory to Bank subject only to exceptions approved by Bank in writing, together with any endorsements required by Bank. 2.4.9 Bank has received a certificate of #axes with respect to the Property which meets with the approval of Sank and indicates no past due taxes or special assessments. 2.4.1Q !f the Property is a condominium unit or is otherwise part of a common interest ownership association, Borrower has obtained an acceptable certificate or other instrument from the governing association which shows the amount of any regular or special assessment which is due, and Bank has determined that such amount will be paid at closing from a source other than the proceeds of the loan. 2.4.11 Harrower has obtained and delivered to Bank any requested certifca#s of occupancy or any other requested certifrcations relating to the Property. 2.4.12 Bank has determined to its satisfaction that the Property is in compliance with all zoning and building code ordinances and regulations of the Town. 2.4.13 Borrower has submitted evidence that the Property is not in a flood or other hazard area which is deemed unacceptable to Bank. 3. Credit Accommodations by Town. 3.1 Consideration. As an incentive for Bank to participate in the Program and to approve the application of Borrower for the !roan, Town has agreed to extend credit accommodations to Borrower. The credit accommodations shall be in the form of an assignment and pledge by Town of cash or readily available funds in the amount and nature described below to mmlatov.fbv 4114195 4 s support the Loan. Town and Borrower acknowledge that Bank has bargained for these credit accommoda#ions as a condition of malting the Loan, and that Bank would not be willing to make the Loan without these credit accommodations. 3.2 Pledge and Assignment by Town. 3.2.1 As~ a condition precedent to Bank's obligation to make and close the Loan, Town shall assign and pledge to Bank cash or readily available funds in the amount of ten percent of the purchase price of the Property. This assignment and pledge shall be evidenced by an assignment and security agreement between Town and Bank which describes the Program and Town's agreement to provide credit support for each Loan which Bank makes under the Program. The security agreement shall also provide that the funds assigned and pledged by Town wilt be maintained in the Accoun# and, subject to the provisions of Section 3.3 below, may be utilized by Bank in the event of a default under the Loan Documents #o pay principal, accrued interest and any other amount which may be owing by Borrower under the Loan Documents. Bank shall nat be required #o proceed against Borrower as a condition precedent to utilizing the assigned funds to pay obligations which become due under the Loan Documents. 3.2.2 Bank shat! release the assigned funcils to Town at such Time as the Loan has been paid in foil. Bank shall also release the assigned funds on the fifth anniversary of fhe Loan {a) as long as all Loan payments have been made as agreed, {b) the value of fhe Property is then equal to or greater than the purchase price of the Property paid by Borrower, (c) the "back ratio" of the Borrower {as defined by Bank} is not greater than 40% based on the current interest rate under the Loan, and (d} Bank determines there has been no adverse change in the financial condition of Borrower. 1n the event the Property is sold for any reason, Bank shalt not be required to release the assigned funds until such time a5 the Loan is paid in fulE. . 3.2.3 Unless the Assigned Funds are removed from fhe Account by Bank, interest shah accrue on the Assigned Funds in the discretion of Bank at either a rate adjusted weekly which is equal to 95% of the Fed Funds Rate for the previous week as quoted in the WaN Street Journal yr at a rate adjusted on an annual basis equal to the rate paid by Norwest Bank of Denver on one year certificates of deposit. 3.3 Prior Notice by Bank. Bank will provide advance notice to Town in writing of Bank's intent to utilize any funds of Town which have been assigned to support the Loan. Upon receipt of such notice, Town shall have a period of five (5) business days to notify Bank in writing of Town's decision to elect to purchase the Loan from Bank under Section 9 of this agreement or to fake such other remedial steps as Bank may require. In the event Town fails to notify Bank in writing or take.other appropria#e action mmlatov.fbv 4114195 e • required by Bank within this period of tirne, Bank shall be entitled to utilize the assigned funds immediately to pay any obligations due under any of the Loan pacuments. 