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or equal to the qualifying limits for households of Very Low Income for Alameda County, adjusted for Actual Household Size, as determined periodically by HUD on the basis of gross annual household income and published by HCD in the Regulations. If HUD ceases to make such determination, "Very Low Income" shall be defined as not greater than 50% of Area Median Income adjusted for Actual Household Size, as published by HCD in the Regulations. If both HCD and HUD cease to make such determinations, Agency in its reasonable discretion may designate another definition of "Very Low - Income" used by any other federal or state agency so long as such definition is no more restrictive than that set forth herein. "Regulations" means Title 25 of the California Code of Regulations. "Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable Rent by a household of not more than Very Low- Income in accordance with and as set forth in Sections 2.1 and 2.2. 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 multifamily rental housing development in compliance with the City Loan Agreement, the Agency Loan Agreement, 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 Agency. 2.1 Affordability Requirements. For a term of fifty -five (55) years commencing upon the Effective Date not less than five (5) of the residential units in the Project shall be both Rent Restricted (as defined below) and occupied (or if vacant, available for occupancy) at Affordable Rents to Eligible Households whose income is no greater than Very Low- Income. Such units shall be in addition to the residential units restricted under the existing City Regulatory Agreement. In the event that recertification of tenant incomes indicates that the number of Restricted Units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section 2.1, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the required income mix is achieved. A dwelling unit shall qualify as "Rent Restricted" if the gross rent charged for such unit does not exceed Affordable Rent. Notwithstanding anything to the contrary contained in this Agreement, if other Project lenders, investors or regulatory agencies restrict a greater number of units than restricted by this Agreement or require stricter household income eligibility or 1582117.4 4