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HomeMy WebLinkAbout01-190 Resolution No. 01-190 RESOLUTION AUTHORIZING EXECUTION OF A SUB-RECIPIENT AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES OF ELGIN FOR A FIRST-TIME HOMEBUYERS DOWNPAYMENT ASSISTANCE PROGRAM BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Joyce A. Parker, City Manager, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a Sub-recipient Agreement on behalf of the City of Elgin with Neighborhood Housing Services of Elgin for a First-Time Homebuyers Downpayment Assistant Program, a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: July 11, 2001 Adopted: July 11, 2001 Vote : Yeas : 7 Nays : 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk SUB-RECIPIENT AGREEMENT BETWEEN THE CITY OF ELGIN, AND NEIGHBORHOOD HOUSING SERVICES OF ELGIN B-00-MC-17-0011 THIS AGREEMENT is made and entered into this "`h day of July, 2001, by and between NEIGHBORHOOD HOUSING SERVICES OF ELGIN (NHS), a not-for-profit corporation pursuant to the laws of the State of Illinois located at 300 Douglas Avenue in Elgin, (hereinafter referred to as the "Sub-recipient"), and the CITY OF ELGIN, Illinois, a municipal corporation, (hereinafter referred to as the"Grantee"or"City"). WHEREAS, Grantee has applied for and received funds from the United States Government pursuant to Title I of the Housing and Community Development Act of 1974, Public Law 93—383, as amended; and WHEREAS, Sub-recipient will act as administrator for the City of Elgin's First-Time Homebuyers Down payment Assistance Program; and WHEREAS, Sub-recipient will receive 10% ($7,500.00) of the program budget to cover administrative expenses including staff time for processing applications of qualified homebuyers, obtaining credit reports, establishing and recording second mortgage lien documents, conducting homebuyer education courses, developing marketing strategies and for office overhead, supplies and program advertising. WHEREAS, Grantee has determined it to be in its best interest to enter into this Agreement with Sub-recipient to administer CDBG funds awarded to the City of Elgin's First- Time Homebuyers Down payment Assistance Program and totaling $75,000.00. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein,the sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Statement of Work A. Activities The Elgin City Council allocated $75,000.00 in program year 2000-2001 CDBG funds to the First-Time Homebuyers Down payment Assistance Program. Sub-recipient will administer this program for the City of Elgin. CDBG funds shall be used for grants to qualified homebuyers. Grants for one-half of the qualified applicant's combined down-payment and closing costs, not to exceed 2% of the purchase price of the home, (a maximum of$4,000), shall be provided. Sub-recipient shall perform all the following activities in a satisfactory manner. Whether performance is satisfactory is determined by the Grantee in its sole discretion. Should Sub- recipient not perform in a satisfactory manner, as solely determined by the Grantee, Grantee may terminate the Agreement and pursue any remedies provided by law including but not limited to suits for breach of contract, or for reimbursement of any and all money paid to Sub-recipient by Grantee. Sub-recipient will provide the following services: Activity 1: Establish a Revolving Loan Fund account for the deposit of all applicant fees. Activity 2: Set-up and maintain all account records on an internal Notesmith loan accounting system. Activity 3: Market the program to Elgin residents through: ► Press releases to all local media including the Courier News, Daily Herald, The Neighborhood Voice. Written program material for local lenders and real estate offices. Activity 4: Process homebuyer assistance applications using established NHS underwriting standards. Obtain a 1003 mortgage application from program applicants. Obtain a copy of all applicable lead-based paint disclosures if applicant is pursuing FHA financing or perform appropriate lead-based paint inspection if applicant is pursuing conventional financing. Activity 5: Conduct homebuyer education classes for applicants prior to fund distribution. Activity 6: Sub-recipient shall submit monthly activity reports to Grantee until all program funds are expended. These reports shall describe the number of applications processed, lead paint inspections performed, and education classes conducted. Reports shall include client household size and income information and grant allocation levels. Expenditure reports shall also be submitted to detail the costs incurred by the Sub-recipient. Activity 7: Notify the City of any early re-payments. Deposit all repayments in the Revolving Loan Fund account for distribution to additional qualified applicants. Report program activity. Activity# 8: Sub-recipient shall maintain records in accordance with Section 2 of this Agreement as required by the U.S. Department of Housing and Urban Development. Sub-recipient shall perform their activities in a manner consistent with any standards required as a condition of providing these funds and shall comply with all applicable Federal, state, and local statutes, rules and regulations governing such CDBG funds. The First-time Homebuyers Down- payment Assistance Program will include the following activities eligible under the CDBG Program: B. Eligibility and National Objectives Sub-recipient certifies that the activities undertaken pursuant to this Agreement will be implemented in accordance with CDBG eligibility