3.~4 Waiver and Estoppel. Any action or nonaction by Bank with respect to the available procedures described in this section shall not impede or bar Bank's right to initiate remedial procedures under the Loan Documents in the event of a default by Borrower, and ibis shall include, but shall not be limited to, Bank's right to foreclose the Deed of Trust. Bank shall pat be subject to any argument or assertion based upon principles of estoppel or waiver as a result of Bank's action or nonaction under this section. 3.5 Reimbursement ~bliaation to Town, In the event Town erects to purchase the Loan under this Section, or if any of the funds in the Account are utilized by Bank to pay any amours#s owing under the Laan Documents, Borrower shall be obligated to reimburse Town for all such amounts along with interest at the rate of percent. 3.6 CaNateral for Pledaed Funds. Bank acknowledges tha# Town is prohibited by its charter and municipal status from permitting any funds owned by Town to be maintained in a depositary institution without adequate collateral furnished by the depositary institution. Accordingly, Bank agrees to maintain all funds which are assigned and pledged by Town under this agreement in a deposit account which is collateralized kiy treasury bills and other government securities which have maturities no longer than 3.7 Riahts of Town with Respect to Pledaed Funds. From time to time and with the prior written consent of Bank, Town shall have the right to substitute acceptable securities or other liquid obligations for funds which are required to be assigned and piedged by Town pursuant to this agreement. Each substitution shall be made only with the written approval and consent of Bank, and Bank agrees that it will not unreasonably withhold any such approval and consent. Each such substitution, however, shall be accepted by Bank upon terms and conditions which Bank deems appropriate, and Bank in its discre#ion shall have the right at any time during the pendency of this agreement to require Town to assign and pledge readily available funds in place of any substituted securities ar liquid obligations. 4. Mortaaae Loan Documentation. 1 Unless otherwise provided in an addendum to this agreement, the Loan shall be made as part of Bank's variable -rate mor#gage loan program known as the "FIRM-5" loan. Borrower acknowledges receipt of program discCosures as well as a copy of the Consumer Handbook on Adjustable Rate Mortgages. Borrower understands that the fixed initial interest rate will be converted to a variable interest rate at the end of five years. Borrower further understands that the variable interest rate wilt be based on an index rate plus a margin, and that the rate of interest can be adjusted on an annual basis. An increase in the variable interest rate will mmiatov.fbv 4114195 6 r ~ usually result in an increase in the amount of the monthly payment which Borrower is required to make. 4.2 Borrower agrees to execute ail documents which are required by Bank in connection with the Loan including, but not limited to, the adjustable rate note and rider, the deed of #rust and any required riders, an assignment of rents, escrow account disclosures and authorizations, and an agreement to execute and deliver additional documents requested by Bank. 4.3 In consideration of the special interest rate and maximum loan amounts established by Bank under the Program, 13orrawer agrees to authorize Bank to charge Borrower`s deposit account maintained at Bank far the amount of each monthly payment due under the Loan. The amount of this payment shall include principal and interest as well as the amortized portion of any mortgage or other insurance premiums or reserves, tax reserve, and any other reserve. 4.4 Borrower agrees during the term of the Loan to execute such further documents as Bank may deem necessary from time to time in connection with the Program ar with respect to any regulatory compliance requirement. 5. Title Ewxceptions. As a requirement of the Loan, Bank must receive an acceptable ALTA lender's title insurance policy insuring Bank's lien upon the Property as described in Section 2.4.8 of this agreement. In addition, Borrower will receive an owner's policy of title insurance issued by the same title insurer. The policies will contain an excep#ion to ti#le based upon the Program restrictions and their impact upon the future use, transfer and marketability of the Property. Borrower agrees tha# any exception to title of this nature will not give rise to any action for rescission ar any other remedy or cause of action by Borrower under any of the Loan Documents or any other document executed in connection with the Program or Borrower's acquisition of .the Property. 