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ARTICLE 4 <br />LENDER PROVISIONS <br />I. Senior Loan <br />Mortgages, deeds of trust, or any other form of conveyance required for any <br />reasonable method of financing as a Senior Loan are permitted, but only as <br />follows: <br />I -A. For the sole purpose of securing a purchase money loan of funds to be <br />used by an Owner for financing the acquisition of the Inclusionary Unit. <br />The Senior Loan must comply with the requirements imposed by Section <br />IV -D of the Administrative Procedures Manual; or <br />I -B. For the sole purpose of refinancing a Senior Loan that was obtained by <br />the Owner, and approved by the City, provided that the principal amount <br />of such refinancing shall be limited to the outstanding principal then owed <br />on the existing Senior Loan, plus any customary fees and costs <br />associated with such current refinancing. <br />II. Subordination <br />II -A. This Inclusionary Housing Covenants Declaration shall be subordinate to <br />the Senior Loan, so long as the Senior Lender agrees to the default and <br />foreclosure provisions set forth in this Inclusionary Housing Covenants <br />Declaration, or other alternative provisions proposed by the Senior <br />Lender, and acceptable to the City in its sole discretion. <br />II -B. In the event the City fails to timely cure a default under such Senior Loan, <br />and the Senior Lender proceeds with foreclosure, or deed in lieu of <br />foreclosure, of such Senior Loan, then any provisions herein or in any <br />other collateral agreement restricting the use of the Inclusionary Unit to <br />Moderate Income Households or otherwise restricting the Senior Lender's <br />ability to sell the Inclusionary Unit based upon income qualification of the <br />purchaser shall terminate and shall have no further force or effect on <br />subsequent owners or purchasers of the Inclusionary Unit. <br />II -C. In that event, any person, including the Senior Lender's successors and <br />assigns, receiving title to the Inclusionary Unit through foreclosure, or <br />deed in lieu of foreclosure, of such Senior Loan shall receive title to the <br />Inclusionary Housing Covenants Declaration Page 23 <br />City of Santa Ana January 2015 <br />