Draft Rental Covenenat
1
WHEN RECORDED, MAIL TO:
City
Mailing Address
ATTN: City Clerk
Planning Dept Housing Planner
WASHINGTON STATE COUNTY AUDITOR/RECORDER/S INDEXING FORM
Document Title(s) (or transactions contained therein):
DECLARATION OF AFFORDABLE HOUSING COVENANTS--
Reference Number(s) of Documents assigned or released:
☐ Additional reference numbers on page of document.
Grantor(s) (Last name first, then first name and initials):
1. ___________________________
☐ Additional names on page of document.
Grantee(s) (Last name first, then first name and initials):
1. CITY OF ____________, WASHINGTON
☐ Additional names on page of document.
Legal Description (abbreviated form; i.e., lot, block, plat name,
section-township-range):
______________________________
☐ Additional legal on Exhibit “A” of document.
Assessor’s Property Tax Parcel Account Number(s):
______________________________
The Auditor/Recorder will rely on the information provided on the form. The
staff will not read the document.
2
DECLARATION OF AFFORDABLE HOUSING COVENANTS
PROJECT NAME
SECTION 1 — DEFINITIONS AND INTERPRETATION
SECTION 2 — RESIDENTIAL RENTAL PROPERTY
SECTION 3 — AFFORDABLE UNITS FOR ELIGIBLE HOUSEHOLDS
SECTION 4 — REPORTING REQUIREMENTS
SECTION 5 — SECTION 8 CERTIFICATE HOLDERS
SECTION 6 — LEASE PROVISIONS
SECTION 7 — SALE OR TRANSFER OF THE PROJECT
SECTION 8 — TERM
SECTION 9 — NO DISCRIMINATION
SECTION 10 — COVENANTS RUN WITH LAND
SECTION 11 — ENFORCEMENT
SECTION 12 — SUBORDINATION, TERMINATION, RIGHTS RESERVED BY
HUD
SECTION 13 — ESTOPPEL CERTIFICATE
SECTION 14 — AGREEMENT TO RECORD
SECTION 15 — RELIANCE
SECTION 16 — GOVERNING LAW
SECTION 17 — NO CONFLICT WITH OTHER DOCUMENTS
SECTION 18 — AMENDMENTS
SECTION 19 — NOTICES
SECTION 20 — FEE WAIVER REQUIREMENTS
SECTION 21 — SEVERABILITY
SECTION 22 — CONSTRUCTION
SECTION 23 — TITLES AND HEADINGS
EXHIBITS
"A" LEGAL DESCRIPTION OF PROPERTY
"B" DESIGNATION OF AFFORDABLE UNITS
"C" CERTIFICATE OF HOUSEHOLD ELIGIBILITY
"D" ANNUAL PROJECT CERTIFICATION
3
DECLARATION OF AFFORDABLE HOUSING COVENANTS PROJECT NAME
THIS DECLARATION OF AFFORDABLE HOUSING COVENANTS (the
"Covenant") is made and entered into as of this _______ day of
_________________, 20____, by and between the CITY OF ___________,
a Municipal Corporation of the State of Washington (the "City");
and _[ALL CAPS for name, small case for type of corporation] (the
“Owner”).
WITNESSETH:
This Covenant is predicated upon the following facts:
A. The Owner is the owner of property located at address in
city, Washington. Owner intends to develop said property by
constructing and renting number dwelling units (the "Project”),
subject to City approval and such other approvals by State and
local agencies as required.
B. The Owner's proposed Project shall include ________(__)
affordable rental units for Moderate-/Low-Income Households
(“Eligible Households”, as the term is defined below). Such
affordable rental units shall be of such bedroom quantity and
quality as are in proportion to the overall proportion of bedroom
quantity and quality of all of the rental units in the Project.
C. The City finds that the Project will benefit the City by
providing affordable rental housing for Eligible Households.
D. The Owner has indicated its willingness to accept
certain conditions affecting the use of the Property. It is the
purpose of this Covenant to set forth the conditions under which
the City has approved the Project and to impose enforceable
restrictions on the use and occupancy of the rental portion of the
Project.
E. This Covenant is entered into pursuant to code chapter
or section, which implements the Affordable Housing policies of
the City.
NOW, THEREFORE, for and in consideration of the mutual
promises aforesaid and made and relied upon by the parties hereto,
and for other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Owner and the City agree as
follows:
4
SECTION 1 — DEFINITIONS AND INTERPRETATION
Capitalized terms used herein shall have the following
meanings unless the context in which they are used clearly requires
otherwise.
“Affordable Rent” means a monthly housing expense, including
Utilities or an applicable Utility Allowance for tenant-paid
utilities, parking for a minimum of one car, and any expenses
required by the Owner as a condition of tenancy (including but not
limited to renter’s insurance, pest control, sewer system capacity
charges), that is no greater than thirty percent (30%) of the
monthly King County Median Income level(s) for Eligible
Households, as shown in the following table, adjusted for Household
Size. If a tenant pays for Utilities separately from rent, the
Affordable Rent will be reduced by the amount of the applicable
Utility Allowance.
