DECLARATION OF LAND USE RESTRICTIVE COVENANTS
FOR LOW-INCOME HOUSING TAX CREDITS
2026 ALLOCATION OR AWARD YEAR

	THIS DECLARATION OF LAND USE RESTRICTIVE COVENANTS (“AGREEMENT” or “LURA”) dated as of      , by      , a      , and its successors and assigns (“Owner”), is given as a condition precedent to the allocation or award of low-income housing tax credits by the Minnesota Housing Finance Agency, a public body corporate and politic of the state of Minnesota, 400 Wabasha Street North, Suite 400, St. Paul, MN 55102 (“Minnesota Housing”) together with any successor to its rights, duties and obligations.

RECITALS

A. Owner is the fee simple owner of a      -unit rental housing Project located on real property located in the City of      , County of      , state of Minnesota, legally described in Exhibit A attached hereto (the “Project Land”). The rental housing project, Project Land, and all other improvements and property located on or appurtenant to the Project Land are collectively known as or to be known as       (the “Project”).

B. Minnesota Housing has been designated by the legislature of the state of Minnesota as the low-income housing tax credit (“HTC”) agency authorized to allocate or award HTCs for this Project.

C. Owner has applied to Minnesota Housing for an allocation or award of HTCs to the Project under the       Minnesota Housing Finance Agency Qualified Allocation Plan (the “QAP”). Minnesota Housing has determined that the Project would support annual HTCs in the amount of $     .

D. Section 42 of the Internal Revenue Code of 1986, as amended (“Section 42” and the “IRC”, respectively) requires as a condition precedent to the allocation or award of the HTCs that Owner execute, deliver and record this Agreement in the official land records of the county in which the Project is located in order to create certain covenants running with the land for the purpose of enforcing the requirements of Section 42, Minnesota Housing and other applicable state and federal law by regulating and restricting the use, occupancy and transfer of the Project as set forth in this Agreement.

E. Owner, under this Agreement, intends, declares and covenants that the regulatory covenants and restrictive covenants set forth in this Agreement governing the use, occupancy, and transfer of the Project will be and are covenants running with the Project Land for the term of this Agreement, will be binding upon all subsequent owners of the Project Land for the term, and are not merely personal covenants of Owner.

NOW, THEREFORE, in consideration of the promises and covenants set forth in this Agreement and of other valuable consideration, the receipt and sufficiency of which is acknowledged, Owner hereby declares and covenants as follows.

SECTION 1 - DEFINITIONS

Any capitalized term or word used herein but not defined shall have the meaning given to such term in Section 42 or the QAP or such other source cited herein. 

SECTION 2 - RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND

(a)	Upon execution and delivery by Owner, Owner will cause this Agreement to be recorded in the appropriate office of the county recorder and/or registrar of titles of the county in which the Project Land is located, except as otherwise directed by Minnesota Housing, and will pay all fees and charges incurred in connection with recording. Upon recording, Owner will immediately transmit to Minnesota Housing an executed original of the Agreement, or a duly certified copy of the executed original, showing the date and document numbers of record. Owner agrees that Minnesota Housing will not issue an Internal Revenue Service (IRS) Form 8609 constituting final allocation or award of the HTCs for the Project unless Minnesota Housing has received the recorded executed original, or a duly certified copy, of this Agreement as recorded.

(b)	Owner intends, declares and covenants, on behalf of itself and all future owners and operators of the Project Land and the Project during the term of this Agreement, that this Agreement, including the covenants and restrictions set forth and the exhibits, regulating and restricting the use, occupancy and transfer of the Project Land and the Project: (i) will be and are covenants running with the Project Land, encumbering the Project Land for the term of this Agreement, binding upon Owner’s successors in title and all subsequent owners and operators of the Project Land, (ii) are not merely personal covenants of Owner; and (iii) will bind Owner (and the benefits will inure to Minnesota Housing and any past, present or prospective tenant of the Project) and its respective successors and assigns during the term of this Agreement. Owner hereby agrees that all requirements of the laws of the state of Minnesota to be satisfied in order for the provisions of this Agreement to constitute deed restrictions and covenants running with the land will be deemed to be satisfied in full, and that any requirements of privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to ensure that these restrictions run with the land. For the longer of the period that the HTCs are claimed or the term of this Agreement, every contract, deed, or other instrument executed conveying the Project Land or any portion, will expressly provide that such conveyance is subject to this Agreement; provided, however, that the covenants contained herein will survive and remain superior to such conveyance  regardless of the language in such contract, deed or other instrument.

(c)	Owner represents, covenants, and warrants that it has obtained the consent of any prior recorded lien holder for the Project to this Agreement and acknowledges that such consent is a condition precedent to Minnesota Housing’s issuance of the IRS Form 8609 constituting final allocation or award of the HTCs for the Project.

 SECTION 3 - REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER

Owner hereby represents, covenants and warrants as follows:

(a)	Owner (i) is a       duly organized under the laws of       and is qualified to transact business under the laws of the state of Minnesota; (ii) has the power and authority to own its properties and assets and to carry on its business as now being conducted; and (iii) has the full legal right, power and authority to execute and deliver this Agreement.

(b)	The execution and performance of this Agreement by Owner: (i) will not violate and has not violated any provision of law, rule or regulation, or any order of any court or other agency or governmental body; (ii) will not violate and has not violated any provision of any indenture, agreement, mortgage, mortgage note, or other instrument to which Owner is a party or by which it or the Project is bound; and (iii) will not result in the creation or imposition of any prohibited encumbrance of any nature.

(c)	At the time of execution and delivery of this Agreement, Owner has good and marketable title to the premises constituting the Project free and clear of any lien or encumbrance except for encumbrances expressly permitted or required by Minnesota Housing in writing. 

(d)	There is no action, suit or proceeding at law or in equity or by or before any governmental instrumentality or other agency now pending, or, to the knowledge of Owner, threatened, against or affecting it or any of its properties or rights that, if adversely determined, would materially impair its right to carry on business substantially as now conducted (and as now contemplated by this Agreement) or would materially adversely affect its financial condition.

(e)	The Project constitutes or will constitute a “qualified low-income housing project” with one or more “qualified low-income buildings” as such terms are defined in Section 42 and implementing regulations, and as identified in Exhibit B.

(f)	Each unit in the Project contains complete facilities for living, sleeping, eating, cooking and sanitation (unless the Project qualifies as a single-room occupancy project), and each unit will not be used on a transient basis (unless the entire building is transitional housing for the homeless that meets the requirements under Section 42(i)(3)(B)(iii) of the Code).

(g)	All units subject to Section 42 will be leased and made available to members of the general public who qualify for occupancy under the applicable election specified in Section 42(g)(1) of the IRC (“Low-Income Tenants”) any additional eligibility restrictions imposed herein. The foregoing does not apply to full-time manager or other common space units that comply with Section 42.

