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Agency may increase rents to the highest applicable rent level, but in no event exceeding, as applicable, the maximum tax credit or HOME rents. 5. Rent Overcharges: If at any time during the period of this Loan Agreement the Agency charges rents higher than those set forth in the rent restriction provisions included in Exhibit A, the Agency will take remedial corrective actions including refunding any overcharges to residents, correcting lease terms and other such actions necessary to bring the project into compliance with the terms and covenants of this Loan Agreement. Repayment for tenant overcharges will be due within thirty (30) days from the date of a written notice of violation delivered to the Agency by the City. D. Federal or State Rent Subsidies Loss or Change in Federal or State Rent Subsidy Programs: Notwithstanding any other provision of this Agreement or the Promissory Note, Deed of Trust or Covenant Agreement, as defined below (collectively, the "Loan Documents") to the contrary, if the Project receives or is expected to receive Federal Section 8 assistance or any other similar rental or operating assistance, should Agency's Section 8 or other rental or operating assistance be reduced or terminated, Agency will continue to serve the target population, as described in Exhibit A of this Agreement. In the event of a decrease or termination of any project-based subsidies committed to the Project, the Agency must notify the City within ten days of notification of such decrease or termination. Any potential changes in the target population served, caused by the decrease or termination of subsidy, must be approved by the City. The Agency must continue to apply for Rental Assistance as long as it is available. It is the responsibility of the Agency to notify the City or its designee in a timely manner of any termination or reduction in Rental Assistance and whether such termination or reduction results in the Project failing to meet any applicable debt service coverage or expense coverage requirements. E. Designation of HOME Units The HOME-Assisted Units shall be considered as "floating units", meaning that units originally designated as HOME-Assisted Units may change over time. The number of HOME-Assisted Units in the Project may never be less than three (3) studio units, as described in Exhibit A, and shall be comparable in size, features and number of bedrooms to those units originally identified as HOME-Assisted Units. Any unit not so designated as a HOME Floating Unit, as may be revised from time to time, will be designated a City- Assisted Unit. The Agency may not duplicate reporting the HOME-Assisted Units with another participating jurisdiction's HOME-Assisted Units. The HOME-Assisted Units are further identified in Exhibit A. The Agency shall identify and provide to the City for review prior to the commencement of the marketing lease-up of the units: a schedule of all the units in the project with building/unit numbers, number of bedrooms, square footages, and identification of the HOME-Assisted Units, and shall designate the specific units that are HOME Floating Units as identified in Exhibit A. Loan Agreement Cocoon House Page 19 of 51