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HomeMy WebLinkAboutAppendix E - Affordable Housing Plan & Attachment 05-05-2020 Appendix E Affordable Housing Plan Arrowleaf and Perennial Park GMD/HRDC Prepared: 2020-04-27 As part of the requirements for Planned Unit Development Performance points for the provision of affordable housing, GMD proposes the construction of 232 units of affordable rental housing. UDC Sec. 38.430.090.E.2.a.7.II - Three points for each percent of dwellings to be constructed in the residential development which are provided by long term contractual obligation to an affordable housing agency, for a period of not less than 20 years, with a written plan assuring ongoing affordability pricing and eligibility monitoring, and annual re-certification. Per the provisions of UDC 38.430.090.E.2.a.7.II, the developer requests 300 PUD points. % of units in development designated affordable: 100% x 3 points/percent = 300 Affordable Units proposed The project proposes a total of 232 affordable rental units, ranging from one to three bedrooms and representing 100% of the housing units proposed for the site. Arrowleaf Park – 136 family targeted units & Perennial Park – 96 senior targeted units UNITS SIZE BY TYPE AND BUILDING Unit Sizes (SF) Number of Units Perennial Park Senior Building 1 Bedroom Units 527 85 2 Bedroom Units 755 11 Arrowleaf Park 24 Unit Building (4 Buildings Total) 1 Bedroom Units 576 48 2 Bedroom Units 809 24 3 Bedroom Units 1,168 24 12 Unit Building (2 Buildings Total) 1 Bedroom Units 576 12 2 Bedroom Units 809 12 Row Houses (2 Buildings Total) 3 Bedroom Units 1,861 16 (Includes 353 SF for Garage) TOTAL 232 Compliance, Monitoring and Re-certification The proposed units will be developed in partnership with HRDC via the Low Income Housing Tax Credit (LIHTC) program through the Montana Board of Housing. GMD and HRDC have executed a Memorandum of Understanding (MOU) outlining the predevelopment expectations of each partner, which includes execution of a Limited Partnership Agreement (LPA) to enable the LIHTC transaction. The LPA outlines the terms of the project between partners, funders, syndicators and other parties, and includes detailed information regarding administration, monitoring and re-certification among other terms. The LPA includes a right of first refusal for the non-profit partner after the initial tax credit compliance period. A draft of the LPA will be provided to the City upon execution as condition of final approval. In addition to terms spelled out in the LPA, the Montana Board of Housing requires filing a Restrictive Use Covenant against the property. A sample Restrictive use Covenant is attached for reference. The Restrictive Use Covenant requires that all information used to secure the tax credits, including: term of affordability commitment, income levels served, number of each unit type, compliance and monitoring requirements, and enforcement provisions be included as a restriction running with the property for the affordability commitment. A draft of the project’s Restrictive Use Covenant will be provided to the City upon execution as condition of final approval, however; it is not recorded until the project is placed into service, as per MBOH guidance. The required LIHTC compliance, including but not limited to, the LPA and Restrictive Covenant exceed the requirements of a contractual requirement of not less than 20 years to administer the onsite affordable rental housing for the required term and a written plan assuring ongoing affordability pricing and eligibility monitoring, and annual re-certification as outlined in the PUD point’s requirements. DRAFT MBOH-REV DRC-6/2016 Page 1 After recording return to: Montana Board of Housing MultiFamily Program P.O. Box 200528 Helena, MT 59620-0528 DECLARATION OF RESTRICTIVE COVENANTS FOR LOW-INCOME HOUSING CREDITS THIS DECLARATION OF RESTRICTIVE COVENANTS (this "AGREEMENT"), dated as of , by Owner and their successors and assigns (the "Owner") is given as a condition precedent to the allocation of low-income housing credits by the Montana Board of Housing, an agency of the State of Montana (together with any successor to its rights, duties and obligations, the "Board"). W I T N E S S E T H: WHEREAS, the Owner is or will be the owner of a rental housing development located on lands in the City of Bozeman, County of Gallatin, State of Montana, more particularly described in Exhibit A-1, attached hereto and incorporated herein by reference (together with all existing and later constructed buildings and improvements thereon, the "Project Land" or the “Project”), known as or to be known as: ; and WHEREAS, the Board has been designated by the Governor of the State of Montana as the housing credit agency for the State of Montana to make allocations of low-income housing tax credit dollars (the "Credit") for the State and to carry out the provisions of Section 42 of the Internal Revenue Code of 1986, as amended (the "Code"); and WHEREAS, the Owner has applied to the Board for an allocation of Credit to the Project in an amount not to exceed and no/100 low-income housing credit dollars (); and WHEREAS, the Owner has represented and committed to the Board in the Owner's Low-Income Housing Tax Credit Application (the "Application") that, for the duration of this Agreement: (i) the Owner shall lease % (the “Low-Income Occupancy Percentage”) of the units in the Project (the "Low-Income Units") to individuals or families whose income is % or less of the area median gross income (including adjustments for family size) (the “Income Restrictions” and those individuals or families meeting the Income Restrictions, the "Low-Income Tenants") as determined in accordance with the Code; (ii) the Owner shall target such percentage of the Low-Income Units to tenants whose income is at or below the percentages of median income as set forth in Exhibit A-2, attached hereto and incorporated herein by reference (the “Targeting Requirements”); and (iii) the Owner shall not charge Low-Income Tenants lease or rent payments exceeding the percentages of Area Median Income as set forth in Exhibit A-2, attached hereto and incorporated herein by reference (the “Rent Restrictions”)(the Low-Income Occupancy Percentage, the Income Restrictions, the Targeting Requirements and the Rent Restrictions together referred to herein as the “Occupancy Restrictions”); and WHEREAS, the Board has determined the Project supports a Credit allocation in the amount of $ 000.00; and WHEREAS, the Project is eligible for a Credit allocation only if the Project will be subject to a binding commitment to maintain the Project as low-income housing for the duration of the Owner’s DRAFT MBOH-REV DRC-6/2016 Page 2 Commitment Period, as defined in subsection 5(a), including certain Occupancy Restrictions and Transfer restrictions as set forth in this Agreement (the “Transfer Restrictions”); and WHEREAS, in the Application, the Owner committed to maintain the Project as low-income housing for a period of 31 years beyond and in addition to the initial 15-year compliance period (the “Commitment Period”); and WHEREAS, as a condition of allocation of the low-income housing tax credits as described herein, the applicable Qualified Allocation Plan requires that the Owner waive and forfeit the right to request that the Board locate a non-profit qualified buyer (the “qualified contract process”), agree to maintain the Low-Income Units through the entire Commitment Period, and agree that the Commitment Period may not be terminated early through the qualified contract process; and WHEREAS, the Code requires as a condition precedent to the allocation of the Credit that the Owner execute, deliver and record in the official land deed records of the county in which the Project is located this Agreement in order to create certain covenants running with the Project Land for the purpose of enforcing the Occupancy Restrictions, Transfer Restrictions and other requirements of Section 42 of the Code by regulating and restricting the use, occupancy and transfer of the Project as set forth herein; and WHEREAS, the Board further requires as a condition precedent to the allocation of the Credit that the Owner execute, deliver and record in the official land deed records of the county in which the Project is located this Agreement, in order to create certain covenants running with the Project Land that the Owner and the Project shall be subject to applicable requirements, including without limitation operating and replacement reserves, record-keeping, reporting, training, certification, audit, inspection and other compliance and enforcement requirements and payment of related fees to the Board, as set forth in Section 42 of the Code, and the Board’s rules, guidelines and applicable Qualified Allocation Plan (the “QAP”) (such requirements and fees together referred to as the “Compliance Provisions”); and WHEREAS, the Board further requires as a condition precedent to the allocation of the Credit that the Owner execute, deliver and record in the official land deed records of the county in which the Project is located this Agreement, in order to create certain covenants running with the land (the “Enforcement Provisions”) for the purpose of enforcing the Occupancy Restrictions, Transfer Restrictions, Energy and Green Building Requirements (as specified in Exhibit A-3, attached hereto and incorporated herein by this reference) and Compliance Requirements (the Occupancy Restrictions, Transfer Restrictions, Energy and Green Building Requirements, Compliance Restrictions and Enforcement Provisions together referred to herein as the “Covenants”); and WHEREAS, the Owner, under this Agreement, intends, declares and covenants that all Covenants set forth herein, including without limitation the regulatory and restrictive covenants governing the use, occupancy and transfer of the Project, shall be and are covenants running with the Project Land for the term stated herein (including any applicable Tenant Protection Period during which the Tenant Protections shall continue in effect, as set forth in subsection 5(d)) and binding upon all subsequent owners of the Project Land for such term and are not merely personal covenants of the Owner; NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, and of other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owner agrees as follows: Section 1. Definitions. Words and phrases used herein shall have the same meaning as set forth in Section 42 of the Code, in regulations pertaining thereto promulgated by the Department of Treasury, the Department of Housing and Urban Development