Affordable Rent Levels
Percent of King County Median Income
Low Income 50%
Moderate Income 80%
“Affordable Units” means the number units in the Project as
selected by the Owner and as approved by the City or its Designee,
as set forth in Exhibit B, and reserved for occupancy by Eligible
Households pursuant to Section 3.
“City” means the City of _______________.
“Completion Date” means the date of the completion of the
acquisition, construction, purchase, reconstruction and equipping,
as the case may be, of the Project, as that date shall be certified
as provided in Section 4.
“Covenant” means this Declaration of Affordable Housing
Covenants between the City and the Owner.
“Designee” means A Regional Coalition for Housing (“ARCH”) or
such other agency as may be designated by the City in writing to
the Owner. The City shall notify the Owner of any determination
not to utilize ARCH as its Designee for purposes of this
designation.
5
“Eligible Household” means one or more adults and their
dependents, which adults certify that they meet the qualifications
for eligibility set forth below in this definition, in Section
3.F. of this Covenant, and as set forth in the Certificate of
Household Eligibility attached hereto as Exhibit C and
incorporated by reference herein, and who certify that their
Household Income does not exceed the applicable percent of the
King County Median Income, as set forth in this definition and
Section 3.F of this Covenant, adjusted for Household Size.
Maximum Household Incomes at Initial Occupancy
Income Level Percent of King County Median Income
Low-Income 50%
Moderate–Income 80%
“Household Income” means all income from all household
members over the age of 18 residing in the household. Income
consists of those items listed in Exhibit C, Certificate of
Household Eligibility (e.g. wages, interest income, etc.). Income
of dependents who reside within a household for less than four (4)
months of the year will not be counted toward Household Income.
“Household Size” means the average household size assumed for
purposes of calculating Affordable Rents as follows:
UNIT TYPE AVERAGE HOUSEHOLD SIZE
Studio 1 Person
1 Bedroom 1.5 Persons
2 Bedroom 3 Persons
3 Bedroom 4.5 Persons
“King County Median Income” means the median family income
for the Seattle-Bellevue, WA HUD Metro FMR Area as most recently
determined by the Secretary of Housing and Urban Development
(“HUD”) under Section 8(f)(3) of the United States Housing Act of
1937, as amended. In the event that HUD no longer publishes median
family income figures for King County, the Director may estimate
the King County Median Income in such manner as the Director shall
determine.
“Lender” means HUD/FHA, Veterans Administration (“VA”),
Federal National Mortgage Association (“FNMA”), Federal Home Loan
Mortgage Corporation (“FHLMC”), or another party acquiring such
loan upon foreclosure of a deed of trust or mortgage (“Deed of
6
Trust”) insured, made or held by HUD/FHA, VA, FNMA, FHLMC; or an
institutional third-party lender or investor.
“Owner” means name, and its successors and assigns, and any
surviving, resulting, or transferee entity.
“Owner Representative” means the person or persons (who may
be employees of the Owner) designated from time to time to act
hereunder on behalf of the Owner in a written certification
furnished to the City or its Designee, containing a specimen
signature of such person or persons and signed by the Owner or on
behalf of the Owner by a duly authorized representative of the
Owner.
“Project” means the building, structures and other
improvements to be constructed on the Property, and all equipment,
fixtures and other property owned by the Owner and located on, or
used in connection with, such buildings, structures and other
improvements and all functionally related and subordinate
facilities.
“Property” means the real property which will be devoted to
the Project as more particularly described in Exhibit A which is
attached hereto, and incorporated by reference herein, and all
rights and appurtenances thereunto appertaining.
“Qualified Project Period” means for the life of the Project.
“Utilities” means basic residential utility services,
including heat, gas, electricity, water, sewer, and solid waste
and recycling services, but excluding sewer system capacity
charges and telephone, internet, and television services.
“Utility Allowance” means a deduction to Affordable Rent,
established by the City or its Designee, for tenant-paid Utilities.
SECTION 2 — RESIDENTIAL RENTAL PROPERTY
A. General Description. The Owner will acquire and
construct the Project for purposes of providing multi-family
rental housing and neighborhood retail uses, and the Owner shall
own, manage, and operate (or cause the management and operation
of) the Project to provide multi-family rental housing comprising
a building or structure or several inter-related buildings or
structures, each consisting of more than one dwelling unit and
neighborhood retail uses and facilities functionally related and
7
subordinate thereto, and no other facilities. As used herein
facilities functionally related and subordinate to the Project
shall include facilities for use by the tenants, including, for
example, recreational facilities, parking areas, and other
facilities which are reasonably required for the Project, for
example, heating and cooling equipment, trash disposal equipment,
or units of resident managers or maintenance personnel.
B. Similar Quality Construction. All of the dwelling units
in the Project shall be constructed of similar quality, and each
dwelling unit in the Project shall contain facilities for living,
sleeping, eating, cooking and sanitation for a single person or a
household which are complete, separate and distinct from other
dwelling units in the Project and will include a sleeping area,
separate bathing facility, and a cooking range, refrigerator and
sink.