and national objectives criteria. Sub-recipient shall provide this new public service on behalf of the City of Elgin. This service is an eligible activity pursuant to 570.201 (e) and does not exceed 15% of the CDBG allocation for public services during program year 2000-2001. This program has income eligibility requirements which limit the activity exclusively to low and moderate income persons (see Exhibit A). Program funds shall assist in the acquisition of residential housing that will be occupied by low and moderate income persons pursuant to 570.208 (a) (3). Documentation on family size and household income will confirm that participants are low and moderate income. C. Levels of Accomplishment In addition to the normal administrative services required under this Agreement, Sub-recipient commits to achieving the following implementation milestones. Activity Date of Completion Activity 1: Establish Revolving Loan Fund By 7/18/01. Account for program funds. Activity 2: Set up account records in Notesmith By 7/18/01. loan accounting system. Activity 3: Market program to Elgin residents. By 7/31/01. Activity 4& 5: Process applications and conduct Ongoing. inspections and homebuyer education classes. Activity 6: Monthly activity and expense reports. Beginning 8/15/01, submit monthly on the 15th day of each month until funds are exhausted. Activity 7: Deposit and distribute repayments. As needed. Activity 8: Maintain program records. Beginning 7/11/01 and ending 7/11/06. D. Budget Sub-recipient expenditures are not to exceed the following budget as provided by the City of Elgin Line Item: Amount: Administrative expenses $ 7,500.00 Program grant funds $67,500.00 Total Project Budget $75,000.00 2. Records and Reports A. Types and Schedules Sub-recipient certifies that it will make all records pertaining to this Agreement available to the Grantee, U. S. Department of Housing and Urban Development, Comptroller General of the United States, or any of their duly authorized representatives, until such time as they are no longer required under this Agreement. Sub-recipient shall maintain the following records which are necessary to guarantee project and participant eligibility and for reporting/monitoring purposes. Sub-recipient will retain all records pertinent to this Agreement for a period of 5 years from the date of this Agreement, starting 7/11/01 and ending 7/11/06. 1. Number of clients served, household size and household income. 2. Documents related to administration of the City of Elgin's First-Time Homebuyers Down payment Assistance Program B. Invoices and Payments Grantee will maintain financial management of the program. Grant funds to be awarded to qualifying program applicant(s) will be processed by Grantee upon approval of Sub-recipient and after the execution of mortgage documents. 3. Uniform Administrative Requirements Sub-recipient certifies that they will comply with applicable administrative requirements as set forth in 24 CFR part 570.502(b)(see Exhibit B). These specifically include: 1. OMB Circular A-110, "Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations", implemented at 24 CRF Part 84(see Exhibit C). 2. OMB Circular A-122"Cost Principles for Non-Profit Organizations"(see Exhibit D). 3. OMB Circular A-133 "Audits of Institutions of Higher Education and Other Non-profit Institutions"(see Exhibit E). 4. Other Program Requirements Sub-recipient will conduct activities authorized under this Agreement in compliance with all Federal laws and regulations described in 24 CFR Part 570, Subpart K(see Exhibit F). They may not, however, assume Grantee's environmental responsibilities described at 570.604 or assume Grantee's responsibility for initiating reviews required pursuant to 24CRR Part 52 (see Exhibit G). The applicable laws and regulations include: 570.600 General. 570.601 Public Laws 88-352/90-284; affirmatively furthering fair housing; Exec. Order 11063. 570.602 Section 109 of the Act. 570:603 Labor Standards. 570.604 Environmental Standards. 570.605 National Flood Insurance Program. 570.606 Displacement,relocation, acquisition, and replacement of housing. 570.607 Employment and contracting opportunities. 570.608 Lead-based paint. 570.609 Use of debarred, suspended, or ineligible contractors or sub-recipients. 570.610 Uniform administrative requirements and cost principles. 570.611 Conflict of interest. 570.612 Executive Order 12372. 570.613 Eligibility restrictions for certain resident aliens. 5. Suspension and Termination of Agreement This Agreement may, in accordance with the provisions of 24 CFR Part 85.43, be suspended or terminated by Grantee if Sub-recipient materially fails to comply with any term of this award. The award may also be terminated for convenience, in writing, by either Grantee or Sub- recipient,pursuant to 24 CFR Part 85.44,providing a minimum of 30 days prior notice. The Sub- recipient shall repay to the Grantee all funds used for ineligible activities, further described below. 6. Reversion of Assets Upon the expiration of this Agreement, any remaining CDBG project funds shall be available for distribution to other eligible homebuyers or reallocation by the Grantee to another eligible CDBG project. If Sub-recipient materially fails to comply with any term of this award, the Sub-recipient shall repay to the Grantee all funds used for ineligible activities. All persons served by this program shall be at or below the Section 8 Income Limits contained in Exhibit A in order maintain eligibility for the CDBG funds provided for herein. Said income levels shall be updated and revised from time to time to conform to levels set by the U. S. Department of Housing and Urban Development. Failure to comply with the aforementioned income threshold shall require Sub-recipient to reimburse Grantee for funds expended, in whole or in part, for down-payment assistance Changes in the scope of services, budget, or method of compensation contained in this Agreement, unless otherwise noted, may only be made through a written amendment to this Agreement, executed by the Sub-recipient and Grantee. 