RecDoc2025-040037 Regulatory Agreement and Declaration of Restrictive Covenants 112 Vera Avenue

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former Very Low -Income Household or a Low -Income Household's Adjusted Income has increased and exceeds the qualifying income for a Low -Income Household by more than ten percent (10%), as set forth in Section 1.1 above, but does not exceed the qualifying limit for a Moderate -Income Household as set forth in Section 1.1 above, then, upon expiration of the Resident's lease: (1) Such Resident's Unit may be considered a Moderate -Income Unit; (2) Such Resident's Rent may be increased to a Moderate -Income Rent, upon six (6) months written notice to the Resident; and (3) The Owner shall rent the next available Moderate -Income Unit, of comparable size, to a Very Low-income Household at a Very Low - Income Rent or Low -Income Household at a Low -Income Rent, as necessary to maintain the required number of Very Low -Income Units and Low -Income Units required by Section 2.1. (c) Non-Qualifyin Household. If, upon recertification of the income of a Resident, the Owner determines that a former Very Low -Income Household, Low Income Household, or Moderate Income Household has an Adjusted Income exceeding the maximum qualifying income for a Moderate Income Households by more than ten percent (10%), such Resident shall be permitted to continue occupying the Unit and upon expiration of the Resident's lease and upon six (6) months written notice, the Resident may continue to reside in the Unit and the Rent may be increased to the lesser of one -twelfth (1/12th) of thirty percent (30%) of actual Adjusted Income of the Resident, or fair market rent and the Owner shall rent the next available Unit to a Very Low -Income Household, Low Income Household, or Moderate Income Household to meet the requirements of Section 2.1 above. (d) Termination of Occu anc . Upon termination of occupancy of a Unit by a Resident, such Unit shall be deemed to be continuously occupied by a household of the same income level (e.g., Very Low -Income Household Low Income Household, or Moderate Income) as the income level of the vacating Resident, until such Unit is reoccupied, at which time the income character of the Unit (e.g., Very Low -Income Household, Low Income Unit, or Moderate Income) shall be redetermined. In any event, Owner shall maintain the occupancy requirements set forth in section 2.1 above. 2.4 Resident Selection. (a) The Owner shall market the Affordable Units to eligible households at Rents required by Section 2.2, in compliance with the "Below Market Rate (BMR) Tenant Selection and Management Plan" (the "Management Plan") approved in advance by the City pursuant to Section 5.2 and consistent with this Agreement and the Affordable Housing Ordinance. (b) The Owner shall not discriminate against any applicants for tenancy on the basis of source of income or rent payment (for example, without limitation, Temporary Assistance for Needy Families (TANF) or Section 8), and the Owner shall consider a prospective Resident's previous rent history of at least one (1) year, or such other time period the Owner deems reasonable, as evidence of the prospective Resident's ability to pay the applicable Rent. The ability to pay shall be demonstrated if the prospective Resident can document that, the prospective REV: 04-03-25 LF ATTY/AGR.2025.060/112 Vera Ave., L.P. (REGULATORY AGREEMENT & RESTRICTIVE COVENANTS) (Page 8 of 22)