(h)	Owner will fully comply with the requirements of the Fair Housing Act and the Minnesota Human Rights Act as they may from time to time be amended.

(i)	Owner will not refuse to lease a unit to the holder of a voucher or certificate of eligibility under Section 8 of the United States Housing Act of 1937, or similar state or local rent subsidy, because of the status of the prospective tenant as such a holder, and Owner will accept voucher, subsidy and assistance payments for rent owed.

(j)	Each HTC unit is and will remain suitable for occupancy in accordance with Section 42 and applicable federal regulations, including the physical standards required under Section 42. In addition, each building and each HTC unit is and will remain in compliance with applicable physical standards required by Minnesota Housing’s Housing Tax Credit Program Compliance Guide (Compliance Guide), as amended, and state and local law.  

(k)	All sales, transfers, exchanges, and other conveyances of Project real property are subject to the following: 

(1) 	Subject to the requirements of Section 42 and this Agreement, Owner may sell, transfer or exchange the entire Project, including the Project Land, or a specified interest in the entire Project if and only if  Owner: 
(i) 	notifies in writing and obtains the agreement of any buyer or successor or other acquiring party that such acquisition is subject to the requirements of this Agreement and to the requirements of Section 42 and any applicable regulations, and contingent on Minnesota Housing’s approval. 
(ii) 	requests and obtains Minnesota Housing’s prior written approval in advance of closing the sale, transfer, or exchange in accordance with Minnesota Housing’s procedures at the time of the request. 
(iii) 	This provision will not act to waive any other restriction on sale, transfer, or exchange of the Project or any low-income portion of the Project. 

(2) 	Owner may not sell, transfer, or exchange less than all of the Project unless Minnesota Housing, in its sole discretion, deems such conveyance necessary to: (1) preserve the Project, (2) extend the use restrictions beyond the original LURA term, (3) replace destroyed or condemned units, or (4) carry out an Eventual Tenant Ownership plan approved by Minnesota Housing and indicated on Exhibit D. If such determination is made, the conveyance is subject to the requirements under (k)(1).

(3)  	Owner agrees that Minnesota Housing may void any sale, transfer or exchange of the Project if the buyer or successor or other person fails to obtain all required Minnesota Housing approvals prior to the closing of the transaction.

(l)	Owner will not demolish any part of the Project or substantially subtract from any real or personal property of the Project or permit the use of any residential rental unit for any purpose other than rental housing during the term of this Agreement unless required by law.

(m)	If the Project, or any part, is damaged or destroyed, is condemned or subject to an order to vacate by the appropriate government entity, or will be or is condemned or acquired for public use, Owner will use its best efforts to repair and restore the Project to substantially the same condition as existed prior to the event in compliance with applicable physical standards imposed by Section 42, this LURA, and applicable state and local law and to operate the Project in accordance with the terms of this Agreement.

(n)	Owner has not executed and will not execute any other agreement with provisions contradictory to, or in opposition to, the provisions hereof, and the requirements of this Agreement are paramount and controlling as to the rights and obligations set forth herein and supersede any other requirements in conflict herewith. Notwithstanding the foregoing sentence, any conflict of the provisions in this LURA with prior restrictive covenants recorded in connection with previously allocated or awarded HTCs shall be resolved by Minnesota Housing, in its sole discretion, by amendment or clarification.    

(o)	Owner will fully comply with the requirements of Section 42 and any applicable regulations as they may from time to time be amended.

(p)	Owner will fully comply with the requirements of the Compliance Guide, as amended.

(q)	Owner will not cause or allow, without the prior written approval of Minnesota Housing, any alteration of the Project that would change the unit configurations or interfere with the additional restrictions under Exhibits C and D.

(r) 	Owner will pay all monitoring fees established by Minnesota Housing from time to time in its Compliance Guide or other publicly available procedures pursuant to the Authority’s responsibility for monitoring compliance with this LURA and Section 42.

SECTION 4 - INCOME RESTRICTIONS; RENT RESTRICTIONS

Owner hereby represents, warrants and covenants that throughout the term of this Agreement and in order to satisfy the eligibility, income, and rent restrictions required by Section 42 and Minnesota Housing (the “Occupancy Restrictions”):

(a)	The determination of whether an applicant is a qualified low-income tenant shall be made by the Owner at initial occupancy on the basis of the anticipated gross annual household income and student status. Owner shall recertify student status annually and, where applicable, recertify gross annual household income for the purpose of applying the available unit rule.

(b)	All units subject to Section 42 (the “HTC units”) shall be income restricted in accordance with Section 42(g)(1), as set forth in Exhibit C and any additional income restrictions imposed by Exhibit D.

(c)	All HTC units will be rent restricted in accordance with Section 42(g)(2) of the IRC, except where more stringent rent restrictions are imposed by this LURA. The HTC units do not include full time manager or other common units described in IRS Revenue Ruling 92-61.

(d)	The applicable fraction (as defined in Section 42(c)(1) of the IRC) for each building for each taxable year in the Extended Use Period (as defined in this Agreement) will not be less than the Applicable Fraction for each building specified in Exhibit B.

SECTION 5 - ADDITIONAL RESTRICTIONS

Exhibit C and Exhibit D set forth certain additional obligations of Owner with respect to the Project upon which the allocation or award of HTCs has been based and with which Owner covenants to comply throughout the term of the LURA (together the “Additional Restrictions”). In the event that the obligations listed in Exhibit C or Exhibit D fail to be consistent with the Project’s original reservation or carryover agreement, except as approved by Minnesota Housing, Owner agrees to amend this Agreement, as may be deemed necessary by Minnesota Housing.

SECTION 6 - TERM OF AGREEMENT 

(a)	The following definitions will apply to this Section 6.

(1)	Placed-In-Service Date means the placed in service date stated on the IRS Form 8609 approved by Minnesota Housing and submitted to the IRS with respect to any building that is part of this Project. The Placed-In-Service Date(s) for the buildings in this Project are listed on Exhibit B.
	
(2) 	Compliance Period means, with respect to any building that is part of the Project, the period of 15 taxable years beginning with either: (i) the first taxable year in which the building is placed in service, or (ii) at the election of the taxpayer, the succeeding taxable year. The Compliance Period start date(s) for the buildings in this Project are listed on Exhibit B.  

(2)	Extended Use Period means, with respect to any building that is part of the Project, the period beginning on the first day in the Compliance Period on which such building is part of a qualified low-income housing project and ending on the date that is at least 15 years after the close of the Compliance Period or such longer period as may be specified in Exhibit D.

(b)	This Agreement will commence on the earlier of the first day of the Compliance Period or the Placed in Service Date. 

(c)  	All restrictive covenants in this LURA except those described in section 6(e) below will terminate on December 31st of the last year of the Extended Use Period as set out in Exhibit B. 