6. Limitations on Sale or Transfer. Borrower agrees that from the date of the closing of Borrower's purchase of the Property, Borrower's ability to sell or transfer the Property shall be limited as follows: fi.1 No part of the Property or any in#erest in the Property may be sold or transferred by Borrower without the prior written consent of Bank and Town, 6.2 In the event Bank and Town consent to any proposed sale of the Property by Borrower, the gross sales price which Borrower may receive (not including any real estate commissions owed by Borrower as part of the transaction) may not exceed: ' 6.2.1 The original price; 6.2.2 Plus an increment equal to 3% per annum of the original price paid by Borrower from the date of purchase (pr'arated at the rate of 25% for each whole month of any part of any year}; mmlatov.fbv 4/14/95 7 6.2.3 .Plus the value of capital improvements made to the Property not exceeding 90% of the original purchase price paid by Borrower; 6.2.4 Plus assessments made by any homeowner's association or local government which have been paid by Borrower from the date of Borrower's purchase of the Property. 6.3 . Any, transfer of an. interest in the Property shall remain subject to the imitations on sale or transfer described in this agreement and in the Program Documents and Program Guidelines. However, the following transfers shall be considered as exempt from these limitations under the conditions described below: 6.3.1 A transfer of an interest to a trustee for the beneft of the Borrower or the Borrower's spouse or issue as long as the Borrower remains an occupant of the Property. 6.3.2 A transfer of an interest by Treasurer's Deed pursuant to a sale for delinquent taxes, by a sheriffs deed, by a private or public trustee's deed pursuant to foreclosure proceedings of any nature, or by deed in lieu of foreclosure pursuant to a judgment execution or a foreclosure sale. 6.3.3 A transfer of an interest by the U.S. Department of Housing and Urban Development ("HUD"} after HUD has acquired Title pursuant to a foreclosure of a deed of trust insured by HUD. 6.4 In the event of any transfer pursuant to any of the subsections in Section 6.3 above, all grantees or successors in interest shall still be bound by the terms and conditions of this agreement in the same manner and degree as if an exempt transfer had not occurred. 7. Limitations on Occuoancv and Use. 7.1 Borrower (ar any person to whom Borrower rents or leases the Property) must qualify on a continuing basis under one of the following categories: 7.1.1 An employee of the Upper Eagle Valley who works a minimum of 30 hours per week; 7.1.2 A senior citizen (age 65 or over} who has formerly fulfilled the definition of an employee as established in Section 7.1 above; 7.1.3 A handicapped person; 7.1.4 A dependent of any person fulfilling any of the three categories described above. 7.2 The Property shalt be limited exclusively to provide housing or home ownership for persons who meet the definition of a Qualified Buyer and their immediate families. This restriction shall bind the Property on a continuing basis and shall be effective as to all successors in interest to mmlatov.fbv 4114195 the Property, except that this restriction shall not survive the foreclosure and sale of the Property through administrative or court proceedings. 8. Involunt_ ary Proceedings. Borrower shall be in default under the Loan Documents and under the Program in the event Harrower: 8.9 Fails to pay any amount which becomes due under the Note or the Deed of Trust. 8.2 Fails to comply with any performance obligation under any of the Lnan Documents or the Program Documents. 8.3 Permits any [ten to be asserted against the Property which is not resolved to the satisfaction of Bank or released within 30 days from its attachment to the Property. 8.4 Permits any creditor, governmental agency; person or entity to levy upon or seize the Property under any court or administrative proceeding. 8.5 Damages the Property or permits any uninsured loss or destruction to occur wi#h respect to the Property in a material fashion. 8.6 Seeks to revoke, terminate or otherwise limit Borrower's obligations and compliance duties under the Loan Documents or the Program Documents. 