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. ' "Extremely Low-Income" means an annual gross income that is not greater than thirty percent (30%) of Area Median Income. "Four-year Transition Period" means the term beginning on the Effective Date and ending on the fourth anniversary ofthe Effective Date during which the Owner will exercise all reasonable efforts to convert any residential units that are not Restricted Units into Restricted Units in accordance with the requirements specified in Section 2.3 and Exhibit B. "Qualifying Rent" means a monthly rent which does not exceed one-twelfth of 30% of the applicable income level set forth in Exhibit B, adjusted by the utility allowance published by the Alameda County Housing Authority for any utilities not paid by the Owner, or by any other utility allowance approved by the City or the Agency in writing. "Restricted Unit" means a residential unit which is reserved for occupancy at a Qualifying Rent by a Very Low-Income or Extremely Low-Income household in accordance with and as set forth in Section 2.3 and Exhibit B. "Very Low-Income" means an annual gross income that is less than or equal to fifty percent (50%) of AMI. 2. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the operation of a twenty-five (25) unit multi-family rental housing and commercial development in compliance with the City Loan Agreement, the Agency Loan Agreement, the OP A, the City Deed of Trust, the Agency Deed of Trust and the requirements set forth herein. Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City and Agency. Notwithstanding the foregoing or anything to the contrary contained herein, if the terms of financing for the Proj ect require greater affordability restrictions than those imposed hereby, the requirements of such other financing shall prevail for the term thereof. 2.1 HOME Restrictions. For a term of fifty-five (55) years, commencing upon the Effective Date, the Project shall include a minimum of one (1) floating residential studio unit and of one (I) floating residential one-bedroom unit for Very Low-Income households, as defined by and in accordance with and regulated by 24 CFR Part 92 ("HOME Assisted Units"). HOME Assisted Units shall be Restricted Units that are subject to, and included in, the affordability requirements of Section 2.3 and Exhibit B. Any residential studio or one-bedroom Project unit may be substituted for another studio or one-bedroom Project unit and designated as a HOME Assisted unit in order to maintain conformity with the requirements of this section. Owner shall comply with lease terms for HOME Assisted Units as governed by 24 CFR Part 92.253, and with all other federal HOME requirements as governed by 24 CFR Part 92.350-358. The requirements of this Section 2.1 are separate and distinct from the requirements of Section 2.2. 2.2 McKinney Restrictions. For a term of fifty-five (55) years, commencing upon the Effective Date, the Project shall include eight (8) floating residential units for Very Low-Income 817718-5 4