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Good Management Practices: 1) 2) 3) 4) 5) Owner abides by all fair housing laws Owner uses some formal method to screen all potential residents Owner shall utilize a written rental agreement that contains specific criteria Owner utilizes written "House Rules" Owner performs "walk-throughs" at the beginning and end of each tenancy Each management practice must be passed in order to advance to Stage Two and is subject to on-site verification during the Stage Two inspection. Stage Two - Only owners who have passed Stage One of this program will be eligible to initiate Stage Two. This stage consists of an exterior inspection of the property and verification of the current use of the good management practice materials submitted by the owner during Stage One. The criteria for this exterior inspection is attached (see Appendix A) and the inspector evaluating the exterior conditions will do so with the goal that such conditions should be in an "above average" to "superior" condition and collectively the property should be in exceptional condition. The criteria and/or specific materials necessary for the on-site verification of the good management practices shall be outlined in the program implementation policy and the property owner shall be made aware of the materials necessary prior to the Stage Two inspection. This exterior inspection consists of 50 items, each worth two points. An owner must achieve a score of 100% on the "must pass" items and have an overall score of 85% or better in order to pass Stage Two and advance to Stage Three of the Incentivve Program. Stage Three - Only owners who have passed Stage Two of this program will be eligible to initiate Stage Three. This stage consists of an interior inspection of rental units at time of turnover. The criteria for this inspection is attached (see Appendix B) and the inspector evaluating the interior conditions will do so with the goal that such conditions should be in an "above average" to "superior" condition and collectively the property should be in exceptional condition. A Maximum°of 10% of the dwelling units in the complex (rounded tip on any fraction) will be inspected (but no less than one unit). The units to be inspected will be selected by the inspector from a list of at least 20% of the units on the property (vacant and/or occupied) selected by the ownef). This interior inspection shall consist of 40 items, each worth two points. Thus a score of 80 points is possible for each nnit inspected and an owner must achieve a score of 85% or better to achieve passage of this stage of the Incentive Program. Prioritization of Applications - Applications will be reviewed in the order they are received. Incentive benefits will be awarded on a first come basis by qualification date. Twenty p~reent of the properties qualifying for the benefits must contain 15 units or less and 20% must contain 16 units or more. The remaining sixty percent may be from either category. Exhibit I - Page 2