05 - JOINT PH - Vista Del Rio DDA

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Maximum Gross Monthly Rents shall be recalculated following issuance of a Release of Construction Covenants but prior to the time of initial lease-up in accordance with any changes in allowable rent and income tables as published by HUD and the State of California, and shall be as approved by the Executive Directors in writing in accordance with this Section. Such Maximum Gross Monthly Rents charged to the first tenants of the 41 units (40 Units plus manager's unit) shall constitute the Initial Rental Schedule. 7.3 Rental Vouchers. (a) In the event Vista Del Rio rents a Unit to a household holding a Portable Voucher, the rental agreement (or lease agreement, as applicable) between Vista Del Rio, as landlord, and the tenant shall expressly provide that the monthly rent charged shall be the Affordable Rent required hereunder for the Unit (not fair market rent) and that the rent collected directly from such tenant holding a portable rental voucher shall be not more than 40% of the tenant's actual gross income pursuant to the applicable voucher program regulations; i.e., the rent charged to such tenant under the rental agreement shall be the Affordable Rent chargeable hereunder and not fair market rent for the area, as would otherwise be permitted under the applicable Portable Voucher program. Thus, the subsidy payment to Vista Del Rio under any Portable Voucher shall not exceed the difference between forty percent (40%) of the tenant's actual gross income and Affordable Rent chargeable for the applicable Unit hereunder (and under the Affordability Restrictions). (b) The parties acknowledge that Vista Del Rio and Authority intend to enter into the HAP Contract and that the Senior Lender is anticipated to underwrite a Senior Loan based in part on the Project Based Section 8 subsidy to the Project under the HAP Contract, including payments thereunder equal to the difference between 30% of each tenant household's actual gross income and the fair market rent for the area. In the event that, during the Term hereof, a new Housing Assistance Payments Contract is proposed to be entered into (or is entered into) with respect to any Units at the Project not already receiving Project Based Section 8 assistance under the HAP Contract (or those Units, after expiration of the HAP Contract), Vista Del Rio shall cause the rental agreement (or lease agreement, as applicable) for each Unit receiving Project Based Section 8 assistance pursuant to such new Housing Assistance Payments Contract (but not the HAP Contract) to provide that the monthly rent charged under such rental agreement (or lease agreement, as applicable) shall not exceed the Affordable Rent required hereunder for the Unit (not fair market rent). Thus, the subsidy payment to Vista Del Rio under any project-based rental voucher (other than with respect to the subsidy pursuant to the HAP Contract) shall not exceed the difference between thirty percent (30%) of the tenant's actual gross income and Affordable Rent chargeable for the applicable Unit hereunder (and under the Regulatory Agreement). (c) Vista Del Rio hereby acknowledges and agrees that, upon completion of construction of the Project and leasing of the Units to Extremely Low Income and Very Low Income households pursuant to this Agreement, the DDA and the Affordability Reshictions, Vista Del Rio will have received governmental subsidies from Authority, City, Agency and TCAC (through the Tax Credits allocated to the Project) in exchange for Vista Del Rio's agreement to limit the rents charged to tenants of the Project to an Affordable Rent and Vista Del Rio further acknowledges and agrees that, except for the HAP Contract payments with respect to between 7 and 10 Units (as determined by Authority), which are part of the approved financing for the Project, acceptance of additional governmental rental subsidies resulting in total, cumulative rent payments to Vista Del Rio in excess of an Affordable Rent for any of the Units at the Project would constitute an unjustified windfall to Vista Del Rio at the expense of Authority and the federal and state governments. Further, 19 DOCSOC/1475221 v5/200272-0004