or another authorized federal agency or in the Board’s rules, guidelines or applicable QAP. Section 2. Recording and Filing; Covenants To Run With the Land; Consent of Prior Lien Holders. DRAFT MBOH-REV DRC-6/2016 Page 3 (a) Upon execution and delivery by the Owner, the Owner shall cause this Agreement and all amendments hereto to be recorded and filed in the official public land deed records of the county in which the Project is located and shall pay all fees and charges incurred in connection therewith. Upon recording, the Owner shall immediately transmit to the Board an executed original of the recorded Agreement and any amendment showing the date of recording and recording references. The Owner acknowledges and agrees that the Board will not issue a Carryover Commitment or the Internal Revenue Service Form 8609 constituting final allocation of the Credit unless and until the Board has received the recorded executed original of the Agreement. (b)The Owner intends, declares and covenants, on behalf of itself and all future owners and operators of the Project Land during the term of this Agreement, that this Agreement and the covenants and restrictions set forth in this Agreement, including without limitation those regulating and restricting the use, occupancy and transfer of the Project Land and the Project: (I) shall be and are covenants running with the Project Land, encumbering the Project Land for the term of this Agreement, binding upon the Owner's successors in title and all subsequent owners and operators of the Project Land, (ii) are not merely personal covenants of the Owner, and (iii) shall bind the Owner (and the benefits shall inure to the Board and any past, present or prospective tenant of the Project) and its respective successors and assigns during the term of this Agreement. The Owner hereby agrees that any and all requirements of the laws of the State of Montana to be satisfied in order for the provisions of this Agreement to constitute deed restrictions and covenants running with the land are and shall be deemed to be satisfied in full, or, in the alternate, that an equitable servitude has been created to insure that these restrictions run with the land. For the longer of the period this Credit is claimed or the term of this Agreement, each and every contract, deed or other instrument hereafter executed conveying or providing for the conveyance of the Project or any portion thereof shall expressly provide that such conveyance is subject to this Agreement; provided, however, the covenants and restrictions contained herein shall survive and be effective regardless of whether such contract, deed or other instrument hereafter executed conveying or providing for the conveyance of the Project or any portion thereof provides that such conveyance is subject to this Agreement. (c)The Owner covenants to obtain a written agreement of any prior recorded lienholder on the Project Land or the Project, subordinating such lien to this Agreement, and the obtaining and submission to the Board of such written subordination agreement shall be a condition precedent to the issuance of Internal Revenue Service Form 8609 constituting final allocation of the Credit. Section 3. Representations and Warranties of the Owner. The Owner hereby represents and warrants as follows: (a)The Owner: (i) is a Limited Liability Limited Partnership duly organized under the laws of the State of Montana; (ii) is authorized to transact business in the State of Montana; (iii) has the power and authority to own its properties and assets and to carry on its business as now being conducted and as represented in its Credit Application; and (iv) has the full legal right, power and authority to execute and deliver this Agreement. (b)The execution, recording and performance of this Agreement by the Owner: (i) have been duly authorized by all necessary action; (ii) do not violate any provision of law, rule or regulation or any order of any court or other agency or governmental body applicable to Owner, or Owner’s properties, assets or liabilities; (iii) do not conflict with, violate or constitute a default under any provision of any indenture, agreement, mortgage, mortgage note or other instrument to which the Owner is a party or by which it or the Project is bound; and (iv) will not result in the creation or imposition of any prohibited encumbrance of any nature. (c)The Owner will, at the time of execution and delivery of this Agreement, have (i) good and marketable title to the premises constituting the Project free and clear of any lien or encumbrance (subject to encumbrances created pursuant to this Agreement or other permitted encumbrances), or (ii) a lease of the Project Land effective for a period at least as long as the Owner’s Commitment Period specified in subsection 5(a). DRAFT MBOH-REV DRC-6/2016 Page 4 (d)There is no action, suit, investigation or proceeding at law or in equity or by or before any court, governmental instrumentality or other agency now pending or, to the knowledge of the Owner, threatened against or affecting it or any of its properties or rights which, if adversely determined, would materially impair its right to carry on business substantially as now conducted, as represented in its Credit Application or as now contemplated by this Agreement, or that would materially