Rehabilitation Loan Agreement

Transcription

1 This Agreement, cludg provisions below is made this day, betw een Borrow er Lender to establish conditions under w hich Lender w ill advance proceeds a loan to be used to purchase rehabilitate or refance rehabilitate property described below. The property is located County, State, is described as: [Legal Description] 1. The loan will w ill be be prcipal sum sum :LN_Amt_$Alph Dollars ($ 1026:LN_Amt_STW ) to be advanced Lender to as provided this Agreement Dollars will secured ($ a mortgage or deed ) to be advanced trust ("Mortgage"), Lender which will to be a Borrow first lien er on as provided property. this Agreement w ill be secured a mortgage or deed trust (" Mortgage" ), w hich w ill be a first lien on property. 2. Payments required under Mortgage must be made Borrow er on date specified, even though proposed rehabilitation or improvement may not be completed, or property may not be suitable for occupancy, on anticipated date. 3. The Lender tends to request Assistant Secretary for Housg - Federal Housg Commissioner or Secretary' s Designee (" Commissioner" ) - to sure Mortgage under provisions Section 203(k) National Housg Act; refore, Borrow er agrees to Page 1 5

2 conform to, to cause improvements to be constructed conformance w ith, all requirements Commissioner The The Lender Lender will w ill place place portion portion prcipal prcipal amount amount mortgage mortgage allocated allocated to to total rehabilitation total rehabilitation cost ($ cost :LN_TotRehab), ($ plus ), any plus reserves any reserves put up put up Borrow or ors er or cash, ors a secured cash, terest a secured bearg terest account, bearg trust account, or escrow trust for or escrow benefit for benefit (hereafter called Borrow "Rehabilitation er (hereafter called " Rehabilitation Account"). Lender shall Account" release Rehabilitation ). Lender shall release Account funds Rehabilitation check, payable to Account funds /or check, contractor, payable upon to satisfactory Borrow er completion /or rehabilitation contractor, upon accordance satisfactory with completion Work Write-Up rehabilitation or Work Plan, as accordance evidenced w ith a compliance Work spection Write-Up or or Work or authorized Plan, as evidenced method, a when compliance repairs spection improvements or or authorized meet all federal, method, state w hen local laws, repairs codes improvements ordances, meet cludg all federal, required state permits local spections. law s, codes ordances, cludg required permits spections. The Lender or Commissioner may determe that that additional compliance spections are required are throughout required throughout rehabilitation rehabilitation period to ensure period that to ensure work that is progressg w ork is progressg a satisfactory manner. a Release satisfactory funds manner. is not Release authorized funds on this is type not authorized spection, on this type spection, is responsible for payg Borrow er is spection responsible fee. for The payg Lender may spection require a fee. property The Lender spection may if require re have a property been no draw requests spection for if more re than have 30 been consecutive no draw days. requests for more than 30 consecutive days. 5. If a Mortgage Payment Reserve is cluded Rehabilitation Account, Lender must make monthly mortgage payments directly from Rehabilitation Account, provided dw ellg, or dividual units for w hich Mortgage Payment Reserve is established, cannot be occupied Fal Release Notice has not been issued. Once property, or dividual unit, if applicable, is able to be occupied, application Mortgage Payment Reserves w ill cease. Mortgage Payment Reserves remag Rehabilitation Account after property is able to be occupied must be used to reduce mortgage prcipal. 6. The terest accumulated Rehabilitation Account w ill be distributed as required 203(k) Borrow er' s Acknow ledgement, form HUD A. 7. The prcipal amount loan specified paragraph 1 may conta a Contgency Reserve. The Contgency Reserve may be used to make or improvements to property after it is determed that it is unlikely that any health or safety deficiency w ill be discovered. The Borrow er or Consultant, if re is one, must submit form HUD to Lender detailg additional improvements beg requested. The Lender w ill form Borrow er w ritg approval or rejection request w ith five busess days. If Contgency Reserve is fanced, any unused Contgency Reserve funds must be applied to reduce mortgage prcipal. Such prepayment w ill not extend or postpone due date any monthly stallment due under Note w ill not change amount such stallments. Page 2 5