C. Conversion to Condominium. In the event the Project is
proposed for conversion to condominium, owner-occupied, or non-
rental residential use, the Owner must submit to the City for its
review a plan for preserving the Affordable Units. The City can
consider options which would convert the Affordable Units to owner
occupancy by Eligible Households. The Owner must receive
authorization from the City prior to conversion to condominium,
owner-occupied, or non-rental residential use. This section does
not waive the Owner's obligations to comply with any other law or
regulations pertaining to conversion to ownership use.
SECTION 3 — AFFORDABLE UNITS FOR ELIGIBLE HOUSEHOLDS
A. Number of Affordable Units. The Owner shall lease or
rent, or make available for lease or rental, to the general public,
all of the Affordable Units in the Project. The Owner shall
designate all of the Affordable Units, reserved for occupancy by
Eligible Households, as follows:
Dwelling Units
Unit Type (Bedrooms) Affordable Units Total Units Low-Income Moderate-Income
Studio
Open 1-bedroom
1-bedroom
2-bedroom
Total
8
B. Designation/Re-designation of Affordable Units. The
Owner agrees to rent the dwelling units designated in Exhibit B as
Affordable Units. Units so designated shall have substantially the
same equipment and amenities as other dwelling units in the Project
with the comparable number of rooms. The Affordable Unit(s) shall
be intermingled with all other dwelling units and shall have a
unit mix comparable to the overall mix of units in the Project.
The City or its Designee shall approve or deny the proposed
Affordable Units based upon the criteria set forth in this section.
The Owner, from time to time, may propose to change the
particular units designated as Affordable Units, provided that at
all times at least number of all of the residential units in the
Project are designated as Affordable Units, and provided that at
all times the same unit mix [and affordability mix] is retained.
The Owner shall notify the City or its Designee of the proposed
change in writing for the City's or its Designee's approval. The
City or its Designee will review the proposed changes and shall
approve or deny the proposed changes based upon the criteria set
forth in this Section.
C. Affordable Units Rent Level. The monthly rent for the
Affordable Units occupied by Eligible Households shall not exceed
the applicable Affordable Rents, and for each specific tenant,
shall be adjusted no more than once every twelve (12) months, and
in no event within the first twelve months of occupancy.
D. Renting Affordable Units to Eligible Households. During
the Qualified Project Period, the Owner shall rent or lease the
Affordable Units to Eligible Households and, if at any time the
Owner is unable to rent or lease the Affordable Units, the
Affordable Units shall remain vacant pending rental or lease to
Eligible Households.
[ALTERNATE (Redmond): During the Qualified Project Period,
the Owner shall rent or lease the Affordable Units to Eligible
Households and, if at any time the Owner is unable to rent or lease
an Affordable Unit, such Affordable Unit shall remain vacant
pending rental or lease to Eligible Households for a period of not
less than six (6) consecutive months. If, despite diligent efforts
of the part of the Owner and the City to lease an Affordable Unit,
such Affordable Unit has been vacant and available for six (6)
consecutive months, the City may relax the income restriction
required for the Affordable Unit from the Maximum Initial Income
Level to the Maximum Recertification Income Level, as defined in
9
Section 3F of this Covenant. At the expiration of the lease of
such Affordable Unit, the income restriction will be restored to
the Maximum Initial Income Level. In the event the income
restrictions are relaxed by the City pursuant to this Section,
there will be no change in the Affordable Units rent level
established pursuant to Section 3.C of this Covenant.]
E. Equal Access to Common Facilities. Tenants in the
Affordable Units shall have equal access to enjoyment of all common
facilities of the Project.
F. Qualifying Eligible Household Income for Affordable
Units at Initial Occupancy and Recertification. Qualifying
Eligible Household Income at time of occupancy may not exceed the
applicable percent of King County Median Income set forth in the
table below, adjusted for Household Size. At time of annual
recertification, a household will remain eligible for an
Affordable Unit as long as Household Income does not exceed the
Maximum Recertification Income set forth in the table below,
adjusted for Household Size. If at the time of recertification
Household Income exceeds the Maximum Recertification Income limit
for the income level initially qualified for by a household, then
within 90 days either such household must pay market rent and the
next available comparable market rate unit must be rented as an
Affordable Unit; or the household must vacate the unit, unless
otherwise prohibited by law, to make it available for an Eligible
Household.
Maximum Permitted Income Levels
Income Level
Maximum Income at Initial Occupancy Maximum Recertification Income
Low Income 50% %
Moderate Income 80% 100%
G. Household Size Limits for Affordable Units. The Owner
shall utilize the following occupancy standards for Affordable
Units:
Unit Size Household Size
Studio 1–2 Persons
1 Bedroom 1–2 Persons
2 Bedroom 2–4 Persons
3 Bedroom 3–6 Persons
10
SECTION 4 — REPORTING REQUIREMENTS
A. Notice of Occupancy Permit. Within thirty (30) days of
issuance of any final inspection or, if applicable, occupancy
permits, the Owner shall notify the City's Planning and Community
Development Department [Attn: Housing Planner] or its Designee of
receipt of the first certificate of occupancy for the Project.
