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77060962v1
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<br />has received an allocation of tax exempt bonding authority pursuant to applicable provisions of
<br />Chapter 474A, the restrictions imposed by Chapter 474A apply to the Project as described below.
<br />(a) In addition to any other restrictions on rent or the income of tenants set forth in this
<br />Regulatory Agreement, during the Qualified Project Period, the Borrower shall restrict rents on at
<br />least 20% of the units in the Project (which may consist of the same units as meet the requirements
<br />of Section 4) to an amount not exceeding the area fair market rents or exception fair market rents,
<br />as applicable, for existing housing as established by the federal Department of Housing and Urban
<br />Development from time to time, which units shall be occupied, or held for occupancy, by Low
<br />Income Tenants. The rental rates of units in a residential rental project for which rental assistance
<br />payments are made are deemed to be within the rent limitations of this clause if the amount paid
<br />by the tenants is less than the fair market rents.
<br />(b) The annual certifications required to be made by the Borrower hereunder shall
<br />conform to the requirements of Section 474A.047, subdivision 3, and the Governmental Lender
<br />shall have the authority to impose upon the Borrower any and all penalties described in Section
<br />474A.047, subdivision 3, from time to time, in addition to any remedies otherwise available under
<br />this Regulatory Agreement.
<br />(c) The Borrower must satisfy the requirements of Section 474A.047, subdivision 1(a),
<br />during the Qualified Project Period. The Borrower must annually certify to the Governmental
<br />Lender over the term of this Regulatory Agreement that the rental rates for the rent-restricted units
<br />are within the limitations under Section 474A.047, subdivision 1(a), of Chapter 474A. The
<br />Governmental Lender may request individual certification of the income of residents of the
<br />income-restricted units. The Commissioner of Minnesota Management and Budget may request
<br />from the Governmental Lender a copy of the annual certification prepared by the Borrower. The
<br />Commissioner of Minnesota Management and Budget may require the Governmental Lender to
<br />request individual certification of all residents of the income-restricted units.
<br />(d) Upon completion of the Project, (1) 100% of the residential units in the Project will
<br />be eligible for low income housing tax credits under Section 42 of the Code; and (2) all of the
<br />residential units of the Project: (x) will be rent-restricted in accordance with Section 42(g)(2) of
<br />the Code and (y) will be subject to rent and income restrictions for a period of not less than 30
<br />years.
<br />Section 6. Covenants Run with the Land. The Borrower hereby declares its express
<br />intent that the covenants, restrictions, charges, and easements set forth herein shall be deemed
<br />covenants running with the Land and shall, except as otherwise provided in this Regulatory
<br />Agreement, pass to and be binding upon the Borrower’s successors in title including any purchaser,
<br />grantee, owner, or lessee of any portion of the Project and any other person or entit y having any
<br />right, title, or interest therein and upon the respective heirs, executors, administrators, devisees,
<br />successors, and assigns of any purchaser, grantee, owner, or lessee of any portion of the Project
<br />and any other person or entity having any right, title, or interest therein. Except as otherwise
<br />provided in this Regulatory Agreement, each and every contract, deed, or other instrument
<br />hereafter executed covering or conveying the Project or any portion thereof or interest therein shall
<br />contain an express provision making such conveyance subject to the covenants, restrictions,
<br />charges, and easements contained herein; provided, however, that any such contract, deed, or other
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