STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT "HCD" - (SANTA ANA ARTS COLLECTIVE, L.P. & META HOUSING PROJECT)

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Meta Housing Corporation, City of Santa Ana, and Santa Ana Arts Collective L.P. 16-AHSC-11199 Page 7 of 17 I0:II illid payments are prohibited on senior loans. Senior loans are prohibited from including call option language in the terms of the loan other than is reasonable in case of default, nor may Sponsor be required to remarket Bonds prior to expiration of the senior loan. All payments, lender fees, bond fees, issuer fees, trustee fees, letter of credit fees, swaps fees, hedge fees, enhancement fees, credit facility and liquidity fees, and other fees, charges and costs, in addition to principal and interest payments, must be fully disclosed to the Department In the loan closing transaction summary and in the operating budget. Sponsors must obtain an interest rate cap on any interest rate that is not fixed for the full term of the senior loan. The interest rate at the cap must not jeopardize project feasibility. Interest rate resets, renewals, extensions of letters of credit, or other senior loan provisions, must not require the Sponsor to re -qualify. Financial instruments on senior loans (including but not limited to swaps, collars, and interest rate hedges) must extend for the full term of the senior loan and cannot be required to be renewed or extended prior to the end of the full term. 22. Environmental Conditions The Sponsor shall provide a Phase I Environmental Site Assessment ("ESA") for the Affordable Housing Development, in conformance with ASTM Standard Practice E 1527, evaluating whether the Affordable Housing Development is affected by any recognized environmental conditions. In the event the Phase I ESA indicates evidence of recognized environmental conditions and the Sponsor desires to proceed with the Affordable Housing Development, the Sponsor shall provide the Department with a Phase II report and such further reports as required by the Department in form acceptable to the Department. Any remediation work to be performed shall be subject to Department approval. The Sponsor shall also provide an asbestos assessment and a lead-based paint report for the Department's approval if the Affordable Housing Development involves rehabilitation or demolition of existing improvements. 23. Article XXXIV The Sponsor shall deliver to the Department satisfactory evidence that the requirements of Article XXXIV of the California Constitution are inapplicable or have been satisfied. CONSTRUCTION PHASE REQUIREMENTS 24. Construction Phase Information If requested by the Department, the Sponsor shall provide the Department information during the construction period including but not limited to all change orders and modifications to the construction documents, all inspection reports prepared by the Affordable Housing Development architect and other consultants, and information relative to Affordable Housing Development income, expenses, occupancy, relocation benefits and expenses, contracts, operations and conditions of the Affordable Housing Development. Upon written notice to Sponsor, Department may require its advance written approval of all future change orders and modifications. Deviations from the plans and specifications which have the effect of reducing the quality, life or utility of a specified item or system must receive the prior written approval of the Department. Should AHSC Loan - Rental Affordable Housing Development NOFA Date: 01/29/16 Approved Date: 03/09/17 Prep Date: 07/20/17