3 If Contgency Reserve is established w ith Borrow er' s ow n funds, Borrow er may receive a refund any unused Contgency Reserve funds or may request unused funds be applied to reduce prcipal balance. 8. The Borrow er w ill complete all improvements on property accordance w ith Work Write-Up or Work Plan, cludg architectural exhibits, as accepted Lender. 9. Changes architectural exhibits must be requested Borrow er, eir a letter describg changes or submission form HUD-92577, prior to start any w ork associated w ith requested changes. The Lender must issue an approval w ritg before w ork can beg on changes. Work must be 100% complete on each change order item before release funds from Rehabilitation Account. 10. Borrow er w ill cause all improvements to be made a w orkmanlike manner accordance w ith all applicable statutes regulations. All licenses, permits privileges required local governmental authorities to rehabilitate property w ill be obtaed Borrow er or contractor. 11. Representatives Lender Commissioner w ill have right to enter upon property at all times durg period construction to determe w her w ork conforms w ith this Agreement to determe amount funds Rehabilitation Account to be released Lender. 12. Borrow er w ill furnish such records, contracts, bills or documents relatg to property improvements as Lender or Commissioner may require. 13. For a Borrow er performg his/her ow n w ork under a Rehabilitation Self-Help Agreement, Rehabilitation Account w ill clude funds for labor materials costs for each w ork item to be completed Borrow er. The Borrow er w ill be reimbursed for actual cost materials only. The Borrow er cannot be reimbursed for labor. The funds resultg from difference betw een estimated actual costs materials, as w ell as funds escrow ed for labor costs, w ill rema Rehabilitation Account until all w ork is complete may n be used for additional improvements to property. No cash may be paid to Borrow er. Any funds for self-help items remag Rehabilitation Account after completion rehabilitation must be used to reduce prcipal balance. 14. Without prior, w ritten consent Lender, no materials, equipment, fixtures or any part improvements fanced w ith this loan w ill be purchased or stalled subject to conditional sales contracts, security agreements, lease agreements or or arrangements w here title is retaed or right is reserved or accrues to anyone to remove or repossess any item, or to consider it as personal property. Page 3 5

4 15. The Borrow er w ill cause eir this strument or construction contract under w hich improvements are to be made to be filed public records, if effect recordg w ill be to relieve mortgaged property from mechanics' materialmen' s liens. The Lender must obta Lien Waivers, or equivalent, at time any disbursement funds to ensure validity first lien on property. If all w ork items to be performed a contractor have not been completed at time draw request, Lender must obta a partial conditional Lien Waiver for w ork items that have been completed for each draw request. Upon completion project, Lender w ill obta a release any all liens arisg out contract or submission or receipts or or evidence payment coverg all contractors, subcontractors or suppliers w ho could file a legal claim. 16. Borrow er must cause w ork to beg w ith 30 days follow g date this Agreement. Work must be performed w ith reasonable diligence; refore, w ork is never to cease for more than 30 consecutive days. Should Borrow er fail to comply w ith se terms, Lender may refuse to make any furr disbursements under this Agreement, any funds remag Rehabilitation Account must be used to reduce mortgage prcipal. 17. In event any Stop Notices, Notices to Withhold, Mechanic' s Liens, or claims lien are filed agast property, Lender, after five (5) days' notice to Borrow er its tention to do so, may pay any all liens or claims, or may contest validity any claim, payg all costs expenses contestg same. 18. Failure Borrow er to perform under terms this w ill make loan amount, at option Lender, due payable. 19. The Borrow er understs that mortgage payments (PITI) that w ere fanced at closg are estimates Borrow er w ill be responsible for payg full amount mortgage payment, each every month due, if a shortage occurs. 20. The accepted Work Write-Up or Work Plan architectural exhibits, if any, are corporated this Agreement. 21. Borrow er must have w ork completed w ith Agreement. 22. w ork must be completed: months follow g date this 23. If applicable, follow g riders, exhibits, addendums /or or documents are attached to this Agreement made a part here: Page 4 5

5 Borrow er Refer to attached Signature Addendum for additional parties signatures. Lender Representative Title Lender Representative Page 5 5