RecDoc 2017-055496 Declaration of Convenants

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ueciaracion or Anoraaonny uovenanc Page 3 of 6 e) Affordability and Physical Distribution of the Rental Units: DOH must approve the affordability mix of the development. The ARAPP-Restricted Units should be distributed by unit size, amenity mix, and income affordability throughout the entire development. (i) ARAPP-Restricted Units in the Project will be floating units: Upon recertification of household income, if a household no longer qualifies to occupy their ARAPP-Restricted Unit at the initially targeted affordability level for that unit, then the next available comparable unit shall become designated to target households at the same initially targeted affordability level as the recertified household's unit. The objective is to ensure the development maintains the initial affordability mix of the ARAPP-Restricted Units overtime. (ii) Rent Limit Compliance: DOH will periodically monitor the Project to ensure that the ARAPP-Restricted Units are in compliance with these affordability requirements, and that procedures used to calculate the maximum tenant - paid rent for ARAPP-Restricted Units are consistent with ARAPP policies and requirements. 2. Rent and occupancy Restrictions In the event that the income of a qualifying tenant increases such that the tenant no longer meets the income criteria for an ARAPP-Restricted Unit, 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 Development becomes available, at which time that unit must be rented to a qualifying tenant and the restriction shall transfer to the new unit as a ARAPP-Restricted Unit. 3. Subordination. This Affordability Covenant shall be subordinate to the permanent loan(s) and its securities as anticipated for this property. Any Note(s), Deed of Trust(s) and Restrictive Covenant(s) executed and recorded by the City of Redwood City shall be pari passu with the Note, Deed of Trust, and Restrictive Covenant executed and recorded by the County. 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 so long as DOH is provided with notice and cure rights with respect to such mortgage or Deed of Trust. 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. The Owner grants to DOH the right to take any and all legal action necessary to enforce the provisions of this Affordability Covenant, and the Owner shall be responsible for all reasonable legal expenses incurred by DOH in the enforcement of this Affordability Covenant. DOH shall have the right to waive any and all breaches of the terms of this Affordability Covenant, but any such waiver shall not be deemed a waiver of all previous or subsequent breaches.