This page uses extracted PDF text. Text can misread numbers, dates or table columns. Check the PDF before quoting or interpreting it. Redacted areas remain redacted.
THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY
FROM THE PLEDGED REVENUES (AS DEFINED IN THE INDENTURE) AND FROM OTHER
MONEY PLEDGED UNDER THE INDENTURE. NEITHER THE FAITH AND CREDIT OF THE
COMMONWEALTH NOR THE FAITH AND CREDIT OF ANY POLITICAL SUBDIVISION
THEREOF (INCLUDING THE ISSUER AND THE CITY) ARE PLEDGED TO THE PAYMENT
OF THE PRINCIPAL OF OR THE INTEREST OR PREMIUM, IF ANY, ON THE BONDS. THE
ISSUANCE OF THE BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY
OBLIGATE THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION THEREOF
(INCLUDING THE ISSUER AND THE CITY) TO LEVY ANY TAXES WHATEVER THEREFOR
OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT EXCEPT FROM THE FUNDS
PLEDGED THEREFOR. THE ISSUER HAS NO TAXING POWER.
Enforceability of Remedies upon an Event of Default
The remedies available to the Trustee and the owners of the Bonds upon an Event of Default under
the Indenture, the Loan Agreement, the Regulatory Agreement or any other document described herein are
in many respects dependent upon regulatory and judicial actions which are often subject to discretion and
delay. Under existing law and judicial decisions, the remedies provided for under such documents may not
be readily available or may be limited. The various legal opinions to be delivered concurrently with the
delivery of the Bonds will be qualified to the extent that the enforceability of certain legal rights related to
the Bonds is subject to limitations imposed by bankruptcy, reorganization, insolvency or other similar laws
affecting the rights of creditors generally and by equitable remedies and proceedings generally.
Infectious Disease Outbreak
An outbreak of a highly contagious, epidemic or pandemic infectious disease such as COVID-19,
Zika or Ebola nationally or locally in the Project’s market area could adversely affect the Borrower’s
operations and financial results, including the cost or length of time necessary to complete the rehabilitation
of the Project. An increase in delinquencies and/or vacancies could depress rental revenue, and operating
costs could increase, resulting in a default by the Borrower on its obligations with respect to the Bonds or
the FHA Insured Mortgage Loan, including the taxability of interest paid on, and/or the extraordinary
mandatory redemption of, the Bonds.
Tax Exemption
In the event the Borrower does not maintain the Project as a “qualified residential rental project”
for the Qualified Project Period, the interest on the Bonds may be or become taxable from the date of
original issuance to the Holders of the Bonds for federal income tax purposes. Such an event will not
constitute an immediate default under the Loan and is not the basis for an increase in the rate of interest
payable on the Bonds or give rise to the payment to the owners of the Bonds of any amount denoted as
“supplemental interest,” “additional interest,” “penalty interest,” “liquidated damages” or otherwise, in
addition to the amounts payable to the owners of the Bonds prior to the occurrence of the event which
results in the interest payable on the Bonds being includable, for federal income tax purposes, in the gross
income of the owners of the Bonds.
Secondary Markets and Prices
No representation is made concerning the existence of any secondary market for the Bonds. The
Underwriter will not be obligated to repurchase any of the Bonds, nor can any assurance be given that any
secondary market will develop following the completion of the offering of the Bonds. Further, there can be
no assurance that the initial offering prices for the Bonds will continue for any period of time. Furthermore,
19Jump to an indexed page (744 of 744)