B. City Mailing List. The City or its Designee maintains
a mailing list of households interested in occupying Affordable
Units. From time to time the City or its Designee will provide to
the Owner the names of persons from the mailing list. In
determining which eligible applicants shall be rented Affordable
Units, the Owner shall, subject to Section 4.C. below, reasonably
consider persons on the mailing list, and when they were placed on
the mailing list.
C. Completion of Certificate of Household Eligibility.
Prior to allowing any household to occupy any Affordable Unit, the
Owner shall require the prospective tenant to complete a
Certificate of Household Eligibility that shall be substantially
in the form set forth in Exhibit C. The Owner shall also undertake
a good faith effort to verify the applicant's Household Income, as
reported on the completed Certificate. The Owner's obligation to
verify the reported Household Income shall be limited to requesting
copies of and reviewing the applicant's federal income tax returns,
unless the Owner has actual knowledge, or reason to believe, that
the information provided by the applicant is materially
inaccurate. In the event federal income tax returns are not
available, the Owner shall verify Household Income using wage or
salary statements, or other income records that the City or its
Designee may consider appropriate.
D. Annual Recertification of Residents. On an annual
basis, the Owner shall require all households occupying Affordable
Units to complete and return to the Owner an updated Certificate
of Household Eligibility. The Owner shall undertake a good faith
effort to verify the reported Household Income, as reported in the
completed Certificate. The Owner's obligation to verify the
Household Income shall be limited to obtaining a copy of and
reviewing the tenant's federal income tax returns, unless the Owner
has actual knowledge or reason to believe that the information
provided by the household is materially inaccurate. In the event
federal income tax returns are not available, the Owner shall
11
verify Household Income using wage or salary statements, or other
income records the City or its Designee may consider appropriate.
The Owner shall file certifications with the City or its
Designee, by attachment to the Annual Project Certification
required pursuant to Subsection E of this Section. The City or its
Designee may investigate independently to verify certifications
submitted by the Owner.
E. Annual Project Certification. After the Completion Date
and until 90% of the rental units are occupied, the Owner shall,
on a quarterly basis, file with the City or its Designee an Annual
Project Certification, in substantially the form of Exhibit D.
Thereafter, the Owner shall file such certification annually on or
before March 31st, which must set forth the required information
for the preceding year.
F. Maintain Complete Records. The Owner shall maintain
complete and accurate records pertaining to the Affordable Units,
and shall permit any duly authorized representative of the City,
including, without limitation, its Designee, to inspect the books
and records of the Owner pertaining to the Affordable Units, and
if applicable, incomes of Eligible Households residing in the
Project. The Owner’s failure to maintain such records or failure
to allow examination by the City or any duly authorized
representative shall constitute a default hereunder.
G. Form of Certification. Notwithstanding anything in this
Section to the contrary, the Owner shall submit all documentation
required by this Section on the forms designated herein, which may
be modified by the City or its Designee from time to time. Changes
to forms by the City or its Designee shall not significantly
enlarge the Owner's obligations hereunder.
H. Monitoring Fee. The City may assess, and the Owner
agrees to pay fees to cover the costs of monitoring the Owner’s
compliance with income and affordability restrictions of this
Covenant.
SECTION 5 — SECTION 8 CERTIFICATE HOLDERS
The Owner shall accept as tenants for Affordable Units, on
the same basis as all other prospective households, households who
are recipients of Federal certificates for rent subsidies pursuant
to the existing program under Section 8 of the United States
Housing Act of 1937, as amended. The Owner shall not apply or
12
permit the application of management policies or lease provisions
with respect to the Project which have the effect of precluding
occupancy of Units by holders of Section 8 certificates.
SECTION 6 — LEASE PROVISIONS
A. It is the Owner's responsibility to screen and select
tenants for desirability and credit worthiness. Except as
restricted in this Covenant, such selection is within the Owner's
discretion. If written management policies exist, or exist in the
future, with respect to the Project, the City or its Designee may
review such written policies and may require changes in such
policies, if necessary, so that they comply with the requirements
of this Covenant.
B. All leases for Affordable Units shall contain clauses
wherein each individual lessee: (i) certifies the accuracy of the
statements made in the Certificate of Household Eligibility, (ii)
agrees that the household income and other eligibility
requirements shall be deemed substantial and material obligations
of the tenancy, and (iii) agrees that misrepresentation in the
certification is a material breach of the lease, entitling the
Owner to terminate the lease for the Affordable Unit.
SECTION 7 — SALE OR TRANSFER OF THE PROJECT
The Owner hereby covenants and agrees not to sell, transfer
or otherwise dispose of the Project or any portion thereof without
first providing a written notice from the purchaser stating that
the purchaser understands, and will comply with the Owner's duties
and obligations under this Covenant. Such notice must be received
by the City or its Designee at least 10 days prior to the close of
escrow.
SECTION 8 — TERM
This Covenant shall become effective upon its execution and
delivery and shall continue in full force and effect throughout
the Qualified Project Period, unless sooner modified or terminated
in accordance with Section 12 hereof.
