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d. HOME Income is income at 60% AMI, adjusted for family size as calculated by HUD and adjusted from time to time by HUD or a successor agency. (2) Rent and Occupancy Restriction At least 20% of the 3 HOME assisted units (1 units) must be occupied by households whose income does not exceed the Very Low -Income limit as specified above, which limit may be adjusted from time to time by HUD or any successor agency. The rent on said units, including tenant paid utilities, may not exceed the Low HOME Rent specified above, which rent may be adjusted from time to time by HUD or any successor agency. All remaining HOME assisted units must be occupied by households whose income does not exceed the HOME Income Limit as specified above, except that after initial occupancy, tenant incomes in these units may increase up to 80% AMI. The rent on said units, including tenant paid utilities, may not exceed the High HOME Rent, which rent may be adjusted from time to time by HUD or any successor agency. Floating HOME Units: The specific units affected by this Restriction shall be "floating" units, that is, there shall be no specified HOME -assisted units provided a minimum number of units is occupied in compliance with the HOME requirements specified above, and the floating units reflect the unit - size mix of the entire Project. Over -Income Tenants: In the event that the income of a qualifying tenant increases so that the tenant no longer meets the income criteria (i.e., 50% AMI for the Low HOME Units and 80% AMI for the High HOME Units), the Owner will be allowed a variance to the income criteria of this Restriction until such time as said formerly qualifying tenant vacates the unit, or another unit of comparable size in the Project becomes available, at which time that unit must be rented to a qualifying tenant and the restriction shall transfer to the new unit. The rent for an over -income tenant whose income exceeds 80% AMI, adjusted for household size, must be calculated at 30% of adjusted gross income, capped at market rent for comparable, unassisted units, provided however, that if the tenant is occupying a unit that has been allocated low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code of 1986 (26 USC 42), the rent will governed by that provision. (3) Subordination: The Covenant shall be subordinate to any mortgage or Deed of Trust and the affordability period shall be terminated in the event of a foreclosure or transfer in lieu of foreclosure if the foreclosure or other transfer recognizes any contractual or legal rights of the City of Pleasanton to take actions that would avoid the termination of low-income affordability. However, this affordability restriction shall be revived if, during the original term hereof, the owner of record before the foreclosure or other transfer, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the property. A-4 191\52\1543377.4