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Exhibit C— Rental Affordable Covenant Summary All Permanently Affordable rental units are subject to a covenant that ensures the rental property/units remain perpetually affordable into the future. The Owner must accept all terms of the covenant and Rental Compliance Manual. Rental Covenant Key Points ■ Maximum Income: The maximum income limits at initial occupancy determine household income eligibility. Household income after initial occupancy may increase up to 84% AMI. ■ Over -Income: Households that have an income at or above 84% are considered over income and therefore no longer eligible to occupy the affordable unit. ■ Maximum Assets: The Asset Policy imposes a 55,000 liquid asset limit. Seniors and persons with disabilities are exempt from the liquid asset limit. The policy also imposes a restriction on ownership interest in residential property in which an applicant can legally reside. ■ Maximum Rent & Rent Increases: Maximum rent is based on the Area Median Income outlined in the Covenant and the number of bedrooms. Rents can only be increased once per year up to the maximum rent published. ■ Capital Reserves: The Owner must contribute a minimum amount of funds annually towards capital replacement reserve. ■ Property Standards: Buyers are required to maintain their affordable home in a manner that protects the health, safety, and livability for future homeowners. ■ Reporting Requirements: The Owner/Manager must submit Quarterly and Annual Reports to the City as outlined in the Rental Compliance Manual ■ Record & Retention Requirements: The Owner/Manager must have complete records and meet the retention requirements as outlined in the Rental Compliance Manual. ■ Tenant Selection Plan: The Owner/Manager must develop a Tenant Selection Plan which outlines the selection criteria. The Plan must be in compliance with the City's Tenant Selection Policies. ■ Waiting List Requirements: The Owner/Manager must create and maintain a wait list. ■ Lease Requirements & Prohibited Lease Terms: Leases between the Owner and residents of the specified permanently affordable units must be for not less than one year unless mutually agreed upon by the Owner and residents. The lease must not contain any of the prohibited lease terms as outlined in the Rental Compliance Manual. ■ Termination of Tenancy: The Owner may not terminate the tenancy or refuse to renew the lease of a tenant of the Property except for serious or repeated violation of the terms and conditions of the lease; for violation of applicable federal, state or local law; or for other good cause as determined by the Owner and City of Boulder policies. Any termination of tenancy or refusal to renew must be preceded by not less than 30 days by service upon the tenant of a written notice from the Owner specifying the grounds for the action. 16