(d)	Notwithstanding Section 6(c), the Extended Use Period for any building that is part of the Project will terminate on the date the building is acquired by foreclosure (or instrument in lieu of foreclosure) unless the Secretary of the Treasury determines that such acquisition is part of an arrangement with the taxpayer, a purpose of which is to terminate the Extended Use Period. Upon such acquisition date, this Agreement will not be extinguished or terminated and will remain an encumbrance restricting use of the Project in accordance with Section 6(e).

(e)	Notwithstanding Sections 6(c)-(d), the Section 42 rent requirements and tenant protections will survive and continue to encumber the Project in accordance with Section 42(h)(6)(E)(ii) for a period of three years following the termination or the expiration of the Extended Use Period. The Extended Use Period plus the additional 3-year period described in this section 6(e) shall be collectively known as the “term of the Agreement” or the “term of the LURA.” Throughout the term of this Agreement, Owner will not evict or terminate the tenancy of an existing tenant of any HTC Unit other than for good cause and will not increase the gross rent above the maximum allowed under Section 42 with respect to such HTC Unit. This section 6(e) and all rights and privileges granted to Minnesota Housing and to past, present, and future tenants to enforce this Agreement shall survive any foreclosure or deed in lieu of foreclosure and remain in full force and effect for the term of the Agreement.

(f) 	Throughout the term of this Agreement, Owner will comply with Section 42, the Occupancy Restrictions, the Additional Restrictions, and all other provisions of the Agreement. The provisions of Section 42(h)(6)(E)(i)(II) and 42(h)(6)(F) (which provisions would permit Owner to terminate the restrictions under the Agreement at the end of the 15-year Compliance Period in the event that a qualified contract for the acquisition of the Project is not presented) do not apply to the Project.

(g)	The provisions under this section 6 shall not be construed to invalidate, impede, or replace any additional rights or authority granted to Minnesota Housing or past, present, and future tenants under state or federal law.  

SECTION 7 - INSPECTIONS AND DOCUMENTATION

(a)	Owner will permit, during normal business hours and upon reasonable notice, any duly authorized representative of Minnesota Housing to inspect any books and records of Owner regarding the Project that pertain to compliance with the terms of this Agreement.

(b)	Owner will submit any other information, documents or certifications requested by Minnesota Housing that Minnesota Housing deems reasonably necessary to substantiate Owner’s continuing compliance with the provisions of this Agreement and the requirements of Section 42.

SECTION 8 - ENFORCEMENT OF AGREEMENT

(a)	Owner covenants that it will not knowingly take or permit any action that would result in a violation of the requirements of Section 42, any applicable regulations, or this Agreement. Owner covenants to take any lawful action (including amendment of this Agreement as may be necessary, in the opinion of Minnesota Housing) to comply fully with Section 42 and with all applicable rules, rulings, policies, procedures, regulations, or other official statements promulgated or proposed by Treasury, the IRS, or HUD from time to time pertaining to Owner’s obligations under Section 42 and affecting the Project.

(b)	Owner acknowledges that the primary purpose for requiring compliance by Owner with the requirements of this Agreement is to ensure compliance of the Project and Owner with Section 42 and any applicable regulations, AND BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING HTCs FOR THIS PROJECT HEREBY AGREES THAT MINNESOTA HOUSING AND ANY INDIVIDUAL WHO MEETS THE INCOME LIMITATION APPLICABLE UNDER SECTION 42 (WHETHER PROSPECTIVE, PRESENT OR FORMER OCCUPANT) SHALL BE ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREOF, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE SPECIFIC PERFORMANCE BY OWNER OF ITS OBLIGATIONS UNDER THIS AGREEMENT IN A STATE COURT OF COMPETENT JURISDICTION. Owner further acknowledges that the beneficiaries of Owner’s obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder.

(c)	Owner hereby agrees that the representations and covenants set forth herein may be relied upon by Minnesota Housing and all persons interested in Project compliance under Section 42 and any applicable regulations.

(d)	Owner acknowledges that Minnesota Housing is required, pursuant to Section 42(m)(1)(B)(iii) of the IRC and Section 1.42-5 of the Treasury regulations, to establish a procedure to monitor Owner’s and the Project’s compliance with the requirements of Section 42, which procedure includes the monitoring of Owner’s compliance with the Additional Restrictions, if any, set forth in Exhibit C and Exhibit D, and with the Compliance Guide. In addition, Minnesota Housing may be required to notify the IRS of any noncompliance.

SECTION 9 - MISCELLANEOUS

(a)	Severability.  The invalidity of any clause, part or provision of this Agreement will not affect the validity of the remaining portions thereof.

(b)	Notices.  All notices to be given pursuant to this Agreement will be in writing and will be deemed given when mailed by certified or registered mail, return receipt requested, to the parties at the addresses set forth below, or to such other place as a party may from time to time designate in writing.

To Minnesota Housing:	ATTENTION: Housing Tax Credit Program
Minnesota Housing Finance Agency
400 Wabasha Street North, Suite 400
St. Paul, MN 55102
	
To Owner:	ATTENTION:     
     
     
     

Minnesota Housing and Owner, may, by notice given pursuant to this Agreement, designate any further or different addresses to which subsequent notices, certificates or other communications will be sent. Notices regarding compliance and monitoring by Minnesota Housing may be sent by electronic mail.

(c)	Amendment. Notwithstanding anything to the contrary contained herein, this Agreement may be amended by a written agreement between Minnesota Housing and Owner, which agreement will be effective upon execution by Minnesota Housing and Owner and the recording of the amendment with the County Recorder and/or Registrar of Titles of the County in which the Project is located. Any amendment will be recorded at the Owner’s expense. Owner agrees that it will take all actions necessary to effect amendment of this Agreement as may be necessary to comply with the IRC and any applicable rules, regulations, policies, procedures, rulings, or other official statements pertaining to the HTCs. Such actions by Owner include, but are not limited to, those needed to ensure this Agreement remains filed with the county records and in full force and effect through its term.

(d)	Subordination of Agreement. 

(1) 	This Agreement and the restrictions hereunder are subordinate to the mortgage liens, if any, recorded against the Project to the extent provided in Section 6(d) hereof and subject to the terms of this Agreement implementing Section 42(h)(6)(E)(ii) of the Code.
(2)	Upon resyndication of the Low-Income Housing Tax Credits, Minnesota Housing and the Owner may execute their consent to subordinate the terms of this Agreement to a new Declaration of Land Use Restrictive Covenants, provided that Minnesota Housing determines, in its sole discretion, that there is no conflict with the terms of this Agreement required by Section 42.

(e)	Governing Law. This Agreement will be governed by the laws of the state of Minnesota and, where applicable, the laws of the United States of America.

