Sacramento City Council
April 8, 2025

Provision Term

1. ANNUAL ADMINISTRATIVE FEE. Borrower agrees to pay an annual administrative fee (“Fee”) to Lender as compensation for monitoring compliance with regulatory restrictions and the administration of the Loan. Borrower shall pay annually a Fee equal to 12.5 basis points (0.125%) of the Loan Amount and One Hundred and No/100 Dollars ($100.00) for each unit assisted by the Loan Program, not to exceed an annual amount of Fifteen Thousand Dollars and No Cents ($15,000) per project.

Fee payments shall commence on the Closing Date for the pro rated semiannual period from the Closing Date to and including April 2025, and in equal semiannual installments in advance on each October 1 and April 1 of each year thereafter throughout the term of the Regulatory Agreements.

8. REPRESENTATIONS. Agency has provided Agency Funding to Owner to develop the Property, subject to the terms of the Funding Agreement. For purposes of this Section 8, “Property” shall mean Property or Restricted Unit as the context may indicate. This Regulatory Agreement is a substa ntial part of the consideration to Agency for making Agency Funding. The funds used by Agency under the Funding Agreement are funds from public funding sources administered by Agency and their use is subject to certain requirements some of which are embodied in this Regulatory Agreement. Further, Agency has made Agency Funding in accordance with the laws, rules and regulations to which Agency is subject. Therefore, Agency has made Agency Funding conditioned upon Owner’s agreement, for itself and its successors and assigns, to comply with all provisions of this Regulatory Agreement, including without limitation, the Funding Agreement. Owner represents that it has had full opportunity to make itself independently familiar with such limitations and restrictions, and Owner accepts them and agrees to comply fully with them. As a material inducement to Agency to enter into the Funding Agreement and to give Agency Funding to Owner, Owner unconditionally, and each signatory who signs on its behalf, to the extent of their best knowledge, represents and warrants to Agency, as of the Close of Escrow, as follows:
a. Owner represents that it has had full opportunity to make itself independently familiar with the limitations and restrictions contained herein, and Owner accepts them and agrees to comply fully with them. b. The Plans and Specifications are satisfactory to Owner and the General Contractor and have been approved by Agency and all other construction lenders. There are no structural defects in the Project as shown in the Plans and Specifications that are known to or reasonably should have been known to Owner or its agents and employees, and to the best of Owner’s knowledge, no violation of any Governmental Requirement, including but not limited to an environment al requirement, exists.

c. Owner is duly formed and validly exists in the form stated above, is qualified to do business in California, and has full power to consummate the transactions contemplated.

d. The consummation of the transactions covered by this Regulatory Agreement and the payment and performance of all of the obligations in the Funding Agreement and all documents evidencing, securing, or otherwise related to the Funding Agreement, will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, contract, loan or credit agreement, corporate charter, bylaws, partnership agreement, trust agreement, or other instrument to which Borrower or any of its general partners is a party or by which it or they or the Prop erty may be bound or affected.

e. Owner is the sole legal and beneficial owner of the Property, which is free of all claims, liens, and encumbrances other than those shown in the Title Policy.

f. Owner has not received financing for either the acquisitio n of the Property, the construction of the Project or the permanent financing of the Project except as has been specifically disclosed to and approved by Agency in writing.

g. All Personalty is vested solely in Owner, free of all claims, liens, and encumbrances, and the security interest of Agency in the Personalty is a first lien.

h. Owner has filed all required Federal, State, County, and City tax returns and has paid all taxes due and owing. Owner knows of no basis for additional assessments with respect to any taxes, other than the lien of taxes not yet due.

9. COVENANTS. Owner makes the following covenants. Unless Owner has received the prior written consent or Agency approval otherwise, Owner shall fully comply with each and every covenant. Except as otherwise stated in this Regulatory

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Agreement, the following covenants shall have a term that is the same as the longest term specified in the Funding Requirements.

a. Owner shall use and permit others to use the Property only for the Approved Use. . Additionally, Owner shall not use or permit others to use the Property, in whole or in part, for any “Disapproved Use,” which includes any use not listed as an Approved Use, including but not limited to a liquor store, bar, adult film store, hazardous materia ls storage or warehousing, tattoo or piercing establishment, pawn shop, check cashing or paycheck advance business, or cannabis sales, including medical cannabis.

b. Owner shall ensure full compliance with the Funding Requirements at all times.

c. Owner shall not convey, Transfer, hypothecate, or otherwise encumber any of the Property or permit the conveyance, Transfer, hypothecation, or encumbrance of the Property unless such conveyance, Transfer, hypothecation, or encumbrance of the Property has r eceived prior, written approval from the Agency and the assignee, transferee, beneficiary, or encumbrancer has agreed, in writing and in a form suitable for recordation, to be bound by the terms of this Regulatory Agreement.

d. Owner shall not cause and shall not permit expansion, construction, modification reconstruction, or demolition of all or any part of any improvements on the Property, except as provided by the Funding Agreement or as authorized in a written agreement between Agency and Owner that has been executed by Agency’s Executive Director or their designee.

e. During the construction of the Project, Owner shall ensure that any funding received from Agency is used solely for payment of the costs of construction of the Project in accordance with the Plans and Specifications, or for other purposes specified in a written agreement between Agency and Owner that has been executed by Agency’s Executive Director or their designee.

f. During the Term of this Regulatory Agreement, to prevent defects, Owner shall inspect, review, supervise, and assure the high quality and suitability of any construction, demolition, rehabilitation, alteration, or maintenance performed on the Property.

Additionally, Owner shall ensure that any of the above acts are performed in a timely manner.

g. If, at any time, residents of the Project are displaced, Owner shall comply fully with all relocation laws. Owner’s failure to comply with applicable relocation laws is an Event of Default.

h. Owner shall maintain the Property and all bu ilding improvements, grounds and equipment of the Property in good repair and condition and in compliance with all applicable housing quality standards and local code requirements. Owner shall maintain the Property in good condition and shall keep the Property reasonably free from graffiti and unrepaired vandalism and from accumulation of abandoned property, inoperable vehicles, unenclosed storage, debris, waste materials, and hazardous substances. In the event of a casualty loss, Owner shall cause the restoration or replacement of the Property, in a timely manner.

i. Owner shall not cause and shall not permit discrimination based on race, color, national origin, religion, sexual orientation, gender, familial status, age source of income or disability in the sale, lease, or rental or in the use or occupancy of the Property. Owner covenants by and for him/her/itself, his/her/its heirs, executors, administrators, and assigns, and al l persons claiming under or through them that there shall be no discrimination ag ainst or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. This covenant against discrimination shall continue in perpetuity.

j. Owner shall not evict, refuse to rent to, or otherwise treat someone differently because of that person’s status as a victim of domestic violence, dating violence, sexual assault, or stalking, in compliance with the Violence Against Women Act. This protection is available regardless of sex, gender identity, or sexual orientation.

k. Owner shall ensure compliance with the obligations imposed by the federal Personal Responsibility and Work Opportunity Act (Public Law 104-193, commonly known as the Welfare Reform Act) as amended by California Welfare and Institutions Code Section 17851, which restrict Agency funding of federal, state or local benefits to persons who are not citizens or qualified aliens as defined in such act.

l. At or before the close of escrow, Owner shall provide Agenc y with a detailed resident services plan including but not limited to the following information: (1) identification of all entities responsible for providing resident services to Proje ct tenants and each entity’s role in the provision of those services; (2) a description of the services to be provided; (3) a resident services budget; and (4) Agency approved resident services at the Project according to the schedule of fifteen (15) hours per week and including the following services (the “Resident Services P lan”). Agency shall have the right to reject or approve

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

the Resident Services Plan submitted by Owner. Prior to initial occupancy, Owner must have a Resident Services Plan in place that has been approved in writing by the Agency:

1) An onsite Coordinator (1.0 full-time equivalent) who provides coordination services to residents for a minimum of: four (4) hours per week; and

2) Services of a minimum of thirty -six (36) hours per week shall be provided and may include, but are not limited to:
i) Workforce development support activities
ii) Educational classes such as nutrition, exercise, health resources, health insurance application assistance, annual onsite health fair, English as a Second Language (ESL) classes; iii) Socialization activities such as community building events; and iv) Other services such as transportation assistance, counseling assistance and employee readiness and job search assistance.

3) A minimum of 1.5 full-time equivalent case managers who provides supportive services to the residents that may include, but are not limited to:
i) Case management
ii) Documentation assistance including intake processes; iii) Facilitating support groups;
iv) Harm reduction strategies; and
v) Addressing underlying social determinants of health and health education.

m. Beginning at initial occupancy of the Project, Owner shall ensure the resident services are provided to Project residents at all times in accordance with the Resident Services Plan. Beginning at initial occupancy of the Project, and at a ll times during the Term of this Regulatory Agreement, Owner shall deliver to Agency a once -quarterly report that includes information deemed necessary by the Agency to evaluate the resident services being provided at the Project, including but not limited to: the schedule o f services and activities offered, the efforts made by Owner or resident services providers to advertise the activities and services, the number of Tenants served by each service or activity per week, the demographics of the Tenants served by each service or activity per week.

n. Owner shall ensure that the resident services offered at the Property are reasonably tailored to the needs of the Project’s resident community. Beginning at 75% occupancy of the Project’s residential units, Owner shall ensure that, at least once annually, the needs of the Project’s resident community are evaluated and, if necessary, the Resident Services Plan is amended to best suit the Project residents’ needs. The Resident Services Plan is not amended until the Agency provides written consent to the amendment.

o. At least once every calendar year, Owner shall deliver to Agency a “ Needs Assessment Report ,” which describes the following information in sufficient detail for the Agency to determine whether the needs assessment performed was adequate and whether the Resident Services Plan is adequately tailored to the Project’s needs:

1) the methodology used by Owner to determine the Project community’s needs;

2) a summary of the data collected about the Project community’s needs;

3) a summary of the data collected about the utilization of the existing resident services provided at the Project; and

4) an explanation of Owner’s decision to maintain the current Resident Services Plan or to amend the Resident Services Plan.

p. If Agency determines the Owner’s efforts to assess the Project residents’ needs or to tailor the Resident Services Plan to the Project’s residents’ needs are inadequate, Agency shall provide notice to Owner, and Owner shall remedy the deficiencies identified by Agency within 45 days of deemed delivery of such notice. Failure to remedy such deficiencies in a timely manner shall be an Event of Default.

q. Owner shall not permit any entity to provide resident services at the Project without the Agency’s prior approval of such entity, such approval to be given, withheld, or revoked at any time upon Agency’s determination, in Agency’s sole and absolute discretion, that the resident services provider is not performing satisfactorily. Upon deemed delivery of notice fro m the Agency to Owner of the Agency’s determination that any resident services provider is performing or has performed

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

unsatisfactorily to the Agency, Owner must ensure that such provider is removed and replaced with a new Agency-approved service provider within 60 days. Failur e to timely remove and replace such service provider shall be an Event of Default under this Regulatory Agreement.

r. Subject to Agency’s written approval, Owner shall obtain and maintain for the life of this Regulatory Agreement an Agency approved, top qual ity property management agreement with a duly accredited real estate property management company for the management of the Property, and shall assure compliance of the property manager with the property management agreement. Agency shall have the right to review and approve or reject any proposed changes to scope of said agreement and to changes in the real estate property management company prior to making such changes. Any such changes made without Agency approval shall be an Event of Default under this Regulatory Agreement. Agency approval of a property management company or a property management agreement is fully revocable with 60 days’ notice from Agency. Upon the effective date of the revocation of Agency approval of a property management company or a property management agreement, the maintenance by Owner of the disapproved property management company or property management agreement, whichever applies, shall constitute an Event of Default under this Regulatory Agreement.

s. Owner shall not pass utility charges paid by Owner, including water, sewer, and garbage collection charges, through to any Tenant as an add-on to their contracted rent subject to adjustments permitted by applicable utility allowances.

t. Owner shall not make any Tenant’s payment of rental insurance premiums a condition of occupancy. If Owner require renters’ insurance, the policy premium must be deducted from the Tenant’s Rent. Owner shall not add the insurance premium to the Tenant’s Rent in either the initial year at any time thereafter.

u. Owner shall ensure all of the units, indoor common areas and buildings are smoke free.

10. NATURE OF COVENANTS. The provisions contained in this Regulatory Agreement are covenants which subject and burden the Property, as covenants running with the land. It is intended and agreed that the agreements and covenants provided in this Regulatory Agreement shall be covenants running with the land and equitable servitudes on the land and that they shall, in any event, and without regard to technical classifications or designation, be binding, to the fullest extent permitted by law and equity, for the benefit and in favor of, and enforceable by, Agency, Agency's successors and assigns, any other governmental entity acting within its authority, and any s uccessor in interest to Agency's interest under this Regulatory Agreement against Owner, its successors and assigns and every successor in interest to all or any part of the Property.

11. TERM. The “Term” of this Regulatory Agreement shall commence on the Effective Date and continue until the terms of all of the covenants, including without limitation, the terms stated in the Funding Requirements, have expired or otherwise been terminated. Unless a longer term is stated in the Funding Requirements, the term of this Regulatory Agreement shall be twenty (20) years from the Certificate of Occupancy.

12. EXPIRATION OF AFFORDABILITY PERIOD. Owner agrees the rent of "in -place” Tenants at the conclusion of the Term will continue to be governed by the applicable Afforda bility Restrictions for as long as those Tenants continue to reside in the Project.

13. MULTIPLE FUNDING REQUIREMENTS. If more than one form of Funding Requirements is attached, each Restricted Unit shall be subject to the Funding Requirements for every Funding Source applied to the respective Restricted Unit. If the terms of the Funding Requirements shall conflict as to any Restricted Unit, the Funding Requirements shall be construed so as to meet all applicable requirements for the respective Restricted Unit, including without limitation the use of the most restrictive requirements and the use of the “Recapture” formula that results in the greatest repayment to Agency.