adversely affect its financial condition. (e)The Project constitutes or upon placement in service will constitute a qualified low-income building or qualified low-income project, as applicable, as defined in Section 42 of the Code and applicable Regulations. (f)Each unit in the Project contains or upon placement in service will contain completefacilities for living, sleeping, eating, cooking and sanitation (unless the Project qualifies as a single-room occupancy project or transitional housing for the homeless) which are to be used on other than a transient basis. (g)Each Low-Income Unit is or upon placement in service will be suitable for occupancy in accordance with Section 42(I)(3)(B)(ii) of the Code and applicable local health, safety and building codes. Section 4. Owner’s Covenants and Agreements. A.Occupancy Requirements. Owner covenants and agrees throughout the term of this Agreement that: (i)20-50/40-60 Test. Either: (1)at least 20% or more of the residential units in the Project are both rent-restricted and occupied by individuals whose income is 50% or less of area median income; or (2)XX at least 40% or more of the residential units in the Project are both rent-restricted and occupied by individuals whose income is 60% or less of area median income. (Check either (1) or (2) to indicate Owner’s applicable percentage election.) (ii) Low-Income Occupancy Percentage; Income Restrictions. The Owner shall lease % (the “Low-Income Occupancy Percentage”) of the units in the Project (the "Low-Income Units") to individuals or families whose income is 0% or less of the area median gross income (including adjustments for family size) (the “Income Restrictions” and those individuals or families meeting the Income Restrictions, the "Low-Income Tenants") as determined in accordance with the Code. (iii) Targeting Requirements. The Owner shall target such percentage of the Low-Income Units to tenants whose income is at or below the percentages of median income as set forth in Exhibit A-2, attached hereto and incorporated herein by reference (the “Targeting Requirements”). (iv) Rent Restrictions. The Owner shall not charge Low-Income Tenants lease or rent payments exceeding the percentages of Area Median Income as set forth in Exhibit A-2, attached hereto and incorporated herein by reference (the “Rent Restrictions”). (v) Changes in Targeting Requirements or Rent Restrictions. The Targeting Requirements or Rent Restrictions of units may be changed only if the Board, in its sole discretion, determines that maintaining such Targeting Requirements or Rent Restrictions would cause undue hardship for the Project and approves such changes in writing. (vi) Eviction; Rent Increases. The Owner shall not (i) evict or terminate the tenancy of an existing tenant of any low-income unit other than for good cause, or (ii) impose any increase in the gross rent with respect to any low-income unit not otherwise permitted under Section 42 of the Code. DRAFT MBOH-REV DRC-6/2016 Page 5 (vii)General Public Tenants. All Low-Income Units shall be leased and rented or made available to members of the general public who qualify as Low-Income Tenants (or otherwise qualify for occupancy of the Low-Income Units) under the applicable election specified in Section 42(g) of the Code. (viii)Fair Housing Act. The Owner agrees to comply fully with the requirements of the Fair Housing Act as it may from time to time be amended. (ix)Suitability for Occupancy. Each Low-Income Unit is and will remain suitable for occupancy in accordance with Section 42(I)(3)(B)(ii) of the Code and applicable local health, safety and building codes. (x)Section 8 Tenants. The Owner shall not refuse to lease any Low-Income Unit to a holder of avoucher or certificate of eligibility under Section 8 of the United States Housing Act of 1937 because of the status of the prospective tenant as such a holder. B.Transfer Restrictions. Owner covenants and agrees throughout the term of this Agreement that: (i)Sale, Transfer or Exchange Subject to Covenants. Subject to the requirements of Section 42 of the Code, applicable Board requirements and this Agreement, the Owner may sell, transfer or exchange the entire Project at any time, but the Owner shall notify in writing and obtain the written agreement of any buyer, transferee, successor or other person acquiring the Project or any interest therein that such acquisition is subject to the requirements of this Agreement and to the requirements of Section 42 of the Code and applicable Regulations, including Owner training and certification requirements. This provision shall not act to waive any other restriction on sale, transfer or exchange of the Project or any low-income portion of the Project. The Owner agrees that the Board may void any sale, transfer or exchange of the Project if the buyer, transferee, successor or other person acquiring the Project or any interest therein fails to assume in writing the requirements of this Agreement and the requirements of Section 42 of the Code. Notwithstanding the provisions of this subsection, no portion of a building to which this Agreement applies may be sold to any person unless all of such building is sold to such person. (ii)Notification of Transfer. The Owner shall notify the Board in writing of any such sale, transfer or exchange of