SECTION 9 — NO DISCRIMINATION
The Owner shall not discriminate on the basis of race, creed,
religion, color, sex, sexual orientation, age, national origin,
marital status, or presence of any mental or physical handicap as
13
set forth in RCW 49.60.030, as now existing and as may be amended,
in the lease, use, or occupancy of the Project or in connection
with the employment or application for employment of persons for
the operation and management of the Project.
SECTION 10 — COVENANTS RUN WITH LAND
The City and Owner hereby declare their understanding and
intent that the covenants, conditions, and restrictions set forth
herein directly benefit the land (i) by enhancing and increasing
the enjoyment and use of the Project by certain Eligible
Households, and (ii) by furthering the public purposes of providing
housing for Eligible Households.
The City and the Owner hereby declare that the covenants and
conditions contained herein shall bind and the benefits shall inure
to, respectively, the Owner and their successors and assigns and
all subsequent owners of the Project or any interest therein, and
the City and its successors and assigns, all for the Qualified
Project Period. Except as provided in Section 12 of this Covenant,
each and every contract, deed or other instrument hereafter
executed conveying the Project or any portion thereof or interest
therein shall contain an express provision making such conveyance
subject to the covenants and conditions of this Covenant, provided
however, that any such contract, deed, or other instrument shall
conclusively be held to have been executed, delivered and accepted
subject to such covenants and conditions, regardless of whether or
not such covenants and conditions are set forth or incorporated by
reference in such contract, deed, or other instrument.
SECTION 11 — ENFORCEMENT
A. Enforcement Provisions. The Owner shall exercise
reasonable diligence to comply with the requirements of this
Covenant and shall correct any such noncompliance within sixty
(60) days after such noncompliance is first discovered by the Owner
or would have been discovered by the exercise of reasonable
diligence, or within 60 days after the Owner receives notice of
such noncompliance from the City or its Designee; provided however,
that such period for correction may be extended by the City if the
Owner is exercising due diligence to correct the noncompliance. If
such noncompliance remains uncured after such period, then the
Owner shall be in default and the City on its own behalf may take
any one or more of the following steps:
14
1) By any suit, action or proceeding at law or in
equity, require the Owner to perform its obligations under this
Covenant, or enjoin any acts or things which may be unlawful or in
violation of the rights of the City hereunder; it being recognized
that the beneficiaries of the Owner's obligations hereunder cannot
be adequately compensated by monetary damages in the event of the
Owner's default;
2) Have access to, and inspect, examine and make
copies of, all of the books and records of the Owner pertaining to
the Project. Provided, however, the City or its Designee shall not
divulge such information to any third party unless required by law
or unless the same is necessary to enforce the City's rights
hereunder; and
3) Take such other action at law or in equity as may
appear necessary or desirable to enforce the obligations,
covenants, conditions and agreements of the Owner under this
Covenant.
4) The Owner hereby grants to the City or the Designee
the option, upon Owner's default under this Covenant, for the
Qualified Project Period to lease up to number of the units in the
Project as mutually selected by the City or its Designee and the
Owner for the purpose of subleasing such units to Eligible
Households, but only to the extent necessary to comply with the
provisions of this Covenant. The City or its Designee may lease
from the Owner the units at the Affordable Rent level less a
reasonable management fee to reimburse the City or its Designee
for any expenses incurred in connection with such sublease. The
City or its Designee may terminate its lease of the units in the
Project upon determination that the Owner is no longer in default
pursuant to this Covenant.
B. Hold Harmless. The Owner shall defend, indemnify, and
hold the City, its officers, officials, employees, volunteers and
its Designee and any other party authorized hereunder to enforce
the terms of this Covenant, harmless from any and all claims,
injuries, damages, losses, or suits, including attorney fees,
arising out of or resulting from this Covenant.
C. No Third-Party Beneficiaries. The provisions of this
Covenant and of the documents to be executed and delivered in
connection herewith are and will be for the benefit of the Owner,
the City and its Designee only and are not for the benefit of any
15
third party (including, without limitation, any tenants or tenant
organizations), and accordingly, no third party shall have the
right to enforce the provisions of this Covenant or of the
documents to be executed and delivered in connection herewith.
SECTION 12 — SUBORDINATION, TERMINATION, RIGHTS RESERVED BY HUD
A. Notwithstanding any provision in this Covenant to the
contrary, all of the provisions of this Covenant shall terminate
and have no further force and effect upon the occurrence of one of
the following events:
(1) Foreclosure of a HUD/FHA insured loan is initiated
under which the Project is held as a security.
(2) Title to the Project is acquired by Lender or
HUD/FHA by deed in lieu of foreclosure of the Deed of Trust.
(3) Title to the Project is acquired by HUD/FHA,
Veterans Administration ("VA"), Federal National Mortgage
Association ("FNMA"), Federal Home Loan Mortgage Corporation
("FHLMC") or another party upon foreclosure of a deed of trust or
mortgage ("Deed of Trust") insured, made or held by HUD/FHA, VA,
FNMA, FHLMC; or an institutional, third-party lender or investor
(collectively, "Lender").
(4) The Deed of Trust, if insured by HUD/FHA, is
assigned to HUD/FHA.