14. RECORDKEEPING AND REPORTING. Upon request of Agency, Owner shall promptly provide any additional information or documentation requested in writing by Agency to verify Owner's compliance with the provisions of this Regulatory Agreement. At the written request of Agency, Owner shall, within a reasonable time following receipt of such request, furnish reports and shall give specific answers to questions upon which information is desired from time to time relative to the income, assets, liabilities, contracts, operations, and condition of the property and the status of any deeds of trust encumbering the Property.

15. AUDIT AND INSPECTION. The Property and all related equipment, buildings, plans, offices, books, contracts, records, documents and other related papers shall at all times be maintained in reasonable condition for audit and shall be subjec t to examination by Agency or its agent at any time without prior notice. The books and accounts of the operations of the Property shall be kept in accordance with generally accepted accounting principles. Owner shall provide Agency access to the Property and its tenants during reasonable hours for the purpose of reviewing Owner’s compliance with this Regulatory Agreement.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

16. INDEMNITY FOR OWNER’S FAILURE TO MEET LEGAL REQUIREMENTS. Owner shall indemnify and hold Agency, its officers, directors, and employ ees harmless from any and all liability arising from Owner’s failure to comply with the covenants, conditions and restrictions contained in this Regulatory Agreement or to comply with all other laws, rules, regulations and restrictions related to the use of Agency Funding. Without limitation, such indemnity shall include repayment to the appropriate parties of rents or sales proceeds in excess of amounts authorized to be charged and repayment to Agency of the costs of funds and the value of lost opportuniti es resulting from the required repayment by Agency to the funding source of funds improperly used.

17. CHANGES WITHOUT CONSENT OTHERS. Only Agency and its successors and assigns, and Owner (subject to the reasonable approval of Owner's lender) shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants or restrictions contained in this Regulatory Agreement without the consent of any easement holder, licensee, other mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property.

DEFAULT. Upon a breach of any of the provisions of this Regulatory Agreement by Owner, Agency may give written notice of such breach to Owner by registered or certified mail. If such violation is not corrected to the satisfaction of Agency within thirty (30) days after the date such notice is mailed or within such further time as Agency may determine in its sole and absolute discretion is necessary to correc t the breach, and without further notice to Owner, Agency may declare a default under this Regulatory Agreement, effective on the date of such declaration of default, and upon such default Agency may:
(a) during the term of the Funding Agreement take any action then available under the Funding Agreement for a default under the Funding Agreement; (b) apply to any court for specific performance of this Regulatory Agreement, (c) apply to any court for an injunction against any violation of this Regulatory Agreement; (d) apply to any court for the appointment of a receiver to take over and operate the Property in accordance with the terms of this Regulatory Agreement, (e) apply to any court for money damages; or (f) apply to any court or other tribunal for such other relief as may be appropriate. The parties agree the injury to Agency arising from a default under any of the terms in this Regulatory Agreement would be irreparable, and the amount of damage would be difficult to ascertain. A copy of any notice sent to Owner hereunder may ne sent to Owner’s limited partner at the address provided in the Deed of Trust.

18. REGULATORY AGREEMENT VIOLATIONS. Owner shall pay the program compliance fees and expenses to Agency set forth in Compliance Violations and Actions (Exhibit 3 - Compliance Violations and Actions) in reimbursement of the amounts and time expended by Agency to insure Owner’s compliance with State statutes and federal regulations and Owner’s obligations under this Regulatory Agreement as a result of Owner not meeting its obligations and reporting requirements. No compliance fee will be assessed for one incident of each type of compliance violation per annual inspection provided the violation is corrected within the specified corrective time period. The s econd and subsequent violations will be assessed compliance fees as detailed in the Compliance Violations and Actions tables.

19. BINDING SUCCESSORS IN INTEREST. This Regulatory Agreement shall bind and the benefits shall inure to Owner, its successors in interest and assigns, and to Agency and its successors for the term of this Regulatory Agreement.

20. CONTRADICTORY AGREEMENTS. Owner warrants that it has not, and will not, execute any other agreement with provisions contradictory of or in opposition to, the provisions of this Regulatory Agreement, and that, in any event, the requirements of this Regulatory Agreement are paramount and controlling as to the rights and obligations set forth and supersede any other requirements in conflict with this Regulatory Agreement.

21. COMPLIANCE AMENDMENTS. If revisions to the provisions of this Regulatory Agreement are necessitated to comply with the laws or regulations governing Agency Funding, Owner agrees to execute modifications to this Regulatory Agreement that are needed to comply with such laws or regulations.

22. ATTORNEYS' FEES. If the services of any attorney are required by any party to secure the performance of this Regulatory Agreement or otherwise upon the breach of default of another party, or if any judicial remed y or mediation is necessary to enforce or interpret any provision of this Regulatory Agreement or the rights and duties of any person in relation to this Regulatory Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and costs i n addition to any other relief to which such party may be entitled. Any award of damages following judicial remedy shall include an award of prejudgment interest from the date of the breach at the maximum amount of interest allowed by law. The prevailing party shall mean the party receiving a judgment in its favor, unless the award or judgment is less favorable than the best settlement offered in writing in a reasonable manner by the other party, in which case the prevailing party is the other party.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

23. SEVERABILITY. The invalidity or unenforceability of any clause, part or provision of this Regulatory Agreement shall not affect the validity of the remaining portions.

24. ELECTION OF REMEDIES. To the extent applicable, in the event of any breach of any covena nt, condition or restriction contained in this Regulatory Agreement, Agency shall reasonably endeavor to remedy such breach by conference and conciliation. If, in the opinion of Agency, Agency and Owner are unable mutually to agree upon a suitable remedy or the circumstances so warrant, such breach may be enjoined or abated by appropriate proceedings brought by Agency.

Agency may institute or prosecute in its own name, any suit Agency may consider advisable in order to compel performance of any obligation of any owner to develop and maintain the subject property in conformity with this Regulatory Agreement and to remedy any default of this Regulatory Agreement. Agency may also seek a decree requiring removal of any improvements constructed on the Property which improvements are designed for uses not permitted under this Regulatory Agreement and which improvements are unsuitable only for uses not permitted under this Regulatory Agreement.

The remedies of Agency under this Regulatory Agreement are cumulativ e, and the exercise of one or more of such remedies, including, without limitation, remedies under the Funding Agreement shall not be deemed an election of remedies and shall not preclude the exercise by Agency of any one or more of its other remedies.

25. NO WAIVER. No waiver by Agency of any breach of or default under this Regulatory Agreement shall be deemed to be a waiver of any other or subsequent breach or default.

26. NOTICES. Written notices and other written communications by and between the parties sh all be addressed to Owner at Owner’s Address and to Agency at Agency Address or such other address as each respective party has designated by written notice to the other party.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

THE PARTIES HAVE EXECUTED THIS REGULATORY AGREEMENT in Sacramento, California as of the Effective Date

OWNER :

SACRAMENTO 11TH STREET II LP,
a California limited partnership

By: Sacramento 11th Street II LLC,
a California limited liability company,
its Administrative General Partner

By: Danco Communities,
a California corporation,
its Manager

By:

Daniel Johnson
President

By: Community Revitalization and Development
Corporation, a California nonprofit public
benefit corporation, its Managing General
Partner

By:

David Rutledge
President

AGENCY:

Sacramento Housing and Redevelopment Agency

By: _______________________________________
La Shelle Dozier, Executive Director

Approved as to form: _________________________
Agency Counsel

[NOTARIZED ACKNOWLEDGEMENTS]

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

EXHIBIT 1

Legal Description

Real property in the City of Sacramento, County of Sacramento, State of California, described as follows:

ALL THAT PORTION OF LOTS 1, 2, 3 AND 4, IN THE BLOCK BOUNDED BY "H" AND "I", ELEVENTH AND

TWELFTH STREETS OF THE CITY OF SACRAMENTO, ACCORDING TO THE OFFICIAL MAP OR PLAN OF SAID CITY "MAP OF SACRAMENTO CITY & WEST SACRAMENTO", LYING NORTH OF THE NORTH LINE OF A 21 FOOT STRIP OF LAND CONVEYED BY BISBEE INVESTMENT COMPANY, A CORPORATION, TO THE CITY OF SACRAMENTO, FOR THE PURPOSE OF A PUBLIC STREET BY DEEDS DATED JANUARY 14, 1925, RECORDED JANUARY 31, 1925, IN BOOK 710 OF DEEDS, PAGE 115, AND RECORDED FEBRUARY 26, 1925, IN BOOK 710 OF DEEDS, PAGE 433, SACRAMENTO COUNTY RECORDS.

APN: 006-0045-002-0000 AND APN: 006-0045-003-0000

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

EXHIBIT 2

Funding Requirements

ATTACHMENT 3: HOPWA AND OTHER FEDERAL REQUIREMENTS
The following provisions shall be applicable to this Contract and binding on Subrecipient and Agency only if all or part of the funds to be paid for work performed under this Contract are provided under the Housing Opportunities for Persons with Aids Program administered by the United States Department of Housing and Urban Development. In the event of a dispute as to the applicability of any of the following provisions to Subrecipient’s work under this Contract, Agency’s determination shall be final.

DEFINITIONS. For purposes of this Contract and in addition to definitions made elsewhere in this Contract, the following quoted words and phrases contained in this Contract shall have the following meanings:

The “Act” is the federal Housing and Community Development Act of 1974, as amended. “Allocable Costs” are particular to a Federal award or other cost objective if the goods or s ervices involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. See 2 CFR §200.405.
“Contract Provisions” refers to “Attachment 1: Contract Provisions.” This Attachment 3 contains the provisions common to all Agency administered HOPWA agreements.
“Cost Objective” generally means a service, program, project or activity in which costs can be assigned to and measured from. See 2 CFR §200.28.
“Direct Costs” are those costs that can be identified specifically with a particular final cost objective or other internally or externally funded activity, or that can be directly assigned to such activities relatively easy with a high degree of accuracy. See 2 CFR §200.413.
“HOPWA” is the federal Housing Opportunities for Persons with AIDS program administered by HUD. “CFR” is the Code of Federal Regulations.
“HOPWA Requirements” are the laws, rules and regulations (other than the Act) which are specifically applicable to this Contract. A substantial portion of the HOPWA Requirements are included in this Attachment 3. “Indirect Costs” Indirect costs” means those costs incurred for a common or joint purpose benefitting more than one cost objective and not readily assignab le to the cost objectives specifically benefitted without effort disproportionate to the results achieved. See 2 CFR §§ 200.56, 200.413, and 200.414 “HUD” is the United States Department of Housing and Urban Development. “OMB” is the federal Office of Management and Budget.
“Program Income” is defined in 2 CFR §200.80. Generally, Program Income is income to Subrecipient that is generated from the use of HOPWA funds under this Contract. Program Income may include, without limitation, proceeds of the sale, rent or lease of real or personal property acquired with such funds, principal and interest payments on loans of such HOPWA funds, and interest earned on other Program Income. “Project Funds” are the funds to be paid to the Subrecipient under this Contract. All Project Funds are funds disbursed to the Recipient and Agency under the HOPWA Program. “Quarterly Reports” are required to be submitted by Subrecipient in accordance with 2 CFR 200.328(b)(1).

See 2 CFR §200.327, 200.328, 200.329, 200.512, 24 CFR Part 91, and 24 CFR §574.520 for additional reporting requirements.
“Reasonable Costs” include costs that are generally recognized as ordinary and necessary for the operation or efficient performance of the contract or award and do not exceed that which would b e incurred by a prudent person

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

under the circumstances prevailing at the time the decision was made to incur the cost. See 2 CFR §200.404. “Subrecipient” is the Contractor as defined elsewhere in this Contract.

EXHIBITS. Exhibits to this Attachment are located online at www.shra.org and contain a substantial portion of the Federal Requirements and are incorporated into this Contract.

Subrecipient acknowledges they have reviewed and accept these Exhibits by initialing here:_____ :

Exhibit 1 – HOPWA Regulations: 24 CFR Part 574.

Exhibit 2 – Requirements for Nonprofit Subrecipients. 2 CFR §200.70 and Appendix VIII to 2 CFR Part 200.

Exhibit 3 – Grants and Agreements with Institutions of Higher Education, Hospitals and Other Nonprofit Organizations [applies only to Subrecipients who are not a state or local government or a public agency]. See also 2 CFR §§ 200.52, 200.55, and Appendix VIII to 2 CFR Part 200.

Exhibit 4 - Cost Principles for Nonprofit Organizations [applies only to Subrecipients who are not a state or local government, a public agency or an educational institution]. See 2 CFR §200.70, and Appendix VIII to 2 CFR Part 200.

Exhibit 5 – Audits of Institutions of Higher Education and Other Nonprofit Organizations [applies only to Subrecipients who are not a state or local government or a public agency]. See also 2 CFR §§ 200.55, 200.418, 200.419, and Appendix III to 2 CFR Part 200.

Exhibit 6 – Cost Principles for Educational Institutions [applies only to Subrecipients who are an educational institution]. See CFR §§ 200.418 and 200.419.

Exhibit 7 –Principles for determining Costs Applicable to Grants and Contracts with State, Local a nd Federally-Recognized Tribal Indian Governments [applies only to Subrecipients who are a state or local government, a public agency. 2 CFR §§ 200.416, 200.417, and Appendix VII to 2 CFR Part 200.

Exhibit 8 – Uniform Administrative Requirements for Grant s and Cooperative Agreements to State and Local Governments. 2 CFR Part 200; see also 2 CFR §§200.416, 200.417, and Appendix VII to 2 CFR Part 200.

Exhibit 9 – New Restrictions on Lobbying. 24 CFR Part 87; see also 2 CFR §200.450.

Exhibit 10 – Federal Labor Standards Provisions; 29 CFR §5.5.

Exhibit 11 – Executive Order 12432 – M/WBE; see also 2 CFR §200.321.