7. Indemnification To the fullest extent permitted by law, Sub-recipient agrees to indemnify, defend and hold harmless the City, its officers, employees, boards and commissions from and against any and all claims, suits,judgments, costs, attorney's fees, damages or other relief arising out of or resulting from or through or alleged to arise out of any reckless or negligent acts or omissions of Sub- recipient's officers, employees or agents in the performance of this Agreement. In the event of any action against the City, its officers, employees, agents, boards or commissions covered by the foregoing duty to indemnify, defend and hold harmless, such action shall be defended by legal counsel of the City's choosing. 8. Severability The terms of this Agreement shall be severable. In the event any of the terms or provisions of this Agreement are deemed to be void or otherwise enforceable for any reason, the remainder of this agreement shall remain in full force and effect. 9. Independent Contractor Status This Agreement shall not be construed so as to create a partnership,joint venture, employment or other agency relationship between the parties. 10. Choice of Law This Agreement shall be subject to and governed by the laws of the State of Illinois. Venue for the resolution of any disputes or the enforcement of any rights pursuant to this Agreement shall be in the Circuit Court of Kane County, Illinois. 11. No Personal Liability No official, director, officer, agent or employee of the City shall be charged personally or held contractually liable under any term of provision of this Agreement or because of their execution, approval or attempted execution of this Agreement. 12. Period of Applicability This Agreement will be in full force and effect from July 11, 2001 through July 11, 2002. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year written above. CITY OF ELG, By: ,/. ..,." f rwE.. City Ma ager, NEI r • :O' OAD I G SERVICES OF ELGIN By: r Ang-. ' •--nthal Exec e Director Attest: WgiAlftaL 4/6>I4: v 711 Loni Mecum City Clerk ��- '� "\ � § No.Agenda Item _; City of Elgin E L ti ... June 22 , 2001 G !I TO: Mayor and Members of the City Council QUALITY HOUSING FROM: Joyce A. Parker, City Manager SUBJECT: Sub-recipient Agreement Between the City of Elgin and Neighborhood Housing Services of Elgin PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to consider a Sub-recipient Agreement between the City of Elgin and Neighborhood Housing Services of Elgin (NHS) . BACKGROUND The City Council allocated $75, 000 in 2000-2001 Community Development Block Grant (CDBG) funds to the Planning and Neighborhood Services Department for a First-Time Homebuyers Down- payment Assistance Program. Through this program, low and moderate income homebuyers may receive assistance with down-payment and closing costs associated with the purchase of a house. Approximately 22 households will receive no interest loans to supplement their own funds. A maximum loan of $4, 000 is available to qualified applicants who meet the program' s eligibility requirements. The loans are forgiven if the applicant stays in the property for a period of five years . A contract with NHS is proposed to administer the program. NHS has experience with similar programs and the expertise to conduct this program in compliance with FHA standard underwriting criteria and U. S . Department of Housing and Urban Development (HUD) guidelines . To cover administrative expenses including application processing, program marketing, homebuyer education courses and materials, general office expenses and staff costs, NHS is to receive 10% of the program budget . The attached Sub-recipient Agreement defines the program scope, sub-recipient responsibilities and reporting requirements, the Reversion of Assets process and the City of Elgin' s monitoring actions . Sub-recipient Agreement/Neighborhood Housing Services tek- June 22 , 2001 Page 2 The City of Elgin' s Legal Department has reviewed and approved this Sub-recipient Agreement . The Executive Director of NHS, Angel Rosenthal , has approved and signed the Agreement . COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED Angel Rosenthal, Executive Director, NHS. FINANCIAL IMPACT A total of $75, 000 in 2000-2001 CDBG funds has been allocated to the First-Time Homebuyers Down-payment Assistance Program. NHS will receive 10% of the program funds ($7 , 500) for administrative expenses and 90% of the program funds will be awarded to qualified homebuyers. Program expenditures will be charged to account number 230-0000-791 . 78-05 (Buildings/Structures) , project number 154695 . LEGAL IMPACT frit 'In order to comply with the U. S. Department of Housing and Urban Development' s (HUD) Code of Federal Regulations (CFR) 570 . 203 and HUD directives, NHS and the City of Elgin must enter into a Sub- recipient Agreement before program funds are disbursed. ALTERNATIVES 1 . Approve the attached Sub-recipient Agreement . 