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3. Maximum Rents (HOME -Funded Unit Onlv),: The total monthly rent cannot exceed <br />the Maximum Rent for Very Low Income Households. <br />4. Maximum Rents (CDBG/Affordable Housing Fund Units and, after the HOME <br />Affordabilitv Period, the HOME Funded -Unit): The total monthly rent cannot exceed <br />the Maximum Rent for Low Income Households. <br />5. Tenant Income: To be eligible for the HOME -Funded Unit, households must be a Very <br />Low Income Household and for CDBG/Affordable Housing Fund Units, households must <br />be Low Income Households. Income limits will be prepared and made available by the <br />City annually based on the income data published by HUD and HCD for San Mateo <br />County. <br />6. Subordination: These affordability covenants shall be subordinate to any mortgage or <br />deed of trust and the Affordability Period shall be terminated in the event of a foreclosure <br />or transfer in lieu of foreclosure if the foreclosure or transfer recognizes any contractual <br />or legal rights of the City to take actions that would avoid the termination of affordability <br />for Low Income Households and Very Low Income Households. However, these <br />affordability covenants shall be revived if, during the original term hereof, the owner of <br />record before the foreclosure or othertransfer, or any entitythat includes theformer owner <br />or those with whom the former owner has or had family or business ties, obtains <br />ownership interest in the Property. Owner grants to the City the right to take any and all <br />legal action necessary to enforce the provisions of these affordability covenants, and <br />Owner will be responsible for all reasonable legal expenses incurred by the City in the <br />enforcement of these affordability covenants. Within the CDBG and HOME program <br />guidelines, the City will have the right to waive any and all breaches of the terms of these <br />affordability covenants, but any such waiver shall not be deemed a waiver of any previous <br />or subsequent breaches. <br />7. Affirmative Marketing: The Project must comply with affirmative marketing <br />responsibilities that meet federal and state requirements. Owner shall submit an <br />affirmative marketing plan to the City prior to disbursement of funds under the Agreement. <br />S. Leases, Tenant Protection and Selection: Owner must adhere to a fair lease, tenant <br />selection and grievance procedure and must provide a plan for and follow a program of <br />tenant participation in management decisions. Said plan shall be submitted to the City <br />prior to or at the time of Project Completion. Owner shall adopt written tenant selection <br />policies and criteria that are consistent with the purpose of providing housing for Very <br />Low Income Households and Low Income Households; are reasonably related to program <br />eligibility and the applicants' ability to perform the obligations of the lease; provide for the <br />selection of tenants from a written waiting list in the chronological order of their <br />application, insofar as is practicable; and give prompt written notification to any rejected <br />applicant of the grounds for any rejection. <br />ATTY/AGR/2017.145.1/STAFFORD FUNDING AGREEMENT— DECLARATION OFAFFORDABILITY COVENANTS <br />REV: 06-21-17 JS <br />Page 3 of 6 <br />