Exhibit 12 – Executive Order 12138 – M/WBE; see also 2 CFR Section §200.321.

Exhibit 13 – Executive Order 11625 – M/WBE and Agency assembled M/WBE materials.

Exhibit 14 – Executive Order 11246, as amended – Equal Opportunity.

Exhibit 15 – Executive Order 13166 – Limited English Proficiency Access.

Exhibit 16 – Equal Access to Housing and HUD Programs Regardless of Sexual Orientation or Gender Identity: 24 CFR Parts 5, 200, 570, 574, 882, 891 and 982 Exhibit 17 – Generally Applicable HUD Program Requirements; Waivers. 24 CFR Part 5.Exhibit 18. CPD Notice 15-02 – Appropriate Placement for Transgender Persons in Single Sex Emergency Shelters and Other Fa cilities.

Exhibit 20 – Notice CPD 06 -07 Standards for HOPWA Short -Term Rent, Mortgage, and Utility (STRMU) Payments and Connections to Permanent Housing.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

FINDINGS AND REPRESENTATIONS. This Contract has been made for the following purposes and based upon the following representations of the parties:

In accordance with the provisions of California Government Code §53703, Agency possesses full powers for the purpose of administering the e xpenditure of funds received under the federal Housing and Community Development Act of 1974, as amended, Housing Opportunities for Persons with AIDS Grant program, administered by the United States Department of Housing and Urban Development.

Agency has d etermined that the fulfillment of Subrecipient’s obligations under this Contract serves the purposes of community improvement and welfare.

Pursuant to the provisions of California Government Code §53703 and after public hearing, Subrecipient has been allocated HOPWA funds for the uses and activities of this Contract.

Agency and Subrecipient are subject to all laws, rules and regulations regarding the use of HOPWA funds for the purposes and activities stated in this Contract.

SECTION 3 REQUIREMENTS. Owner shall ensure compliance with the following Section 3 Requirements. The terms used in this Section shall have the meanings assigned to them in 24 CFR Part 75. Further, Owner shall ensure all Covered Contracts, as defined in 24 CFR Part 75, related to the Project contain the provisions set forth in this Section 4, subsections a through g (the “Section 3 Clause”):

The work to be performed under this contract is subject to the requirements of section 3 of the Housing and Urban Development Act of 1968, as amende d, 12 U.S.C. 1701u (section 3). The purpose of section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD -assisted projects covered by section 3, shall, to the greatest extent feasible, be directed to low - and very low -income persons, particularly persons who are recipients of HUD assistance for housing.

The parties to this contract agree to comply with HUD's regulations in 24 CFR part 75, which implement section 3. As evidenced by their execution of this con tract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the part 75 regulations.

The contractor agrees to send to each labor organization or representative of workers w ith which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this section 3 clause, and will post copies of the noti ce in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the section 3 preference, shall set forth minimum number and job titles subject to hire, avail ability of apprenticeship and training positions, the qualifications for each; and the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin.

The contractor agrees to include this s ection 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 75, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this section 3 clause, upon a finding that the subcontract or is in violation of the regulations in 24 CFR part 75. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 75.

The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 CFR par t 75 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR part 75.

Noncompliance with HUD's regulations in 24 CFR part 75 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts.

With respect to work performed in connection with section 3 covered Indian housing assistance, section 7(b) of the Indian Self -Determination and Education Assistance Act (25 U.S.C. 450e) al so applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and sub contracts shall be given to Indian organizations and Indian -owned Economic Enterprises. Parties to this contract that are subject

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

to the provisions of section 3 and section 7(b) agree to comply with section 3 to the maximum extent feasible, but not in derogation of compliance with section 7(b).

COSTS. All costs must be must be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles per 2 CFR §§ 200.403 and 404. Classifying a particular cost as direct or indirect depends on whether it can be identified directly with a cost objective (such as a project or activity) without disproportionate effort. All costs must comply with 2 CFR Part 200, Subpart E-Cost Principles (2 CFR §§ 200.420-200.475).

The contractor may elect, but is not required, to charge for indirect costs. If the contractor chooses to charge for indirect costs, the maximum indirect cost rate is 10% ( de minimis), unless an indirect cost rate has been previously negotiated with and approved by the federal agency responsible for reviewing, negotiating and approving cost allocation plans or indirect cost rate proposals. The negotiated rate must be accepted by all federal awarding agencies.

ADDITIONAL RESTRICTIONS OF FUNDS. Subrecipient acknowledges that the funds for this Contract are HOPWA funds, the amount of which has been established after public hearing and that Agency has no authority to change the Project Funds except after public hearing and Recipient approval. Therefore, and notwithstanding any other provision of this Contract, the parties agree that the total compensation and reimbursement for all services and expenses required during the term of this Contract shall not exceed the Project Funds. Subrecipient shall provide, from whatever source, all additional funds necessary to fulfill Subrecipient’s obligations under this Contract.

If Subrecipient incurs additional expenses or does additional work related to t his Contract, Subrecipient shall bear all such costs and expenses unless the Agency has executed a written amendment to this Contract prior to Subrecipient’s having incurred such costs and expenses.

Subrecipient shall use proceeds of this Contract only for the purposes stated in this Contract, as described in the Scope of Work, and strictly in compliance with all applicable laws, rules and regulations.

If Subrecipient is not a state or local governm ent, educational institution or public agency, Subrecipient shall fully comply with the regulations, policies, guidelines and requirements Subrecipient shall deposit any advance under this Contract in an interest bearing account and, unless specified otherwise in this Contract, shall remit any interest earned over $100 to the Agency.

Project Funds shall not be used for any religious purposes, which prohibition is further described in 24 CFR §§ 5.109 and 574.300(c).

In the event of suspension or termination of this Contract, Subrecipient shall return unused funds to the Agency.

If the Subrecipient improperly retains funds, the Agency may retain funds from future disbursements to the Subrecipient.

In accordance with 2 CFR §§ 200.338 and 200.339, suspension or termination may occur if Subrecipient materially fails to comply with any term of the award, and the award may be terminated for convenience in accordance with 2 CFR §§ 200.338,200.339, 200.340, 200.341, and 200.342.

RESEARCH AND DEVELOPMENT (R & D). Funds may not be used for R & D. R & D means all research and development related activities, both basic and applied, that are performed by non -Federal entities. See 2 CFR § 200.87 for additional information on R & D.

RETURN OF PROGRAM INCOME. Subrecipient shall report receipt of all Program Income and return all Program Income to the Agency.

ANTI-KICKBACK RULES. Monthly, or more often, Subrecipient must, without condition, pay the salaries of architects, draftsmen, technical engineers and technicians perf orming work under this Contract. Such payments shall be made without deduction or rebate, excepting only such payroll deductions as are mandatory by law or permitted by applicable regulations issued by the Secretary of Labor pursuant to the "Anti -Kickback Act" of June 13, 1937 ( 18 U.S.C., §874).

Subrecipient shall comply with all applicable "Anti -Kickback" regulations and shall insert appropriate provisions in all subcontracts covering work under this Contract to ensure compliance by subcontractors with suc h regulations.

Subrecipient shall be responsible for the submission of affidavits required of subcontractors under this Contract, except for such variations or exemptions as the Secretary of Labor may specifically allow.

WORK HOURS. Subrecipient must comp ly with the provisions of the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 3701-3708) and must cooperate with Agency in implementing and enforcing the provisions of such Act. Among

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

other requirements of the act, Subrecipient must pay not less than one and one -half times the basic rate of pay for the work of Subrecipient's employee in excess of eight hours in one day or forty hours in one week in the performance of this Contract. Subrecipient must insert appropriate provisions in all subcontracts covering work under this Contract to ensure compliance with such Act. Subrecipient must meet and cooperate with Agency's Labor Compliance officer to assure compliance with such Act.

WITHHOLDING OF SALARIES. If, in the performance of this Contract, ther e is any underpayment of salaries by Subrecipient or by any subcontractor, Agency must withhold from Subrecipient out of payments due to him or her any amount sufficient to pay employees underpaid the difference between the salaries required under this Contract to be paid and the salaries actually paid such employees for the total number of hours worked. The amounts withheld shall be disbursed by Agency for and on account of Subrecipient or subcontractor to the respective employees to whom they are due.

CLAIMS AND DISPUTES PERTAINING TO SALARY RATES. Claims and disputes pertaining to salary rates or to classification of architects, draftsmen, technical engineers and technicians performing work under this Contract must be promptly reported in writing by Subrecipient to Agency for the latter's decision which shall be final with respect thereto.

CONFLICT OF INTEREST. No member, officer or any employee of Subrecipient, or its designees or agents, who exercises any functions or responsibilities with respect to the program during his or her tenure or for one (1) year thereafter, shall have an interest, direct or indirect, in any contract or its proceeds, for work to be performed in connection with the program assisted under this Contract. Subrecipient must incorporate, or cause to be incorporated, in all subcontracts a provision prohibiting such interest pursuant to the purposes of this Section. In the procurement of supplies, equipment, construction, and services by Subrecipient, the conflict of interest provisions in 2 CFR §§ 200.318 and 200.319, respectively, shall apply.

DISCRIMINATION BECAUSE OF CERTAIN LABOR MATTERS. No person employed on the work covered by this Contract shall be discharged or in any way discriminated against because he or she has filed any complaint or instituted or caused to be instituted any proceeding or has testified or is about to testify in any proceeding under or relating to the labor standards applicable to his employer und er this Contract.

RECORDS, REPORTING AND MONITORING. Agency may monitor the adequacy of Contractor’s performance in any manner which Agency deems most effective. Contractor must cooperate with Agency in such monitoring. Subrecipient must keep all necessary books and records, including loan documentation and financial records, in connection with the operation and services performed under this Contract, in accordance with 2 CFR §200.333, and must document all transactions so Agency may properly audit all expenditures made pursuant to this Contract. Subrecipient must maintain and preserve all records related to this Contract in its possession for a period of three (3) years from the completion date of this Contract, unless otherwise directed by Agency. All books, records and accounts kept by Subrecipient in connection with the performance of this Contract shall be made available for inspection by representatives of the federal government and/or Agency staff as required to monitor or audit the program.

In addition to the reports specified in this Contract, Subrecipient shall retain the records required by the applicable provisions of 2 CFR §200.333 and provide the Agency with the reports required pursuant to 2 CFR §§ 200.328 and 200.343, and such other records and reports as the Agency may reasonably require in the administration of this Contract.

Subrecipient shall keep all other necessary books and records, including property, personnel, loan documentation and financial records, in connection with the operation and services performed under this Contract. Subrecipient shall conduct audits in accordance with 2 CFR Part 200, Subpart F. Subrecipient shall document all transactions sufficiently for Agency to properly monitor and audit all expenditures made pursuant to this Contract.

DRUG FREE WORKPLACE. Subrecipient must comply with the Drug-Free Workplace Act of 1988 (final rule published on May 25, 1990) and Agency's policies and rules promulgated under the Act. Subrecipient must obtain such policies and rules from the Agency.

RESTRICTIONS ON LOBBYING; FILING CERTIFICATION AND DISCLOSURE FORMS. Subrecipient shall not use any funds paid under this Contract, directly or indirectly, for any political activity, whatsoever or to influence any public official or employee. In any event, Subrecipient shall comply with the restrictions on lobbying stated in 24 CFR Part 87.

Subrecipient shall sign and return to the Agency the certification described in 24 CFR 87, Appendix A and the disclosure form described in 24 CFR Part 87, Appendix B. Subrecipient shall require any person receiving proceeds of this Contract from Subrecipient to comply with 24 CFR Part 87, including the submission to Agency of completed certifications under Appendix A and disclosure forms under Appendix B. Se e also 2 CFR §200.450.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

ELIGIBILITY AND NON-DISCRIMINATION (SECTION 109). Subrecipient shall not employ discriminatory practices in the provision of services, employment of personnel, or in any other respect on the basis of race, color, religion, sex, national origin, ancestry, or physical or mental handicap, or age as more specifically set forth in 24 CFR §574.603, which requires compliance with the non-discrimination and equal opportunity requirements at 24 CFR Part 5 and Section 109 of the Act (42 USC §5301).

CIVIL RIGHTS COVENANT. As provided in 24 CFR §§ 5.105,and 574.603 and depending upon the type and nature of the grant of HOPWA funds, this Contract may be subject to the requirements of Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and Title VIII of the Civil Rights Act of 1968 (P.L. 90 -284) and HUD regulations. Subrecipient certifies that its activities under this Contract shall be conducted and administered in conformity with Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and Title VIII of the Civil Rights Act of 1968 (P.L. 90-284) and that it will comply with the other provisions of Titles 2 and 24 of the CFR and with other applicable laws, to the full extent of their application. Further, pursuant to Executive Order 11063 (as amended pursuant to Executive Order 12259) set out in 24 CFR Part 107, in the sale, lease or other transfer of land acquired, cleared or improved with assistance provided under the Contract, Subrecipient shall cause or require a covenant running with the land to be inserted in the deed or lease for such transfer, prohibiting discrimination upon the basis of race, color, religion, sex, or national origin, in the sale, lease or rental, or in the use or occupancy of such land or any improvements erected or to be erected thereon, and providing that the Agency and the United States are beneficiaries of and entitled to enforce such covenant. Subrecipient, in undertaking its obligation in carrying out the program assisted hereunder, shall take such measures as are nec essary to enforce such covenant and shall not itself so discriminate.

MINORITY/WOMEN’S BUSINESS ENTERPRISES REQUIREMENTS. This Contract is subject to minority and women's business enterprises requirements set forth in Executive Orders 12432, 11625, and 12138. Subrecipient shall take all reasonable steps necessary to encourage the participation of minority and female owned businesses in work under this Contract.

With regard to any work of construction funded with Project Funds, such steps may include, witho ut limitation, the following:

Obtaining the minority and Women's Business Enterprises Registry from the Agency MBE/WBE Coordinator to ensure such contractors receive an invitation to bid.