2 . Choose not to approve the Sub-recipient Agreement yet select an alternate agency to administer the program. 3 . Reallocate the project funds to another CDBG project or eligible activity. RECOMMENDATION The recommendation is that the Mayor and City Council approve the attached Sub-recipient Agreement between the City of Elgin and NHS . Res•ectfully submitted, ./. -Iti----\------- r ce A! Parker ftCity Manager JAP/jaw ,(OFfz.. J' § City of Elgin Memorandum Vii^ /rITEU MEMORANDUM TO: Joyce A. Parker, City Manager FROM: Mark Biernacki, Community Development Manag � DATE: June 27, 2001 // SUBJECT: First-time Homebuyers Down-payment Assistance Program Councilman Figueroa has suggested a proposed revision to the down-payment requirements for the First-time Homebuyers Down payment Assistance Program to allow varying down-payments. His suggestions will result in positive enhancements to the program. Current Language 1. Statement of Work A. Activities The Elgin City Council allocated $75,000.00 in program year 2000-2001 CDBG funds to the First-Time Homebuyers Down payment Assistance Program. Sub-recipient will administer this program for the City of Elgin. CDBG funds shall be used for grants to qualified homebuyers. Applicants must provide a minimum of 3% of their own funds towards a 5% down-payment, meeting FHA standard underwriting criteria. Grants up to 2% of down-payment costs (a maximum of$4,000) shall be provided to qualified applicants. Proposed Language 1. Statement of Work A. Activities The Elgin City Council allocated $75,000.00 in program year 2000-2001 CDBG funds to the First-Time Homebuyers Down payment Assistance Program. Sub-recipient will administer this program for the City of Elgin. CDBG funds shall be used for grants to qualified homebuyers. Grants for one-half of the qualified applicant's down-payment,not to exceed 2%of down-payment costs(a maximum of$4,000), shall be provided. Both City staff and NHS have reviewed this proposed revision and are supportive of the changes. This modification will create greater flexibility and a broader market for participation. PROPOSAL FIRST TIME HOMEBUYERS DOWNPAYMENT ASSISTANCE PROGRAM GUIDELINES Neighborhood Housing Services of Elgin (NHS) will act as administrator for the City of Elgin's First-Time Homebuyers Down payment Assistance Program. The program will be administered by NHS of Elgin to comply with all federal guidelines noted under the City of Elgin's Community Development Block Grant (CDBG)program application. Eligibility Requirements: - Applicants must be current residents of Elgin(for the twelve month period prior to application) and must meet federal first-time homebuyer and low to moderate income guidelines. - Applicants must have an accepted sales contract to purchase a home within the City of Elgin, and must have a first mortgage commitment. - Applicants should demonstrate a financial need for assistance (no more than the equivalent of four month's mortgage payments available in savings). - Applicants must complete a homebuyer education program administered by NHS prior to funding. - Properties to be purchased must not contain lead-based paint hazards. Application Processing: Applicants will complete a 1003 mortgage application with NHS, or provide a copy to NHS from their first mortgage financer. If the applicant is obtaining FHA financing,NHS will be provided with a copy of all applicable lead based paint disclosures. If the applicant is obtaining conventional financing, NHS staff will be responsible for performing applicable lead based paint inspection services. All applications will be approved by the NHS Loan Committee using existing NHS underwriting standards. Once approved, applicants will schedule a homebuyer education class with NHS staff. It is anticipated that participants will be required to attend a class from two to four hours in length using materials from Neighborhood Reinvestment Corporation and Fannie Mae. Upon successful completion of the homebuyer education class, applicants will receive a certificate to be included in their first mortgage and NHS loan files. Three days prior to closing, applicants will execute documents with NHS. The loan proceeds check will be made payable to the title company whenever possible, or to the applicants directly to exchange for a bank check to be presented at closing. Program Guidelines: Applicants will be eligible to receive a grant of up to a maximum of$4,000 to make up a total of 2% of down-payment funds needed to close. Applicants must submit proof of providing a minimum of 3% of their own funds, meeting FHA standard underwriting criteria. The loan will be forgiven if the applicants stay in the property for a period of five years. If the property is sold prior to the end of the five year period, the loan would be repaid by the borrower at a rate of 20% for each year remaining up to the fifth year. NHS will record a second mortgage on each property with the applicable county recorder's office. NHS will maintain all account records on the internal Notesmith loan accounting system. A separate bank account will be established for program funds. All fees will be deposited to the NHS Revolving Loan Fund account. NHS will provide monthly reports to the City until all funds are exhausted. The City will be notified of any early repayments. These funds may be used by NHS for any other first-time homebuyer applicants. Marketing: NHS will market the program through the following sources: press releases to all local media, including the Courier News, Elgin Herald, Chicago Tribune and The Neighborhood Voice. NHS will