7 Dies, becomes legally incompetent, becomes insolvent, makes an assignment for-the benefit of creditors, fails to pay debts as they become due, files a petition under the federal bankruptcy Laws, has an involuntary petition in bankruptcy filed in which Borrower is named, or has any personal property which is associated in a material fashion with the Property taken under any writ or process of court or any administrative proceeding. 8.8 Allows goods to be used, #ransported or stared on the Property, the possession, transportation, or use of which is illegal. 8.9 Allows any party other than Borrower to assume or undertake any of the obliga#ians under the Loan Documents or the Program Documents withou# the written consent of Bank and Town.' 8.90 Causes Bank to deem itself insecure due to a significant decline in value of the Property; or if Bank, in good faith, for any reason believes that the prospect of payment or performance by Borrower under any of the Loan Documents is impaired. 9. Right of Tawn to Purchase Loan. 9.9 In the event any administrative or judicial proceeding is commenced for the foreclosure and safe of the Property, or in the event any other action is taken by a third party with any lien or claim against the Property to bring about an involuntary sale of the Property, Town shalt have the right, but not the obligation, to purchase the Loan from Bank and exercise any mmlatov.fbv 4114195 9 remedies or powers which Bank may have under the Loan Documents. It is intended that the right #o purchase the Loan under these circumstances is an important and essential element of this agreement. 9.2 The exercise of this right will permit Town to preserve the pool of dwellings which are part of the Program and enable the Property to be made available for purchase by another eligible resident employee under the Program. Therefore, the right of Town #o purchase the Loan and exercise all rights and remedies of Bank under the Loan Documents should be construed in the most comprehensive fashion in order to accord Town the maximum flexibility under the Program and under the Loan Documents. 9.3 In the event Town elects to purchase the Loan in this situation, Town shall notify Bank of i#s election in writing and shall tender to Bank the outstanding balance of principal and accrued interest owed to Bank under the Loan Documents. Upon acceptance of this amount by Bank, the pledge obligation of the Town with respect to the Loan shall be released, and the Laan Documents shall be endorsed, transferred, assigned and delivered #o Town by Bank without recourse. Bank shall cooperate with . Town thereafter in assisting Town to exercise any right or remedy available under the Loan Documents. 9.4 In the event Town becomes the owner of the Property by exercising its rights and remedies under the Loan Documents in this fashion, Bank will thereafter review and process any subsequent mortgage loan application under the Program from ono#her eligible resident employee with respect to the Property. However, any mortgage loan approved by Bank under these circumstances shall be established as a new and separate mortgage loan under the Program and shall not be related to or affected by the previous mortgage loan in any fashion. 10. Representations and Warranties of Borrower. Borrower represents and warrants to Town and Bank as follows: 10.1 Ail information furnished to Town and Bank concerning Borrower's eligibility for the Program and Borrower's financial condition is complete and accurate as of the date, of such information, and Borrower will promptly notify Town and Bank in writing of any material change in such information. 10.2 Borrower wilt utilize the proceeds of the Loan to purchase a residential dwelling under the Program, and Borrower will comply in all respects with the requirements of the Program during the #erm of the Laan. 10.3 ' Borrower will maintain the restricted status of the Property and will comply with all occupancy, use and resale conditions required by this agreement. Borrower will not take or permit any action or occurrence which might jeopardize or conflict with the restricted status of the Property. 10.4 Borrower will occupy the Property as his or her sole place of residence during the time that the Property is owned by Borrower (subjec# to any rental arrangements approved by Town in writing} and will not engage in mmlatov.fbv 4114195 10 any business or activity upon the Property which is not in conformance with the applicable zoning regulations and the Program Guidelines. 