Item HA 03 - Subordination Agreement and Lease Rider for FX Residences

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EXHIBIT 2 "Junior Lienholder Deed of Trust") recorded on January 14, 2022, as Instrument No. 2022000020118 in the Official Records of Orange County, California (the "Official Records"). C. The Junior Lienholder and Borrower have also entered into a certain Affordability Restrictions on Transfer of Property, affecting the use of the Development, recorded on January 14, 2022, as Instrument No. 2022000020116 in the Official Records (the "Affordability Restrictions"). D. The Junior Lienholder and Borrower have also entered into a certain Loan Agreement, affecting the use of the Development, recorded on January 4, 2023, as Instrument No. 2023000001784 in the Official Records (the "Loan Agreement"). E. The Junior Lienholder Deed of trust and Loan Agreement are collectively referred to as the ("Junior Lienholder Documents"). F. In order to finance the development of the Improvements, the Senior Lender has agreed to loan the Borrower a sum not to exceed Three Million Six Thousand Five Hundred Sixty Seven and No/100 Dollars ($3,006,567.00) (the "NPLH Loan"), subject to the terms and conditions of: (i) a regulatory agreement restricting the use and occupancy of the Development and the income derived therefrom which shall be dated as of even date herewith and recorded concurrently herewith as an encumbrance on the Property in the Official Records (the "NPLH Regulatory Agreement"), (ii) the Capitalized Operating Subsidy Reserve Agreement (the "COSRA") if applicable, and (iii) other loan documents. The NPLH Loan will be evidenced by a promissory note (the "NPLH Note"), the repayment of which will be secured by, among other things, a deed of trust by Borrower as trustor, to Senior Lender as beneficiary recorded concurrently herewith as an encumbrance on the Property in the Official Records (the "NPLH Deed of Trust") and by such other security as is identified in other loan documents. The NPLH Regulatory Agreement, the COSRA, the NPLH Note, the NPLH Deed of Trust and all other documents evidencing or securing the NPLH Loan are collectively referred to herein as the "Senior Lender Documents." G. The Senior Lender is willing to make the NPLH Loan provided the Senior Lender Documents are liens, claims or charges upon the Development prior and superior to the Junior Lienholder Documents, and provided that the Junior Lienholder specifically and unconditionally subordinates and subjects the Junior Lienholder Documents to the liens, claims or charges of the Senior Lender Documents. AGREEMENT NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to induce the Senior Lender to make its NPLH Loan, it is hereby declared, understood NPLH R1 Subord. Agrmt Page 2 of 9 (NOFA—10/15/2018,Amended 10/30/2018) Rev:3/12/2024 Prep: 6/1/2026(Housing Authority of the City of Santa Ana Loan) Dev: Francis Xavier Residence Assessor's Identification Number:398-303-04,398-303-05,398-303-06 and 398-303-07 Loan No.: 18-NPLH-12673