send written program material to local lenders and real estate offices. Administrative Costs: NHS will receive 10% ($7,500) of the program budget to cover administrative expenses. Included in these administrative expenses are the following: application processing costs including recording of second mortgage lien documents and credit report costs, homebuyer education course and materials, bank account establishment, staff costs, office expenses and overhead and marketing expenses. Attachments: NHS Loan Documents • MORTGAGE THIS INDENTURE,made 2001 between, herein referred to as "Mortgagors,"and Neighborhood Housing Services of Elgin, Inc., 300 Douglas Avenue, Elgin, Illinois 60120, herein referred as "Mortgagee,"witnesseth: THAT WHEREAS the Mortgagors are justly indebted to the Mortgagee upon the installment note of even date herewith,in the principal sum of 00/100($000.00),payable to the order of and delivered to the Mortgagee,in and by which note the Mortgagors promise to pay the said principal sum and interest at the rate and in installments as provided in said note, with a final payment of the balance due on the 1st _day of ,20,and all of said principal and interest are made payable at such place as the holders of the note may,from time to time,in writing appoint,and in absence of such appointment,then at the office of the Mortgagee at 300 Douglas Avenue,Elgin,IL 60120 NOW,THEREFORE,the Mortgagors to secure the payment of the said principal sum of money and said interest in accordance with the terms,provisions and limitations of this mortgage,and the performance of the covenants and agreements herein contained,by the Mortgagors to be performed, and also in consideration of the sum of One Dollar in hand paid, the receipt whereof is hereby acknowledged, do by these presents CONVEY AND WARRANT unto the Mortgagee, and the Mortgagee's successors and assigns, the following described Real Estate and all of their estate, right, title and interest therein, situate, lying and being in the City of Elgin, COUNTY OF KANE, STATE OF ILLINOIS,to wit: PERMANENT INDEX NUMBER: Commonly known as , ELGIN,IL 60120. which,with the property hereinafter described,is referred to herein as the"premises," TOGETHER with all improvements, tenements, easements, fixtures, and appurtenances thereto belonging,and all rents,issues and profits thereof for so long and during all such times as Mortgagors may be entitled thereto(which are pledged primarily and on a parity with said real estate and not secondarily)and all apparatus,equipment or articles now or hereafter therein or thereon used to supply heat,gas,air conditioning, water, light, power, refrigeration (whether single units or centrally controlled), and ventilation, including (without restricting the foregoing),screens,window shades,storm doors and windows, floor coverings,inador beds,awnings,stoves and water heaters. All of the foregoing are declared to be a part of said real estate whether physically attached thereto or not, and it is agreed that all similar apparatus, equipment or articles hereafter placed in the premises by Mortgagors or their successors or assigns shall be considered as constituting part of the real estate. TO HAVE AND TO HOLD the premises unto the Mortgagee, and the Mortgagee's successor and assigns,forever,for the purposes,and upon the uses herein set forth,free from all rights and benefits under and by virtue of the Homestead Exemption Laws of the State of Illinois, which said rights and benefits the Mortgagors do hereby expressly release and waive. THE MORTGAGORS HEREBY COVENANT, PROMISE AND AGREE AS FOLLOWS: 1. Mortgagors shall(1)promptly repair, restore or rebuild any buildings or improvements now or hereafter on the premises which may become damaged or be destroyed; (2) keep said premises in good condition and repair, without waste, and free from mechanic's or other liens or claims for lien not expressly subordinated to the lien thereof; (3)pay when due any indebtedness which may be secured by a lien or charge Return to: Neighborhood Housing Services of Elgin, 300 Douglas Ave., Elgin, IL 60120 on the premises superior to the lien hereof,and upon request exhibit satisfactory evidence of the discharge of such prior lien to the Mortgagee;(4)complete within a reasonable time any building or buildings now or at any time in process of erection upon said premises;(5)comply with all requirements of law or municipal ordinances with respect to the premises and the use thereof; (6) make no material alterations in said premises except as required by law or municipal ordinance. 2. Mortgagors shall pay before any penalty attaches all general taxes,and shall pay special taxes, special assessments,water charges,sewer service charges,and other charges against the premises when due,and shall,upon written request,furnish to the Mortgagee duplicate receipts therefor. To prevent default hereunder Mortgagors shall pay in full under protest, in the manner provided by statute, any tax or assessment which Mortgagors may desire to contest. 