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6. 1. D. - Page 43 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 to a person of very low income whose income did not exceed Fifty percent (50°1x) of the median income in San Mateo County for a family of two (2). 6 Refinance Restriction; Prohibition on Home Equity Lines of Credit; Home Equity Loan Restrictions (a) Refinance Restriction Owner may not, during the term of this Resale Agreement, refinance the loan(s) used to purchase the Subject Affordable Units (the "Purchase Loan "), without the express written approval of the City, which shall not be unreasonably withheld [the "Refinance Restriction(s) "j. The City's decision to approve or disapprove such refinancing shall be based upon such factors as whether; (i) the replacement loan (the "New Loan ") provides a reasonable and tangible net benefit to Owner such as a reduction in the interest rate and monthly mortgage payment (ii) a reduction in the amortization period, (iii) required due to an order of a court of competent jurisdiction, or (iv) frustrates the City's ability to administer the covenants contained in this Resale Agreement, in no event shall Owner be permitted to refinance into an Ineligible Loan, Any New Loan approved by the City shall remain subject to this Refinance Restriction for the balance of the term of this Resale Agreement. Any such refinance shall be subject to the terms and conditions of the City's Subordination Policy, as may be amended from time to time. Owner acknowledges and agrees that the Refinance Restriction is not an unreasonable restraint on property alienation rights and is necessary in order to ensure that there is sufficient equity maintained in the Subject Affordable Unit to pay -off loan balances in the event of a Transfer, taking into account the Transfer Amount of the Subject Affordable Unit upon resale as set forth in Section 11. The Refinance Restriction shall not be construed or understood to confer any rights upon any third parties whatsoever, and exists solely for the benefit of the City to assist the City in the administration of this Resale 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 Credit "), 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 Transfer of the Subject Affordable Units, taking into account the Transfer Amount of the Subject Affordable Unit upon resale as set forth in Section 11. ATTY /AGR /2010, 079aResaie Restriction Agr 09127/10