NEIGHBORHOOD STABILIZATION PROGRAM 2

(i) All of the proceeds of the senior loan, less any transaction costs, are used to provide acquisition, construction and /or permanent financing for the Subject Property. (ii) The proposed lender is a state or federally chartered financial institution, a nonprofit corporation, a charitable foundation, or a public entity that is not affiliated with the developer or any of developer's affiliates, other than as a depositor or a lender. (iii) CONTRACTOR, or Eligible Purchaser, as the case may be, demonstrates that adequate financing is not available without the proposed subordination. (iv) The subordination agreement minimizes the risk that the County's security interest in the property would be extinguished as a result of a foreclosure by the senior lender or other holder of the senior loan. The condition is satisfied if the County has adequate rights to cure any borrower default. (v) The subordination agreement does not limit the effect of the County's deed of trust before a foreclosure and does not require the consent of the holder of the senior loan before the County can exercise any of its remedies under the loan documents. 14. Rental of Rehabilitated Properties. If, after reasonable efforts, including but not limited to a sales price reduction, a sale of the Subject Property to an Eligible Purchaser does not occur, CONTRACTOR may request that the County permit CONTRACTOR to retain ownership of the Subject Property as a rental property until market conditions improve. Any such request must be in writing and must include the following: a. Documentation of CONTRACTOR's efforts to sell the Subject Property to an Eligible Purchaser. b. CONTRACTOR's assessment of why the Subject Property has not sold. c. A requested conversion date. d. An operating budget and a management plan for the Subject Property as a rental. e. Schedule of rents, to be approved by the Housing Director f. Contractor will ensure that for Phase 1 properties which were targeted to Very Low- Income Households, NSP funds are used to benefit Very Low- Income Households under this scenario as well. g. A financing plan which addresses repayment, restructure or extension of other financing in the Subject Property.