3. In the event of the enactment after this date of any law of Illinois deducting from the value of land for the purpose of taxation any lien thereon,or imposing upon the Mortgagee the payment of the whole or any part of the taxes or assessments or charges or liens herein required to be paid by Mortgagors,or changing in any way the laws relating to the taxation of mortgages or debts secured by mortgages or the mortgagee's interest in the property, or the manner of collection of taxes, so as to affect this mortgage or the debt secured hereby or the holder thereof,then and in any such event,the Mortgagors,upon demand by the Mortgagee,shall pay such taxes or assessments, or reimburse the Mortgagors to make such payment or(b)the making of such payment might result in the imposition of interest beyond the maximum amount permitted by law,then and in such event, the Mortgagee may elect, by notice in writing given to the Mortgagors, to declare all of the indebtedness secured hereby to be and become due and payable sixty(60)days from the giving of such notice. 4. If, by the laws of the United States of America or of any state having jurisdiction in the premises,any tax is due or becomes due in respect of the issuance of the note hereby secured,the Mortgagors covenant and agree to pay such tax in the manner required by any such law. The Mortgagors further covenant to hold harmless and agree to indemnify the Mortgagee, and the Mortgagee's successors or assigns, against any liability incurred by reason of the imposition of any tax on the issuance of the note secured hereby. 5. At such time as the Mortgagors are not in default either under the terms of the note secured hereby or under the terms of this mortgage,the Mortgagors shall have such privilege of making prepayments on the principal of said note(in addition to the required payments)as may be provided in said note. 6. Mortgagors shall keep all buildings and improvements now or hereafter situated on said premises insured against loss or damage by fire, lightning and windstorm under policies providing for payment by the insurance companies of moneys sufficient either to pay the cost of replacing or repairing the same or to pay in full the indebtedness secured hereby, all in companies satisfactory to the Mortgagee, under insurance policies payable,in case of loss or damage,to Mortgagee,such rights to be evidenced by the standard mortgage clause to be attached to each policy, and shall deliver all policies, including additional and renewal policies,to the Mortgagee,and in case of insurance about to expire, shall deliver renewal policies not less than ten days prior to the respective dates of expiration. 7. In case of default therein,Mortgagee may,but need not,make any payment or perform any act hereinbefore required of Mortgagors in any form and manner deemed expedient,and may,but need not,make full or partial payments of principal or interest on prior encumbrances, if any, and purchase, discharge, compromise or settle any tax lien or other prior lien or title or claim thereof, or redeem from any tax sale or forfeiture affecting said premises or contest any tax or assessment. All moneys paid for any of the purposes herein authorized and all expenses paid or incurred in connection therewith, including attorney's fees,and any other moneys advanced by Mortgagee to protect the mortgaged premises and the lien hereof,shall be so much additional indebtedness secured hereby and shall become immediately due and payable without notice and with interest thereon at the highest rate now permitted by Illinois law. Inaction of Mortgagee shall never be considered as a waiver of any right accruing to the Mortgagee on account of any default hereunder on the part of the Mortgagors. 8. The Mortgagee making any payment hereby authorized relating to taxes or assessments,may Return to: Neighborhood Housing Services of Elgin,300 Douglas Ave., Elgin,IL 60120 do so according to any bill, statement or estimate procured from the appropriate public office without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale,forfeiture, tax lien or title or claim thereof. 9. Mortgagors shall pay each item of indebtedness herein mentioned,both principal and interest, when due according to the terms hereof. At the option of the Mortgagee and without notice to Mortgagors, all unpaid indebtedness secured by this mortgage shall,notwithstanding anything in the note or in this mortgage to the contrary, become due and payable (a) immediately in the case of default in making payment of any installment of principal or interest on the note,or(b)when default shall occur and continue for three days in the performance of any other agreement of the Mortgagors herein contained. 10. When the indebtedness hereby secured shall become due,whether by acceleration or otherwise, Mortgagee shall have the right to foreclose the lien hereof. In any suit to foreclose the lien hereof,there shall be allowed and included as additional indebtedness in the decree for sale all expenditures and expenses which may be paid or incurred by or on behalf of Mortgagee for attorney's fees, appraiser's fees, outlays for documentary and expert evidence,stenographers'charges,publication costs and costs(which may be estimated as to items to be expended after entry of the decree)of procuring all such abstracts of title,title searches,and examinations,title insurance policies,Torrens certificates,and similar data and assurances with respect to title as Mortgagee may deem to be reasonably necessary either to prosecute such suit or to evidence to bidders at any sale which may be had pursuant to such decree the true condition of the title to or the value of the premises. All expenditures and expenses of the nature in this paragraph mentioned shall become so much additional indebtedness secured hereby and immediately due and payable, with interest thereon at the highest rate now permitted by Illinois law,when paid or incurred by Mortgagee in connection with(a)any proceeding,including probate and bankruptcy proceedings,to which the Mortgagee shall be a party, either as plaintiff, claimant or defendant, by reason of this mortgage or any indebtedness hereby secured; or (b) preparations for the commencement of any suit for the foreclosure hereof after accrual of such right to foreclose whether or not actually commenced; or(c)preparations for the defense of any actual or threatened suit or proceeding which might affect the premises or the security hereof. 