the entire Project and shall provide the Board with the written agreement, in the form prescribed by the Board, of the buyer, transferee, successor or other person to assume the requirements of this Agreement and the requirements of Section 42 of the Code, including Owner training and certification requirements. (iii)No Demolition or Change in Use. The Owner shall not demolish any part of the Project or substantially subtract from any real or personal property of the Project or permit the use of any residential rental unit for any purpose other than rental housing in compliance with the covenants and restrictions contained herein during the term of this Agreement unless otherwise required by law. (iv)Project Restoration. If the Project, or any part thereof, shall be damaged or destroyed or shall be condemned or acquired for public use, the Owner shall use its best efforts to repair and restore the Project to substantially the same condition as existed prior to the event causing such damage or destruction, or to relieve the condemnation, and thereafter to operate the Project in accordance with the terms of this Agreement. C.Energy and Green Building Requirements. (i)Conditions of Tax Credit Allocation. The Owner shall comply with the Energy and Green Building Requirements specified in Exhibit A-3, attached hereto and incorporated herein by this reference. D.Compliance Requirements. Owner covenants and agrees throughout the term of this Agreement that: DRAFT MBOH-REV DRC-6/2016 Page 6 (i)Compliance with Applicable Requirements. The Owner shall be subject to and comply with all applicable requirements, including without limitation operating and replacement reserves, record- keeping, reporting, training, certification, audit, inspection and other compliance and enforcement requirements and payment of related fees to the Board, as set forth in Section 42 of the Code, and the Board’s rules, guidelines and applicable Qualified Allocation Plan (the “QAP”) (such requirements and fees together referred to as the “Compliance Provisions”) Annual Compliance Certification. The Owner shall prepare and submit to the Board a certification of program compliance in the form prescribed by the Board annually on or before the 25th of the month following the assigned annual period. (ii)Tenant Income Certification; Owner’s Compliance Certificate. The Owner shall, unlesswaived by the Department of Treasury pursuant to Section 42(g)(8) of the Code, annually obtain and maintain on file from each Low-Income Tenant residing in the Project an updated copy of each tenant's executed Tenant Income Certification and Owner’s Certificate of Continuing Compliance in the form prescribed by the Board. The Owner must submit a copy of each tenant's annual certification to the Board. The determination of whether a tenant meets the low-income requirement shall be made by the Owner at least annually on the basis of the current income of such Low-Income Tenant. (iii)Additional Records. The Owner shall retain the following information for each year for each building in the Project for at least six years after the due date for filing the federal income tax return for such year, and with respect to the first year of the credit period, for at least 6 years beyond the due date for filing the federal income tax return for the last year of the compliance period for the building: (I) the total number of residential rental units in a building (including the number of bedrooms and the size in square feet of each residential rental unit); (ii) the percentage of residential rental units in the building that are Low-Income Units; (iii) the rent charged on each residential rental unit in the building (including any utility allowances and mandatory fees); (iv) Low-Income Unit vacancies in the building and information showing when, and to whom, the next available units were rented; (v) the annual income certification of each Low-Income Tenant by unit, including annual certifications for each continuous Low-Income Tenant; (vi) documentation to support each Low-Income Tenant's income certification, including a copy of verification of income from third parties or 6 consecutive pay stubs; (vii) the eligible basis and qualified basis of the building at the end of the first year of the credit period; and (viii) the character and use of any nonresidential portion of the building included in the eligible basis of the building. (iv)Additional Compliance Monitoring. If at any point following execution of this Agreement, Section 42 of the Code or regulations implementing said Section require the Board to undertake additional monitoring of the Owner’s or Project’s compliance with the Occupancy Restrictions or, alternatively, if the Board chooses to undertake additional monitoring of the Owner’s or Project’s compliance with the Occupancy Restrictions, the Owner shall take any and all actions reasonably necessary and required by the Board to substantiate the Owner's compliance with the Occupancy Restrictions and will pay a reasonable fee to the Board for such monitoring activities performed by the Board. (v)Inspection. At least once every three years, or more frequently if determined necessary by the Board in its sole discretion, the Owner shall permit, during normal business hours and upon minimal advance notice, any duly authorized