(f)	Survival of Obligations. The obligations of Owner as set forth in this Agreement and in Owner’s application for the HTCs will survive the allocation or award of the HTCs and will not be deemed to terminate or merge with the issuing of the allocation or award. Those provisions that by their nature are intended to survive the termination of this Agreement, including without limitation Section 6(d), shall survive the expiration or earlier termination of this Agreement.

(THE REMAINING PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

	IN WITNESS WHEREOF, Owner has caused this Agreement to be signed by its duly authorized representatives, as of the day and year first written above.

	OWNER

	INSERT OWNER NAME
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        By:  Insert name of entity
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STATE OF      	)
	)  ss
COUNTY OF      	)

	The foregoing instrument was acknowledged before me this       day of      ,      , by      ,       of      , a      ,       of      , a      , on behalf of the      .

	     
	Notary Public

This document is drafted by:

Minnesota Housing Finance Agency
400 Wabasha Street North, Suite 400
St. Paul, MN 55102

**INCLUDE THIS PAGE WITH AMENDED AND RESTATED LURAS ONLY**

Acknowledged, agreed and consented to by:

						Minnesota Housing Finance Agency

						By:  							
						        James Lehnhoff
						        Assistant Commissioner, Multifamily

STATE OF MINNESOTA	)
	)  ss
COUNTY OF RAMSEY	)

	The foregoing instrument was acknowledged before me this ____ day of ____________ 20___, by James Lehnhoff, the Assistant Commissioner, Multifamily, of Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, on behalf of the Agency.

		
	Notary Public

EXHIBIT A
Legal Description

     

EXHIBIT B
Applicable Fraction and Building Information

BIN	BUILDING ADDRESS	APPLICABLE
FRACTION	PLACED IN SERVICE DATE	1ST YEAR
OF COMPLIANCE PERIOD	**YEAR EXTENDED PERIOD ENDS	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	
     	     	     %	     	     	     	

Compliance Period means, with respect to any building that is part of the Project, the period of 15 taxable years beginning with either: (i) the first taxable year in which the building is placed in service, or (ii) at the election of the taxpayer, the succeeding taxable year. 

Extended Use Period means, with respect to any building that is part of the Project, the period beginning on the first day in the Compliance Period on which such building is part of a qualified low-income housing project and ending on the date that is at least 15 years after the close of the Compliance Period or such longer period as may be specified Exhibit D.
*The building applicable fraction stated on this form must match the building applicable fraction stated on the Building Map. The Building Map can be located in Minnesota Housing’s Property Online reporting tool (PORT) and determines the applicable fraction based on the lesser of the unit fraction or the floor space fraction.

**The Extended Use Period ends on December 31 for the year listed above. As set out in Section6(e), certain requirements for a period of three years following the termination or the expiration of the Extended Use Period.

EXHIBIT C
Minnesota Housing Project Description and Additional Restrictions
This Allocation or Award of HTCs is based upon the following:

1.	Project Name:      

2.	Development Number:      
	Project Number:       
	HTC Number:      

3.	Project Street Address:      
	Project City:      
	Project State:      
	Project Zip Code:      

4.	Total Units:       
	HTC Units:      
	Common Space Units:      

5.	Owner Name:       

6.	Owner Street Address:       
	Owner City:      
	Owner State:      
	Owner Zip Code:      

7.	Name(s) of General Partner(s)/Managing Member(s):	     

8.	Name(s) of Qualified Nonprofit Organization:	     

9.	Owner Taxpayer I.D. No.:       

10.	Type of Credits:       

11.  Minimum Set-Aside:      
(NOTE: Further details for each minimum set-aside election below) 

(1)	20% at 50% means: At least 20 percent or more of the total residential units in each IRS project, as defined by the IRS and irrevocably elected by the Owner on line 8b of IRS form 8609 and, where applicable, described on the statement attached to form 8609, are both rent-restricted and occupied by individuals whose income is at or below 50 percent of the Multifamily Tax Subsidy Project (MTSP) income limits.

(2)	40% at 60% means: At least 40 percent or more of the total residential units in each IRS project, as defined by the IRS and irrevocably elected by the Owner on line 8b of IRS form 8609 and, where applicable, described on the statement attached to form 8609, are both rent-restricted and occupied by individuals whose income is at or below 60 percent of the MTSP income limits.

(3)	Average Income Test means: At least 40 percent or more of the total residential units in each IRS project, as defined by the IRS and irrevocably elected by the Owner on line 8b of IRS form 8609 and, where applicable, described on the statement attached to form 8609, are both rent restricted and occupied by individuals whose income does not exceed the imputed income limitation designated by the taxpayer with respect to the respective unit as set out in 42(g)(1)(C). The imputed income limitation of any unit designated shall be 20 percent, 30 percent, 40 percent, 50 percent, 60 percent, 70 percent or 80 percent of the MTSP income limits (including adjustments for family size) as determined in accordance with Section 42 of the Code. The average of the imputed income limitations designated by the Owner with respect to the HTC Units shall not exceed 60 percent of the MTSP income limits. Subject to any then-applicable guidance from either Treasury or the IRS and the Owner’s obligation to ensure compliance with the Code, the Owner may change from time to time the Owner’s designations.

12. Average Income Election: 
 	The Project must be 100% HTC restricted and the owner agrees to elect to treat all buildings as one multiple building project on the 8609. The project must maintain the number of restricted units listed below at the 20%, 30%, and 40% income and rent limits.

Number of Units:
20% Units 	     
30% Units	     
40% Units 	       

13.	Qualified Census Tract Area:       
	Difficult Development Area:        
	State Designated Basis Boost Applied:      

14.	Total Eligible Basis: $     
(NOTE: Total includes excess basis and high cost adjustment of basis)

15. Total Qualified Basis: $     
(NOTE: Total includes excess basis and high cost adjustment of basis)

16. Applicable Percentage: 
	4% (Acquisition):      
	4% or 9% (New construction or rehabilitation):      

17.	Annual HTC Amount: $     

18. Term of the LURA:      
(NOTE:  The term includes the 3-year tenant protection period)

EXHIBIT D
Additional Selection Restrictions

Part I: Additional Restrictions Through Issuance of IRS Form 8609
The Exhibit D, Part I: Additional Restrictions Through Issuance of IRS Form 8609 for this Project is attached to the Reservation Agreement or 42M Agreement entered by the Owner and Minnesota Housing for the HTCs Awarded or Allocated to the Project. Such Part I requirements are incorporated herein and shall remain enforceable as part of this LURA until Minnesota Housing has issued IRS form 8609 for all buildings in the Project. Minnesota Housing will assess compliance with Part I during issuance of the IRS Form 8609, after the Project is completed. 

Part II: Selection Restrictions throughout the term of the LURA
The Project must comply with the provisions checked below for the full term of the LURA. The requirements listed here are summarized for reference. Please refer to the Selection Criteria in the Selection Letter, Self-Scoring Worksheet, and Application for a full description of each item.  

