Chapter 2 — RULES AND REGULATIONS—1981 RESIDENTIAL MORTGAGE REVENUE

BONDS

PREFACE

These Rules and Regulations are made pursuant to Chapter 8 of Part 1 of Division 24 of the Health and Safety Code of the State of California and relate to the Agency's 1981 Residential Mortgage Revenue Bonds residential mortgage financing program of providing long-term, below-market-interest-rate mortgage loans to eligible borrowers for newly constructed residences in the Agency's redevelopment project area. All mortgage loans made by the Agency through this program shall be made in accordance with these Rules and Regulations.

Article 1

Definitions

Unless the context otherwise requires, the terms defined in this section shall for all purposes of these Rules and Regulations have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Unless otherwise defined, all terms used in these Rules and Regulations shall have the meanings assigned to such terms in the Act.

"Act" means Chapter 8 of Part 1 Division 24 of the Health and Safety Code of the State of California as in effect on the date of adoption of these Rules and Regulations.

"Agency" means the Redevelopment Agency of the City of San Leandro, a public body, corporate and politic, established under the Community Redevelopment Law of the State of California (being Part 1 of Division 24 of the Health and Safety Code of the State of California).

"Bonds" means the Redevelopment Agency of the City of San Leandro 1981 Residential Mortgage Revenue Bonds authorized by, and at any time outstanding pursuant to, the Resolution.

"Developer" means Citcon Corporation, a California corporation, or any successors of assigns.

"Local Codes" means the Uniform Building Code, the Uniform Mechanical Code, the Uniform Plumbing Code, the Uniform Electrical Code and the Uniform Housing Code, all as adopted by the City of San Leandro by Ordinance No. 81-020 on March 30, 1981, as may be amended from time to time by the City, and the Uniform Fire Code, as adopted by the City of San Leandro by Ordinance No. 75-29 on June 9, 1975, as such may be amended from time to time by the City, and any applicable state or federal standards for residential construction.

"Mortgage Loan" means a loan of moneys made pursuant to the Program to a Participating Party to finance the purchase of property, which loan is evidenced by a note, secured by a deed of trust and insured or guaranteed, in whole or in part, by any instrumentality of the United States or of the State of California, or by any person licensed to insure mortgage loans in this State.

"Owner Participation Agreement" means the agreement, dated as of February 23, 1981, by and between the Developer and the Agency, providing for the construction of 164 Properties.

"Participating Party" means any Person receiving financing for Property pursuant to the Program. No elective officer of the state or any of its political subdivisions or employee of any redevelopment agency shall be eligible to be a Participating Party.

"Person" means an individual, corporation, firm, association, partnership, trust or other legal entity or any agency or political subdivision thereof.

"Program" means the Agency's program of making Mortgage Loans pursuant to the Resolution, the Act, and these Rules and Regulations.

"Property" means a residential condominium dwelling unit constructed in accordance with and pursuant to the Owner Participation Agreement.

"Redevelopment Project Area" means those project areas currently or hereafter designated by a redevelopment plan as plans adopted in accordance with the Community Redevelopment Law (commencing with Section33750, of Part 1 of Division 24 of the California Health and Safety Code).

"Resident Homebuyer" means any person who, on the date of purchase of Property, is a legal resident of the City of San Leandro or is employed in a permanent full-time position in the City of San Leandro and does not own and has never owned a principal residence for his or her own use in any location.

"Resolution" means the resolution providing for the issuance of the Redevelopment Agency of the City of San Leandro 1981 Residential Mortgage Revenue Bonds, as originally adopted by the Agency or as it may from time to time be supplemented, modified or amended.

"Rules and Regulations" means these rules and regulations implementing the Program as adopted by the Agency on April 2, 1981, pursuant to Resolution No. 81-17, as they may be amended from time to time.

"Trustee" means the Trustee appointed by the Agency pursuant to Section 8.01 of the Resolution, or its successor for the time being as Trustee under Section 8.01 of the Resolution.

Article 2

Standards

The construction of any property to be financed by a Mortgage Loan shall be undertaken and completed in compliance with these Rules and Regulations, the Redevelopment Plan, Local Codes and the Owner Participation Agreement.

Any Property financed by a Mortgage Loan shall be available for sale or open for rental to all, regardless of race, sex, marital status, color, religion, national origin or ancestry.

All contractors and subcontractors engaged in the construction of Property to be financed by a Mortgage Loan shall provide equal opportunity for employment, without discrimination as to race, sex, marital status, color, religion, national origin or ancestry. All contracts and subcontracts for such construction shall be let without discrimination as to race, sex, marital status, color, religion, national origin or ancestry. It is the express policy of the Agency to encourage participation by minority contractors in such construction.

Article 3

Mortgage Loans

No Mortgage Loan shall exceed 95% of the purchase price or 95% of the appraised value of the Property, whichever is less.

For a period of not to exceed six months after the commencement of the sale of Property pursuant to the Program, there shall be reserved for purchase by Resident Homebuyers 35 Properties to the following extent: One bedroom Properties and one bedroom with den Properties may be purchased by a Resident Homebuyer with a Mortgage Loan equal to 95% of the purchase price of the Property or 95% of the appraised value of the Property, whichever is less, and two bedroom Properties and two bedroom with den Properties may be purchased by a Resident Homebuyer with a Mortgage Loan of not less than 90% of the purchase price of the Property or 90% of the appraised value of the property, whichever is less.

Any Mortgage Loan may be assumed upon the Participating Party's sale, transfer or other disposition of the Property, if the purchaser of such Property demonstrates his or her creditworthiness to assume such Mortgage Loan.

No person (or any "related person" as defined in Section 103(b)(6)(C) of the Internal Revenue Code of 1954, as amended) from whom the Agency may acquire or through whom the Agency may make Mortgage Loans shall, pursuant to an arrangement, formal or informal, purchase Bonds in an amount related to the amount of Mortgage Loans to be purchased from or made through such Person.

Article 4

Miscellaneous

No failure on the part of the Agency to enforce any rule or regulation herein contained, or any waiver of any right hereunder, shall discharge or invalidate such rule or regulation or affect the right of such party to enforce the same in the event of any subsequent breach of default. Failure to demand strict performance of any of these rules and regulations shall not be deemed a waiver of such rule or regulation.

All questions with respect to the construction of these Rules and Regulations shall be governed by the laws of the State of California.

The headings of the several sections of these Rules and Regulations, and any table of contents appended hereto, shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof.

If any one or more of the provisions contained in these Rules and Regulations shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions hereof and such invalidity, illegality or enforceability shall not affect any other provision hereof, and these Rules and Regulations shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

Whenever possible and appropriate, the Agency will cooperate with federal, state and other local agencies to utilize all existing and available resources to promote the production and increased availability of below-market-rate-interest loans to facilitate construction of residences in the Redevelopment Project Area. (Resolution No. 81-17, 04/02/1981 [§§26.2.100-26.2.420]; Resolution No. 2006-123, 11/20/ 2006 [§26.2.185]; Resolution No. 2007-001 RDA, 01/02/2007 [§§26.2.100-26.2.420])