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5. Encumbrances.
<br />a. Subordination. Except as provided otherwise herein, the provisions of
<br />the Loan Agreement, this Restriction, the Notice of Affordability Restrictions and the City Deed
<br />of Trust and Rider, the obligations herein and therein, shall be subordinate only to the First Lien
<br />on the Property and, if applicable, other loan(s) as approved by the Executive Director, including
<br />lien instruments that secure other Homebuyer purchase money and/or down payment assistance,
<br />including without limitation City, State of California, or federal affordable housing programs,
<br />which liens shall not impair the rights under the First Lien in the event of default under the First
<br />Lien by Homebuyer. Such remedies under the First Lien include the right of foreclosure or
<br />acceptance of a deed or assigmnent in lieu of foreclosure. If title to the Property is transferred by
<br />foreclosure or acceptance of a deed in lieu of foreclosure, or assignment of the First Lien to the
<br />Secretary of the Department of Housing and Urban Development, the Loan Agreement, this
<br />Restriction, and City Deed of Trust shall be automatically terminated and shall have no further
<br />effect as to the Property or any Transferee thereafter. However, in no event shall the Loan
<br />Agreement, the City Deed of Trust, and this Affordable Housing Resale Restriction, be
<br />subordinate to any First Lien on the Property securing a loan with provisions which allow
<br />negative amortization, or to refinancing of the lien of the First Lien for a loan amount in excess
<br />of the sum of the then current loan balance secured by the First Lien and loan closing costs.
<br />b. Request for Notice of Default, City may cause a Request for Notice to
<br />be recorded on the Property subsequent to the recordation of the First Lien deed of trust or
<br />mortgage requesting a statutory notice of default as set forth in California Civil Code Section
<br />2924b. A form of a Request for Notice is attached hereto as Exhibit C and incorporated herein.
<br />e. Further Encumbrances. Homebuyer agrees that it shall not record or
<br />cause the recordation of any deed of trust ("Further Encumbrance") securing a note having an
<br />original principal sum which, when added to the sum of the principal amount(s) of any notes
<br />secured by any deeds of trust against the Property as of the date of recordation of the Further
<br />Encumbrance, exceeds one hundred percent (100%) of the fair market value of the Property.
<br />6. Reserved.
<br />7. Uses. Homebuyer covenants and agrees to devote, use and maintain the Property
<br />in accordance with this Restriction. All uses conducted on the Property, including, without
<br />limitation, all activities undertaken by Homebuyer pursuant to this Restriction, shall conform to
<br />all applicable provisions of the Santa Ana Municipal Code, and the recorded documents
<br />pertaining to and running with the Property.
<br />S. Nondiscrimination Covenants. Homebuyer covenants by and for itself, its
<br />successors and assigns, and all persons claiming under or through them that there shall be no
<br />discrimination against or segregation of, any person or group of persons on account of any basis
<br />listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
<br />defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of
<br />Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease,
<br />transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the
<br />grantee or any person claiming under or through him or her, establish or permit any practice or
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<br />EXHIBIT B
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