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Initial rents may be recalculated to allowable rental amounts at the time of initial lease -up following completion of construction in accordance with any changes in allowable rent and income tables as published by HUD. 3.3 Rent Increases: On an annual basis, the City shall provide Developer with the maximum allowable schedule of rents for the Property in accordance with changes in allowable rent and income tables published by HUD and the California Tax Credit Allocation Committee, provided however that the rent for the HOME units shall in no event be higher than the rent for the equivalent non -HOME assisted unit within the Project. In no event can Developer charge any tenant more than such amount. The City will make all best efforts to provide Developer with the maximum allowable schedule of rents within no more than 30 calendar days after the date TCAC publishes the allowable rent and income tables. 3.4 Increase in Rent and Occupancy Restrictions upon Termination of Rental Subsidies. The parties acknowledge that Developer is only able to rent units to Extremely Low Income Households because the City is providing 75 Housing and Urban Development Veterans Affairs Supportive Housing (HUD VASH) Project -Based Vouchers for Permanent Supportive Housing ("VASH Vouchers"). In the event the VASH Vouchers expire, terminate, are not renewed or are reduced for any reason other than a default by Developer under the VASH Vouchers, then the occupancy requirements for all of the units, other than the 2 HOME Assisted Units shall automatically increase to 60% of the Area Median Income and the Affordable Rent shall increase to Affordable Rents for households earning 60% of the Area Median Income in accordance with the rent limits set forth by the California Tax Credit Allocation Committee (TCAC for households earning 60% of the Area Median Income. 3.5 CHDO Provisions. Developer shall maintain CHDO (Community Housing Development Organization) status for the term of this Agreement and the HOME Regulatory Agreement in accordance with 24 CFR 92. Developer agrees to provided information as may be requested by the City to document its continued compliance, including but not limited to an annual board roster and certification of continued compliance. Any funds advanced as CHDO pre -development funds must be in compliance with 24 CFR 92.301, and are forgivable only under the terms in 24 CFR 92.301. Any funds advanced to Developer as CHDO Operating Expenses must be expended in compliance with 24 CFR 92.208. Any funds that Developer is permitted to retain as CHDO proceeds from this Project shall be used in compliance with 24 CFR 92.300(a)(2) or as specified in this Agreement. The provisions of this Section 3.5 shall not apply in the event of a foreclosure of the Property or transfer in lieu of foreclosure. In the event of a foreclosure, or acceptance of a deed in lieu of foreclosure, Senior Lender will use commercially reasonable efforts to accept bids for the Property from a qualified CHDO; provided, however, that in no event shall Senior Lender be obligated to select a qualified CHDO to be the purchaser of the Property unless, among other criteria used in Senior Lender's reasonable discretion, such qualified CHDO has offered the highest purchase price among the bidders. 4of14