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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 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 City. 2.1 Affordability Requirements. Fora term of fifty -five (55) years commencing on the Effective Date, not less than ten (10) 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 by Eligible Households whose income is no greater than 60% of AMI. In addition, until June 30, 2058 the following additional units shall be subject to the following restrictions: not less than two (2) additional units (the "35% Units ") shall be both Rent Restricted and occupied (or if vacant, available for occupancy) at Affordable Rents by Eligible Households whose income is no greater than thirty -five percent (35 %) of Area Median Income, no fewer than nine (9) additional units (the "Very Low Income Units ") shall be both Rent Restricted and occupied (or if vacant, available for occupancy) at Affordable Rents by Eligible Households of Very Low- Income, and not less than eleven (11) additional units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) at Affordable Rents by Eligible Households whose income is no greater than sixty percent (60 %) of Area Median Income. 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 the Affordable Rent for the applicable household income category as set forth in this Section 2.1, subject to Section 2.2. 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 affordability requirements than those imposed hereby, the requirements of such other lenders, investors or regulatory agencies shall prevail. 2.1.1 HOME Restrictions. The 35% Units and the Very Low- Income Units (collectively the "HOME Assisted Units ") were assisted by the Existing Loan, which was funded in part by HOME Program Funds. Owner shall comply with all requirements applicable to the HOME Assisted Units pursuant to the HOME Regulations, and with respect to the HOME Assisted Units, the HOME Regulations shall prevail in the event of conflict between this Agreement and the HOME Regulations. 1753724.4 5