Notwithstanding anything in this Covenant to the contrary,
enforcement of this Covenant shall not serve as a basis for (i)
default under the Deed of Trust insured by HUD/FHA or any other
Lender, or (ii) an acceleration of the loan secured by the Deed of
Trust ("Loan"), or result in any claim against the Project, the
Loan proceeds, any reserve or deposit required by HUD/FHA or any
other Lender in connection with the Loan transaction or the rents
or other income from the Project other than from available surplus
cash as that term is defined by HUD/FHA or any other Lender.
B. Notwithstanding anything in this Covenant to the
contrary:
(1) All of the provisions of this Covenant are
subordinate and subject to the Deed of Trust, the Loan, and all
documents relating to the Loan ("Loan Documents"), if any, as well
as all applicable HUD/FHA mortgage insurance regulations, related
16
HUD/FHA administrative requirements, Section 8 of the U.S. Housing
Act of 1937, as amended, and the regulations thereunder, as
amended, and the rights of the Lender thereunder. In the event of
any conflict between this Covenant and the provisions of any
applicable HUD/FHA mortgage insurance regulations, related HUD/FHA
administrative requirements, Section 8 of the U.S. Housing Act of
1937, as amended, and the regulations thereunder, as amended, the
applicable HUD/FHA mortgage insurance regulations, related HUD/FHA
administrative requirements, Section 8 of the U.S. Housing Act of
1937, as amended, and the regulations thereunder, as amended, will
control.
(2) Lender shall take no role in monitoring compliance
with state and federal use and occupancy requirements; nor shall
Lender be required to provide notice to third parties of actions
under the Deed of Trust, if any.
(3) No amendment to this Covenant will be effective
without the prior written consent of Lender, if any.
(4) The Owner, its successors or assigns, will take all
steps necessary to comply with this Covenant; provided that the
Owner, its successors or assigns, shall not be required to take
action prohibited by, or to refrain from action required by Lender,
pursuant to the National Housing Act (as amended), applicable
HUD/FHA mortgage insurance regulations, related administrative
requirements, Section 8 of the Housing Act of 1937, as amended,
and the regulations thereunder, as amended, or the Loan and the
Loan Documents.
SECTION 13 — ESTOPPEL CERTIFICATE
The City agrees, upon the request of the Owner or its
successor in interest, to promptly execute and deliver to the Owner
or its successor in interest or to any potential or actual
purchaser, mortgagor or encumbrance of the Project, a written
certificate stating, if such is true, that the City has no
knowledge of any violation or default by the Owner of any of the
covenants or conditions of this Covenant, or if there are such
violations or defaults, the nature of the same.
SECTION 14 — AGREEMENT TO RECORD
The Owner shall cause this Covenant to be recorded in the
real property records of King County, Washington. The Owner shall
pay all fees and charges incurred in connection with such recording
17
and shall provide the City or its Designee with a copy of the
recorded document.
SECTION 15 — RELIANCE
The City and the Owner hereby recognize and agree that the
representations and covenants set forth herein may be relied upon
by City and the Owner. In performing its duties and obligations
hereunder, the City may rely upon statements and certificates of
the Owner and Eligible Households, and upon audits of the books
and records of the Owner pertaining to occupancy of the Project.
In performing its duties hereunder, the Owner may rely on the
Certificates of Household Eligibility unless the Owner has actual
knowledge or reason to believe that such Certificates are
inaccurate.
SECTION 16 — GOVERNING LAW
This Covenant shall be governed by the laws of the State of
Washington, except to the extent such laws conflict with the laws
of the United States or the regulations of federally insured
depository institutions or would restrict activities otherwise
permitted in relation to the operation of federally insured
depository institutions.
SECTION 17 — NO CONFLICT WITH OTHER DOCUMENTS
The Owner warrants that it has not executed and will not
execute, any other agreement with provisions contradictory to, or
in opposition to, the provisions hereof, and that in any event the
requirements of this Covenant are paramount and controlling as to
the rights and obligations herein set forth and supersede any other
requirements in conflict herewith.
SECTION 18 — AMENDMENTS
This Covenant shall be amended only by a written instrument
executed by the parties hereto or their respective successors in
title, and duly recorded in the real property records of King
County, Washington. Amendments to Exhibit B shall be considered to
be approved in writing when the revised Exhibit B is signed by the
Owner and the City or its Designee without the need for a further
written document attaching the revised exhibit and striking prior
versions of the exhibit. In the event of conflict between versions
of Exhibits B, the version maintained by the City or its Designee
18
as the then-current version, signed by Owner and City or its
Designee, shall prevail.
SECTION 19 — NOTICE
Any notice or communication hereunder, except legal notices,
shall be in writing and may be given by registered or certified
mail. The notice or communication shall be deemed to have been
given and received when deposited in the United States Mail,
properly addressed with postage prepaid. If given otherwise, it
shall be deemed to be given when delivered to and received by the
party to whom addressed. Such notices and communications shall be
given to the parties hereto at their following addresses:
If to the City: city name
mailing address
city, WA zip
Attn: person name or title
With a copy to the Designee
A Regional Coalition for Housing (ARCH)
16225 NE 87th Street, Suite A-3
Redmond, WA 98052
Attn: Housing Planner
If to the Owner: owner name
mailing address
city, st zip
Attn: person name or title
Any party may change its address for notices upon ten (10)
days prior written notice to the other parties. Legal counsel for
a party may deliver notices on behalf of the represented party and
such notice shall be deemed delivered by such party.
