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4. Maximum Rents (Very Low Affordable Units): The total monthly rent for Very Low <br />Affordable Units cannot exceed the Maximum Rent for Very Low Income Households. <br />5. Maximum Rents (Extremely Low Affordable Units): The total monthly rent for <br />Extremely Low Affordable Units cannot exceed the Maximum Rent for Extremely Low <br />Income Households. <br />6. Tenant Income: To be eligible for the Low Affordable Units, households must be Low <br />Income Households. To be eligible for Very Low Affordable Units, households must be <br />Very Low Income Households. To be eligible for the Extremely Low Affordable Units, <br />households must be Extremely Low Income Households. The foregoing notwithstanding, <br />no household shall be charged rent exceeding maximum rent for the lowest income <br />category for which that family qualifies. For example, if a Very Low Affordable Unit is <br />rented to a household that qualifies as an Extremely Low Income Household, the rent for <br />that Very Low Affordable Unit shall not exceed Maximum Rent for Extremely Low Income <br />Households. Income limits will be prepared and made available by the City annually <br />based on the income data published by HUD and HCD for San Mateo County. <br />(a) City hereby acknowledges that (i) Owner purchased the Project with <br />existing tenants, some of which have received Section 8 Tenant Based rent vouchers (the <br />"TB Vouchers") and (ii) Owner has obtained an award for Section 8 Project Based <br />Vouchers for the Project and that prior to the Project's placed in service date, Owner will <br />enter into a Housing Assistance Payment contract with the Housing Authority of the <br />County of San Mateo (the "HAP Contract"). City further acknowledges that any subsidy <br />payments received through TB Vouchers and the HAP Contract will not be applied when <br />calculating whether a household's income meets the affordability restrictions set forth in <br />this Section 6. <br />(b) To the extent consistent with the affordability standards set forth in the <br />Chapter 18 Article XVII of the Redwood City Code, Owner may use (i) HUD <br />methodologies to calculate tenant's annual income levels to assess the Maximum Rent <br />for Low Income Households, the Maximum Rent for Very Low Income Households and <br />the Maximum Rent for Extremely Low Income Households; and (ii) Owner may rely on <br />HUD income limits to establish tenant eligibility. <br />7. Subordination: Except as set forth in a separately recorded subordination agreement, <br />these affordability covenants shall be subordinate to any mortgage or deed of trust <br />existing on the date these restrictions are recorded. In the event of either a foreclosure <br />by another Project lender, or a termination or material reduction of project -based Section <br />8 or other project -based rental assistance for the Low Affordable Units, Very Low <br />Affordable Units, and Extremely Low Affordable Units (collectively, the "Assisted Units") <br />such that the Project is unable to pay all required (and approved) operating costs and <br />debt service, the City agrees that, subject to the prior written consent of the City, which <br />shall not be unreasonably denied, the maximum tenant household income and rents <br />limitations for the Assisted Units may be increased to amounts necessary to make <br />ATTY/AGR/2018.027.1/MIDPEN MOSAIC GARDENS (ATHERTON COURT) DECLARATION OF AFFORDABILITY COVENANTS <br />REV: 02-22-18 JS <br />Page 3 of 7 <br />