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of City, a new HOME Homebuyer Note for the benefit of the City, and a new HOME Homebuyer Deed of
<br />Trust for the benefit of the City. If either the City or Habitat assigns its option to a Designated Purchaser,
<br />the Designated Purchaser, as a condition of purchasing the Property, shall be required to execute a Grant
<br />of Option to Repurchase and Resale Restriction Agreement on terms similar to this Agreement, a
<br />Homebuyer Deed of Trust for the benefit of City, a new HOME Homebuyer Note for the benefit of the City,
<br />and a new HOME Homebuyer Deed of Trust for the benefit of the City.
<br />6.3 Effect of Failure to Record Waiver. If neither Habitat nor the City elect to exercise the Option,
<br />Habitat shall deliver to Owner, a notice of waiver (the "Waiver Notice") within sixty (60) days after the earlier
<br />of (i) receipt from the City of notice of City's election not to exercise the Option, and (ii) expiration of the
<br />City Exercise Period, and shall record such Waiver Notice in the Official Records of San Mateo County;
<br />provided however, any subsequent purchaser of the Property from the then-record owner of the Property
<br />must be an Eligible Household, the Property must be sold at the Affordable Sales Price, and as a condition
<br />of purchase of the Property, the Eligible Household purchasing the Property shall be required to enter into
<br />a Grant of Option to Repurchase and Resale Restriction Agreement on terms substantially similar to the
<br />terms of this Agreement, a Homebuyer Deed of Trust for the benefit of City, and a new HOME Homebuyer
<br />Note for the benefit of the City, and a new HOME Homebuyer Deed of Trust for the benefit of the City. The
<br />Waiver Notice shall not constitute a waiver of any other future Transfer of the Home. If the Waiver Notice
<br />is not recorded, it shall be presumed that the Option has not been waived.
<br />6.4 Resale by Habitat or City. If Habitat or City exercises the Option, Habitat or the City shall sell the
<br />Home to an Eligible Household selected by Habitat or City at an Affordable Sales Price as defined in the
<br />Regulatory Agreement and the HOME Regulatory Agreement. The Eligible Household acquiring the Home
<br />from Habitat or the City shall, as a condition of acquisition of the Home, be obligated to enter into a Grant
<br />of Option to Repurchase and Resale Restriction Agreement on terms substantially similar to the terms of
<br />this Agreement with a term of fifty-five (55) years, a Homebuyer Deed of Trust for the benefit of City, a new
<br />HOME Homebuyer Note for the benefit of the City, and a new HOME Homebuyer Deed of Trust for the
<br />benefit of the City.
<br />6.5 Sales Price. The sale price for the repurchase (or purchase) of the Home by Habitat, or the City
<br />shall be the lesser of: (A) the fair market value of the Home as determined by an appraisal taking into
<br />consideration the affordability restrictions applicable to the Home ("Fair Market Value"), less the cost to
<br />cure any outstanding impounds, liens, fines, or delinquent payments and the reasonable cost to repair any
<br />damage to the Home, as determined by Habitat or the City, as applicable, and (B) the Adjusted Purchase
<br />Price, calculated as set forth in this Section. The "Adjusted Purchase Price" means the Original
<br />Affordable Sales Price adjusted by the value of Qualifying Improvements (as defined in Section 6.5.1
<br />below). If there are any Qualifying Improvements, such shall be added, and the reasonable cost to repair
<br />any damage to the Property or cure any outstanding impounds, liens, fines, or delinquent payments, as
<br />determined by Habitat or the City, as applicable, shall be deducted.
<br />6.5.1 Qualifying Improvements. A "Qualifying Improvement' shall be any capital
<br />improvement, as opposed to repairs and maintenance, made to the Home by Owner, which
<br />satisfies all the criteria set forth below. The value of the Qualifying Improvements shall be limited
<br />to a total of ten percent (10%) of the Original Purchase Price. The value of the Qualifying
<br />Improvements shall be the sum equal to the original cost of materials and labor prorated over the
<br />remaining useful life of the improvements. It shall be the obligation of Owner to establish by
<br />sufficient evidence that any improvements are a Qualifying Improvement and the value thereof.
<br />Habitat shall have the right to determine the value of any Qualifying Improvement in its sole and
<br />absolute discretion. Further, in establishing any value of a Qualifying Improvement, Habitat shall
<br />have the right to consider any damage to capital improvements in the Home, and may offset the
<br />sale price of the Home by the reasonable cost of repair on such damage. In order to be deemed a
<br />Qualifying Improvement, each improvement must satisfy the following qualifying criteria:
<br />(a) The cost of the improvement must exceed one percent (1%) of the Original Purchase Price;
<br />(b) The improvements must have a remaining expected useful life of at least five (5) years beyond the
<br />REV: 08-10-22 SK
<br />ATTY/AGR.2022.247/Habitat 612 Jefferson 603 (03HOME - Resale Restriction Agreement 603) (Page 8 of 17)
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