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3. Maximum Rents (Low Affordable Units): The total monthly rent for Low Affordable Units cannot exceed the Maximum Rent for Low Income Households 4. Maximum Rents (Very Low Affordable Units): The total monthly rent for Very Low Affordable Units cannot exceed the Maximum Rent for Very Low Income Households. 5. Maximum Rents (Extremely Low Affordable Units): The total monthly rent for Extremely Low Affordable Units cannot exceed the Maximum Rent for Extremely Low Income Households. 6. Tenant Income: To be eligible for the Low Affordable Units, households must be Low Income Households. To be eligible for Very Low Affordable Units, households must be Very Low Income Households. To be eligible for the Extremely Low Affordable Units, households must be Extremely Low Income Households. The foregoing notwithstanding, no household shall be charged rent exceeding maximum rent for the lowest income category for which that family qualifies. For example, if a Very Low Affordable Unit is rented to a household that qualifies as an Extremely Low Income Household, the rent for that Very Low Affordable Unit shall not exceed Maximum Rent for Extremely Low Income Households. Income limits will be prepared and made available by the City annually based on the income data published by HUD and HCD for San Mateo County. (a) City hereby acknowledges that (i) Owner purchased the Project with existing tenants, some of which have received Section 8 Tenant Based rent vouchers (the "TB Vouchers") and (ii) Owner has obtained an award for Section 8 Project Based Vouchers for the Project and that prior to the Project's placed in service date, Owner will enter into a Housing Assistance Payment contract with the Housing Authority of the County of San Mateo (the "HAP Contract"). City further acknowledges that any subsidy payments received through TB Vouchers and the HAP Contract will not be applied when calculating whether a household's income meets the affordability restrictions set forth in this Section 6. (b) To the extent consistent with the affordability standards set forth in the Chapter 18 Article XVII of the Redwood City Code, Owner may use (i) HUD methodologies to calculate tenant's annual income levels to assess the Maximum Rent for Low Income Households, the Maximum Rent for Very Low Income Households and the Maximum Rent for Extremely Low Income Households; and (ii) Owner may rely on HUD income limits to establish tenant eligibility. 7. Subordination: Except as set forth in a separately recorded subordination agreement, these affordability covenants shall be subordinate to any mortgage or deed of trust existing on the date these restrictions are recorded. In the event of either a foreclosure by another Project lender, or a termination or material reduction of project -based Section 8 or other project -based rental assistance for the Low Affordable Units, Very Low Affordable Units, and Extremely Low Affordable Units (collectively, the "Assisted Units") such that the Project is unable to pay all required (and approved) operating costs and debt service, the City agrees that, subject to the prior written consent of the City, which ATTY/AGR/2018.027/MID PEN MOSIAC GARDENTS (ATHERTON COURT) REV: 02-06-1815 Page 21 of 41