NORTHERN MARIANAS HOUSING CORPORATION

COMMUNITY DEVELOPMENT BLOCK GRANT - DISASTER RECOVERY (CDBG-DR) DIVISION

P.O. BOX 500514, Saipan, MP 96950
Email: cnmi-cdbg-dr@nmhcgov.net
Website: http://www.cnmi-cdbgdr.com
Tels: (670) 233-9447
233-9448
233-9449
233-9450
Fax: (670) 233-9452
CDBG-DR PROGRAM
COMMITMENT LETTER/WRITTEN AGREEMENT
August ___, 2023

Jesus I. Taisague
P.O. BOX 505154
Saipan, MP 96950

Dear Borrower(s):

We are pleased to inform you that the Northern Marianas Housing Corporation (NMHC) has
approved your loan application for the Affordable Rental Housing Development Program – 1
to 4 Units (New Construction) Program under the United States Department of Housing and
Urban Development’s (HUD) Community Development Block Grant-Disaster Recovery
(CDBG-DR) Program, with a total amount of $700,000.00.

This commitment to Borrower is subject to the following terms and conditions:

Project Commitments
a. Affordability Period:
b. Loan Forgiveness: may occur at one point in time (at the end of the affordability) or
forgiven incrementally overtime.
 A Deed of Trust will be secured for the length of the Affordability Period, or the term
of the loan, whichever is longer.
Loan Amount, Interest Rate, Repayment Terms, and Maturity
a. Loan Amount, Interest Rate, Repayment Terms: The principal amount of the Loan is
Seven Hundred Thousand and 00/100 ($700,000.00) Dollars, bearing interest at the
rate of zero percent, computed on the basis of a 360-day year, consisting of twelve 30-
day months, to be repaid in three hundred sixty (360) equal monthly installments in the
amount of $1,944.44 each, plus all accrued, but unpaid, interest, if any, which shall begin
on the date that is one (1) year from the date of the Loan and continuing on each year
thereafter through ______.
b. Maturity:

“NMHC is an equal employment and fair housing public agency”

Tinian Field Office CDBG-DR Office Rota Field Office
Tel: (670)433-9213 Tel: (670)233-9447/9448/9449/9450 Tel: (670)532-9410
Fax: (670)433-3690 Fax: (670) 233-9452 Fax: (670)532-9441
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Commitment Letter
& Written Agreement

Use of CDBG-DR Funds

a. The proceeds for the loan shall be used for the construction of a four-unit multifamily
rental project, with a total amount of $700,000.00. The property is located on a certain
immovable property, specifically identified as Lot Number 010 K 17 in Dandan,
Saipan. See “Exhibit A - Property Description” attached hereto for details.
b. The loan proceeds will be utilized for the payment of construction materials, labor, and
other related purposes in the construction of new multifamily rental units according to the
plans, details, and specifications provided by the chosen contractor and approved by
NMHC, with a total amount of $700,000.00. See “Exhibit B – Construction Cost”
attached hereto for details.
c. Closing Fees and Related Costs:
Securities
a. A Fee Simple First Mortgage is required for Lot Number 010 K 17, an area of 841
square meters located in Dandan, Saipan. The mortgage shall be maintained for a period
no shorter than the term of each approved loan or the affordability period, whichever is
greater.
b. Borrower(s) shall provide an Appraisal Report (AR) on the property to be mortgaged.
 Prior to purchase or acquisition of property, if applicable;
 Prior to loan closing, to determine the projected after-construction value of the
property to be assisted with CDBG-DR Program funds must not exceed the most
current 95 percent of the area median purchase price for multifamily housing, as
determined by HUD.
Conditions
a. All grant documents, mortgages and other instruments of hypothecation to be executed
by Jesus I Taisague. The estimated schedule for execution, for completing the loan
process and for the construction or purchase of the residence is as set forth in the attached
exhibits, which in addition to all of the attached Exhibits are made a part of this
Commitment Letter/Written Agreement by this reference as if they are fully set forth
herein.
b. Upon completion of the repairs or reconstruction of your primary residence, NMHC shall
require Grantee(s) to maintain, at their expense, property insurance for fire, earthquake,
water, and typhoon damage covering the replacement. Value of all properties at a
minimum, equal to the loan amount. A waiver may be granted on this insurance
requirement if a financial hardship is justified. Financial hardships shall be reviewed on a
case-by-case basis and subject to approval by the Corporate Director. Should Grantee(s)
fail to maintain such insurance, then NMHC may do so on behalf of, and as agent of
Grantee(s), but NMHC is not obligated to do so. The insured amount shall be satisfactory
to NMHC and naming NMHC as loss payee.