1 t).5 In the event Borrower determines to sell the Property, Borrower shall promptly notify Town and Bank in writing of such infentlon. Borrower may then proceed to sell the Property, but only to a Qualified Buyer and only in accordance with the provisions of Sec#ion B ofi this agreement and in compliance with the Program Guidelines. Borrower will present documentary evidence to the safisfac#ion of Town to show that the Property is being sold for an amount which is not greater than the maximum sale price as determined in Section 6.2 of this agreement, and Borrower will not close the transaction or convey title to the Property until Town has issued a written confrmatian that the proposed sale meets the requirements of this agreement and the Program Guidelines. 11. Representations and Warranties of Town. Town represents and warrants to Bank as follows: 11.1 Town is authorized and empowered to establish and operate the Program. 11.2 All appropriate municipal authorizations and resolutions have been adopted and executed to enable Town to enter into the Program Documents and to execute this agreement. 11.3 Town is authorized by its Charter or other inherent powers to provide financial accommodations to Borrower and to assign deposit account funds in the manner provided by this agreement. 12. Representations and Warranties of Bank. Bank represents and warrants to Town as follows: 12.1 Bank is authorized and empowered to make loans under the Program Guidelines and to enter into the Program Documents and this agreement. 12.2 Bank is a Colorado chartered supervised lender and is regulated by the Colorado Division of Banking as well as the Federal Deposit Insurance Corporation. 12.3 The deposits maintained at Bank are insured by the Federal Deposit Insurance Corporation to the extent provided by applicable law, 13.. Miscellaneous. 13.1 Severability. The invalidity or unenforceabi[ity of any one or more provisions of this agreement shall in no way affect any other provisions. 13.2 Counterparts. This agreement has been executed in severs[ counterparts, any one of which may be deemed an original Signatures pages bearing facsimile signatures shall be received in Geu of original signatures, and such copies taken together shall be deemed to be a full and complete agreement between the parties. mmlatav.fbv 4114195 11 13.3 Entire Arareement. This agreement embodies all written and oral negotiations between the parties and may not be amended except in writing executed by alt parties. 13.4 Notices. Ali notices shaft be in writing and sha!! be deemed to have been given when presented personally, sent by facsimile transmission, or when deposited in the United States mail, certified mail, return receipt requests, addressed as follows r<or as contained in any amendments hereto): Bank: FirstBank of Vail ' Attn; Mark Ristow 17 Vail Road Vain, CO 81657 Facsimile No. 303-479-0585 Town: Town of Vaif Attn: R. Thomas Moorhead, .Town Attorney 75 South Frontage Road Vail, CO 81657 Facsimile No'. 303-479-2157 Borrower: Facsimile No. Town of Vai! Borrower By: FirstBank of Vail By; mmlatov.fbv 4114195 12 From: Norman R. Hahrig To: Tom Moorhosd game and address of Borrower{s} fiats: R/i4/g5 Tima: 13:33:54 Deposit Account Assignment and Securi#v Agreement Loan No.: Principal Amount: $ Maturity Date: Lender: FirstBank of Vaii 17 Vail Road Vail, C0 89657 Assignor: Town of Vail 75 So. Frontage Rd. Vail, GO 81657 This assignment and security agreement (the "Agreement") is entered into this _ day of 998, by and between Firstsank of Vail, astate-chartered banking corporation Bank"} and the Town of Vail, a Colorado municipal corporation ("Town"). Recitals Page 2 0l 3 A, in connection with Town's current Residential Employee Mortgage Loan Program (the Program"), Town has agreed to provide fnancia! accommodations to Bank as an incentive far Bank to make mortgage loans to qualified borrowers under the Program. B. Under the terms of the Program documents and the Master Mortgage Loan Agreement, each mortgage loan will be partially collateralized by an assignment from Town of deposit account funds maintained at Bank in the amount of ten percent of the purchase price of the rea! property which is being purchased with the mortgage Ivan proceeds. C. This Agreement is intended to provide for the assignment of the requisite deposit account funds to Bank as collateral for the mortgage loan described above {the "Loan"). Accordingly, the parties agree as follows: 9 . Assignment, Town assigns and grants a security interest to Bank in the entire interest of Town to funds maintained in the name of Town in money market account number the "Account") at Bank to the extent of $ {the Assigned Funds"). 