Advertising the invitation to bid or to submit proposals in the El Hispano and the Sacramento Observer as well as in a newspaper of general circulation in the Sacramento metropolitan area.

Reviewing the telephone directory or professional organization membership lists, or making direct contact with minority- or female-owned businesses for specialized trades and services, and inviting such firms to bid.

Subrecipient shall include the Minority and Women's Business Enterprises requirements, in the form prescribed by the Agency, in all contracts for use of funds under this Contract, and Subrecipient shall coordinate purchases of goods and services over $10,000 with the Agency's MBE/WBE Coordinator.

Subrecipient shall maintain documentation of outreach efforts to minority and/or female owned businesses. Additionally, Subrecipient shall maintain documentation of contract awards for the Quarterly Reports.

FLOOD DISASTER PROTECTION. Pursuant to the requirements of the Flood Disaster Protection Act of 1973 (42 USC §4001), Subrecipient shall not use or permit the use of any portion of the assistance provided under this Contract for acquisition or construction purposes as defined by the Director of the Federal Emergency Management Agency (42 USC §4003(a)(4)), for use in an area identified by the Director of the Federal Emergency Management Agency as having special flood hazards unless the community in which such area is located is then participating in the national flood insurance program (described at 42 USC §§4011) and the use of any such assistance shall be subject to the mandatory purchase of flood insurance requirements of 42 USC §4012a.

Any contract or agreement for the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this Contract shall contain, if such land is located in an area identified by the Director as having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, 42 USC §§4001 et seq., provisions obligating the transferee and its successors or assigns to obtain and maintain, during the ownership of such land, such flood insurance as required with respect to financial assistance for acquisition or construction purposes under the Flood Disaster Protection Act of 1973 (42 USC §4012a). Such provisions shall be required notwithstanding the fact that the construction on such land is not itself funded with assistance provided under this Contract.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

COMPLIANCE WITH AIR AND WATER ACTS. This Contract is subject to the applicable requirements of the Clean Air Act (42 USC §7401 et seq.), the Federal Water Pollution Control Act, (33 USC §1251 et seq.), and the corresponding regulations of the Environmental Protection Agency (40 CFR Parts 1-49). In compliance with said regulations, Subrecipient shall cause or require to be inserted in all contracts and subcontracts funded with Project Funds, and with respect to any transaction which is not otherwise exempt from such laws and regulations, all of the following requirements:

A stipulation by the contractor or subcontractor that any facility to be utilized in the performance of the contract or subcontract is not listed on the List of Violating Facilities issued by the Environmental Protection Agency (EPA).

Compliance with all the requirements of Section 114 of the Clean Air Act, (42 USC §7414c-8) and Section 308 of the Federal Water Pollution Control Act, (33 USC §1318) relating to inspection, monitoring, entry, reports, and information, as well as all other requirements specified in said Section 114 and Section 308, and all regulations and guidelines issued thereunder.

A stipulation that, as a condition for the award of the contract, prompt notice shall be given to Agency by Subrecipient or the prospective contractor or subcontractor of any notification received from the Director, Office of Federal Activities, EPA, indicating that a facility utilized or to be utilized for the contract is under consideration to be listed on the EPA List of Violating Facilities.

Agreement by the contractor that he or she shall include or cause to be included the criteria and requirements in this Section 19a through 19c of this Section in every non-exempt subcontract and requiring that the contractor shall take such action as the government may direct as a means of enforcing such provisions.

In no event shall any amount of the assistance provided under this Contract be utilized with respect to a facility which has given rise to a conviction under Section 113(c)(1) (42 USC §7413) of the Clean Air Act or Section 309(c) (32 USC §1319) of the Federal Water Pollution Control Act.

RELOCATION. This Contract is subject to the requirements of Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC §4601 et seq.) and HUD implementing regulations at 24 CFR Part 42 and CFR §574.630. Subrecipient shall not undertake any of the work contemplated under this Contract if relocation is involved without first obtaining written approval from Agency. Subrecipient shall inform affected persons of the relocation assistance policies and procedures set forth in the regulations at 24 CFR Part 42 and 24 CFR 574.630.

PROPERTY OWNERSHIP AND PROCUREMENT. The Subrecipient, shall, in the acquisition or im provement of real and personal property with funds provided under this Contract, be subject to all applicable provisions of the Federal Requirements.

General property and procurement guidelines are contained in 2 CFR §§ 200.310 -200.316 and 2 CFR §§ 200.317-200.326, respectively. In all cases in which personal property is sold, the proceeds shall be transferred to Agency for the HOPWA program or shall be Program Income, and, personal property not needed by the Subrecipient shall be transferred to Agency for the HOPWA program or shall be retained by Subrecipient after compensating the Agency.

Real property shall be acquired in accordance with Title III, Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (24 CFR Part 42) and 24 CFR §574.630.

USE OF DEBARRED, SUSPENDED OR PROHIBITED PARTIES. Subrecipient shall not use any Project Funds, directly or indirectly, to award contracts to, or otherwise engage the services of, or f und any contractor or subrecipient during any period of debarment, suspension or placement in ineligibility status under the provisions of 2 CFR Part 2424, 2 CFR Part 180, and 2 CFR §200.213. Subrecipient will verify that the Federal Debarred List Registry does not include any contractor or subrecipient prior to awarding contracts and that they will record the date that the Registry was consulted. Subrecipient acknowledges this requirement by initialing here:

Subrecipient initials_____
DAVIS BACON ACT AND STATE PREVAILING WAGES. The provisions of the Davis -Bacon Act do not apply to the HOPWA Program (24 CFR §574.655). However, if this Contract is for construction, alteration, or repair (including painting and decorating) of public buildings or public work s, California State Prevailing wages may apply (California Labor Code §1720 et seq.), in which case Subrecipient must comply with the provisions of California Labor Code §1720 et seq. and all rules, regulations and orders promulgated under said statutes.

FEDERAL LABOR STANDARDS. For construction, rehabilitation, alteration, or repair of real property funded with Project

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Funds, Subrecipient shall comply, and shall cause all subcontractors on such work to comply, with the applicable provisions of the Contract Work Hours and Safety Standards Act, as amended, (40 USC §3701 et seq.) and all rules, regulations and orders promulgated under said Acts. Among other provisions, said Acts establish minimum wages and fringe benefits; prohibit deductions or rebates from payments; provide for the withholding of funds to assure compliance with wage provisions; and provide for the termination of the contract and debarment of the contractor for failure so to comply.

Subrecipient shall also comply, and shall cause all subcont ractors on such work to comply, with all other applicable HUD labor requirements, including, without limitation, the requirements of 29 CFR Parts 3 and 5, which govern the payment of wages and the ratio of apprentices and trainees to journeymen. If wage rates higher than those required under such regulations are imposed by state or local law, nothing in this Contract is intended to relieve Subrecipient of its obligations, if any, to require payment of the higher rates. Subrecipient shall cause or require to be inserted, in all such contracts, provisions which subject the parties to the Federal Labor Standards Provision and all other applicable regulations and requirements of HUD. Subrecipient shall not award any contract subject to the provisions of Section 25 of the Contract to any contractor who is at the time ineligible under the provisions of any applicable regulations of the Department of Labor to receive an award of such contract.

ECONOMIC OPPORTUNITY EMPLOYMENT REQUIREMENTS. The following is applicable to all contracts related to the project which is the subject of this Contract.

The contract requires that, to the greatest extent feasible, opportunities for training and employment be given to lower-income residents of the project area.

The parties to this Contract certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements.

Contractor will send to each labor organization or representative of workers with which he or she has a collective bargaining agreement or other contract or understanding, if any, a notice advising the said labor organization or workers' representative of his or her commitments under this Employment Clause and shall post copies of the notice in conspicuous pl aces available to employees and applicants for employment or training.

Contractor will include this Employment Clause in every subcontract for work in connection with the project.

Good Faith Effort. Each Contractor or subcontractor undertaking work in con nection with a Section 3 covered project must fulfill his or her obligation to utilize lower -income project area residents as employees to the greatest extent feasible by:

Identifying the number of positions in the various occupational categories including skilled, semi-skilled, and unskilled labor, needed to perform each phase of the Section 3 covered project; Identifying the positions described in Paragraph (1) of this Section, the number of positions in the various occupational categories which are currently occupied by regular, permanent employees; Identifying the positions described in Paragraph (1) of this Section, the number of positions in the various occupational categories which are not currently occupied by regular permanent employees; Establishing the positions described in Paragraph (3) of this Section, a goal which is consistent with the purpose of this subpart within each occupational category of the number of positions to be filled by lower -income residents of the Section 3 covered project area;
Making a good faith effort to fill all of the positions identified in Paragraph (4) of this Section with lower income project area residents first and foremost, through the First Source Program; and Making a good faith effort to fill of the positions i dentified in Paragraph (4) of this Section with lower - income project area residents.

ARCHITECTURAL BARRIERS ACT. Subrecipient shall comply with the Architectural Barriers Act of 1968 (42 USC §4151), as applicable, which Act requires that the design of any facility, except a private residence, that is constructed, renovated, remodeled or rehabilitated with funds received pursuant to this Contract shall comply with the "American Standard Specification for Making Buildings and Facilities Accessible, and Usable by, the Physically Handicapped," as described in 41 USC §§ 101-4712, and Subrecipient shall cooperate with Agency in its inspections pursuant to such provisions.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

LEAD-BASED PAINT. The use of lead -based paint is prohibited in any residential structure constructed or rehabilitated with Project Funds, which prohibitions are further described in 24 CFR Part 35.. For those properties constructed prior to 1978, Subrecipient shall assure that rehabilitation applicants, purchasers or tenants, as the case may be, shall be notified (i) that the property may contain lead-based paint, (ii) of the hazards of lead-based paint, (iii) of the symptoms and treatment of lead-based poisoning (iv) of the precautions to be taken to avoid lead-based paint poisoning (including maintenance and removal techniques for eliminating such hazards), (v) of the advisability and availability of blood level screening for children under the age of seven years of age, an d (vi) that, in the event lead -based paint is found on the property, appropriate abatement procedures may be undertaken. Subrecipient shall follow the procedures for the elimination of lead-based paint hazards, to the extent required under 24 CFR 574.635.

FOOD, TRAVEL AND ENTERTAINMENT. Travel costs may include expenses for transportation, lodging and subsistence and are only allowable for employees who are in travel status on official business and approved as part of this contract or with prior written approval and are specifically related to this contract. Costs must be considered reasonable and do not exceed charges allowed by contractor’s Out of Town Travel Policy. See 2 CFR §200.474 for additional information on travel costs and www.shra.org for the Out of Town Travel Policy.

The costs of entertainment, including amusement, diversion, and social activities and any associated costs are unallowable, except where specific costs that might otherwise be considered entertainment have a programmatic purpose and are authorized either in th e approved budget for the Federal award or with prior written approval. All entertainment costs must comply with 2 CFR §200.438. In addition, the costs of alcoholic beverages are unallowable per 2 CFR §200.423.

BUILD AMERICA, BUY AMERICA. Subrecipient must comply with the requirements of the Build America, Buy America (BABA) Act, 41 USC 8301 note, and all applicable rules and notices, as may be amended, if applicable to the Subrecipient’s project. Pursuant to HUD’s Notice, “Public Intere st Phased Implementation Waiver for FY 2022 and 2023 of Build America, Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance” (88 FR 17001), any funds obligated by HUD on or after the applicable listed effective dates, are subject to BABA requirements, unless excepted by a waiver.

CHANGES IN LAWS AND REGULATIONS. In the event an applicable law or regulation is modified or eliminated, or new law or regulation is adopted, the revised law or regulation shall automatically supersede the contract’s scope of work and any attachments. The most current exhibits, laws and regulations will be posted at www.shra.org.

OTHER PROGRAM REQUIREMENTS. Agency must provide Subrecipient with all relevant prog ram information regarding the federal programs having jurisdiction over this Contract. Agency must assist Subrecipient in the interpretation of the requirements of such programs. Subrecipient shall be considered to be familiar with the requirements of such programs and shall comply with such requirements.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

EXHIBIT 3

Compliance Violations and Actions

COMPLIANCE VIOLATIONS AND ACTIONS
(All payments due and payable within 30-days of assessment)

Tenant Eligibility and Affordability Violations
Compliance
Violation
Fees and Actions* Corrective Time Period
Tenants over income
at
initial move-in
Initial $500 per unit, again every 90 days
until another income qualified tenant is
housed.

Correction: Evict tenant if tenant fraud.

Otherwise, next available unit must be
Affordable and rented to an Income-
Qualified tenant.
90 days from discovery date to avoid additional
$500 charge every 90-days the problem is not
corrected.

Incorrect eligibility
documentation
Initial $50 per file for incorrect
calculations, verifications, or required
documents. Additional $50 per month if
not corrected.

Correction: Submit copies of corrections
to compliance staff as applicable.
30 days from discovery date to submit copies of
corrections to compliance staff to avoid additional
$50 per month if not corrected
Failure to complete
annual
recertifications
Initial $250 for each incomplete file.

Additional $50 per month if not corrected.

Correction: Submit copies of
recertifications to compliance staff.
30 days from discovery date to submit corrections
to avoid additional $50 per month if not
corrected.

Failure to maintain
tenant eligibility
records
Initial $500 per unit, again every 90-days
thereafter until new records in place.

Additional $100 per unit per month the
project remains out of compliance.

Correction: Immediately establish new
files/records.
30 days from discovery date to submit copies of
new records to avoid additional $100 per unit per
month the project remains out of compliance.

Incorrect Rents Reimbursement to tenant of the entire
amount overcharged. $100 payment to
Agency for each over-charged unit.

Correction: Refund tenant with letter of
correction.
30 days from discovery date to avoid additional
$100 per overcharged unit per month fee to
Agency.