representative of the Board to inspect any building in the Project and to inspect any books and records of the Owner regarding the Project with respect to the incomes of Low-Income Tenants and rents charged to Low-Income Tenants (including utility allowances and mandatory fees) which pertain to compliance with the Occupancy Restrictions. (vi)Additional Compliance Substantiation. The Owner shall submit any other information, documents or certifications requested by the Board which the Board shall deem reasonably necessary to substantiate the Owner's continuing compliance with the Covenants and this Agreement. (vii)Compliance with Covenants. The Owner shall comply with and shall not knowingly take orpermit any action or omission that would result in a violation of the requirements of Section 42 of the DRAFT MBOH-REV DRC-6/2016 Page 7 Code and applicable Regulations, the Board’s rules, guidelines or applicable QAP, or of this Agreement. For purposes of this Agreement, the “applicable QAP” means: (a) for purposes of any substantive issues relating to an Award of Credits, or to the Development Evaluation Criteria, Scoring, Selection Criteria or Selection Standard for such Award, the particular year’s QAP under which the Application was submitted, evaluated and Awarded Credits; or (b) for purposes of Project changes, Reservation (Initial Allocation), Carryover Commitment, 10% Cost Certification, Final Allocation, compliance requirements, compliance audits, and any post-Award procedures, the QAP most recently adopted. (viii)Reliance Upon Representations. The Owner’s representations and covenants set forth herein may be relied upon by the Board and all persons interested in Project compliance under Section 42 of the Code and the applicable Regulations. E.Enforcement Provisions. Owner covenants and agrees throughout the term of this Agreement that: (i)Actions to Comply with Covenants. Owner shall take any lawful action (including amendment of this Agreement, as may be necessary in the opinion of the Board) to comply fully with (i) the Code and with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed from time to time by the United States Department of the Treasury, the Internal Revenue Service, the Department of Housing and Urban Development or any other authorized governmental agency or instrumentality pertaining to the Owner's obligations under Section 42 of the Code and affecting the Project; (ii) this Agreement and the Covenants contained herein; or (iii) the Board’s rules, guidelines or applicable QAP. (ii)Action for Specific Performance Authorized. In consideration for receiving low-income housing credits for the Project and for purposes of assuring compliance of the Project and the Owner with this Agreement, Section 42 of the Code and the applicable regulations, and the Board’s rules, guidelines and applicable QAP, the Owner hereby acknowledges and agrees that (a) the beneficiaries of the Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder, and (ii) the Board or any individual who meets the income limitation applicable under this Agreement or Section 42 (whether a prospective, present or former occupant) shall be entitled, for any breach of the provisions hereof, and in addition to all other remedies provided by law or in equity, to enforce specific performance by the Owner of its obligations under this Agreement in a Montana state court of competent jurisdiction. Section 5. Term of Agreement. (a) Except as hereinafter provided, this Agreement and the Covenants and Restrictions specified herein shall commence with and apply beginning on the first day on which any building which is part of the Project is placed in service and shall terminate on the end of the Owner’s Commitment Period. The Owner has committed to maintaining and shall maintain the Project as Low-Income Housing subject to the terms of this Agreement for and throughout the entire Commitment Period. For purposes of this Agreement, “Commitment Period” or “Owner’s Commitment Period” means the period that includes the initial 15-year compliance period and an additional period of 31 years beyond the initial 15-year compliance period. (b)Except as specifically otherwise provided in subsection 5(c), this Agreement and the Covenants and Restrictions specified herein shall remain binding and effective and the Owner shall comply therewith for and during the entire Commitment Period specified above. By execution and recording of this Agreement, the Owner: (i) waives and forfeits the right to request that the Board locate a non-profit qualified buyer (the “qualified contract process”); (ii) agrees to maintain the Low-Income Units through the entire Commitment Period; and (iii) agrees that the Commitment Period may not be terminated early through the qualified contract process. (c)The Occupancy Restrictions, Transfer Restrictions, Compliance Requirements and Enforcement Provisions specified herein, other than the Tenant Protections specified in subsection 5(d), shall terminate with respect to the Project or any Project building on the date the Project or any DRAFT MBOH-REV DRC-6/2016 Page 8 respective Project building is acquired by foreclosure or instrument in lieu of foreclosure (unless the Secretary of the Treasury determines that such acquisition is part of an arrangement to terminate the Occupancy