2. Use of Collateral. The Assigned Funds have been pledged to Bank as callateral for the repayment of the Loan. Bank shall have the right to debit the Account and utilize the Assigned Funds in the event of any default by the borrower{s} under the Loan. The Assigned Funds shall remain as collateral for the Loan until the Loan is repaid in full or the Assigned Funds are released by Bank in accordance with the #erms of the master Mortgage Loan Agreement. The Assigned Funds may not be drawn or utilized by Town in any fashion during the term of this agreement. 3. Interest. Unless all or any portion of the Assigned Funds are removed from the Account by Bank, interest will continue to accrue on the Assigned Funds at the-rate which has otherwise been agreed upon between Town and Bank. interest shall nat accrue on any Assigned Funds which are removed. from the Account by Bank for any purpose. tovdaasa.fbv 4/14195 Exh~liit B From: Norman H. Halwig 7a: Tom Moortiwad Data: 4114lg5 Time: 73.34:6 _ Pagw 3 of 3~ 4. Representations of Tawn. Town represents and warrants to Bank that: 4.1 Town has not made any prior assignment or transfer of the Assigned I/unds. 4.2 Town has not withdrawn, cancelled, been repaid, or redeemed alt or any part of the Assigned Funds. 4.3 There is no pending application or instrurr-ent for the withdrawal, cancellation, payment, or redemption of the Assigned Funds. 4.4 The Town shall not, at any time during which the Loan is outstanding, assign, transfer, withdraw, cancel, redeem, or seek any payment or advance from the Assigned Funds. 5. Authority of Bank. In the event of any payment or performance default under the Loan which has continued for a period of mare than 30 days, Town authorizes and empowers Bank, either in its own name or in the name of Town, to: 5.1 Charge or debit the Account for any portion of the Assigned Funds which represent an unpaid baiance owing under the Loan. 5.2 Demand, collect, and receive payment of any and all sums or proceeds due or to become due as the result of the deposit of the Assigned Funds in the Account. 5.3 Deaf in all respects with the Account as the holder thereof. 5A Pay any portion or all of the Assigned Funds to Bank or its order. Executed by the parties on the day and year described above. Firs#1Bank of Vail Town of Vail By:sy: tovdaasa.fbv 4114195 2 i ! THE TOWN 0~' VAIL DEED RESTRICTIONS AND GUIDEI,Ii`1ES FOR TXPE . A EMPLbYEE HOUSING UNITS Effective Niay , 199 Exhibit C i. PURPOSE The purpose of the Type A Employee Housing Unit is to enable individuals to purchase primary residences within the Town of Vail. One of the goals and requirements Ois the deed restrictions is that the residence be owner occupied. Renting the residence is allowed in extenuating circumstances only, as described in Section IV below. Additional information pertaining to the Type A Employee Housing Unit deed restrictions can be found in the Type A Employee Housing Unit "occupancy and Resale Deed Restriction and Agreement" (deed restriction}. The purpose of the Type A Guidelines is to set forth the requirements and res#rictions for those dwelling units throughout the Town of Vail that are purchased via the mortgage guarantee program or the mortgage credit certifica#e program. These two programs can be used individually or can be combined by potential homeowners. At the time ofi closing, if either program has been utilized, the owner must sign the Type A deed restriction which will run with the property in perpetuity. 11. RESALE RESTRICTIONS In the event that an owner desires to self the Type A Employee Housing Unit, the owner may do so provided that the resale price and prospective purchaser meet the standards of the Type A Guidelines and deed restriction. Resale price may nat exceed: A. The original price; B. Pius an increment equal to 3% per annum of the said purchase price from the date of purchase (prorated at the rate of 0.25°I° for each whale month of any part of any year); C. Plus the value of capital improvements (including professional fees) made to the Employee Housing Unit not exceeding t0% of the original purchase price. For every ten years from the date of original purchase and deed restriction, another ten percent of the purchase price may be added to the value of the property for capital improvements; D. plus the value of any special assessments made by a homeowner's association or by a local government that have been paid by the owner. Additional details regarding resale value as well as calculation methods are provided in the deed