OPTION ADD IF FEE WAIVER
SECTION 20 — FEE WAIVER REQUIREMENTS
Pursuant to _______________________________the Owner
received fee waivers in the approximate amount of $_____________
as consideration for the provision of affordable units in the
Project. In the event at any time during the term of this Covenant,
the Affordable Units are not provided pursuant to the provisions
of this Covenant, the City retains the right to require the Owner
to pay to the City all fees that were waived at the rate prevailing
19
at the time the City determines the Project is no longer conforming
to the affordability requirements of this Covenant. This provision
shall survive termination of the Covenant if such occurs prior to
expiration of the Qualified Project Period.
SECTION 21 — SEVERABILITY
If any provision of this Covenant shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or
impaired thereby.
SECTION 21 — CONSTRUCTION
Unless the context clearly requires otherwise, words of the
masculine, feminine or neuter gender shall be construed to include
each other gender when appropriate and words of the singular number
shall be construed to include the plural number, and vice versa,
when appropriate. All the terms and provisions hereof shall be
construed to effectuate the purposes set forth in this Covenant
and to sustain the validity hereof.
SECTION 22 — TITLES AND HEADINGS
The titles and headings of the sections of this Covenant have
been inserted for convenience of reference only, are not to be
considered a part hereof and shall not in any way modify or
restrict any of the terms or provisions hereof or be considered or
given any effect in construing this document or any provision
hereof or in ascertaining intent, if any question of intent shall
arise.
[Signature page follows.]
20
IN WITNESS WHEREOF, the Owner and City have each executed
this Declaration of Affordable Housing Covenants on the Date first
above written.
Owners: City:
name name
Its: title Its: title
Approved as to Form:
______________________
City Attorney
21
STATE OF WASHINGTON }
} ss.
COUNTY OF KING }
On this ________ day of _____________, 20___, before me, a
Notary Public in and for the State of Washington, duly
commissioned and sworn, personally appeared _________________,
known to me to be the _____________________ of the CITY OF
____________, who executed the foregoing document on behalf of
said City, and acknowledged the said document to be the free and
voluntary act and deed of said City, for the uses and purposes
therein mentioned, and on oath stated that he or she was
authorized to execute said document.
IN WITNESS WHEREOF I have given under my hand and official seal
this ___ day of ___________, 20___.
Notary Public in and for the State
of Washington.
Print Name
Residing at
My commission expires
22
STATE OF WASHINGTON }
} ss.
COUNTY OF KING }
On this ________ day of _____________________, 20___, before me,
a Notary Public in and for the State of Washington, duly
commissioned and sworn, personally appeared
___________________________________, to me known to be the
____________________ of ________________________, corporation,
who executed the foregoing instrument on behalf of the said
corporation, and acknowledged the said document to be the free
and voluntary act and deed of said corporation for the uses and
purposes therein mentioned, and on oath stated that he or she
was authorized to execute said document.
IN WITNESS WHEREOF I have given under my hand and official seal
this ____ day of ___________, 20___.
Notary Public in and for the State
of Washington.
Print Name
Residing at
My commission expires
23
EXHIBIT A
LEGAL DESCRIPTION
24
EXHIBIT B
DESIGNATION OF AFFORDABLE UNITS
Unit Number Unit Type Unit Size (sq ft)
See attached diagram(s).
BEAUX ARTS VILLAGE♦BELLEVUE♦BOTHELL♦CLYDE HILL♦HUNTS POINT♦ISSAQUAH♦KENMORE♦KIRKLAND
MEDINA♦MERCER ISLAND♦NEWCASTLE♦REDMOND♦SAMMAMISHWOODINVILLE♦YARROW POINT♦KING COUNTY
EXHIBIT C
FORM OF CERTIFICATE OF HOUSEHOLD ELIGIBILITY
Together Center Campus
16225 NE 87th Street, Suite A-3 ♦ Redmond, WA 98052
(425) 861-3677 ♦ Fax: (425) 861-4553
WEBSITE: www.archhousing.org
CERTIFICATION OF HOUSEHOLD ELIGIBILITY
I, , and I , , as applicants for rental
of the following Affordable unit, do hereby represent and warrant that my/our adjusted annual income is
$
Project:_______________________ Project Address: ______________________________________
Unit # No. of Bedrooms: Household size *: Disabled: Yes / No
Household Members:
, Age , Age
, Age , Age
, Age , Age
The attached computation is $ , and includes all income I/we received for the date I/we
execute a rental agreement for an affordable unit, or the date on which I/we will initially occupy such unit,
whichever is earlier.