Restrictions. (d)In the event of termination as provided by subsection 5(c) above, the Tenant Protections specified in this subsection 5(d) shall remain binding and effective for a period of three years (the “Tenant Protection Period”) following such termination. During the Tenant Protection Period, the Owner shall not (i)evict or terminate the tenancy of an existing tenant of any Low-Income Unit other than for good cause, or (ii) impose any increase in the gross rent with respect to any Low-Income Unit not otherwise permitted under Section 42 of the Code (the “Tenant Protections”). The Tenant Protections that apply during the Tenant Protection Period also include the Compliance Requirements and Enforcement Provisions provided hereunder with respect to compliance with and enforcement of the requirements of clauses (i)and (ii) of this subsection 5(d). Section 6. Miscellaneous. (a)Severability. The invalidity of any clause, part or provision of this Agreement shall not affect the validity of the remaining portions thereof. (b)Notices. All notices to be given pursuant to this Agreement shall be in writing and shall be deemed given when mailed by certified or registered mail, return receipt requested, to the parties hereto at the addresses set forth below, or to such other address(es) as a party may from time to time designate in writing. To the Board: Montana Board of Housing P. O. Box 200528 Helena, MT 59620-0528 Attn: LIHTC Program To the Owner: The Board and the Owner may, by notice given hereunder, designate any further or different address(es) to which subsequent notices, certificates or other communications shall be sent. (c) Amendment. The Owner agrees that it will take all actions necessary to effectamendment of this Agreement as may be necessary to comply with the Code and any and all applicable rules, regulations, policies, procedures, rulings or other official statements pertaining to the Credit. (d)Release and Indemnification. The Owner hereby agrees to pay, indemnify and hold the Board harmless from any and all claims, losses, demands, suits, judgments, costs, expenses and fees, including all reasonable attorneys' fees which may be incurred by the Board, arising from or relating to this Agreement, allocation of the Credit or recapture of the Credit. The Owner agrees to release the Board from and to indemnify the Board for any claim, loss, demand or judgment as a result of the allocation of tax credit dollars to the Project or the recapture of same by the Internal Revenue Service. (e)Attorney Fees. The Owner hereby agrees to pay the Board’s reasonable attorneys’ fees and costs incurred in enforcing this Agreement, whether the same shall be enforced by suit or otherwise. The Owner also hereby agrees to pay the Board’s costs, fees and expenses, including all reasonable fees and expenses of the Board's Counsel, which may be incurred in connection with any amendment to this Agreement, whether such amendment is at the request of the Owner or the Board. (f)Priority, Subordination or Termination of Agreement. This Agreement shall apply according to its terms and shall have priority over any subsequently recorded or any subordinated mortgage or other instrument, except as otherwise provided in any subordination agreement executed by the Board. In the event of termination as provided in subsection 5(c), the Restrictions and Covenants DRAFT MBOH-REV DRC-6/2016 Page 9 hereunder, other than the Tenant Protections specified in subsection 5(d), shall terminate, but the Tenant Protections shall thereafter remain valid and effective during the 3-year Tenant Protection Period specified in subsection 5(d) and or Code Section 42(h)(6)(E)). (g)Governing Law. This Agreement shall be governed by the laws of the State of Montana and, where applicable, the laws of the United States of America. (h)Survival of Obligations. The obligations of the Owner as set forth herein and in the Application shall survive the allocation of the Credit and shall not be deemed to terminate or merge with the awarding of the allocation. (i)Agreement Controlling. The Owner shall not execute any other agreement withprovisions contradictory to, or in opposition to, the provisions of this Agreement, and, in any event, the requirements of this Agreement are paramount and controlling as to the rights and obligations herein set forth and supersede any other requirements in conflict herewith. [Signature Page Follows:] DRAFT MBOH-REV DRC-6/2016 Page 10 IN WITNESS WHEREOF, the Owner has caused this Agreement to be signed by its duly authorized representative, as of the day and year first written above. OWNER ______________________________________ Name: ________________________________ Title: __________________________________ STATE OF ) ) ss. COUNTY OF ) On this day of , 20 , before me a notary public for the state of ________________________, personally appeared , the ______________________ for ______________________, the entity which is subscribed to the within instrument, and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the entity upon behalf of which he/she acted executed the instrument. In witness whereof, I have hereunto set my hand and affixed my notarial seal on the day and year first-above written. ________________________________ Notary Public for the State of _________ (Notarial Seal/Stamp Above)