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(20) years following the date of recordation of the Regulatory Agreement, unless terminated earlier pursuant to the terms of this Agreement. 1.5 Compliance with Program Requirements Borrower agrees that at all times its acts regarding the Project and the use of the HOME Funds shall be in conformity with all provisions of the HOME Program including the statues, rules and regulations and such policies and procedures of HUD and the State of California pertaining to the HOME Program, including without limitation, those described in Article IV of this Agreement. Borrower acknowledges that it is familiar with such applicable provisions and has been professionally advised to the extent necessary for the purpose of enabling Borrower to fully comply with such provisions. 1.6 Use of Funds Borrower shall use the HOME Funds only for costs eligible under the HOME Program Regulations incurred for the construction of the Project. Such costs shall only be for work approved by the City at the time of project set -up under the HOME Program or later approved in writing by the City if a modification of the scope of work is necessary. Any expenditure that is not authorized by this Agreement or that is found to be ineligible under the HOME Program Regulations, as determined by the City, shall be disallowed, and funds must be returned to the City within thirty (30) days of discovery by the City unless the City approves in writing an alternative plan to address the concern. Borrower agrees that it will not use the HOME Funds in violation of Section 4.3 below. 1.7 Performance and Payment Bonds In accordance with the HOME Program Regulations and the Standard Agreement, the Borrower and /or the construction firm undertaking the actual general contracting duties shall provide security to assure completion of the Project by furnishing the City and any construction lenders with Performance and Payment Bonds consistent with the requirements of Section 3.21 of that certain Amended and Restated Owner Participation and Loan Agreement executed by and between Borrower and the City dated as of (the "OPLA ") prior to commencement of construction. 1.8 Scope of Project Borrower agrees to complete the development of the Project in accordance with the scope of work approved by the City and described in Exhibit B attached hereto and pursuant to the Standard Agreement. The scope of work shall be completed in accordance with the time frame established in the notice to proceed that will be issued for the Proj ect. 1.9 Re ug latory Agreement The Borrower shall execute, and pledges to operate the development in compliance with, a Regulatory Agreement substantially in the form attached as Exhibit A which shall restrict eleven (11) of the units in the Project for occupancy by Very Low - Income Households at affordable rents (as more particularly described in the Regulatory Agreement) for twenty (20) years. The Regulatory Agreement shall be recorded in the Official Records of Alameda County. 1.10 Disbursement of Funds The City shall disburse HOME Funds to reimburse the Borrower for Project construction costs as provided in Section 1.6 subject to satisfaction of the conditions set forth in this Section 1.10 and in Section 1.10.1 Not more than once per month, Borrower shall submit to the City a written requisition for payment accompanied by invoices, evidence of completion, and such additional documentation as City may reasonably require. The 1908324.5