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(e) The rehabilitation, renovation, improvement, construction and equipping of the Project will
be completed in accordance with the Plans and Specifications and the portion of the Project funded with
the proceeds of the Bonds will constitute a qualified residential rental project within the meaning of
Section 142(d) of the Code and will be operated and maintained in such manner as to conform in all material
respects with all applicable zoning, planning, building, environmental and other applicable Governmental
regulations and as to be consistent with the Act.
(f) [Reserved.]
(g) At least 95% of the net proceeds (as defined in Section 150 of the Code) of the Bonds will
be used to provide a “qualified residential rental project” (as defined in Section 142(d) of the Code), and
the Borrower will not request or authorize any disbursement from the Project Fund pursuant to Section 3.4
hereof, which, if paid, would result in less than 95% of the net proceeds of the Bonds being so used.
(h) The costs of issuance financed by the Bonds will not exceed 2% of the proceeds (within
the meaning of Section 147(g) of the Code) of the Bonds, and the Borrower will not request or authorize
any disbursement from the Project Fund pursuant to Section 3.4 hereof or otherwise, which, if paid, would
result in more than 2% of the proceeds of the Bonds being so used. Except as permitted by Section 1.148-
6(d)(3)(ii) of the Treasury Regulations, none of the proceeds of the Bonds will be used for working capital
purposes.
(i) Except for proceeds of the Bonds used for costs of issuance in accordance with subsection
(h) above, the proceeds of the Bonds shall be used exclusively to pay costs that (1) are (i) capital
expenditures (as defined in Section 1.150-1(a) of the Code’s regulations) and (ii) not made for the
acquisition of existing property, to the extent prohibited in Section 147(d) of the Code, and (2) are made
exclusively with respect to the requirements of a “qualified residential rental project” within the meaning
of Section 142(d) of the Code so that the Project and the land on which it is located will have been financed
25% or more by the proceeds of the Bonds for the purpose of complying with Section 42(h)(4)(B) of the
Code.
(j) Upon the execution and delivery thereof by the other parties thereto, each of the Borrower
Documents will constitute valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws or judicial decisions affecting creditors’ rights generally and by judicial
discretion in the exercise of equitable remedies.
(k) The Borrower acknowledges, represents and warrants that it understands the nature and
structure of the Project, that it is familiar with the provisions of all of the documents and instruments relating
to the financing of the Project to which it is a party, that it understands the risks inherent in such transactions,
including without limitation the risk of loss of the Project, and that it has not relied on the Issuer for any
guidance or expertise in analyzing the financial or other consequences of such financing transactions or
otherwise relied on the Issuer in any manner except to issue the Bonds in order to provide funds for the
Loan.
(l) The Borrower intends to hold the Project for its own account, has no current plans to sell
and has not entered into any agreement to sell any of the units that comprise the Project. It is hereby
acknowledged, however, that the Borrower’s partnership agreement may provide for certain rights of the
General Partner or an Affiliate to acquire the Project, and for the possible acquisition of the Project
following the 15-year tax credit compliance period as identified in the Borrower’s partnership agreement,
and those provisions shall not result in a breach of this subsection (l).
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