Failure to submit
complete and
accurate monthly
Bond Report by due
date
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
7 days from discovery date to submit complete
and accurate report to avoid additional $100 per
day charge.

Failure to submit
annual required audit
documentation
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable
7 days from discovery date to submit complete
and accurate report to avoid additional $100 per
day charge.

Failure to comply
with approved
Management Plan
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
30 days from discovery date to submit corrections
to avoid additional $100 per day charge.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Failure to submit
complete and
accurate quarterly
Resident Services
report by due date
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
7 days from discovery date to submit corrections
to avoid additional $100 per day charge.

Failure to provide a
resident service
required by Resident
Services Plan
Initial $250 per service. Additional $100
per day until service is provided.

Correction: Implement required service or
new resident services plan submitted and
approved; approved plan implemented.
7 days from discovery date to implement required
service or provide new resident services plan to
avoid additional $100 per day charge; 30 days
from discovery date to implement new plan to
avoid additional $100 per day charge.

Failure to employ and
SHRA approved
Management
Company
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
7 days from discovery date to submit corrections
to avoid additional $100 per day charge.

Failure to employ an
SHRA approved
Resident Services
Provider
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
7 days from discovery date to submit corrections
to avoid additional $100 per day charge.

Noncompliant lease $100 per noncompliant lease.

Correction: Prepare and execute approved
lease or addendum to address the
deficiency.
30 days from discovery date to avoid additional
$100 per noncompliant lease per month charge to
Agency.

Failure to provide
residents proper
notice of unit
inspections
Initial $200 per unit. Additional $75
reinspection fee

Correction: Submit copies of notices to the
compliance staff.
7-days from discovery date to avoid additional
$75 per day each day thereafter corrective action
not taken.

Housing Quality Standards Violations
Compliance
Violation
Fees and Actions* Corrective Time Period
Verifiable existence
of Toxic Mold
$200 per unit. Additional $75 per day
charge each time efforts fall outside of
corrective timeframes.

Correction: Prepare and submit action plan
that addresses scope of work and timetable
to complete. Relocate tenant if necessary.

Obtain certified clearance that mold has
been abated and unit is safe to occupy
once again.
3-days from discovery date to submit action plan
to address. 10-days to relocate tenant if necessary.
30-days to obtain certification that unit is mold
free. $75 per day additional charge each time
efforts fall outside of these timeframes.

Broken pipes and
plumbing facilities
$200 per unit. Additional $75 charge per
day if not corrected.

Correction: Repair/replace as necessary
7-days from discovery date to avoid additional
$75 per day each day thereafter corrective action
not taken.

Smoke detectors not
working in the units
$200 per unit with non-functional smoke
detector. Additional $75 charge per day if
not corrected.

Correction: Replace batteries or non-
working unit within 24 hours.

Within 24 hours of discovery date to avoid $75
per day additional charge each day thereafter
corrective action not taken.

Windows with large
cracks or missing
glass
$200 per unit. Additional $75 charge per
day if not corrected.

Correction: Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.

Infestation of roaches
or vermin
$200 per infested unit. Additional $75
charge per day if not corrected.

Correction: Letter from pest control
company verifying removal of pests with
paid invoice to compliance staff.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Non-working heating
unit (Winter) or air
conditioning unit
(Summer)
$500 per nonworking unit. Additional $75
charge per day if not corrected. $75 re-
inspection fee if necessary to verify
problem corrected.

Correction: Repair/replace as necessary.

Within 24 hours of discovery date to avoid $75
per day additional charge each day thereafter
corrective action not taken.

Excessive amount
of urine/ feces
$200 per unit. Additional $75 charge per
day if not corrected.

Correction: Clean unit as necessary and
address problem as the lease allows.

Submit correction letter with
documentation to compliance staff.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.

Excessive amount of
trash/garbage in the
unit
$75 per unit. Additional $75 charge per
day if not corrected.

Correction: Clean unit and send letter of
correction to compliance staff.
14-days from date of discovery to avoid an
additional $75 per day thereafter each day
corrective action not taken.

Hazardous exterior
conditions
$500 for hazardous conditions. Additional
$75 charge per day if not corrected. $75
re-inspection fee.

Correction: Clean and/or repair as
necessary. Re-inspection to verify problem
addressed.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

Large holes
walls/ceiling
$100 per unit. Additional $75 charge per
day if not corrected.

Correction: Submit correction letter with
documentation to compliance staff.
30-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

Non-Operable
Security Gate
$500 per non-working gate. Additional
$75 charge per day if not corrected. $75
re-inspection fee if necessary to verify
problem corrected.

Correction: Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

No Security Cameras
(if cameras required)
$250 per discovery. Additional $75
charge per day if not corrected. $75 re-
inspection charge to verify problem
corrected.

Correction: Replace cameras.
30-days from the date of discovery to avoid $75
per day additional charge each day thereafter
corrective action not taken.

Non-working
Security Cameras
$100 per camera per discovery.

Additional $75 charge per day if not
corrected. $75 re-inspection charge to
verify problem corrected. Correction:

Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

Non-working or non-
accessible
amenities/services
$100 per item per discovery. Additional
$75 charge per day if not corrected. $75
re-inspection charge to verify problem
corrected. Correction: Repair/replace as
necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

* No compliance fee will be assessed for one incident of each type of compliance violation per annual inspection provided the violation is corrected within the specified corrective time period. The second and subsequent violations will be assessed compliance fees as detailed in the Tenant Eligibility and Affordability Violations and Housing Quality Standards Violations tables.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Exhibit 7a: Funding Requirements

CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (HCD)

LOCAL HOUSING TRUST FUND (HCD-LHTF)

FINANCING FOR RESIDENTIAL RENTAL PROPERTY

These “HCD HCD-LHTF Funding Requirements” are attached to the Loan and Regulatory Agreements (“Agreements”), and are incorporated in such Agreements. The capitalized terms used in these HCD HCD -LHTF Funding Requirements shall have the meanings below in the body of these HCD HCD -LHTF Funding Requirements. Terms being defined are indicated by quotation marks. Capitalized terms in these HCD HCD -LHTF Funding Requirements that are not defined below are defined in the Agreements. Project specific restrictions are set forth in Section 3 of the Regulatory Agreement.

7. RECITALS. The Loan is funded by the Agency (as that term is defined in the Regulatory Agreement) with proceeds of the California Department of Housing and Community Development (Department) Local Housing Trust Fund Program (“HCD - LHTF””). Under the HCD-LHTF Program, the Department provides matching grants to eligible Applicants that have a Local Housing Trust Fund. Pursuant to Health and Safety Code Sections 50842.1, 50842.2, and 54006(f), and the Local Housing Trust Fund Final 2020 Guidelines issued by the Department, HCD-LHTF Program Funds shall be used to make construction loans and/or permanent financing loans to pay for predevelopment costs, acquisition costs, and other costs associated with development or rehabilitation of affordable rental housing projects.

The Agency has approved the Loan on condition that the property securing the Loan (“Property”) is rehabilitated or developed as residential rental property (“Project”) with certain units regulated in accordance with HCD-LHTF (“HCD-LHTF-Assisted Units”) by recordation of these HCD -LHTF Fundin g Restrictions as covenants running with the land. The Agency is allocating $3,700,000 of HCD -LHTF to the Central Sacramento Studios Phase II Project and $3,900,000 in City Housing Trust funds to serve as the required match . HCD-LHTF-Assisted Units are ma de affordable by such regulation to persons and households that qualify as low -income, very low-income, or extremely low-income as indicated in the table in Article I of the Regulatory Agreement. The development of the Project will benefit the Project Area because the Project will provide housing for persons who work within the Project Area. The Project is located within the County of Sacramento. Most Project Area workers live outside of the Project Area and come from throughout the County, including the v icinity of the Property.

8. AFFORDABILITY REQUIREMENTS. Owner shall assure that all of the Assisted Units assisted with HCD -LHTF and matching funds shall be rented at or below the following rates:

g. Low-Income Units shall be rented for not more than thirty pe rcent (30%) of eighty percent (80%) of the Sacramento Metropolitan Statistical Area median income (“Annual Median Income”), as determined annually by the federal Department of Housing and Urban Development and the California Department of Housing and Commu nity Development as adjusted for family size appropriate to the size and number of bedrooms in the respective HCD -LHTF-Assisted Unit. h. Very Low-Income Units: The monthly rental payment shall not exceed one -twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of the Annual Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective HCD-LHTF-Assisted Unit.
i. Extremely Low-Income Units: The monthly rental payment shall not exceed thirty percent (30%)thirty percent (30%) of thirty percent (30%) of the Annual Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective HCD-LHTF-Assisted Unit.

j. Unless Owner has obtained prior written Agency authorization, Owner shal l maintain the allocation of HCD -LHTF- Assisted Units by the bedroom sizes stated in the Regulatory Agreement.

k. Owner shall be responsible to determine the affordable rents for the Assisted Units. Within ten (10) days of Owner request, Agency shall provide all information necessary for Owner to compute such affordable rents and will assist Owner in determining such rents.
l. Affordability restrictions are outlined below

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Agency Funding
Source: Affordability Level:

Number of
Restricted
Units:

Type of Restricted Units:

Maximum
Initial Rent
per
Restricted
Unit per
Month:

HCD - LHTF 30% 14 Studio Bedroom $618.75
HCD - LHTF 30% 7 One Bedroom $707.50
HTF 30% 14 Studio Bedroom $618.75
HTF 30% 7 One Bedroom $707.50
Total Restricted
Units:
42 9. OCCUPANCY REQUIREMENTS. Owner shall assure that all Assisted Units assisted with HCD -LHTF and matching funds shall be occupied by households earning less than sixty percent (60%) of Annual Median Income.

10. UNIT QUALITY. Owner shall assure that Assisted Units assisted with HCD -LHTF and matching funds must be comparable in size and amenities to other units in the Project. The Agency is allocating $ 3,700,000of HCD-LHTF to the Project and $3,900,000in City Housing Trust Funds to serve as the required match

11. RECORDKEEPING AND REPORTING. Not later than June 1 of each calendar year, Owner shall provide to Agency an annual report, in a format specified by Agency, including, but not limited to, the following information:

a. Work undertaken or completed in the reporting period, including the number, type, and unit count of dwelling units receiving HCD-LHTF and matching Funds;
b. Activities planned to be undertaken in the next reporting period; c. Description of problems encountered in Project implementation; and a description of the solution and when it will be implemented; and
d. A financial summary including the amount of HCD -LHTF and matching funds available at the beginning of the reporting period, the amount drawn from the funds to date, the amount expended on dwelling units restricted to Extremely Low Income Households, the amount expended on dwelling units restricted to Moderate Income Households, and the remaining balance.

12. TERM. These covenants shall burden and regulate the Assisted U nits assisted with HCD-LHTF and matching funds for a term of fifty-five (55) years.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Exhibit 7b: Funding Requirements

HTF FUNDING REQUIREMENTS
HOUSING TRUST FUND – CITY OF SACRAMENTO

FINANCING FOR RESIDENTIAL RENTAL PROPERTY

These “HTF Funding Requirements” are attached to a Regulatory Agreement, and are incorporated in that Regulatory Agreement. In turn, the Regulatory Agreement is incorporated in the Loan that is described in the Regulatory Agreement.

The capitalized terms used in these HTF Funding Requirements shall have the meanings below in the body of the these HTF Funding Requirements. Terms being defined are indicated by quotation marks. Capitalized terms in these HTF Funding Requirements that are not defined below are defined in the Regulatory Agreement.

3. RECITALS. The Loan is funded by the Agency with proceeds of the Housing Trust Fund (“HTF”) of the City of Sacramento.

The Agency has approved the Loan on condition that the property securing the Loan (“Property”) is rehabilitated or developed as residential rental property (“Project”) with certain units regulated in accordance with the HTF (“HTF -Assisted Units”) by recordation of these HTF Funding Restrictions as covenants running with the land. The Project has been d etermined to be within a seven-mile distance from the non-residential projects generating the funds or has access to existing or planned public transit such that it is reasonable that tenants of the Project could commute from the Project to the non -residential projects generating the funds. The Project conforms to any City “Fair Share” plan currently adopted and in effect. HTF -Assisted Units are made affordable by such regulation to persons and households that qualify as low -income or very low -income as indicated in the table in Article I of the Regulatory Agreement. The development of the Project will benefit the Project Area because the Project will provide housing for persons who work within the Project Area. The Project is located within the City of Sacramento (“City”). Most Project Area workers live outside of the Project Area and come from throughout the City, including the vicinity of the Property.

4. AFFORDABILITY REQUIREMENTS. Owner shall assure that all of the HTF -Assisted Units assisted with HTF funds shall be rented at or below the following rates:

a. Low-Income Units shall be rented for not more than thirty percent (30%) of eighty percent (80%) of the Sacramento Metropolitan Statistical Area median income (“Median Income”), as determined annually by the federal Department of Housing and Urban Development, as adjusted for family size appropriate to the size and number of bedrooms in the respective HTF-Assisted Unit.

b. Very Low-Income Units shall be rented for not more than thirty percent (30%) of fifty percent (50%) of the Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective HTF -Assisted Unit.

c. Unless Owner has obtained prior written Agency authorization, Owner shall maintain the allocation of HTF-Assisted Units by the bedroom sizes stated in the Regulatory Agreement.

d. Owner shall be responsible to determine the affordable rents for the HTF -Assisted Units. Within ten (10) days of Owner request, Agency shall provide all information necessary for Owner to compute such affordable rents and will assist Owner in determining such rents.

5. OCCUPANCY REQUIREMENTS. Owner shall assure that all HTF -Assisted Units shall be occupied by hous eholds earning less than eighty percent (80%) of Median Income.

6. UNIT QUALITY. Owner shall assure that Assisted Units assisted with HTF funds must be comparable in size and amenities to other units in the Project.