restriction. ill. PURCHASE CR1TERiA Individuals desiring to purchase an employee housing unit shall receive preference and be prioritized according to the order of the criteria listed below. Units with the highest offers of equal amounts and equal priority status shaft be placed in a Pottery which wilt be held within a reasonable amount ofi time following the deadline for bids. A. Highest offered price below or equal to stated maximum. The Housing Authority, Town of Vail or owner reserves the right to reject any and al! offers. fn addition, the Town may set a minimum offer price, below which no offers will be accepted. Individuals with the longest c~ecutive record of employment within'tfie Town of Vaii boundaries. C. individuals with the longest consecutive record .of residency within the Town of Vail boundaries. D. Individuals who reside and are employed outside the Town of Vail boundaries but within the Gore/Eagle Valleys. IV. OCCUPANCY REQUIREMENTS Once a Type A Employee Housing Unit has been purchased, it must continue to be occupied in a manner which is consistent with the goals and policies of the Town of Vaii Housing Program. The Type A Employee Housing Unit must be owner occupied by: An employee, working in Eagle County who works a minimum of thirty hours per week, and the employee's spouse and children. A retired individual, sixty years or older, who has worked a minimum of five years in Eagle County for a minimum of thirty hours per week, and his or her spouse and children. Other regulations pertaining to occupancy are 'as follows: A. A leave of absence may be granted #oi• one year, subject to clear and convincing evidence, which establishes a reason for leaving and a commitment to return to the Vaii/Eagle County area. Said evidence shall be in written form presented to the Town 30 days prior leaving. The leave of absence shall be for one year and may, at the discretion of the Town, be extended for one additional year, but in no event shall such leave of absence exceed two years, The unit may be rented during said year or years to residents who comply with the above occupancy requirements. After verification and qualification ofi tenant(sj, a copy of the executed lease shall be furnished to the Town. B. If the Type A Employee Housing Unit is fisted for sale, the unit may, upon approval of the Town, be rented to' residents who comply with the occupancy requirements. A letter must be sent to the Vail Housing Authority requesting permission #o rent the unit until sold. A minimum six (6) month written lease must be provided to the tenants with a sixty (60j day move out clause upon notification that the unit is said. C. Cosigners may be allowed but shall not occupy the unit unless the occupancy requirements of this section are met. D. if an individual owns a local residence when purchasing an employee housing unit, the individual must agree to restrict the residence as a Type A Employee Housing Unit as provided in the deed restrictions or sell the residence. The residence must be listed for sale within ninety days of purchasing the employee housing unit and must be sold within one year of closing. 2 E. If an individual awns vacant land when purchasing an empbyee housing unit, as soon as the land is improved with a residence, the individual must sell the employee housing unit yr agree to restrict the new unit as a Type A Employee Housing Unit, as provided for in the deed restrictions. V. ANNUAL VERIFICATION AND PENALTIES FOR VIOLATION A. No later than February 1st ofi each year, the owner of the restricted employee housing unit shall submit two copies of a report, on a form to be obtained from the Community Development Department, to the Town of Vail Housing Authority and the Town of Vail Community Development Department verifying #hat the dwelling unit continues to be owner occupied,. that it has been occupied in accordance with Section IV of these guidelines; that the occupant has worked thirty hours per week for the previous year, and the location of where the occupant has worked. B.. !f the Town determines that there has been a violation of the occupancy standards, the owner of the restricted employee housing unit shah be found to be in noncompliance. Penalties the Town may assess against the owner include eliminating resale gain, andlor penalties found in the Town of Vail Municipal Cade Section 1.01. ~ 00. Any misrepresentation by an appiican# in submittal material shall disqualify the applicant. Vi. SUBMITTAL REQUIREMENTS The applicant shall provide (upon request by the Town) any combination, or