11. The proceeds of any foreclosure sale of the premises shall be distributed and applied in the following order of priority:First,on account of all costs and expenses incident to the foreclosure proceedings, including all such items as are mentioned in the preceding paragraph hereof;second,all other items which under the terms hereof constitute secured indebtedness additional to that evidenced by the note,with interest thereon as herein provided; third, all principal and interest remaining unpaid on the note; fourth, any overplus to Mortgagors,their heirs, legal representatives or assigns,as their rights may appear. 12. Upon or at any time after the filing of a complaint to foreclose this mortgage the court in which such complaint is filed may appoint a receiver of said pi emises. Such appointment may be made either before or after sale, without notice, without regard to the solvency or insolvency of Mortgagors at the time of application for such receiver and without regard to the then value of the premises or whether the same shall be then occupied as a homestead or not,and the Mortgagee may be appointed as such receiver. Such receiver shall have power to collect the rents,issues and profits of said premises during the pendency of such foreclosure suit and, in case of a sale and a deficiency, during the full statutory period of redemption, whether there be redemption or not,as well as during any further times when Mortgagors, except for the intervention of such receiver,would be entitled to collect such rents,issues and profits,and all other powers which may be necessary or are usual in such cases for the protection, possession, control, management and operation of the premises during the whole of said period. The Court from time to time may authorize the receiver to apply the net income in his hands in payment in whole or in part of:(1)The indebtedness secured hereby,or by any decree foreclosing this mortgage,or any tax,special assessment or other lien which may be or become superior to the lien hereof or of such decree,provided such application is made prior to foreclosure sale; (2)the deficiency in case of a sale and deficiency. 13. No action for the enforcement of the lien or of any provision hereof shall be subject to any Return to: Neighborhood Housing Services of Elgin, 300 Douglas Ave., Elgin, IL 60120 • defense which would not be good and available to the party interposing same in an action at law upon the note hereby secured. 14. The Mortgagee shall have the right to inspect the premises at all reasonable times and access thereto shall be permitted for that purpose. 15. The Mortgagors shall periodically deposit with the Mortgagee such sums as the Mortgagee may reasonably require for payment of taxes and assessments on the premises. No such deposit shall bear any interest. 16. If the payment of said indebtedness or any part thereof be extended or varied or if any part of the security be released,all persons now or at any time hereafter liable therefor,or interested in said premises, shall be held to assent to such extension,variation or release,and their liability and the lien and all provisions hereof shall continue in full force,the right of recourse against all such persons being expressly reserved by the Mortgagee,notwithstanding such extension,variation or release. 17. Mortgagee shall release this mortgage and lien thereof by proper instrument upon payment and discharge of all indebtedness secured hereby and payment of a reasonable fee to Mortgagee for the execution of such release. 18. Mortgagors shall not transfer, convey or assign any legal or equitable right, title or interest in the property without prior written approval by Mortgagee. 19. This mortgage and all provisions hereof,shall extend to and be binding upon Mortgagors and all persons claiming under or through Mortgagors,including their heirs,successors and assigns,and the word "Mortgagors" when used herein shall include all such persons and all persons liable for the payment of the indebtedness or any part thereof,whether or not such persons shall have executed the note or this mortgage. The word"Mortgagee"when used herein shall include the successors and assigns of the Mortgagee named herein and the holder or holders,from time to time,of the note secured hereby. Witness the hands and seals of Mortgagors the day and year first above written. Name/Date Name/Date State of Illinois,County of KANE ss., I,the undersigned,a Notary Public in and for said County in the State aforesaid,DO HEREBY CERTIFY that personally known to me to be the same persons whose names are subscribed to the foregoing instrument,appeared before me this day in person,and acknowledged that THEY signed,sealed and delivered the said instrument as THEY free and voluntary act, for the uses and purposes therein set forth, including the release and waiver of the right of homestead. - Given under my hand and official seal,this TH day of ,2000 Commission expires January 26, 2002 Notary Public This instrument was prepared by Neighborhood Housing Services of Elgin,Inc.,300 Douglas,Elgin,IL 60120 RETURN TO:NEIGHBORHOOD HOUSING SERVICES