7. TERM. These covenants shall burden and regulate the HTF-Assisted Units for a term of fifty-five (55) years.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Exhibit 7c: Funding Requirements

HOPWA AND OTHER FEDERAL REQUIREMENTS
The following provisions shall be applicable to this Contract and binding on Subrecipient and Agency only if all or part of the funds to be paid for work performed under this Contract are provided under the Housing Opportunities for Persons with Aids Program administered by the United States Department of Housing and Urban Development. In the event of a dispute as to the applicability of any of the following provisions to Subrecipient’s work under this Contract, Agency’s determination shall be final.

1. DEFINITIONS. For purposes of this Contract and in addition to definitions made elsewhere in this Contract, the following quoted words and phrases contained in this Contract shall have the following meanings:
a. The “Act” is the federal Housing and Community Development Act of 1974, as amended. b. “Allocable Costs” are particular to a Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. See 2 CFR §200.405.
c. “Contract Provisions” refers to “Attachment 1: Contract Provisions.” This Attachm ent 3 contains the provisions common to all Agency administered HOPWA agreements.
d. “Cost Objective” generally means a service, program, project or activity in which costs can be assigned to and measured from. See 2 CFR §200.28.
e. “Direct Costs” are tho se costs that can be identified specifically with a particular final cost objective or other internally or externally funded activity, or that can be directly assigned to such activities relatively easy with a high deg ree of accuracy. See 2 CFR §200.413.
f. “HOPWA” is the federal Housing Opportunities for Persons with AIDS program administered by HUD. “CFR” is the Code of Federal Regulations.
g. “HOPWA Requirements” are the laws, rules and regulations (other than the Act) which are specifically applicable to this Contract. A substantial portion of the HOPWA Requirements are included in this Attachment 3. h. “Indirect Costs” Indirect costs” means those costs incurred for a common or joint purpose benefitting more than one cost objective and not readily assign able to the cost objectives specifically benefitted without effort disproportionate to the results achieved. See 2 CFR §§ 200.56, 200.413, and 200.414 i. “HUD” is the United States Department of Housing and Urban Development. j. “OMB” is the federal Office of Management and Budget. k. “Program Income” is defined in 2 CFR §200.80. Generally, Program Income is income to Subrecipient that is generated from the use of HOPWA funds under this Contract. Program Income may include, without limitation, proceed s of the sale, rent or lease of real or personal property acquired with such funds, principal and interest payments on loans of su ch HOPWA funds, and interest earned on other Program Income. l. “Project Funds” are the funds to be paid to the Subrecipient u nder this Contract. All Project Funds are funds disbursed to the Recipient and Agency under the HOPWA Program. m. “Quarterly Reports” are required to be submitted by Subrecipient in accordance with 2 CFR 200.328(b)(1). See 2 CFR §200.327, 200.328, 200.329, 200.512, 24 CFR Part 91, and 24 CFR §574.520 for additional reporting requirements. n. “Reasonable Costs” include costs that are generally recognized as ordinary and necessary for the operation or efficient performance of the contract or award and do not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. See 2 CFR §200.404. o. “Subrecipient” is the Contractor as defined elsewhere in this Contract.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

2. EXHIBITS. Exhibits to this Attachment are located online at www.shra.org and contain a substantial portion of the Federal Requirements and are incorporated into this Contract.

Subrecipient acknowledges they have reviewed and accept these Exhibits by initialing here: _____ :
a. Exhibit 1 – HOPWA Regulations: 24 CFR Part 574.
b. Exhibit 2 – Requirements for Nonprofit Subrecipients. 2 CFR §200.70 and Appendix VIII to 2 CFR Part 200. c. Exhibit 3 – Grants and Agreements with Institutions of Higher Education, Hospitals an d Other Nonprofit Organizations [applies only to Subrecipients who are not a state or local government or a public agency]. See also 2 CFR §§ 200.52, 200.55, and Appendix VIII to 2 CFR Part 200.
d. Exhibit 4 - Cost Principles for Nonprofit Organizations [a pplies only to Subrecipients who are not a state or local government, a public agency or an educational institution]. See 2 CFR §200.70, and Appendix VIII to 2 CFR Part 200. e. Exhibit 5 – Audits of Institutions of Higher Education and Other Nonprofit Orga nizations [applies only to Subrecipients who are not a state or local government or a public agency]. See also 2 CFR §§ 200.55, 200.418, 200.419, and Appendix III to 2 CFR Part 200.
f. Exhibit 6 – Cost Principles for Educational Institutions [applies only to Subrecipients who are an educational institution]. See CFR §§ 200.418 and 200.419.
g. Exhibit 7 –Principles for determining Costs Applicable to Grants and Contracts with State, Local and Federally - Recognized Tribal Indian Governments [applies only to Subrecipients who are a state or local government, a public agency. 2 CFR §§ 200.416, 200.417, and Appendix VII to 2 CFR Part 200. h. Exhibit 8 – Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. 2 CFR Part 200; see also 2 CFR §§200.416, 200.417, and Appendix VII to 2 CFR Part 200. i. Exhibit 9 – New Restrictions on Lobbying. 24 CFR Part 87; see also 2 CFR §200.450. j. Exhibit 10 – Federal Labor Standards Provisions; 29 CFR §5.5. k. Exhibit 11 – Executive Order 12432 – M/WBE; see also 2 CFR §200.321. l. Exhibit 12 – Executive Order 12138 – M/WBE; see also 2 CFR Section §200.321. m. Exhibit 13 – Executive Order 11625 – M/WBE and Agency assembled M/WBE materials. n. Exhibit 14 – Executive Order 11246, as amended – Equal Opportunity. o. Exhibit 15 – Executive Order 13166 – Limited English Proficiency Access. p. Exhibit 16 – Equal Access to Housing and HUD Programs Regardless of Sexual Orientation or Gender Identity: 24 CFR Parts 5, 200, 570, 574, 882, 891 and 982
q. Exhibit 17 – Generally Applicable HUD Program Requirements; Waivers. 24 CFR Part 5.Exhibit 18. CPD Notice 15-02 – Appropriate Placement for Transgender Persons in Single Sex Emergency Shelters and Other Facilities. r. Exhibit 20 – Notice CPD 06-07 Standards for HOPWA Short-Term Rent, Mortgage, and Utility (STRMU) Payments and Connections to Permanent Housing.

3. FINDINGS AND REPRESENTATIONS. This Contract has been made for the following purposes and based upon the following representations of the parties:

In accordance with the provisions of California Government Code §53703, Agency possesses full powers for the purpose of administering the expenditure of funds received under the federal Housing and Community Development Act of 1974, as

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

amended, Housing Opportunities for Persons with AIDS Grant program, administered by the United States Department of Housing and Urban Development.
a. Agency has determined that the fulfillment of Subrecipient’s obligations under this Contract serves the pu rposes of community improvement and welfare.
b. Pursuant to the provisions of California Government Code §53703 and after public hearing, Subrecipient has been allocated HOPWA funds for the uses and activities of this Contract. c. Agency and Subrecipient a re subject to all laws, rules and regulations regarding the use of HOPWA funds for the purposes and activities stated in this Contract.

4. SECTION 3 REQUIREMENTS. Owner shall ensure compliance with the following Section 3 Requirements. The terms used in th is Section shall have the meanings assigned to them in 24 CFR Part 75. Further, Owner shall ensure all Covered Contracts, as defined in 24 CFR Part 75, related to the Project contain the provisions set forth in this Section 4, subsections a through g (the “Section 3 Clause”):
a. The work to be performed under this contract is subject to the requirements of section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (section 3). The purpose of section 3 is to ensure that employmen t and other economic opportunities generated by HUD assistance or HUD -assisted projects covered by section 3, shall, to the greatest extent feasible, be directed to low - and very low -income persons, particularly persons who are recipients of HUD assistance for housing.
b. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 75, which implement section 3.

As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the part 75 regulations. c. The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other unders tanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this section 3 clause, and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the section 3 preference, shall set forth minimum number and job titles subject to hire, availability o f apprenticeship and training positions, the qualifications for each; and the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. d. The contractor agrees to include this section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 75, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR part 75. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 75.
e. The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 CFR part 75 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR part 75.
f. Noncompliance with HUD's regulations in 24 CFR part 75 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts. g. With respect to work performed in connection with section 3 covered Indian housing assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Sectio n 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and sub contracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this contract that are subject to the provisions of section 3 and section 7(b) agree to comply with section 3 to the maximum extent feasible, but not in derogation of compliance with section 7(b).

5. COSTS. All costs must be must be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles per 2 CFR §§ 200.403 and 404. Classifying a particular cost as direct or indirect

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

depends on whether it can be identified dire ctly with a cost objective (such as a project or activity) without disproportionate effort. All costs must comply with 2 CFR Part 200, Subpart E-Cost Principles (2 CFR §§ 200.420-200.475).

The contractor may elect, but is not required, to charge for indir ect costs. If the contractor chooses to charge for indirect costs, the maximum indirect cost rate is 10% (de minimis), unless an indirect cost rate has been previously negotiated with and approved by the federal agency responsible for reviewing, negotiati ng and approving cost allocation plans or indirect cost rate proposals. The negotiated rate must be accepted by all federal awarding agencies.

6. ADDITIONAL RESTRICTIONS OF FUNDS. Subrecipient acknowledges that the funds for this Contract are HOPWA funds, the amount of which has been established after public hearing and that Agency has no authority to change the Project Funds except after public hearing and Recipient approval. Therefore, and notwithstanding any other provision of this Contract, the parties agree that the total compensation and reimbursement for all services and expenses required during the term of this Contract shall not exceed the Project Funds. Subrecipient shall provide, from whatever source, all additiona l funds necessary to fulfill Subrecipient’s obligations under this Contract. a. If Subrecipient incurs additional expenses or does additional work related to this Contract, Subrecipient shall bear all such costs and expenses unless the Agency has executed a written amendment to this Con tract prior to Subrecipient’s having incurred such costs and expenses.
b. Subrecipient shall use proceeds of this Contract only for the purposes stated in this Contract, as described in the Scope of Work, and strictly in compliance with all applicable laws, rules and regulations. c. If Subrecipient is not a state or local government, educational institution or public agency, Subrecipient shall fully comply with the regulations, policies, guidelines and requirements Subrecipient shall deposit any advance under this Contract in an interest bearing account and, unless specified otherwise in this Contract, shall remit any interest earned over $100 to the Agency.
d. Project Funds shall not be used for any religious purposes, which prohibition is further described in 24 CFR §§ 5.109 and 574.300(c).
e. In the event of suspension or termination of this Contract, Subrecipient shall return unused funds to the Agency. If the Subrecipient improperly retains funds, the Agency may retain funds from future disbursements t o the Subrecipient. In accordance with 2 CFR §§ 200.338 and 200.339, suspension or termination may occur if Subrecipient materially fails to comply with any term of the award, and the award may be terminated for convenience in accordance with 2 CFR §§ 200.338,200.339, 200.340, 200.341, and 200.342.

7. RESEARCH AND DEVELOPMENT (R & D). Funds may not be used for R & D. R & D means all research and development related activities, both basic and applied, that are performed by non -Federal entities. See 2 CFR § 2 00.87 for additional information on R & D.

8. RETURN OF PROGRAM INCOME. Subrecipient shall report receipt of all Program Income and return all Program Income to the Agency.

9. ANTI-KICKBACK RULES. Monthly, or more often, Subrecipient must, without condit ion, pay the salaries of architects, draftsmen, technical engineers and technicians performing work under this Contract. Such payments shall be made without deduction or rebate, excepting only such payroll deductions as are mandatory by law or permitted by applicable regulations issued by the Secretary of Labor pursuant to the "Anti -Kickback Act" of June 13, 1937 (18 U.S.C., §874).

Subrecipient shall comply with all applicable "Anti -Kickback" regulations and shall insert appropriate provisions in all subcontracts covering work under this Contract to ensure compliance by subcontractors with such regulations. Subrecipient shall be responsible for the submission of affidavits required of subcontractors under this Contract, except for such variations or exemptions as the Secretary of Labor may specifically allow.

10. WORK HOURS. Subrecipient must comply with the provisions of the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 3701 -3708) and must cooperate with Agency in implementing and enforcing the provisions of such Act.

Among other requirements of the act, Subrecipient must pay not less than one and one-half times the basic rate of pay for the work of Subrecipient's employee in excess of eight hours in one day or forty hours in one week in the per formance of this Contract. Subrecipient must insert appropriate provisions in all subcontracts covering work under this Contract to ensure compliance with such Act. Subrecipient must meet and cooperate with Agency's Labor Compliance officer to assure compliance with such Act.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

11. WITHHOLDING OF SALARIES. If, in the performance of this Contract, there is any underpayment of salaries by Subrecipient or by any subcontractor, Agency must withhold from Subrecipient out of payments due to him or her any amount sufficient to pay employees underpaid the difference between the salaries required under this Contract to be paid and the salaries actually paid such employees for the total number of hours worked. The amounts withheld shall be disbursed by Agency for and on account of Subrecipient or subcontractor to the respective employees to whom they are due.

12. CLAIMS AND DISPUTES PERTAINING TO SALARY RATES. Claims and disputes pertaining to salary rates or to classification of architects, draftsmen, technical engineers and technicians performing work under this Contract must be promptly reported in writing by Subrecipient to Agency for the latter's decision which shall be final with respect thereto.

13. CONFLICT OF INTEREST. No member, officer or any employee of Subrecipient, or its designees or agents, who exercises any functions or responsibilities with respect to the program during his or her tenure or for one (1) year thereaft er, shall have an interest, direct or indirect, in any contract or its proceeds, for wor k to be performed in connection with the program assisted under this Contract. Subrecipient must incorporate, or cause to be incorporated, in all subcontracts a provision prohibiting such interest pursuant to the purposes of this Section. In the procuremen t of supplies, equipment, construction, and services by Subrecipient, the conflict of interest provisions in 2 CFR §§ 200.318 and 200.319, respectively, shall apply.

