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<br />EXHIBIT 3 <br />coverage) is $10,000 or more, Developer shall promptly notify City of such claim. <br />Section 7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE <br />OF THE PROPERTY <br />7.1.Use Covenants and Restrictions. <br />(a) Developer agrees and covenants, which covenants shall run with the <br />land and bind Developer, its successors, its assigns and every successor in interest to the <br />Property, that all Restricted Units on the Property will be made available for rent as follows: <br />(i)Except as set forth in sub-paragraph (ii) of this Section <br />7.1(a), the Restricted Units shall be rented to Extremely Low Income Households for the <br />City Restriction Period. <br />(ii)During the HOME-ARP Compliance Period, all HOME- <br />ARP Units must be rented to a HOME-ARP Qualifying Population as allowed by the <br />HOME-ARP Program. After the HOME-ARP Compliance Period expires, all Units shall <br />be restricted under sub-paragraph (i) of this Section 7.1(a). <br />(b)The HOME-ARP Units shall be studio units, with comparable <br />amenities to the other Restricted Units. The HOME-ARP Units shall be initially distributed <br />throughout the complex, but thereafter shall be allowed to “float”. <br />(c)It is anticipated that during the Term of Agreement the Project will <br />be supported by Project-Based Section 8 rental subsidy payments provided by the <br />Housing Authority of the City of Santa Ana (“Housing Authority”) for not less than <br />twenty-five (25) of the Restricted Units (the “PBV Rental Subsidy”), and the HOME- <br />ARP Subsidy Reserve will be utilized to cover operating deficits associated with the <br />sixteen (16) HOME-ARP Units. The HOME-ARP Subsidy Reserve cannot be used for <br />HOME-ARP Qualifying Households with project-based vouchers or project-based rental <br />assistance. The PBV Rental Subsidy may not be placed on any HOME-ARP Unit. <br />(d)The Developer shall establish a preference for renting Restricted <br />Units to individuals and families who qualify as Chronically Homeless in accordance <br />with the Affordability Restrictions on Transfer of Property, provided however that any <br />preference applicable to the HOME-ARP Units must comply with the HOME-ARP <br />Program. <br />(e)Rental increases in the Restricted Units shall be subject to and in <br />conformance with federal, state law, and local law. <br />(f)Maximum Occupancy for Restricted Units will be two persons per <br />studio unit, unless a different number is required by state or federal law. <br />(g)For all Restricted Units, Developer must have a written lease <br />between tenant and owner for a period of at least one year, unless a shorter period is <br />16 <br />WISEPlace Permanent Supportive Housing <br />City HOME-ARP Loan Agreement