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6.1C Page 24 States Department of Housing and Urban Development ("Huon), which as of the date of this Resale Agreement, is two (2) persons per bedroom, plus one (1) person. In the event Owner fails to comply with this Section 5 or with Section 4 regarding leasing the Subject Affordable Unit, the City may, at its sole option, declare a default under this Resale Agreement. In addition, Owner shall be liable to the City for the difference between the rent being charged for the Subject Affordable Unit and the allowable rent had the Subject Affordable Unit been rented t9 a person of very low income whose income did not exceed Fifty percent (500/0) ofJ~~tnedian income in San Mateo County for a family of two (2). ,..>,~:'- , ;:d;\~n., 6. Refinance Restriction: Prohibition on HomeHE'auit\HlLines of Credit: Home EQuitv Loan Restrictions,! ',,' , .::~:.;':~l~ ';",,' '.- . (a) Refinance Restriction.. :9wner may not, during[ttl~ term of this Resale Agreement, refinance the loan(s) used.fo purchas~}he Subject Aff9(dable Units (the "Purchase Loan"), without the express writtrn appr~)f~tof the City, which shall not be unreasonably withheld [the "Refinance Res1rip.ti~lits)"]. The City's decision to approve or disapprove such refinap.~lpg shall be ba:~'$'~ upon such factors as whether; (i) the replacement loan (the "Ne\l(L()~n") provides!:l~. reasonable and tangible net benefit to Owner such as a reduction.in the:li~~r~st rate:a!m'Q.monthly mortgage payment (ii) a reduction in the amortization peri9d, (ili)~,f~uifed 'CJQ~-to an order of a court of competent jurisdiction, or.(i.Y)Jrustrate$t~heqi~'s\a~f!i.tK.tbadminister the covenants contained in this Resale Agreement. In hcevent shan-OWner be permitted to refinance into an Ineligible LoClrl.Any New Loan approved by the City shall remain subject to this Refinance Restriction for the balance of theJerm of this Resale Agreement. Any such refinance shall beslJ~ject to thf.tt~rm~and Cbn-ditions of the City's Subordination Policy, as may be amended from,tirn~:totfni~u '.:';, ;dWn~r'i;lpknd~I~9ges and agrees that the Refinance Restriction is not an unr~(3~,onable restraintqn prdpi~~ alienation rights and is necessary in order to ensure thaft~~r~ is sufficienteq4,ity m~jmt~ined in the Subject Affordable Unit to pay-off loan balanc~sjn the event of'~. Transfer, taking into account the Transfer Amount of the Subject Affqrpable Unit,qpon resale as set forth in Section 11. The Refinance Restriction sflctl!not be cc>nstrued or understood to confer any rights upon any third parties whatsoev~r! anct~)dsts solely for the benefit of the City to assist the City in the administration of tl1i~.R~sale Agreement. ~ : . : ' :.; ~ (b) Prohibition on Home EQuity Line(s) of Credit. Under no circumstances may Owner obtain home equity lines of credit secured by deeds of trust or similar security instruments upon the Subject Affordable Unit (a "Line of Credif) , during the term of this Resale Agreement. Owner understands and agrees that the prohibition against Lines of Credit is not an unreasonable restraint on property alienation rights and is necessary in order to ensure that sufficient equity is maintained in the Subject Affordable Unit to pay-off the existing loan balances in the event of a REDW\0001 \DOC\023-2. DOC 11/24/08 730 HvT 5