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operation of the Project financially feasible, including the payment of all required operating <br />costs and debt service, but in no event may (a) the household income limitation for any <br />unit exceed 60% of AMI, or (b) the maximum rent limitation for any unit exceed 30% of <br />60% of AMI. In the case of increases due to termination or material reduction of project - <br />based Section 8 or other project -based rental assistance for Assisted Units, these <br />increases may continue until such time that the full amount of the rental assistance or <br />equivalent operating subsidy is restored. However, these affordability covenants shall be <br />revived if, during the original term hereof, the owner of record before the foreclosure or <br />other transfer, or any entity that includes the former owner or those with whom the former <br />owner has or had family or business ties, obtains ownership interest in the Property. <br />Owner grants to the City the right to take any and all legal action necessary to enforce <br />the provisions of these affordability covenants, and Owner will be responsible for all <br />reasonable legal expenses incurred by the City in the enforcement of these affordability <br />covenants. 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 />8. Affirmative Marketinq: 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 />9. 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, which participation may include the <br />opportunity for tenants to provide input at tenant meetings held by Owner. Said plan shall <br />be submitted to the City prior to or at the time of Project Completion. Owner shall adopt <br />written tenant selection policies and criteria that are consistent with the purpose of <br />providing housing for Low Income Households, Very Low Income Households, and <br />Extremely Low Income Households; are reasonably related to program eligibility and the <br />applicants' ability to perform the obligations of the lease; provide for the selection of <br />tenants from a written waiting list in the chronological order of their application, insofar as <br />is practicable; and give prompt written notification to any rejected applicant of the grounds <br />for any rejection. <br />10. Reversion of Assets: If Owner elects to sell the Property or discontinue the <br />affordable housing program and not perform the conditions of the Agreement or these <br />affordability covenants, Owner shall pay to the City the sum of One Million One Hundred <br />Thousand and no/100 Dollars ($1,100,000.00) and any additional sums due to the City <br />pursuant to the Agreement. <br />11. Non Profit Status of Owner: Owner agrees to maintain its status as a nonprofit entity <br />and that its failure to do so shall be grounds for termination of the Agreement and <br />acceleration of the Promissory Note. <br />ATTY/AGR/2018.027.1/MIDPEN MOSAIC GARDENS (ATHERTON COURT) DECLARATION OF AFFORDABILITY COVENANTS <br />REV: 02-22-1815 <br />Page 4 of 7 <br />