HopeWorks Station Residential 5/1/2018

annual operating expenses. Notwithstanding the above, upon tenant turnover, the 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 1. Loss or Change in Federal or State Rent Subsidy Programs: If the Project receives or is expected to receive, Federal Section 8 assistance or any other similar rental assistance ("Rental Assistance"), should Agency's Rental Assistance eligibility or participation be reduced or terminated, Agency will make best efforts to continue to serve the target population, as described in Exhibit A of this Agreement. The Agency must continue to apply for Rental Assistance as long as it is available and does not adversely affect any low income housing tax credits available to the Project. 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. To the extent units are to be made available to homeless households, in the event of a decrease or termination of any Rental Subsidy, the Agency may rent one or more of the units serving homeless households, as such units become available through vacancies, to households that do not meet the eligibility criteria set forth in the Washington State Housing Finance Commission's policies its homeless set aside to the extent necessary so that Agency can operate the Property consistent with applicable Coverage Requirements. In addition, in the event the City determines that rent increases pursuant to this paragraph would make retaining the originally targeted tenant population infeasible, the City would also allow changes, upon submission of a reasonable request, in the target population to the minimum extent necessary to accommodate the new rent levels. 2. Notwithstanding any other provision of this Loan Agreement; the Promissory Note in the form attached hereto as Exhibit C (the "Promissory Note"); the Deed of Trust in the form attached hereto as Exhibit D (the "Deed of Trust"); the Use Restriction Covenant Agreement in the form attached hereto as Exhibit E (the "Covenant"); or the Assignment, Assumption and Consent Agreement in the form attached hereto as Exhibit F (the "Assignment") (collectively, the "Loan Documents") to the contrary, in the event of a decrease or termination of any Rental Assistance committed to the Project, the maximum household income levels and the rents charged for the units receiving such subsidies may be increased by an amount necessary to replace the Loan Agreement Housing Hope Properties Page 20 of 51