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04/08/2013 units that are being used for this purpose. PJs may choose to consider them as a single unit for HOME assistance purposes or, depending upon their size, choose to classify them as single room occupancy (SRO) units" (HUD Notice CPD 94-01: "Using HOME Funds for Single Room Occupancy and Group Housing). c. Group Home Rents: Rents in HOME-assisted group homes are based on the Section 8 Existing Housing Fair Market Rent (FMR) for the unit size. Each tenants rent will be a proportionate share of the total unit rent. The HUD FMR rent includes utilities, but does not include food or cost of any supportive services provided. If any utilities (except telephone and cable) are paid by the tenant this amount must be deducted from their rent. Bedrooms occupied by live-in supportive service providers in determining the applicable FMR for the Group Home are excluded from the bedroom count. d. Maximum Atlowable HOME Rent and Utilitv Allowances: The maximum allowable HOME rents must be reduced if the tenant/s pays for utilities. The FMR includes all utilities and housing-related services, except telephone. Allowances provide a mechanism for reducing the maximum allowable HOME rent when some or all utilities are paid by the tenant/s. Redwood City uses the San Mateo County Housing Authority current allowance schedule to determine utility allowances which vary depending on the type of unit and utilities available in the unit. e. Maximum Rents: The total monthly rent collected by the Group Home cannot exceed the FMR, including any assistance for rent payment provided by sources other than tenants (e.g. Section 8 voucher). Maximum rents do not include other fees that group home providers receive for provision of non-rent related support services (e.g. funds received from sources other than a tenant for case management services). f. Tenant Income: Group homes including special needs transitional housing are considered one-unit projects. All occupants of single unit HOME-assisted projects, except supportive services providers (staf�, must be low-income (incomes at or below 80 percent of area median). Income limits will be prepared and made available by Redwood City annually based on the income data published by HUD and the State California Housing and Community Development. g. Subordination: The Covenant shall be subordinate to any mortgage or Deed of Trust and the affordability period shall be terminated in the event of a foreclosure of transfer in lieu of foreclosure if the foreclosure or transfer recognizes any contractual or legal rights of the City of Redwood City to take actions that would avoid the termination of low-income affordability. However, this affordability restriction shall be revived if, during the original term hereof, the owner of record before the foreclosure or other transfer, or any entity that includes the former owner or those with who the former owner has or had family or business ties, obtains ownership interest in the property. Contractor/Owner grants to the City of Redwood City the right to take any and all legal action necessary to enforce the provisions of this restrictive covenant, and owner will be responsible for all reasonable legal expenses incurred by the City in the enforcement of this restrictive covenant. Within the HOME program guidelines, the City will have the right to waive any and all breaches of the terms of the affordability restrictive covenant, ATTY/AGR/2013.043/KAINOS-1033 REDWOOD AVE REV:03-28-13 VR Page 18 of 34 RESO.#15256 MUFF#304