“NMHC is an equal employment and fair housing public agency”

Tinian Field Office CDBG-DR Office Rota Field Office
Tel: (670)433-9213 Tel: (670)233-9447/9448/9449/9450 Tel: (670)532-9410
Fax: (670)433-3690 Fax: (670) 233-9452 Fax: (670)532-9441
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Commitment Letter
& Written Agreement

c. All documents, applications, loan agreements, security documents and other instruments
or documents contemplated herein shall be executed by Grantee(s) and shall in all
respects, be in form and content, satisfactory to NMHC, and legal counsel will be utilized
to prepare the necessary documents for this credit facility. All counsel’s fees, and out-of-
pocket and miscellaneous expenses incurred by NMHC in the review and/or document
preparation in connection with this Loan shall be paid by NMHC.
d. Grantee(s) approved to receive financial assistance must occupy the property as their
primary residence immediately upon completion of all CDBG-DR Program-funded
activities. An annual recertification for principal residency notice and form shall be sent
to homebuyers/grantee to complete, sign, and submit to NMHC in order to confirm and
have on file that they are continually occupying the mortgaged property and housing.
Proof of residency must be verified on an annual basis through an affidavit signed by the
Grantee applicant(s). Should form not be provided field visits shall verify the Grantee(s)
principal residence and, as necessary, with photos and documentation on the status of
residential unit.
e. CDBG-DR Homeowner Rehabilitation and Reconstruction buyer Program rules require
that assisted properties remain affordable for a specific period of time, depending on the
level of CDBG-DR Program funds invested in the property and the nature of the activity
funded and, in this case, said property is subject to affordability restrictions for a period
of 10 years. The beginning and ending dates will be provided in the Restrictive
Covenants Agreement. The affordability requirements are to be imposed by deed
restrictions, covenants running with the land, or other mechanisms approved by HUD,
except that the affordability restrictions may terminate upon foreclosure or transfer in lieu
of foreclosure. NMHC may use its right of first refusal, as set forth in the loan
documents, to purchase the housing before foreclosure or deed in lieu of foreclosure to
preserve affordability. The affordability restrictions shall be revived according to the
original terms if, during the original affordability period, the owner of record before the
termination event, or any entity that includes the former owner or those whom, the former
owner has or had family or business ties, obtains an ownership interest in the project or
property. If a home assisted with CDBG-DR funds is sold during the affordability period,
resale or recapture provisions apply to ensure the continued provision of affordable
homeownership. Loan payoffs do not end the affordability period.
f. Although whether the financial assistance is a grant deferred loan or a combination of
deferred loan and repayment loan, the Grantee Borrower(s) falls under RECAPTURE
regulation. NMHC must ensure that it recoups all or a portion of the loan assistance to the
Grantee(s)Borrower, if the housing does not continue to be the principal residence of the
Grantee(s)Borrower for the duration of the period of affordability. In accordance with
CDBG-DR Homebuyer owner Rehabilitation and Reconstruction Program Policies and
Procedures, NMHC may utilize any of the following recapture options or any other
recapture options available to it under its agreements with the Grantee(s).

“NMHC is an equal employment and fair housing public agency”

Tinian Field Office CDBG-DR Office Rota Field Office
Tel: (670)433-9213 Tel: (670)233-9447/9448/9449/9450 Tel: (670)532-9410
Fax: (670)433-3690 Fax: (670) 233-9452 Fax: (670)532-9441
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Commitment Letter
& Written Agreement

