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For purposes of complying with the requirements described under this caption, the Trustee may
conclusively rely on the Disbursement Request executed by the Borrower and shall be protected in acting
or refraining from acting upon the Disbursement Request, which may be submitted by email (pdf). All
payments made from the Project Fund shall be presumed by the Trustee to be made for the purposes certified
in said written requests, and the Trustee shall not be required to see to the application of any payments made
from the Project Fund or to inquire into the purposes for which withdrawals are being made from the Project
Fund. The Trustee shall not be bound to make an investigation into the facts or matters stated in any form
of Disbursement Request. The Trustee shall not be responsible for determining whether the funds on hand
in the Project Fund are sufficient to complete the Project. The Trustee shall not be responsible to collect
lien waivers. The Trustee shall have no responsibility whatsoever to disburse or transfer funds absent
written instructions from the Borrower. The Trustee shall not be liable or accountable for the use or
application by the Borrower of any of the Bonds or the proceeds thereof or for the use or application of any
money paid over by the Trustee in accordance with the provisions described under this caption.
(c) Records. The Trustee shall cause to be kept and maintained adequate records pertaining to
the Project Fund and all disbursements therefrom as provided in the Indenture. If requested by the Issuer,
the Borrower, the Federal Investor Limited Partner, or the State Investor Limited Partner, the Trustee shall
file copies of the records pertaining to the Project Fund and disbursements therefrom with the Issuer, the
Borrower, and the Investor Limited Partners.
The proceeds of the Bonds shall be used exclusively to pay costs that (i) are (1) capital expenditures
(as defined in Section 1.150-1(a) of the Code’s regulations) and (2) not made for the acquisition of existing
property, to the extent prohibited in Section 147(d) of the Code, and (ii) are made exclusively with respect
to 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; provided, however, the foregoing
representation, covenant and warranty is made for the benefit of the Borrower and its partners and neither
the Trustee nor the Issuer shall have any obligation to enforce this covenant nor shall they incur any liability
to any person, including without limitation, the Borrower, the partners of the Borrower, any other affiliate
of the Borrower or the Holders of the Bonds for any failure to meet the intent expressed in the foregoing
representation, covenant and warranty; and provided further, that failure to comply with this representation,
covenant and warranty shall not constitute a default or Event of Default under the Indenture.
Upon the occurrence and continuance of an Event of Default under the Indenture because of which
the principal amount of the Bonds has been declared to be due and immediately payable pursuant to the
provisions described under the caption “Acceleration” below, any money remaining in the Project Fund
shall be promptly transferred by the Trustee to the Bond Fund.
Bond Fund
There shall be deposited in the Bond Fund (a) interest earnings on the Project Fund and the
Collateral Fund and (b) amounts set forth under this caption.
The Bond Fund (and the Interest Account and the Remarketing Proceeds Account therein) and the
money and Eligible Investments therein shall be used solely and exclusively for the payment of Bond Debt
Service Charges as they become due and at the stated maturity, or upon redemption, Mandatory Tender, or
acceleration, all as provided in the Indenture and in the Loan Agreement. Any Extension Payment received
by the Trustee in connection with an extension of the Mandatory Tender Date pursuant to the Indenture
shall be deposited in the Interest Account of the Bond Fund.
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