GENERAL REQUIREMENTS 

1.	Joint Powers Agreement:
	The Project falls within the jurisdiction of a suballocator of HTCs, which is party to a current Joint Powers Agreement with Minnesota Housing.

For purposes of Requirements 2 and 3 below, the following definitions shall apply:
A.	“QNO” is that certain Qualified Nonprofit Organization identified in item 8 of Exhibit C.
B.	“Qualified Nonprofit Organization” has the same meaning given to such term in Section 42(h)(5)(C) of the Code.
C.	“ROFR” is a right of first refusal to purchase the Project.  
D.	“ROFR Holder” is the QNO or its assignee or successor-in-interest, provided such assignee or successor-in-interest is a Qualified Nonprofit Organization.

2.	Qualified Nonprofit General Partner/Managing Member:
	The Owner has received HTCs associated with the nonprofit set-aside and has designated the QNO, or an entity controlled by the QNO, as the General Partner or Managing Member of the Owner entity. The Owner represents, covenants, and warrants:
a.	The Ownership structure and QNO meet all requirements of Qualified Nonprofit Organization participation under the QAP and Section 42(h)(5) of the Code. 
b.	If at any time during the Compliance Period, the QNO no longer meets the definition of Qualified Nonprofit Organization under Section 42(h)(5)(C) of the Code, the Owner will identify another Qualified Nonprofit Organization willing to purchase or otherwise assume the ownership and control interests of the QNO and will submit a request for Minnesota Housing’s approval to transfer such interests. 
c.	The QNO or another Qualified Nonprofit Organization approved by Minnesota Housing will continue to own an interest in the Project (whether directly or through a partnership) and materially participate (within the meaning of IRC 469(h)) in the development and operation of the Project throughout the Compliance Period as required by Section 42(h)(5) of the Code. 

3.	Nonprofit Right of First Refusal (ROFR):
	The Owner represents, covenants, and warrants the following:
a.	Owner  the ROFR Holder a right of first refusal to purchase the Project (the “ROFR”) at the end of the Compliance Period in accordance with the QAP and Section 42(i)(7)(B) of the Internal Revenue Code.
b.	The ROFR is a separate instrument or agreement that received Minnesota Housing’s prior written approval and contains the Minnesota Housing ROFR Provisions, which control over any conflicting provisions in the ROFR.
c.	The ROFR contains language ensuring it is subordinate and subject to this LURA, as well as all liens and other interests encumbering the Project and held by Minnesota Housing or its successors or assigns. 

4.	Local HRA and PHA Waiting List:
	Owner agrees to utilize the local Housing and Redevelopment Authority (HRA) or Public Housing Authority (PHA) waiting list in the Tenant Selection Plan to identify eligible individuals and households to fill vacant units.
	The Project is exempt from this requirement. 

TRHESHOLD AND PREFERENCES

Deeper Rent Targeting Threshold

5.	Units Restricted to 30% MTSP Rent Limits:
  	The Project must restrict at least 2% of the total units, with a minimum number of 1 unit, to rents at or below the county 30% MTSP gross rent limit. Units with project-based rental assistance count toward this requirement. 

Number of Units:       

	The Project is exempt from this requirement because 100% of the units include project-based rental assistance.

6.	Units Restricted to Housing Assistance Payment Standard:
	The Project must restrict at least 3% of the total units, with a minimum number of 1 unit, to rents at or below the Housing Assistance Payment (HAP) payment standard as determined by the responsible entity in the jurisdiction. The units must generally be evenly distributed by bedroom type.

Number of Units:       

	The Project is exempt from this requirement because 100% of the units include project-based rental assistance.

	The Project is exempt from this requirement because it is located on Tribal Reservation, Dakota Communities or Tribal trust land.

7.	Preference for Eventual Tenant Ownership:

	The Project Owner commits to converting the HTC units for homeownership and transferring ownership of the units to the Low-Income Tenants after the end of the Compliance Period, in accordance with and subject to a conversion plan to be approved by Minnesota Housing. Upon Minnesota Housing’s approval of the conversion plan and after the end of the Compliance Period, the Project Owner will grant to each Low-Income Tenant household leasing a unit at the time of conversion a right of first refusal to purchase their leased unit after conversion, as permitted by Section 42(i)(7), and subject to any eligibility restrictions required by Minnesota Housing guidance and applicable law. Such right of first refusal is limited to one of the following as described in the conversion plan: (1) purchase of ownership of the unit occupied by the Low-Income Tenant upon conversion or (2) if the project is sold to a member-occupied housing cooperative, purchase of a cooperative membership share for the unit occupied by the Low-Income Tenant upon conversion.

Until the time the HTC units are purchased by Low-Income Tenants or in the event that not all HTC units are purchased by Low-Income Tenants tenants, the Project Owner will continue to comply with all provisions of the LURA with respect to the unpurchased units for the full term of the LURA. If the conversion involves transfer to a cooperative, the Owner will ensure the cooperative is bound by the terms of the LURA and complies with the LURA with respect to all unpurchased units.  No Low-Income Tenant leasing a unit shall be required to exercise their ROFR, nor shall be evicted or denied lease renewal without good cause.

Notwithstanding the foregoing paragraphs in this Requirement #7, any rights of first refusal granted or to be granted are subject to Minnesota’s final decision to allow conversion and the conversion plan approved by Minnesota Housing in accordance with Agency requirements and Section 42. The conversion plan may be amended by agreement of the Owner and Minnesota Housing if required for feasibility of conversion. Minnesota Housing, in its sole discretion, may deny conversion if a conversion would interfere with the continued operation of unpurchased units as HTC units in accordance with the other terms and restrictions of this LURA or result in a loss of federal assistance. The rights of first refusal and the Owner’s actions with regard to this provision must comply with the QAP, the Eventual Tenant Ownership (“ETO”) Guide, subsequent ETO guidance issued by Minnesota Housing, state and local laws (if applicable), and all other applicable program restrictions.  

9% HTC MINIMUM THRESHOLD REQUIREMENTS FOR ROUND 1
For 9% HTC projects selected for a portion of the state of Minnesota’s HTC annual credit ceiling in Round 1. If indicated, the Project must comply with the provisions checked below for the full term of the LURA.

8.	In the Metropolitan Area: Bedroom Size Threshold
	New construction or substantial rehabilitation in which, for the term of the LURA, at least 75% of the total HTC units are single-room occupancy, efficiency or one-bedroom units with rents affordable to households whose income does not exceed 30% of the area median income (AMI); OR

		New construction or substantial rehabilitation family housing projects that are not restricted to persons 55 years old or older in which, for the term of the LURA, at least 75% of the total HTC units contain two or more bedrooms and at least one-third of the 75% contain three or more bedrooms. 

