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2. The initial purchaser of each Target Unit shall execute an instrument or agreement approved by the City restricting the sale of the Target Unit in accordance with this Article during the applicable use restriction period. Such instrument or agreement shall be recorded against the parcel containing the Target Unit and shall contain such provisions as the City may require in order to ensure continued compliance with this Article and the state Density Bonus Law; 3. Renewed restrictions will be entered into on each change of ownership, with a 45-year renewal term, upon transfer of an owner-occupied Target Unit prior to the expiration of the 45-year affordability period not be subject to any requirement of this Article thereafter; 4. Target Units may be refinanced if the loan-to-resale value does not exceed 100 percent and the homeowners receive no cash out except cash that would be used for major rehabilitation; 5. The maximum sales price permitted on resale of the Target Unit designated for owner-occupancy shall be the lower of: (1) fair market value or (2) the seller's lawful purchase price, increased by the lesser of (i) the rate of increase of Area Median Income during the seller's ownership or (ii) the rate at which the consumer price index increased during the seller's ownership. The City shall enter into an equity sharing agreement in accordance with Government Code Section 65915(c) to address disposition of proceeds upon resale; 6. Title in the Target Unit may change due to changes in circumstance, including death, marriage and divorce. Except as otherwise provided, if a change in title is occasioned by events that change the financial situation of the Household so that it is no longer income-eligible, then the property must be sold to an income-eligible Household within 180 days. Upon the death of one of the owners, title in the property may transfer to the surviving joint tenant without respect to the income-eligibility of the Household. Upon the death of a sole owner or all owners and inheritance of the Target Unit by a non-income-eligible child or stepchild of one or more owners, there will be a one year compassion period between the time when the estate is settled and the time when the property must be sold to an income-eligible Household. Inheritance of a Target Unit by any other person whose Household is not income-eligible shall require resale of the unit to an income-eligible Household as soon as is feasible but not more than 180 days; and 7. Target Units shall remain owner-occupied. No renting or leasing shall be allowed. ORDINANCE NO. 2006-010 10