80A - HOUSING AND SUBORDINATION LOANS

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EXHIBIT 3 of lien against the Property. In the event that any claim of lien is asserted against the property or any stop notice or claim is asserted against the City by any person furnishing labor or materials to the Property, Developer shall immediately give written notice of the same to City and shall, promptly and in any event within ten (10) Business Days after written demand therefor, (a) pay and discharge the same, (b) effect the release thereof by delivering to City a surety bond complying with the requirement of applicable laws for such release, or (c) take such other action as City may reasonably require to release City from any obligation or liability with respect to such stop notice or claim. 10.8 General Contractors who are Related Parties to the Developer. If the Project is developed with general contractors who are Related Parties to the Developer, the Developer must be audited to the subcontractor level by an outside auditing firm approved by the City. The Developer shall pay for the audit to the subcontractor level by an outside auditing firm. 11. FEDERAL (HOME PROGRAM) COVENANTS 11.1 CHDO. Jamboree Housing Corporation, the sole member and manager of the managing general partner of Developer, represents and warrants that it qualifies and is in good standing as a Community Housing Development Organization under the HOME Program. Developer hereby covenants and agrees to maintain such status throughout the term of this Agreement, and to provide the Agency and City with written documentation necessary to demonstrate maintenance of said status on an annual basis. 11.2 Oualification as Affordable Housing. As more particularly provided in the Affordability Restrictions on Transfer of Property, Developer shall use, manage and operate the Property in accordance with the requirements of 24 CFR 92.252 so as to qualify the housing on the Property as Affordable Housing with affordable rents. 11.3 Tenant and Participant Protection. Developer shall comply with the requirements of 24 CFR 92.253. 11.4 Local Preference. Subject to compliance with the HOME Regulations and applicable California and federal fair housing laws, local preference for Santa Ana residents and workers in tenant selection shall be a requirement of the Project. Subject to applicable laws and regulations governing nondiscrimination and preferences in housing occupancy required by HUD or the State of California, as well as the City of Santa Ana Affordable Housing Funds Policies and Procedures, the Developer shall give preference in leasing units in the following order of priority: 1. First priority shall be given to persons who have been permanently displaced or face permanent displacement from housing in Santa Ana as a result of any of the following: a. A redevelopment project undertaken pursuant to California's Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) -- applicable only to projects funded by the Low and Moderate Income Housing Asset Fund. 19 80A-55