KOTTINGER GARDENS PHASE 1 - AFFORDABLE HOUSING LOAN AGMT

affordability restrictions set forth in this Agreement,and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City. 2.1 Senior Housing. Owner has elected to operate the Project as a senior housing development and as such to require all dwelling units in the Project except for the manager's unit to be occupied or held available for occupancy by households that include "elderly"or"senior" residents in accordance with applicable law. To the extent applicable, the Project will be operated at all times in accordance with (a)the Unruh Act, including without limitation California Civil Code Sections 51.2, 51.3, and 51.4; (b)the federal Fair Housing Act, 42 U.S.C. Section 3607(b) and 24 CFR 100.304; (c) the California Fair Employment and Housing Act, Government Code Section 12900 et seq., and (d) all other applicable laws and regulations. Owner shall develop and implement appropriate age verification procedures to ensure compliance with this Section 2.1, and shall provide City with a copy of such verification procedures. Owner will indemnify, defend, and hold the Indemnitees harmless from all Claims arising out of Owner's failure to comply with applicable legal requirements related to housing for seniors. The indemnity provisions of this paragraph shall survive the expiration or other termination of this Agreement. 2.2 Affordability and Occupancy Requirements. Throughout the term of this Agreement(as defined in Section 4.1 below): (i) not less than sixty-four(64) of the residential units in the Project(including the three (3) HOME-Assisted Units described in Section 2.2.1 below) (i.e., 49%of the total number of units) shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than sixty percent(60%)of AMI; and (ii)the remaining units in the Project(except for the manager's unit which will not be subject to affordability or occupancy restrictions) shall be both Rent Restricted and occupied(or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than eighty percent(80%) of AMI. One (1) of the residential units in the Project shall be a manager's unit for which rent will not be restricted. Notwithstanding any contrary provision of this Agreement, for the duration of the HOME Restriction Term, the HOME-Assisted Units shall be subject to the rent and occupancy requirements set forth in Section 2.2.1. For the purpose of determining whether a household is an Eligible Household: (i) for the HOME-Assisted Units, during the HOME Restriction Term, gross household income shall be determined in accordance with Section 2.2.1.2(c) below, and (ii) for the remainder of the units in the Project, gross household income shall be determined in accordance with TCAC regulations and federal regulations applicable to low-income housing tax credits. Notwithstanding any contrary provision of this Agreement, for units that are subsidized with Section 8 project-based vouchers, the rules and regulations applicable to such program shall prevail with respect to the setting of rents, implementation of occupancy requirements, and determination of gross household income. In the event that recertification of tenant incomes indicates that the number of Restricted Units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section 2.1 and Exhibit B, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the required 5 OAK #4832-3506-6205 v4