This affidavit is made with the knowledge that it will be relied upon by the City to determine maximum
income for eligibility. I/We warrant that all information set forth in this Certification of Household
Eligibility is true, correct and complete based upon information I/We deem reliable, and that the estimate
contained in the preceding paragraph is reasonable and based upon such investigation as the undersigned
deemed necessary. I/we will assist the Owner in obtaining any information or documents required to verify
the statements made in this Certification.
I/We acknowledge that I/we have been advised that the making of any misrepresentation or
misstatement in this affidavit will constitute a material breach of my/our agreement with the Owner
to lease the unit and will entitle the Owner to prevent or terminate my/our occupancy of this unit by
institution of an action for eviction or other appropriate proceedings.
I/We do hereby swear under penalty of perjury that the foregoing statements are true and correct.
26
Applicant Applicant
Date: ___________________ Date:____________________
Mailing Address Phone
INCOME COMPUTATION
"Household income" includes all items listed below, from all household members over the age of
18. Income of dependents over 18, who reside in the unit for less than four (4) months of the year
will not be counted toward household income.
For the previous 12-month period, indicate income received from the following sources:
a) The full amount, before any payroll deductions, of wages,
salaries, overtime pay, commissions, fees, tips, bonuses and other
compensation for personal services, and payments in lieu of
earnings, such as unemployment and disability compensation,
worker's compensation and severance pay and any earned income
tax credit to the extent that it exceeds tax liability;
a) __________
b) Net income from operations of a business or profession or net
income of any kind from real or personal property;
b) __________
c) Interest and dividends; c) __________
d) The full amount of periodic payments received from Social
Security, pensions, retirement funds, annuities, insurance
policies, disability or death benefits, alimony, child support, or
any similar type of periodical payments, and any regular
contributions or gifts from persons not residing in the unit;
d) __________
e) Public assistance payments; e) __________
f) Regular and special allowances and pay of a member of the
Armed Forces who is a spouse or head of the family.
f) __________
TOTAL $ __________
(NOTE: The following are not considered income: occasional, infrequent gifts of money; one-
time payments from insurance policies or an inheritance settlement; scholarships or student loans
for tuition, fees or books; foster child care payments; the value of Food Stamp coupons;
hazardous duty pay to a member of the Armed Forces; relocation payments; assistance received
under the Low Income Home Energy Assistance Program or any similar program).
27
EXHIBIT D
FORM OF ANNUAL PROJECT CERTIFICATION
ANNUAL PROJECT CERTIFICATION
Project: __________________________________________
Address: __________________________________________
The undersigned hereby certifies that during the annual Reporting Period ending
___________________________________, __________ units or _______ percent of the
residences in the Project were utilized as Affordable housing, as required in the Declaration of
Affordable Housing Covenants, in the following manner:
a) ______ units or ______ percent of units in the Project were rented to Tenants who did
not exceed the applicable income limits of _______% or _______% of area median income;
b) ______ units or ______ percent of units in the Project were rented to Tenants who exceeded
_______% or _______% of area median income but were below _______% or _______ %
of area median income;
c) ______ units or ______ percent of units in the Project were rented to Tenants who now
exceed ______% or _____% of area median income, and therefore can no longer be
considered eligible for Affordable units;
d) ______ units or ______ percent of units in the Project are being held vacant for eligible
Tenants.
The above information and that on the attached sheet(s) has been verified as required by the
Declaration of Affordable Housing Covenants between the City of _____________________ and
Owner Organization Name: ___________________________________________
_________________________________ ____________________________________
Name of Owner Signature of Owner
Date: _______________________________, 20____
28
ANNUAL PROJECT CERTIFICATION
PROJECT NAME_________________________________________________
REPORTING PERIOD: __________________ through ___________________.
Vacancy Status: The following units are vacant as of __________________ and are being held vacant for eligible Tenants.
Does Contract Rent include:Are residents required to buy:
Electricity Yes Water &Yes Garbage?Yes Renter's Yes One Parking Yes Renter's Yes
& Gas?No Sewer?No No insurance?No Space?No insurance?No
For each "No" enter the Allowance or Fee below (except Renter's Insurance, if it's not required).
Unit #
Tenant
Name
Family
Size
Move-in
Date
Current
Lease
Date
Current
HH
Income*
Unit Type
(BRs)
Affrd
Level
Max
Housing
Expense**
Electric &
Gas
Allowance
Water &
Sewer
Allowance
***
Garbage
Allowance
(or Fee)
Insurance
Allowance
Parking
Fee Max Rent
Current
Contract
Rent
$0
$0
$0
$0
$0
$0
$0
$0
*As of report date or when current lease was signed.
**Find on "Rental and Income Guidelines."
***Maximum Housing Expenses also include water, sewer, and garbage. If these are paid for directly by the tenant (in addition to rent), the maximum rent must
be reduced by the typical costs to the tenant of such utilities, or a set allowance established by the city (or ARCH).
ARCH Electric & Gas Allowances:Water & Sewer Allowances:
Studio Studio
1-bedroom 1-bedroom
2-bedroom 2-bedroom
3-bedroom 3-bedroom
4-bedroom 4-bedroom
5-bedroom 5-bedroom