9.	People with Disabilities Threshold:
	 Projects that are not restricted to persons of a particular age group and in which, for the term of the LURA, a percentage of the units are set aside and rented to persons:

a.	With a serious and persistent mental illness as defined in Minnesota Statutes, section 245.462, subdivision 20, paragraph (c);

b.	With a developmental disability as defined in the United States Code, Title 42, Section 6001, paragraph (8), as amended through December 31, 1990;

c.	Who have been assessed as drug dependent persons as defined in Minnesota Statutes, section254A.02, subdivision 5, and are receiving or will receive care and treatment services provided by an approved treatment program as defined in Minnesota Statutes, section 254A.02, subdivision 2;

d.	With a brain injury as defined in Minnesota Statutes, section 256B.093, Subdivision 4, paragraph (a); OR

e.	With permanent physical disabilities that substantially limit major life activities, if at least 50% of the units in the project are accessible as provided under Minnesota Rules, chapter 1341.

NOTE: Minnesota Housing considers accessible units to be Type A and/or Type B units as identified in the referenced Chapter 1341, also known as the Minnesota Accessibility Code.

NOTE: This definition is not limited to persons with mobility impairment.
	
SELECTION CRITERIA

Greatest Need – Tenant Targeting 

10.	Large Family Housing: 
	The Project must provide family housing that is not restricted to persons 55 years old or older. The owner agrees to market to families with minor children.

	At least 75% of the total units contain two or more bedrooms and at least one-third of the 75% contain three or more bedrooms. 

Number of units with:
2 Bedrooms  	      
3 Bedrooms 	      
4 Bedrooms 	     
5 Bedrooms	      
6 Bedrooms	     

 	At least one-third of the three or more bedrooms referenced above contain four or more bedrooms. 
 
11.	Senior Housing:
	The Owner agrees the units below will be restricted as Senior Housing. 

Senior Housing is defined as housing intended and operated for occupancy by Senior Households, provided that at least 80% of the units are occupied by Senior Households, and there is a publication of, and adherence to, policies and procedures that demonstrate an intent by the owner or manager to provide housing for Seniors. 

For purposes of this selection criteria, senior Household is defined as a household with at least one household member that is age 55 years or older. 

Number of Units:       

	Owner agrees to further restrict the units below to households with incomes at or below the 30% MTSP income limit. Owner also agrees that units occupied by households without rental assistance will restrict the rent at or below the county 30% MTSP  rent limit.

Senior Housing – 30% income restricted units and Further Restricted Rental Assistance units must be distinct and cannot be layered.

Number of Units:       

12.	Permanent Supportive Housing for Households Experiencing Homeless High Priority Homeless (HPH): 
	Owner agrees that the following number of units in the Project will be set aside for and rented to High Priority Homeless households, which are households prioritized for permanent supportive housing by Coordinated Entry System or through an approved alternative referral and prioritization process as described below (HPH units).

Coordinated Entry System is defined by the Statewide Coordinated Entry standards and protocol as adopted by the local Continuum of Care, or such successor system as determined by Minnesota Housing. An alternative referral and prioritization process is determined by the agency, in consultation with the owner and the local community, for homeless populations that have a demonstrated need for Supportive Housing but are not included in the Coordinated Entry System. 

Owner agrees that if units set aside for High Priority Homeless are occupied by households without rental assistance, the gross rents, including an allowance for tenant-paid utilities cannot exceed the greater of 30% of the household’s monthly income or the most current Supportive Housing Standard for the unit size, as published annually by Minnesota Housing. Owner must establish and implement policies and procedures to specify the calculation method used to determine the appropriate rent amount and periodic income recertification to adjust rents. 

The Owner agrees to pursue and continue renewal of rental assistance, operating subsidy, or service funding contracts for as long as the funding is available.

	HPH units will use the Coordinated Entry System 

	HPH units will use an approved alternative referral and prioritization process
	
Permanent Supportive Housing for Households Experiencing Homelessness - High Priority Homeless units and People with Disabilities units must be distinct and cannot be layered.

Number of Units:       	
	
HPH Reporting Requirements 

Owner agrees to comply with the reporting requirements contained in the Compliance Guide.
      
HPH Unit Relief Provisions

The following relief provisions may be considered for developments with HPH Units and are subject to Minnesota Housing approval: 

a.    An owner may request approval in writing from Minnesota Housing to prioritize filling a vacant HPH Unit(s) with the next highest need household in accordance with the Supportive Housing HPH Prioritization procedure, as determined at the sole discretion of Minnesota Housing, if the HPH Unit(s) is unable to be filled with highest priority household on the permanent supportive housing waitlist in the Coordinated Entry system. 
b.   If, after a minimum 60-day period, or other time period approved by Minnesota Housing when reasonable options have been exhausted, an HPH Unit(s) is unable to be filled by a household through the Coordinated Entry system or the Supportive Housing HPH Prioritization procedure, temporary relief from the HPH Unit may be requested from Minnesota Housing to permit a non-HPH household to fill the unit. The next comparable available unit is subject to the HPH Unit requirements when a vacancy occurs. 

c.    If a particular HPH Unit(s) experiences unexpected loss of rental or operating support or tenant support services funding (collectively HPH Unit subsidy) and meets the conditions below, the owner may petition Minnesota Housing to eliminate its requirements for the affected HPH Unit(s): 

(i)	The HPH Unit subsidy was withdrawn or terminated due to reasons not attributable to the actions or inactions of the owner; 
(ii)	such withdrawal or termination materially adversely impacts the financial feasibility of the project; 
(iii)	alternative funding or an alternative service provider is unavailable; and 
(iv)	the project is otherwise in full compliance with all the terms of the funding for the project. 

If all of the conditions of “c” above are met, the owner may petition Minnesota Housing to eliminate its requirements for the affected HPH Unit(s). Such petition shall contain all material facts and supporting documentation substantiating owner’s request including, but not limited to, items (i), (ii) and (iii) above. Upon confirmation of such facts, which such confirmation shall not be unreasonably withheld or delayed, owner shall no longer be required to treat such HPH Unit(s) as HPH Unit(s) but must convert the rents of those units to the 50% HTC rent limit; provided that more restrictive threshold, selection priority or funding requirements, if any, do not apply. If such conversion occurs, in order to retain the HTC Allocation or Award, the above described 50% HTC rent limit and the IRC Section 42 minimum set-aside elected for the project by the owner must be maintained for the remainder of the HTC Compliance Period and Extended Use Periods. 

If Minnesota Housing shall, at any time thereafter, in its sole discretion, determine that an HPH Unit subsidy may be available for the remainder of the HTC Compliance and Extended Use Periods, that would not adversely affect the full availability of the HTC Allocation or Award and would permit the HPH Unit(s) to again serve households experiencing homelessness, then at Minnesota Housing’s request the owner shall promptly apply for such HPH Unit subsidy for the Homeless unit(s), upon terms reasonably acceptable to such owner, and if such HPH Unit subsidy is obtained, shall again set aside such HPH Unit(s), when and to the extent then available, to households experiencing homelessness.

