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Notwithstanding any contrary provision of this Agreement, for the thirty-one (31) units that are subsidized with Section 8 project-based vouchers through a Housing Assistance Payment Contract with HUD, the rules and regulations applicable to such program shall prevail with respect to the setting of rents, implementation of occupancy requirements, and determination of gross household income. In the event that recertification of tenant incomes indicates that the number of Restricted Units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section 2 1 and Exhibit B, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the required income mix is achieved A dwelling unit shall qualify as "Rent Restricted" if the gross rent charged for such unit does not exceed the Affordable Rent for the applicable household income category as set forth in Exhibit B, subject to Section 2.2 Notwithstanding anything to the contrary contained in this Agreement, if other Project lenders, Project investors, or regulatory agencies restrict a greater number of units than restricted by this Agreement or require stricter household income eligibility or affordability requirements than those imposed hereby, the requirements of such other lenders, investors or regulatory agencies shall prevail, including without limitation, the rent and occupancy requirements imposed in connection with the use of project based vouchers or other rent subsidies 2.2 1 2.3 Rents for Restricted Units, Unit Sizes. For all Restncted Units), rents shall be limited to Affordable Rents for households of the applicable income limit in accordance with Section 2.2 and Exhibit B The Restricted Units shall be allocated among affordability categories as set forth in Exhibit B Notwithstanding the foregoing, no tenant qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Project because, after admission, such tenant's household income increases to exceed the qualifying limit for such Restncted Unit A household which at initial occupancy qualifies in a particular income category shall be treated as continuing to be of such income category so long as the household's gross income does not exceed one hundred forty percent (140%) of the applicable income limit In the event the gross household income of a household that qualified at the applicable income limit at initial occupancy exceeds the applicable income limit for a unit, that unit will continue to be considered as satisfying the applicable income limit if the unit remains Rent-Restricted In the event a tenant's household income exceeds the limits specified in this Section, Owner shall apply the rules applicable to the Project pursuant to Section 42 of the Internal Revenue Code of 1986, as amended and the federal Regulations applicable thereto. In the event of inconsistency between the provisions of this Section 2 3 and the rules applicable to the Project in connection with low-income housing tax credits, the rules applicable to low-income housing tax credits shall prevail. 2 4 Manager's Unit. One (1) dwelling unit in the Project may be used as resident manager's unit, and shall be exempt from the occupancy and rent restnctions set forth in this Agreement. 5 OAK #4832-3506-8205 v4