14. DISCRIMINATION BECAUSE OF CERTAIN LABOR MATTERS. No person employed on the work cover ed by this Contract shall be discharged or in any way discriminated against because he or she has filed any complaint or instituted or caused to be instituted any proceeding or has testified or is about to testify in any proceeding under or relating to the labor standards applicable to his employer under this Contract.

15. RECORDS, REPORTING AND MONITORING. Agency may monitor the adequacy of Contractor’s performance in any manner which Agency deems most effective. Contractor must cooperate with Agency in such monitoring. Subrecipient must keep all necessary books and records, including loan documentation and financial records, in connection with the operation and services performed under this Contract, in accordance with 2 CFR §200.333, and must document a ll transactions so Agency may properly audit all expenditures made pursuant to this Contract. Subrecipient must maintain and preserve all records related to this Contract in its possession for a period of three (3) years from the completion date of t his Contract, unless otherwise directed by Agency. All books, records and accounts kept by Subrecipient in connection with the performance of this Contract shall be made available for inspection by representatives of the federal government and/or Agency staff as required to monitor or audit the program.

In addition to the reports specified in this Contract, Subrecipient shall retain the records required by the applicable provisions of 2 CFR §200.333 and provide the Agency with the reports required pursuant to 2 C FR §§ 200.328 and 200.343, and such other records and reports as the Agency may reasonably require in the administration of this Contract. Subrecipient shall keep all other necessary books and records, including property, personnel, loan documentation and financial records, in connection with the operation and services performed under this Contract. Subrecipient shall conduct audits in accordance with 2 CFR Part 200, Subpart F. Subrecipient shall document all transactions sufficiently for Agency to properly monitor and audit all expenditures made pursuant to this Contract.

16. DRUG FREE WORKPLACE. Subrecipient must comply with the Drug -Free Workplace Act of 1988 (final rule published on May 25, 1990) and Agency's policies and rules promulgated under the Act. Subrecipient must obtain such policies and rules from the Agency.

17. RESTRICTIONS ON LOBBYING; FILING CERTIFICATION AND DISCLOSURE FORMS. Subrecipient shall not use any funds paid under this Contract, directly or indirectly, for any political activity, whatsoever or to influence any public official or employee. In any event, Subrecipient shall comply with the restrictions on lobbying stated in 24 CFR Part

87. Subrecipient shall sign and return to the Agency the certification described in 24 CFR 87, Appendix A and the disclosure form described in 24 CFR Part 87, Appendix B. Subrecipient shall require any person receiving proceeds of this Contract from Subrecipient to comply with 24 CFR Part 87, including the submission to Agency of completed certifications under Appendix A and disclosure forms under Appendix B. See also 2 CFR §200.450.

18. ELIGIBILITY AND NON -DISCRIMINATION (SECTION 109). Subrecipient shall not employ discriminatory practices in the provision of services, employment of personnel, or in an y other respect on the basis of race, color, religion, sex, national origin, ancestry, or physical or mental handicap, or age as more specifically set forth in 24 CFR §574.603, which requires compliance with the non-discrimination and equal opportunity requirements at 24 CFR Part 5 and Section 109 of the Act (42 USC §5301).

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

19. CIVIL RIGHTS COVENANT. As provided in 24 CFR §§ 5.105,and 574.603 and depending upon the type and nature of the grant of HOPWA funds, this Contract may be subject to the requirement s of Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and Title VIII of the Civil Rights Act of 1968 (P.L. 90-284) and HUD regulations. Subrecipient certifies that its activities under this Contract shall be conducted and administered in conformity with Title VI of the Civil Rights Act of 1964 (P.L. 88 -352) and Title VIII of the Civil Rights Act of 1968 (P.L. 90 -284) and that it will comply with the other provisions of Titles 2 and 24 of the CFR and with other applicable laws, to the full extent of th eir application. Further, pursuant to Executive Order 11063 (as amended pursuant to Executive Order 12259) set out in 24 CFR Part 107, in the sale, lease or other transfer of land acquired, cleared or improved with assistance provided under the Contract, S ubrecipient shall cause or require a covenant running with the land to be inserted in the deed or lease for such transfer, prohibiting discrimination upon the basis of race, color, religion, sex, or national origin, in the sale, lease or rental, or in the use or occupancy of such land or any improvements erected or to be erected thereon, and providing that the Agency and the United States are beneficiaries of and entitled to enforce such covenant. Subrecipient, in undertaking its obligation in carrying ou t the program assisted hereunder, shall take such measures as are necessary to enforce such covenant and shall not itself so discriminate.

20. MINORITY/WOMEN’S BUSINESS ENTERPRISES REQUIREMENTS. This Contract is subject to minority and women's business enterprises requirements set forth in Executive Orders 12432, 11625, and 12138. Subrecipient shall take all reasonable steps necessary to encourage the participation of minority and female owned businesses in work under this Contract.
a. With regard to any work of construction funded with Project Funds, such steps may include, without limitation, the following:
i. Obtaining the minority and Women's Business Enterprises Registry from the Agency MBE/WBE Coordinator to ensure such contractors receive an invitation to bid.
ii. Advertising the invitation to bid or to submit proposals in the El Hispano and the Sacramento Observer as well as in a newspaper of general circulation in the Sacramento metropolitan area. iii. Reviewing the telephone directory or professional organization membership lists, or making direct contact with minority- or female-owned businesses for specialized trades and services, and inviting such firms to bid. b. Subrecipient shall include the Minority and Women's Business Enterprises requirements , in the form prescribed by the Agency, in all contracts for use of funds under this Contract, and Subrecipient shall coordinate purchases of goods and services over $10,000 with the Agency's MBE/WBE Coordinator. c. Subrecipient shall maintain documentatio n of outreach efforts to minority and/or female owned businesses.

Additionally, Subrecipient shall maintain documentation of contract awards for the Quarterly Reports.

21. FLOOD DISASTER PROTECTION. Pursuant to the requirements of the Flood Disaster Prote ction Act of 1973 (42 USC §4001), Subrecipient shall not use or permit the use of any portion of the assistance provided under this Contract for acquisition or construction purposes as defined by the Director of the Federal Emergency Management Agency (42 USC §4003(a)(4)), for use in an area identified by the Director of the Federal Emergency Management Agency as having special flood hazards unless the community in which such area is located is then participating in the national flood insurance program (described at 42 USC §§4011) and the use of any such assistance shall be subject to the mandatory purchase of flood insurance requirements of 42 USC §4012a.

Any contract or agreement for the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this Contract shall contain, if such land is located in an area identified by the Director as having special flood haza rds and in which the sale of flood insurance has been made available under the National Flood Insurance Ac t of 1968, 42 USC §§4001 et seq., provisions obligating the transferee and its successors or assigns to obtain and maintain, during the ownership of such land, such flood insurance as required with respect to financial assistance for acquisition or constru ction purposes under the Flood Disaster Protection Act of 1973 (42 USC §4012a). Such provisions shall be required notwithstanding the fact that the construction on such land is not itself funded with assistance provided under this Contract.

22. COMPLIANCE WITH AIR AND WATER ACTS. This Contract is subject to the applicable requirements of the Clean Air Act (42 USC §7401 et seq.), the Federal Water Pollution Control Act, (33 USC §1251 et seq.), and the corresponding regulations of the Environmental Protection Agency (40 CFR Parts 1-49). In compliance with said regulations,

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

Subrecipient shall cause or require to be inserted in all contracts and subcontracts funded with Project Funds, and with respect to any transaction which is not otherwise exempt from such laws and regulations, all of the following requirements:
a. A stipulation by the contractor or subcontractor that any facility to be utilized in the performance of the contract or subcontract is not listed on the List of Violating Facilities issued by the Environmental Protection Agency (EPA). b. Compliance with all the requirements of Section 114 of the Clean Air Act, (42 USC §7414c -8) and Section 308 of the Federal Water Pollution Control Act, (33 USC §1318) relating to inspection, monitoring, entry, reports, and information, as well as all other requirements specified in said Section 114 and Section 308, and all regulations and guidelines issued thereunder.
c. A stipulation that, as a condition for the award of the contract, prompt notice shall be given t o Agency by Subrecipient or the prospective contractor or subcontractor of any notification received from the Director, Office of Federal Activities, EPA, indicating that a facility utilized or to be utilized for the contract is under consideration to be l isted on the EPA List of Violating Facilities.
d. Agreement by the contractor that he or she shall include or cause to be included the criteria and requirements in this Section 19a through 19c of this Section in every non -exempt subcontract and requiring t hat the contractor shall take such action as the government may direct as a means of enforcing such provisions. e. In no event shall any amount of the assistance provided under this Contract be utilized with respect to a facility which has given rise to a conviction under Section 113(c)(1) (42 USC §7413) of the Clean Air Act or Section 309(c) (32 USC §1319) of the Federal Water Pollution Control Act.

23. RELOCATION. This Contract is subject to the requirements of Title II of the Uniform Relocation Assistanc e and Real Property Acquisition Policies Act of 1970 (42 USC §4601 et seq.) and HUD implementing regulations at 24 CFR Part 42 and CFR §574.630. Subrecipient shall not undertake any of the work contemplated under this Contract if relocation is involved without first obtaining written approval from Agency. Subrecipient shall inform affected persons of the relocation assistance policies and procedures set forth in the regulations at 24 CFR Part 42 and 24 CFR 574.630.

24. PROPERTY OWNERSHIP AND PROCUREMENT. The Subrecipient, shall, in the acquisition or improvement of real and personal property with funds provided under this Contract, be subject to all applicable provisions of the Federal Requirements.
a. General property and procurement guidelines are contain ed in 2 CFR §§ 200.310 -200.316 and 2 CFR §§ 200.317 - 200.326, respectively. In all cases in which personal property is sold, the proceeds shall be transferred to Agency for the HOPWA program or shall be Program Income, and, personal property not needed by the Subrecipient shall be transferred to Agency for the HOPWA program or shall be retained by Subrecipient after compensating the Agency. b. Real property shall be acquired in accordance with Title III, Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (24 CFR Part 42) and 24 CFR §574.630.

25. USE OF DEBARRED, SUSPENDED OR PROHIBITED PARTIES. Subrecipient shall not use any Project Funds, directly or indirectly, to award contracts to, or otherwise engage the services of, or fund any contractor or subrecipient during any period of debarment, suspension or placement in ineligibility status under the provisions of 2 CFR Part 2424, 2 CFR Part 180, and 2 CFR §200.213. Subrecipient will verify that the Federal Debarred List Registry d oes not include any contractor or subrecipient prior to awarding contracts and that they will record the date that the Registry was consulted. Subrecipient acknowledges this requirement by initialing here:

Subrecipient initials_____

26. DAVIS BACON ACT AND STATE PREVAILING WAGES. The provisions of the Davis-Bacon Act do not apply to the HOPWA Program (24 CFR §574.655). However, if this Contract is for construction, alteration, or repair (including painting and decorating) of public buildings or public works, California State Prevailing wages may apply (California Labor Code §1720 et seq.), in which case Subrecipient must comply with the provisions of California Labor Code §1720 et seq. and all rules, regulations and orders promulgated under said statutes.

27. FEDERAL LABOR STANDARDS. For construction, rehabilitation, alteration, or repair of real property funded with Project Funds, Subrecipient shall comply, and shall cause all subcontractors on such work to comply, with the applicable

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

provisions of the Co ntract Work Hours and Safety Standards Act, as amended, (40 USC §3701 et seq.) and all rules, regulations and orders promulgated under said Acts. Among other provisions, said Acts establish minimum wages and fringe benefits; prohibit deductions or rebates from payments; provide for the withholding of funds to assure compliance with wage provisions; and provide for the termination of the contract and debarment of the contractor for failure so to comply.

Subrecipient shall also comply, and shall cause all sub contractors on such work to comply, with all other applicable HUD labor requirements, including, without limitation, the requirements of 29 CFR Parts 3 and 5, which govern the payment of wages and the ratio of apprentices and trainees to journeymen. If wage rates higher than those required under such regulations are imposed by state or local law, nothing in this Contract is intended to relieve Subrecipient of its obligations, if any, t o require payment of the higher rates. Subrecipient shall cause or require to be inserted, in all such contracts, provisions which subject the parties to the Federal Labor Standards Provision and all other applicable regulations and requirements of HUD.

Subrecipient shall not award any contract subject to the provisions of Sect ion 25 of the Contract to any contractor who is at the time ineligible under the provisions of any applicable regulations of the Department of Labor to receive an award of such contract.

28. ECONOMIC OPPORTUNITY EMPLOYMENT REQUIREMENTS. The following is a pplicable to all contracts related to the project which is the subject of this Contract. a. The contract requires that, to the greatest extent feasible, opportunities for training and employment be given to lower-income residents of the project area.
b. The parties to this Contract certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements.
c. Contractor will send to each labor organization or representative of workers with which he or she has a collective bargaining agreement or other contract or understanding, if any, a notice advising the said labor organization or workers' representative of his or her commitments under this Employment Clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training. d. Contractor will include this Employment Clause in every subcontract for work in connection with the project. e. Good Faith Effort. Each Contractor or subcontractor undertaking work in connection with a Section 3 covered project must fulfill his or her obligation to utilize lower -income project area residents as employees to the greatest extent feasible by:
i. Identifying the number of positions in the various occupat ional categories including skilled, semi skilled, and unskilled labor, needed to perform each phase of the Section 3 covered project; ii. Identifying the positions described in Paragraph (1) of this Section, the number of positions in the various occupational categories which are currently occupied by regular, permanent employees; iii. Identifying the positions described in Paragraph (1) of this Section, the number of positions in the various occupational categories which are not currently occupied by regular permanent employees; iv. Establishing the positions described in Paragraph (3) of this Section, a goal which is consistent with the purpose of this subpart within each occupational category of the number of positions to be filled by lower-income residents of the Section 3 covered project area;
v. Making a good faith effort to fill all of the positions identified in Paragraph (4) of this Section with lower income project area residents first and foremost, through the First Source Program; and vi. Making a good faith effort to fill of the positions identified in Paragraph (4) of this Section with lower -income project area residents.