(1) Recapture entire amount. If the housing ceases to be the principal residence less than
halfway into the affordability period, NMHC may recapture the entire amount of its loan
from the undersigned.
(2) Reduction during affordability period. If the property and housing ceases to be the
principal residence more than halfwayu into the affordability period, NMHC may reduce
the loan amount to be recaptured on a pro rata basis for the time the undersigned has
owned and occupied the housing measured against the required affordability period.
g. Notwithstanding any provision of this commitment letter, the parties hereto
agree and acknowledge that this commitment letter does not constitute a commitment of
funds or site approval, and that such commitment of funds or approval may occur only
upon satisfactory completion of environmental review and receipt by NMHC of a release
of funds from the U.S. Department of Housing and Urban Development under 24 CFR
Part 58. The parties further agree that the provision of any funds to the project is
conditioned on NMHC' s determination to proceed with, modify or cancel the project
based on the results of a subsequent environmental review.
Construction
Prior to commencement of construction, Borrower(s) agree to:
 Obtain a Preliminary Title Report (PTR)
 Complete initial inspection of the property.
 Submit 3 construction cost estimates from approved and licensed contractors, together
with final plans and specifications approved and certified by a Licensed P.E., to NMHC.
Plans may not be changed thereafter without written prior approval of NMHC.
 Submit evidence of labor and materials bonding, hazard and liability insurance, Builders
Risk and Workmen’s Compensation insurance to be carried by contractor.
 Submit evidence that contractor has procured a performance and payment bond,
acceptable to NMHC naming Borrower(s) only as obligee.
 Authorize NMHC, for its purposes, to make interim inspections and final inspection of
construction as it deems necessary to determine that construction conforms to plan and
specifications; and authorizes NMHC to reject and to require to be replaced, any material
or workmanship that does not conform.
 Proceeds of construction loans are to be disbursed in accordance with the terms of
construction contract. If disbursed on the basis of progress payments, each disbursement
must be certified by the construction inspector, must pay all construction costs to date of
contractor’s invoice, less 15% retainage to be disbursed upon completion of the contract.

“NMHC is an equal employment and fair housing public agency”

Tinian Field Office CDBG-DR Office Rota Field Office
Tel: (670)433-9213 Tel: (670)233-9447/9448/9449/9450 Tel: (670)532-9410
Fax: (670)433-3690 Fax: (670) 233-9452 Fax: (670)532-9441
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Commitment Letter
& Written Agreement

 Prior to final disbursement of construction funds, Borrower(s) shall submit the Certificate
of Occupancy issued by the Building Safety Code Office of the Department of Public
Works.
 Prior to final disbursement of construction funds, lien waivers must be obtained from all
contractors, subcontractors, and persons or companies providing labor or material for
completion of the construction.
 The building, when completed, shall conform to all applicable international, Federal,
local codes, laws, and regulations, as well as to the Minimum Property Standards set
forth therein.
 Any change order in the amount of $1,000.00 requires the prior approval of NMHC.
 Any overruns in construction cost shall be paid by Borrower(s).
 Comply with all applicable NMHC policies, procedures and regulations including, but
not limited to, all CDBG-DR Affordable Rental Housing Development Program policies,
procedures and regulations.

Should you agree to the above-mentioned terms and conditions, kindly sign on the space
provided below indicating your approval and acceptance. This commitment letter shall be null
and void if not signed by the Borrower(s) within 15 days of receipt.

Sincerely,

________________________ _____________________
JESSE S. PALACIOS DATE
Corporate Director

cc: NMHC Board of Directors

MCD

ACKNOWLEDGMENT BY BORROWER(S)

I/We fully understand that it is a Federal crime punishable by fine or imprisonment, or both, to
knowingly make any false statements concerning any of the above facts as applicable under the
provisions of Title 18, United States Code, Section 1001, et seq.

_____________________________________ ________________________
(Name of Borrower) DATE

_____________________________________ ________________________
(Name of Co-Borrower) DATE
“NMHC is an equal employment and fair housing public agency”
Tinian Field Office CDBG-DR Office Rota Field Office
Tel: (670)433-9213 Tel: (670)233-9447/9448/9449/9450 Tel: (670)532-9410
Fax: (670)433-3690 Fax: (670) 233-9452 Fax: (670)532-9441
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Commitment Letter
& Written Agreement

EXECUTION DATE OF THIS COMMITMENT LETTER: __________________

“NMHC is an equal employment and fair housing public agency”

Tinian Field Office CDBG-DR Office Rota Field Office
Tel: (670)433-9213 Tel: (670)233-9447/9448/9449/9450 Tel: (670)532-9410
Fax: (670)433-3690 Fax: (670) 233-9452 Fax: (670)532-9441