13.	Permanent Supportive Housing for Households Experiencing Homelessness – 30% Units With Homeless Priority:
	Owner agrees that the following number of units in the project will be restricted to rents at or below 30% MTSP, and maintain a priority in the Tenant Selection Plan to serve homeless households which may include any homeless household prioritized for permanent supportive housing by the Coordinated Entry System, or Other Homeless households that include individuals leaving institutions that do not have a permanent residence or other homeless populations not referred or prioritized by the Coordinated Entry System, for the term of the LURA. 

Number of Units:      

14.	Permanent Supportive Housing – Other Homeless:
	Owner agrees that the following number of units in the Project will be set aside for and rented to Other Homeless households which includes individuals leaving institutions that do not have a permanent residence or other homeless populations not referred by the Coordinated Entry System.  

Owner agrees that if units set aside for Other Homeless are occupied by households without rental assistance, the gross rents, including an allowance for tenant-paid utilities cannot exceed the greater of 30% of the household’s monthly income or the most current Supportive Housing Standard for the unit size, as published annually by Minnesota Housing. Owner must establish and implement policies and procedures to specify the calculation method used to determine the appropriate rent amount and periodic income recertification to adjust rents. 

The Owner agrees to pursue and continue renewal of rental assistance, operating subsidy, or service funding contracts for as long as the funding is available.

Number of Units:      

Other Homeless Reporting Requirements 

Owner agrees to comply with the reporting requirements contained in the Compliance Guide.

15.	People with Disabilities:
	Owner agrees that the following number of units in the Project will be set aside for and rented to households with at least one person with one or more disabilities described below for the term of the LURA. The units are restricted to households with incomes at or below 30% MTSP income limits, are not restricted to persons of a particular age group and must be provided in integrated settings.

Number of Units:      

	Owner agrees that the following number of units in the Project will be set aside for and rented to households with at least one person with a disability and will use Housing and Urban Development Section 811 Project-Based Rental Assistance (“HUD Section 811 PRA”) for the term of the LURA. The units are restricted to households with incomes at or below 30% MTSP income limits, are not restricted to persons of a particular age group and must be provided in integrated settings.

Number of Units:      

Owner agrees that if units set aside for People with Disabilities are occupied by households without rental assistance, the gross rents, including an allowance for tenant-paid utilities, cannot exceed the greater of 30% of the household’s monthly income or the most current Supportive Housing Standard for the unit size, as published annually by Minnesota Housing. Owner must establish and implement policies and procedures to specify the calculation method used to determine the appropriate rent amount and periodic income recertification to adjust rents.

The units set aside for People With Disabilities must be rented to households with at least one  person with one or more of the following disabilities: 

a.   A serious and persistent mental illness as defined in Minnesota Statutes, section 245.462, subdivision 20, paragraph (c); 

b.   A developmental disability as defined in United States Code, Title 42, Section 6001, paragraph (8), as amended through December 31, 1990; 

c.   Assessed as drug dependent persons as defined in Minnesota Statutes section 254A.02, subdivision 5, and are receiving or will receive care and treatment services provided by an approved treatment program as defined in Minnesota Statute section 254A.02, subdivision 2; 

d.   A brain injury as defined in Minnesota Statute, section 256B.093, subdivision 4, paragraph (a); or

e.   Permanent physical disabilities that substantially limit major life activities. NOTE: these categories a.- e. apply to Requirement #15. If the Project is also subject to Minimum Threshold Criteria- Persons with Disabilities, see Exhibit D, Requirement #9.
		
NOTE:
•	The definition of permanent physical disability is not limited to people with mobility impairment.

Permanent Supportive Housing for Households Experiencing Homeless - High Priority Homeless and People with Disabilities units must be distinct and cannot be layered.

People with Disabilities (PWD) Relief Provisions:

If, for a particular People with Disabilities unit (“PWD Unit(s)”), the necessary rental assistance or operating support (collectively “PWD Unit Subsidy”) is (1) withdrawn or terminated due to reasons not attributable to the actions or inactions of Owner; (2) such withdrawal or termination materially adversely impacts the financial feasibility of the Project; (3) alternative funding is unavailable; and (4) the Project is otherwise in full compliance with all the terms of the funding for the Project, Owner may petition Minnesota Housing to eliminate its requirements for the affected PWD Unit(s). Such petition will contain all material facts and supporting documentation substantiating the Owner’s request including, but not limited to, items (1), (2) and (3) above. Upon confirmation of such facts, which such confirmation will not be unreasonably withheld or delayed, Owner will no longer be required to treat such PWD Unit(s) as PWD Unit(s) but must convert the rents and incomes of those units to the 50% HTC rent and income limit, provided that more restrictive threshold, selection priority or funding requirements, if any, do not apply. If such conversion occurs, in order to retain the HTC Allocation or Award, the above described 50% HTC rent and income limit and the Section 42 minimum set-aside elected for the Project by Owner must be maintained for the remainder of HTC Compliance Period and Extended Use Periods.

If Minnesota Housing at any time after approving such relief, in its sole discretion, determines that a PWD Unit Subsidy may be available for the remainder of the term of the LURA, that would not adversely affect the full availability of the HTC Allocation or Award and would permit the PWD Unit(s) to again serve People with Disabilities households, then at Minnesota Housing’s request, the Owner will promptly apply for such PWD Unit Subsidy for the PWD Unit(s), upon terms reasonably acceptable to such Owner, and if such PWD Unit Subsidy is obtained, will again set aside such PWD Unit(s), when and to the extent then available, to People with Disabilities needs qualifying individuals.

If, for a particular PWD Unit(s), the necessary tenant support services funding is (1) withdrawn or terminated due to reasons not attributable to the actions or inactions of Owner; (2) alternative funding or an alternative service provider is unavailable; and (3) the Project is otherwise in full compliance with all the terms of the funding for the Project, Owner may petition Minnesota Housing to modify its requirements for the provision of such tenant services for the affected PWD Units(s). Such petition will contain all material facts and supporting documentation substantiating Owner’s request including, but not limited to, items (1) and (2) of this paragraph. Upon confirmation of such facts, which such confirmation will not be unreasonably withheld or delayed, Owner will modify its provision of such tenant support services for the affected PWD Unit(s) in a manner consistent with Minnesota Housing’s modified requirements for the provision of tenant services for the PWD Unit(s), provided that more restrictive threshold, selection priority or funding requirements, if any, do not apply.