ail, of the following documentation as proof of residency, employment and income: A. Federal Income Tax return forms. Applicant must provide the last four (4) years of Federal Income Tax Returns, an audited financial s#atement, or acceptable documentation to the Town. B. Verification of current employment or jvb commitment in Vail or Eagle County i.e., wage s#ubs, employer name, address and phone number or other appropriate documentation as requested by the Town}. C. Landbrd verification (proof of residency, physical address}. D. Valid Colorado Driver's License (address, issue date}. E. Voter registration. Please note that voter registration must be updated within thirty days of closing. F. Deposits for down payment shall be verified by the holder of such funds. G. Any co-ownership interest other #han joint tenancy or tenancy-in-common must be approved by the Town. 3 H. Signed authorization from the applicant allowing the Town of Vaii to discuss details with applicant's employer. 1. Any documentation which the Town deems necessary to make a determination. Vl1, FORECLQSURE The Town of Vail (the "Town"} may, pursuant to an agreement entered into in connection with any first lien deed of trust or mortgage to be secured by the affordable housing unit, agree to release and waive their ability to enforce the resale restrictions contained herein, in the event ofi foreclosure, provided. that such agreement grants to the Town Council and Authority, the option to acquire the affordable housing unit within 30 days after the expiration of the statutory redemption period for an option price not to exceed the redemption price on the last day of the redemption period. The following option provisions shat! be included in loan documents, or in a separate agreement entered into in connection with loan documents, and shall be executed by the lender, the Town Council, and the Authority. n the event of a foreclosure by the holder (including assigns of the holder) of the promissory note secured by a first deed of trust or mortgage on the affordable pausing unit, and subject fo the issuance of a public trustee's or sheriffi's deed to the holder following the expiration of the borrower's redemption rights, the Housing Au#hority of the Town of Vail ("Authority"} and the Town Council of the Town of Vaii, Colorado (the Town Council'"} shall have tpe option to purchase the affordable pausing unit which shall be exercised in the following manner: A. Notice. The polder spell give notice to the Authority and the Town Council teat a certificate of purchase with respect to the affordable housing unit has been issued to said holder by tpe Public Trustee of Eagle County. Such notice will be given within f 0 days of tf~e issuance of the certificate. Notice shall be deemed given upon being placed in the U.S. Mail, First-class postage prepaid, and addressed as follows: Town lUlanager, Town of Vaii 75 S. Frontage Road Vaii, CO 81657 Chairman, Housing Authority of the Town of Vail 75 S. Frontage Road Vail, CO 81657. B. First Option. The Town Council shall have f 5 days after the expiration of the borrower's statutory right to redeem in which to exercise its option by tendering to the polder, in cash or certified funds, an amount equal to the redemption price wpicp would have been required of the borrower on the last day of the redemption period. 4 a • t C. Second Option. The Authority shall have i5 days after the expiration of the Town Council's option as se# forth above to exercise its option #o purchase the affordable housing unit by tendering to the holder, in cash or cer#ified funds an amount e~ua! to the redemp#ion price which the borrower would have been required to pay an the last day of the ' redemption period. D. Title. Upon receipt of the option price, the holder shalt deliver to either the Authority or the Tawn Council a special warranty deed, conveying the property to of#her the Authority or the Town Council. Title shall be merchantable, free and clear of liens and encumbrances which would render title unmerchantabfe. In the event that neither the Authority or the Town Council exercise their respective options as provided above, the Authority and the Town Council shall cause to be recorded in the records of the Clerk and Recorder of Eagle County, a full and complete release of the covenants restricting such unit to Affordable Housing use which appear in said records in Book ( )Page ( ). Such release shall be placed of record within three days after demand therefore by the holder foNowing. the expiration of the options. 5