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APPENDIX E
SUMMARY OF CERTAIN PROVISIONS OF THE REGULATORY AGREEMENT
The following is a summary of certain provisions of the Regulatory Agreement. The summary
does not purport to be complete or definitive and is qualified in its entirety by reference to the
Regulatory Agreement, a copy of which is on file with the Trustee.
The Issuer, the Borrower and the Trustee will enter into a Regulatory Agreement and
Declaration of Restrictive Covenants (the “Regulatory Agreement”) in order to set forth certain terms
and conditions relating to the rehabilitation and operation of the Project. All capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the Indenture and the Regulatory
Agreement.
Qualified Residential Rental Project
The Issuer and the Borrower declare by the Regulatory Agreement their understanding and
intent that the Project is to be owned, managed and operated, as a Qualified Residential Rental Project.
The Issuer hereby elects the “40-60” test as set forth in Section 142(d)(1)(B) of the Code. To that end,
and in compliance with the Act, the Borrower represents, covenants, and agrees by the Regulatory
Agreement as follows:
(a) that the Project is being acquired, rehabilitated, renovated and equipped for the
purpose of providing multifamily residential rental property, and the Project shall be owned,
managed and operated as multifamily Rental Housing, all in accordance with Section 142(d)(1)
of the Code and Section 1.103-8(b) of the Income Tax Regulations, as the same may be
amended from time to time and applicable to the Project;
(b) that all of the dwelling units in the Project will be similarly constructed and
each such dwelling unit shall contain complete facilities for living, sleeping, eating, cooking
and sanitation for a single person or a family;
(c) that during the Qualified Project Period:
(i) none of the dwelling units in the Project shall ever be leased or rented
for a period of less than thirty (30) days; and
(ii) neither the Project nor any portion thereof shall ever be used as a hotel,
motel, dormitory, fraternity house, sorority house, rooming house, hospital, sanitarium,
nursing home, rest home, or trailer court or park;
(d) that during the Qualified Project Period (i) the dwelling units in the Project
shall be leased and rented or made available for rental on a continuous basis to members of the
general public, (ii) at least 40% of the Available Units in the Project shall be leased and rented
or made available for rental on a continuous basis to Low Income Tenants; and (iii) the
Borrower shall not give preference in renting dwelling units in the Project to any particular class
or group of persons, other than Low Income Tenants as provided in the Regulatory Agreement;
provided, however, that an insubstantial number of dwelling units in the Project, may be
occupied by maintenance, security or managerial employees of the Borrower or its property
manager, which employees must be reasonably necessary for operation of the Project;Jump to an indexed page (744 of 744)