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deposits to replacement reserves, and debt service on approved financing as shown on the <br />Operating Budget, and as is necessary to maintain the financial stability of the Project. In <br />addition, upon a reduction, termination or nonrenewal of the Rental Subsidy as described <br />above, Developer hereby agrees to the following: <br />(a) Developer shall use good faith commercially reasonable efforts to <br />obtain alternative sources of rental subsidies and shall provide the City with annual <br />progress reports on efforts to obtain alternative sources of rental subsidies that would allow <br />the rents to be reduced. Upon receipt of any alternative rental subsidies, Developer shall <br />reduce the rents back to the original restrictions to the extent that the alternative rental <br />subsidies provide sufficient income to cover the operating costs, required replacement <br />reserves and debt service of the Project as shown on the Operating Budget. <br />(b) Developer shall provide tenants in the Restricted Units with notice <br />of any rent increase pursuant to this Section 3.4, and shall notify the tenant that if they have <br />received a tenant -based voucher from the Housing Authority of the City of Santa Ana they <br />may use the tenant -based voucher for their Restricted Unit. <br />(c) All rent increases for the Restricted Units are subject to City <br />approval pursuant to the terms of this Section 3.4. No later than sixty (60) days prior to <br />the proposed implementation of any rent increase, Developer shall submit to the City a <br />schedule of any proposed increase in the rent. The City will disapprove a rent increase if <br />it does not comply with the restrictions set forth in this Section 3.4. Notwithstanding the <br />foregoing, rent increases for the PBV Restricted Units shall be subject to review and <br />approval of the City. <br />Developer shall give tenants of all Restricted Units written notice at least sixty (60) <br />days prior to any rent increase. <br />3.5. Reserved, <br />4. Developer, its successors and assigns shall not charge rents for the Units in excess <br />of the amounts set forth herein, as adjusted on the basis of the revised schedules of area <br />median incomes issued from time -to -time by HUD. The City shall notify Developer in <br />writing of the adjusted allowable maximum incomes and rents. <br />5. Developer shall adopt and include as part of its Management Plan (described in <br />Section 11 below), written tenant selection policies and criteria for the Units that meet the <br />following requirements: <br />5.1. Are consistent with the purpose of providing housing for Extremely Low, <br />Very Low, and Low Income households; <br />5.2. Are reasonably related to program eligibility and the applicants' ability to <br />perform the obligations of the lease; <br />6 <br />The Crossroads at Washington <br />City HOME Affordability Restrictions on Transfer of Property <br />