29. ARCHITECTURAL BARRIERS ACT. Subrecipient shall comply with the Architectural Barriers Act of 1968 (42 USC §4151), as applicable, which Act requires that the design of any facility, except a private residence, that is constructed, renovated, remodeled or rehabilitated with funds received pursuant to this Contract shall comply with the "American Standard Specification for Making Buildings and Facilities Accessible, and Usable by, the Physically Handicapped," as described in 41 USC §§ 101-4712, and Subrecipient shall cooperate with Agency in its inspections pursuant to such provisions.

Central Sacramento Studios Phase II – HCD-LHTF-HTF, HOPWA - Construction and Permanent Loan Agreement

30. LEAD-BASED PAINT. The use of lead -based paint is prohibited in any residential structure constructed or rehabilitated with Project Funds, which prohibitions are further described in 24 CFR Part 35.. For those properties constructed prior to 1978, Subrecipient shall assure that rehabilitation applicants, purchasers or tenants, as the case may be, shall be notified (i) that the property may contain lead -based paint, (ii) of the hazards of lead -based paint, (iii) of the symptoms and treatment of lead -based poisoning (iv) of the precautions to be taken to avoid lead -based paint poisoning (including maintenance and removal techniques for eliminating such hazards), (v) of the advisability and availability of blood level screening for children under the age of seven years of age, and (vi) that, in the event lead-based paint is found on the property, appropriate abatement procedures may be undertaken. Subrecipient shall follow the procedures for the elimination of lead - based paint hazards, to the extent required under 24 CFR 574.635.

31. FOOD, TRAVEL AN D ENTERTAINMENT. Travel costs may include expenses for transportation, lodging and subsistence and are only allowable for employees who are in travel status on official business and approved as part of this contract or with prior written approval and are specifically related to this contract. Costs must be considered reasonable and do not exceed charges allowed by contractor’s Out of Town Travel Policy. See 2 CFR §200.474 for additional information on travel costs and www.shra.org for the Out of Town Travel Policy.

The costs of entertainment, including amusement, diversion, and social activities and any associated costs are unallowable, except where specific costs that might otherwise be considered entertainment have a programmatic purpose and are authorized either in the approved budget for the Federal award or with prior written approval. All entertainment costs must comply with 2 CFR §200.438. In addition, the costs of alcoholic beverages are unallowable per 2 CFR §200.423.

32. BUILD AMERICA, BUY AMERICA. Subrecipient must comply with the requirements of the Build America, Buy America (BABA) Act, 41 USC 8301 note, and all applicable rules and notices, as may be amended, if applicable to the Subrecipient’s project. Pursuant to HUD’s Notice, “Public Interest Phased Implementation Waiver for FY 2022 and 2023 of Build America, Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance” (88 FR 17001), any funds obligated by HUD on or after the applicable listed effective dates, are subject to BABA requirements, unless excepted by a waiver.

33. CHANGES IN LAWS AND REGULATIONS. In the event an applicable law or regulation is modified or eliminated, or new law or regulation is adopted, the revised law or regulation shall automaticall y supersede the contract’s scope of work and any attachments. The most current exhibits, laws and regulations will be posted at www.shra.org.

34. OTHER PROGRAM REQUIREMENTS. Agency must provide Subrecipient with all relevant program information regarding the federal programs having jurisdiction over this Contract. Agency must assist Subrecipient in the interpretation of the requirements of such programs. Subrecipient shall be considered to be familiar with the requirements of such programs and shall comply with such requirements.

J1!5HBA- Central Sacramento Studios Phase II

CHANGING LIVES
Ill Central Sacramento Studios
Phase II (815 11th Street)
Ill Central Sacramento Studios
Phase I ( 1100 H Street)
n ra acr
Studios Pha
11th
0 I
Feet
150
I
Central Sacramento
Studios Phase I
(1100HSt)
300
I
Attachment 4

SHRAGIS
April 22, 2024
Central Sacramento Studios Phase II Attachment 5

Addresses
Number of Units
Project Type
Acreage
Unit Mix and Rents 30% AMI Exempt Management Unit
Studios 35
1BR/1BA 16 1
Total Units 51 1
Square Footage Unit Size (sq.ft.) Total (sq. ft.)
Studios 420 14,700
1BR/1BA 800 13,600
Common Areas 16,902
Total Gross 45,202
Resident Facilities
Permanent Sources Total Per Unit Per Square Foot
Permanent Loan 1,674,626$ 32,204$ 37.05$
Federal Tax Credit Equity 21,625,000$ 415,865$ 478.41$ HOPWA 200,000$ 3,846$ 4.42$
Local Housing Trust Funds (LHTF) 3,700,000$ 71,154$ 81.85$ Housing Trust Funds (HTF) 3,900,000$ 75,000$ 86.28$ Solar Credits 240,104$ 4,617$ 5.31$
TOTAL SOURCES 31,339,730$ 602,687$ 693.33$
Permanent Uses Total Per Unit Per Square Foot
Construction Costs 20,342,875$ 391,209$ 450.04$
Architecture & Engineering 1,138,256$ 21,890$ 25.18$ Permits/Fees 2,060,000$ 39,615$ 45.57$
Hard Cost Contingency 1,139,946$ 21,922$ 25.22$
TOTAL HARD COSTS 24,681,077$ 474,636$ 546.02$
Soft Cost Contingency 192,082$ 3,694$ 4.25$
Financing Cost 2,306,513$ 44,356$ 51.03$
Operating Reserves 229,178$ 4,407$ 5.07$
Rent Reserves 30,000$ 577$ 0.66$
COSR 1,100,000$ 21,154$ 24.34$
Legal Fees 115,000$ 2,212$ 2.54$
Developer Fee 2,475,000$ 47,596$ 54.75$
Third Party Fees, Marketing, Other 210,880$ 4,055$ 4.67$ TOTAL SOFT COSTS 6,658,653$ 128,051$ 147.31$
TOTAL USES 31,339,730$ 602,687$ 693.33$
SHRA $ per Unit Per Unit Cost
150,000$ 602,687$ $1.00 : $4.02
Management / Expenses
Proposed Developer
Property Management Company
Operating Expenses 287,117$ 5,521$
Property Management Fee 56,261$ 1,082$
Resident Services 408,140$ 7,849$
Taxes and Insurance 12,372$ 238$
Replacement Reserves 13,000$ 250$
Outdoor patio area with concrete patio, picnic tables, benches, chairs, landscaping, and a small fenced dog area with pet cleanup station and accessible gate access and bench.

Attachment 6
Central Sacramento Studios Phase II
Residential Project Summary
Total
35 17
52 815 11th Street, Sacramento, CA 95814
52 New Construction

0.31 per unit
Leverage
Leverage
SHRA: Other
Danco
Danco Property Management
per unit
per unit
per unit
per unit
Central Sacramento Stuidos Phase II Area Median Square Total Gross Utility Net Net Rent per Total Monthly Current Unit Type Income % (AMI) Number Feet Sq Feet Rent¹ Allowance Rent Sq Foot Net Rent Annual Rent Studio 30% 35 420 14,700 563$ 563$ 1.34$ 19,705$ 236,460$ 1BR/1BA 30% 16 800 12,800 603$ 603$ 0.75$ 9,648$ 115,776$ 2BR/2BA (Exempt Manager) 1 800 800 -$ -$ -$ -$
Totals 52 28,300 29,353$ 352,236$
¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; and the AMI change is due to income averaging regulation by CDLAC. The tenant rent will not exceed 30% of the household adjusted gross income with PBV.

Annual 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2040 Income Increase Per Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 15 Gross Potential Rent 2.50% 370,068 379,320 388,803 398,523 408,486 418,698 429,165 439,894 450,892 462,164 522,896 Other Income 2.50% 13,112 13,440 13,776 14,120 14,473 14,835 15,206 15,586 15,975 16,375 18,527 Rental Subsidy 2.50% 653,825 670,171 686,925 704,098 721,700 739,743 758,236 777,192 796,622 816,538 923,838 Less Vacancy 5.00% -51,850 -53,146 -54,475 -55,837 -57,233 -58,664 -60,130 -61,634 -63,174 -64,754 -73,263 Effective Gross Income $985,154 $1,009,783 $1,035,028 $1,060,904 $1,087,426 $1,114,612 $1,142,477 $1,171,039 $1,200,315 $1,230,323 $1,391,997 Expenses
Operating Expenses 3.50% 5,915 307,567 318,332 329,473 341,005 352,940 365,293 378,078 391,311 405,007 419,182 497,857 Property Management 3.50% 1,159 60,268 62,378 64,561 66,820 69,159 71,580 74,085 76,678 79,362 82,139 97,556 Resident Services 3.50% 8,408 437,210 452,512 468,350 484,742 501,708 519,268 537,442 556,253 575,722 595,872 707,709 Taxes and Insurance 2.00% 248 12,872 13,129 13,392 13,660 13,933 14,212 14,496 14,786 15,081 15,383 16,984 Replacement Reserves 0.00% 250 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 Total Expenses 15,979 $830,917 $859,351 $888,776 $919,227 $950,740 $983,352 $1,017,101 $1,052,028 $1,088,172 $1,125,577 $1,333,106 Net Operating Income $154,238 $150,433 $146,252 $141,676 $136,686 $131,260 $125,376 $119,011 $112,143 $104,746 $58,892 Debt Service amount rate amort
Senior Loan $1,674,626 7.8% 35 $140,780.66 140,780.66$ 140,780.66$ 140,780.66$ 140,780.66$ 140,780.66$ 140,780.66$ 140,780.66$ 140,780.66$ 140,780.66$ 140,780.66$ SHRA Monitoring Fee $7,800,000 0.125% 14,150 14,150 14,150 14,150 14,150 14,150 14,150 14,150 14,150 14,150 14,150 Debt Service Subtotal $154,931 $154,931 $154,931 $154,931 $154,931 $154,931 $154,931 $154,931 $154,931 $154,931 $154,931 DCR 1.00 0.97 0.94 0.91 0.88 0.85 0.81 0.77 0.72 0.68 0.38 Cash Available after Debt Service ($693) ($4,498) ($8,679) ($13,254) ($18,245) ($23,671) ($29,555) ($35,919) ($42,787) ($50,184) ($96,039) Priority Distributions
Limited Partner Management Fee $7,500 3.00% 7,500 7,725 7,957 8,195 8,441 8,695 8,955 9,224 9,501 9,786 11,344 Managing General Partner Management Fee $5,200 3.00% 5,200 5,356 5,517 5,682 5,853 6,028 6,209 6,395 6,587 6,785 7,865 Administrative General Partner Fee $5,200 3.00% 5,200 5,356 5,517 5,682 5,853 6,028 6,209 6,395 6,587 6,785 7,865 Priority Distributions Subtotal 17,900 18,437 18,990 19,560 20,147 20,751 21,374 22,015 22,675 23,355 27,075 Net Cash after Priority Distributions ($18,593) ($22,935) ($27,669) ($32,814) ($38,391) ($44,422) ($50,929) ($57,934) ($65,463) ($73,540) ($123,114) COSR 1,100,000.00$ $18,593 $22,935 $27,669 $32,814 $38,391 $44,422 $50,929 $57,934 $65,463 $73,540 $123,114 HTF Loan
Principal Balance $3,900,000 3.00% 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 Interest for Period 117,000 117,000 117,000 117,000 117,000 117,000 117,000 117,000 117,000 117,000 117,000 Accumulated Interest 117,000 234,000 351,000 468,000 585,000 702,000 819,000 936,000 1,053,000 1,170,000 1,755,000 Payment 0 0 0 0 0 0 0 0 0 0 0
Balance $4,017,000 $4,134,000 $4,251,000 $4,368,000 $4,485,000 $4,602,000 $4,719,000 $4,836,000 $4,953,000 $5,070,000 $5,655,000 LHTF Loan
Principal Balance $3,700,000 3.00% 3,700,000 3,700,000 3,700,000 3,700,000 3,700,000 3,700,000 3,700,000 3,700,000 3,700,000 3,700,000 3,700,000 Interest for Period 111,000 111,000 111,000 111,000 111,000 111,000 111,000 111,000 111,000 111,000 111,000 Accumulated Interest 111,000 222,000 333,000 444,000 555,000 666,000 777,000 888,000 999,000 1,110,000 1,665,000 Payment 0 0 0 0 0 0 0 0 0 0 0
Balance $3,811,000 $3,922,000 $4,033,000 $4,144,000 $4,255,000 $4,366,000 $4,477,000 $4,588,000 $4,699,000 $4,810,000 $5,365,000 HOPWA
Principal Balance $200,000 3.00% 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Interest for Period 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Accumulated Interest 6,000 12,000 18,000 24,000 30,000 36,000 42,000 48,000 54,000 60,000 90,000 Payment 0 0 0 0 0 0 0 0 0 0 0
Balance $206,000 $212,000 $218,000 $224,000 $230,000 $236,000 $242,000 $248,000 $254,000 $260,000 $290,000 Central Sacramento Stuidos Phase II
Cash Flow ProformaAttachment 7
Attachment 8
Family Size 30% AMI
1 person 22,530$
2 person 25,740$
3 person 28,950$
Unit Size 30% AMI
Studio 563$
1 Bedroom 603$
Maximum Gross Rent Limits
¹Pursuant to 24CFR 983.301, contract rents
approved by HUD may exceed the tax-credit
rent limits. The tenant rent will not exceed 30%
of the household adjusted gross income with
PBV.

Central Sacramento Studios Phase II
MAXIMUM INCOME AND RENT LIMITS 2025
Rents at 30% of Area Median Income (AMI)
Low Income Housing Tax Credits, Housing Trust Funds, Local Housing Trust Funds, HOPWA
Maximum Gross Income Limits