If Minnesota Housing at any time after approving such relief, in its sole discretion, determines that PWD Unit tenant support services funding may be available for the remainder of the term of the LURA, that would not adversely affect the full availability of the HTC Allocation or Award and would permit the affected PWD Unit(s) to again provide tenant support services to People with Disabilities households, then at Minnesota Housing’s request, the Owner will promptly apply for such PWD Unit tenant support services funding for the affected PWD Unit(s), upon terms reasonably acceptable to such Owner. If such PWD Unit tenant support services funding is obtained, the owner will resume providing PWD Unit tenant support services, when and to the extent then available, to People with Disabilities needs qualifying individuals.

Servest Lowest Income for Long Durations

16.	Preservation: 
	Tier 1: The Project preserve Existing Federally Assisted Tier 1 units as identified in the Project’s application and Self-Scoring Worksheet and must meet the conditions identified in the QAP.

Number of Units:      

Owner must continue renewals of existing project-based rental assistance contract(s) for the number of units listed above as long as the assistance is available. Except for “good cause,” Owner must not evict existing subsidized residents and must continue to renew leases for those residents.

Units in the Preservation Tier 1 and Serves Lowest-Income Tenants/Rent Reduction criteria must be separate and distinct.  

Units in the Preservation Tier 1 and Serves Lowest-Income Tenants/Rent Reduction criteria must be separate and distinct.  

	Tier 2: The Project preserves Other Existing Federal Assistance  and Critical Affordable units as identified in the Project’s application and Self-Scoring Worksheet and must meet the conditions identified in the QAP.

Number of Units:      

Owner agrees to restrict at least 50% of the number of units listed above to rents at or below the 60% MTSP limit.

Units in the Preservation Tier 2 and Serves Lowest-Income Tenants/Rent Reduction criteria must be separate and distinct .

17.	Rental Assistance:
Project-Based Rental Assistance
	Owner represents and warrants that is has entered a contract or binding commitment with a government entity providing  project-based rental assistance (or effectively project-based by written contract (e.g. NAHASDA)) as set out in the Project application and Self-Scoring Worksheet to the number of units listed below. Owner agrees to continue renewals of the  project-based rental assistance contract(s) for a minimum of 15 years from the last placed in service date for any building in the property. Owner agrees that the gross rents for these units will remain affordable at 50% MTSP income limit for the remainder of the 15-year period if the rental assistance is not available for the full period.

Number of Units:      

Further Restricting Rental Assistance (FRRA)
  	In addition to the Rental Assistance requirements above, Owner agrees to further restrict units with project-based rental assistance to households whose incomes do not exceed the county 30% of MTSP income limit at initial occupancy,. subject to the Rental Assistance relief provision below. T. 

Number of Units:      

Project-based rental assistance is defined as project- specific funding stream that supports the operations of the property, reduces the tenant burden, and provides for the tenant paid portion of rent to be no greater than 30% of household income, unless approved by Minnesota Housing.

Except where such requirements would conflict with tenant protections under state law, federal law, or program requirements with greater tenant protections, the Project must comply with all project-based rent assistance program requirements, including rent limits, for the term of the rent assistance contract, as renewed, and any additional time required by tenant leases or federal or state law.

Units with Rental Assistance cannot be claimed to meet unit requirements in the Serves Lowest Income Tenants/Rent Reduction criteria. 

Senior Housing – 30% income restricted units and Further Restricting Rental Assistance units must be distinct and cannot be layered.

Rental Assistance Relief Provisions:

If, for a particular unit meeting the criteria under Rental Assistance unit and Further Restricting Rental Assistance (collectively, RA Units) units, the necessary rental assistance or operating support (collectively RA Unit Subsidy) is (1) not renewed, withdrawn or terminated due to reasons not attributable to the actions or inactions of Owner; (2) such nonrenewal, withdrawal or termination materially adversely impacts the financial feasibility of the project; (3) alternative funding is unavailable; and (4) the Project is otherwise in full compliance with all the terms of the funding for the Project, Owner may petition Minnesota Housing to eliminate its requirements for the affected RA Unit(s). Such petition shall contain all material facts and supporting documentation substantiating Owner’s request including, but not limited to, items (1), (2) and (3) above. Upon confirmation of such facts, which such confirmation shall not be unreasonably withheld or delayed, Owner shall no longer be required to treat such RA Unit(s) as RA Unit(s) but must convert the rents of those units to the 50% HTC rent limit, provided that if a more restrictive threshold, selection priority or funding requirements applies to the Project, rents shall be set at the lower rent limit. If such conversion occurs, in order to retain the HTC Allocation or Award, the above described 50% HTC rent limit and the Section 42 minimum set-aside elected for the Project by Owner must be maintained for the remainder of the term of the LURA, provided, however, that existing tenants in units that lost assistance: (1) will pay no more than the tenant payment under their lease until such notice required by law has been delivered and the applicable notice period has expired; (2) will not be required to reapply or meet move-in eligibility requirements for their existing unit, except such paperwork necessary to apply for tenant protection vouchers, other available tenant-based assistance, or new project-based assistance available.

If Minnesota Housing at any time thereafter, in its sole discretion, determines that an RA Unit Subsidy may be available for the remainder of the term of the LURA, that would not adversely affect the full availability of the HTC Allocation, then at Minnesota Housing’s request, Owner shall promptly apply for such RA Unit Subsidy for the RA Unit(s), upon terms reasonably acceptable to such Owner. If such RA Unit Subsidy is obtained, the owner shall again set aside such RA Unit(s), when and to the extent then available, to income qualifying individuals.

18.	Serves Lowest Income Tenants/Rent Reduction:
	The Project is hereby restricted to the following gross rent levels for the term of the LURA.

Units with Rental Assistance cannot be claimed to meet unit requirements in the Serves Lowest Income Tenants/Rent Reduction criteria. 

Applicable Rent Restrictions:
	100% of the total units are restricted to rents at or below the county 50% MTSP rent limit.

Number of Units:      

 	At least 50% of the total units are restricted to rents at or below the county 50% MTSP rent limit.

Number of Units:      

        Owner agrees to further restrict a portion of the units above to the county 30% MTSP rent limit. 

Number of Units:       

19.	Long-Term Affordability: 
	Owner agrees to extend the term of the LURA as set out below, with the period indicated beginning with the first day of the Compliance Period. Any extension beyond 30 years constitutes an extension of the Extended Use Period and the term of the LURA. Owner also agrees that the provisions of IRC Sections 42(h)(6)I (i)(II) and 42(h)(6)(F) (the “Qualified Contract provisions”, which provisions would permit the Owner to terminate the restrictions under this Agreement at the end of the Compliance Period in the event that a qualified contract for the acquisition of the Project is not presented) do not apply to the Project.

	Owner agrees to extend the term of the LURA to 50 years and agrees that Qualified Contract provisions in Section 42 do not apply to the Project.	

	Owner agrees to extend the term of the LURA to 40 years and agrees that Qualified Contract provisions in Section 42 do not apply to the Project.   

20.	Additional Conditions: