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04/08/2013 The Promissory Note shall provide that the loan will be at zero percent (0°/a) interest for thirty (30) years with principal and interest payments deferred for the Loan Term, except in the case of default, and shall be repaid in full at the end of the Loan Term, except in the case of a default, in which case repayment may be accelerated. The "Loan Term" shall be the date which is thirty (30) years from the date the Promissory Note is fully executed. Contractor shall not further encumber, subordinate, sale nor transfer title, nor take any other actions which would jeopardize the economic sustainability and affordability of the property being acquired, without the prior written consent of the City. 4. HOME Match Requirements: HOME regulations require a 25% HOME funding match contribution from a non federal source as described in 24 CFR 92.218 through 92.222. The Redwood City Successor Agency will provide the 25% match contribution credit on behalf of Contractor for this Project. The City shall report matching funds to HUD as required under 24 CFR Section 92.221. 5. HOME Affordabilitv Covenant: In accordance with HOME program requirements, all projects receiving HOME funds must record on title a HOME affordability covenant ("Covenant") or deed restriction ("Deed Restriction") that runs with the land and restricts household incomes and rents of HOME assisted units such that the units remain continuously affordable to very low and low income persons for a specified period of time. The term of said HOME affordability restriction for this Project shall be fifteen (15) vears, the minimum term of affordability required for HOME assisted acquisition of existing housing when the per unit investment is greater than $40,000 per unit. The period of affordability becomes effective upon initial occupancy of HOME assisted units notwithstanding that HUD defines Project Completion as the date when the final HOME funds are drawn down and the City has entered project completion information into HUD's disbursement and information system. The Covenant will incorporate the following provisions: HOME Definitions, Requirements, Rent and Occupancy Restrictions - The following definitions, requirements and references may be adjusted from time to time by HUD or the City, and any such adjustments shall be incorporated by reference into this Agreement: a. Special Guidance For HOME Assisted Special Needs Housinq: In addition to Agreement terms, conditions and covenants the following requirements are applicable to Special Needs/Transitional Housing (Group Housing) pursuant to HOME regulations (Reference HUD Notice CPD 94-01: "Using HOME Funds for Single Room Occupancy and Group Housing"). b. Group Home Definition: HOME defines Group Housing and Group Homes as follows: "A Group Home is housing occupied by finro or more single persons or families consisting of common space and/or facilities for group use by the occupants of the unit, and (except in the case of shared one bedroom units) separate private space for each family. It also includes group housing for elderly or disabled persons. Supportive services may be provided. These structures are usually large single-family ATTY/AGR/2013.043/KAINOS-1033 REDWOOD AVE REV:03-28-13 VR Page 17 of 34 RESO.#15256 MUFF#304