OF ELGIN, 300 DOUGLAS, ELGIN,IL 60120 INSTALLMENT NOTE Date: ,2001 Elgin, Illinois Property address: ELGIN, IL 60120 For value received, (hereinafter referred to as "Borrower")promise to pay to the order of Neighborhood Housing Services of Elgin Inc. (hereinafter referred to as "Lender"), the principal sum of 00/100 Dollars $0.00 in installments as follows:monthly payments of$ _due on the 1st day of ,2001 and each month thereafter,to and including the 1st day of 2011 and with interest on the outstanding principal balance from time to time unpaid at the rate of 9.00% per annum on the unpaid principal balance. Each installment of principal shall bear interest after maturity at the rate of 10%per annum. All payments of principal and interest are to be made at the principal offices of Neighborhood Housing Services of Elgin, Inc., in Elgin, Illinois,or such other place as the legal holder of this installment note may from time to time in writing designate. The payment of this installment note is secured by a mortgage bearing even date herewith to Neighborhood Housing Services of Elgin,Inc.on real estate located in the County of KANE and State of Illinois and commonly known as , ELGIN, IL. 60120 . Borrower further agrees and promises to pay a lump sum in the amount of O. on or before. Lump sum payment is anticipated as a result of the Borrowers affirmation that he or she has completed all necessary forms and documentation for inclusion and participation in the City of Elgin's Residential Rehabilitation Rebate Program Borrower agrees and hereby directs the City of Elgin to forward a joint check for any and all of the funds due the Borrower to the Lender as a result of the Borrowers participation in the Residential Rehabilitation Rebate Program for the subject property. Such payment of lump sum shall not exceed the total amount of the loan. Borrower has the right to make payments of principal at any time before they are due,without any charge. Any prepayment of principal will be applied by the Lender to reduce the amount of principal owed by Borrower hereunder. If Borrower makes a partial payment of principal there will be no change in the due date or in the amount of each monthly installment that comes due and owing. If Lender has not received the full amount of any monthly installment payment due hereunder by the end of_ 15 calendar days after the date it is due,then Borrower agrees to pay a late charge to Lender in the amount of $5.00 for each such late payment. Borrower shall be in default hereunder upon the occurrence of any one of the following events(any of which are hereafter referred to as an "event of default"): A. Borrower's failure to pay the full amount of any monthly installment payment when due; B. Borrower's failure to pay the outstanding principal balance plus accrued interest when due; C. Borrower's breach of any promise or covenant contained in the mortgage given to secure payment of this installment note; D. Borrower's transfer of any legal or equitable right,title or interest in the property mortgaged to secure payment of this installment note,without prior written consent of Lender; or E. Any other act,occurrence or event upon which Lender reasonably deems itself insecure. Upon the occurrence of any event of default, and upon Borrower's failure to cure each and any default within 30 days' written notice, Lender may accelerate and declare the remaining principal balance plus all interest accrued and other charges and sums allowed hereunder to be immediately due and owing. Lender's failure to give notice of default or to accelerate this note immediately upon the occurrence of any event of default shall not constitute a waiver of Lender's right to declare a default and accelerate this note based upon each such event of default. Borrower agrees to pay any and all costs and expenses including court costs, and reasonable attorney's fees, incurred by Lender in connection with the collection or enforcement of this installment note. This installment note shall be governed by and construed in accordance with the laws of the State of Illinois. If this installment note is signed by more than one person,then all obligations and authorizations hereunder shall be joint and several and each Borrower shall be jointly and severally liable for all sums due and owing hereunder. This installment note shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Lender. Borrower/Date Borrower/Date Borrower/Date Mail this instrument to (NAME AND ADDRESS) NOTICE TO BORROWER(S)REQUIRED BY FEDERAL LAW AND FEDERAL RESERVE REGULATION Z Lender: Neighborhood Housing Services of Elgin 300 Douglas Avenue Elgin,IL 60120 Borrower: Subject Property: ELGIN,IL 60120 Annual Percentage Rate Finance Charge Amount Total of Payments .00% $.00 $0.00 $.00 Number of Amount of Payment Payments Payment due date $ Beginning 1,2001 SECURITY: You are giving a security interest in the property located at: , ELGIN, IL 60120 ASSUMPTION: Someone buying this property cannot assume the remaining balance under the original mortgage terms. FILING/RECORDING FEES: $15.00 LATE CHARGES: There are no late charges X If payment is not received when due a late charge will be added. PREPAYMENT PENALTY:There is no penalty for early payment. I/We hereby acknowledge reading and receiving a complete copy of this disclosure with copies of documents referred to in this disclosure. I/We also hereby acknowledge receiving a copy of The City of Elgin's A Residential Owner's Guide When A Permit is Required. Borrower/Date Borrower/Date Borrower/Date