**DECLARATION OF RESTRICTIVE COVENANTS**

THIS DECLARATION OF RESTRICTIVE COVENANTS (the "**Declaration**") is
made and entered into as of this date,
**\_\_\_\_\_\_\[1\]\_\_\_\_\_\_\_\_\_,** 200 **\[1\]** by and between
**\[2\]** (the "**Authority**"), a public body corporate and politic,
organized and existing under the laws of **\[3\]** , and **\[4\]** (the
"**Owner**"), a **\[5\]** , for the benefit of the United States of
America, acting by and through the Secretary of Housing and Urban
Development ("**HUD**").

# RECITALS

WHEREAS, the Authority has dedicated HOPE VI funds in the amount of
**\[6\]\_\_\_,** pursuant to a HOPE VI Revitalization Grant Agreement,
Grant No., **\_\_\_\_\_\_\_\[7\]\_\_\_\_\_\_\_\_\_\_** (**Grant
Agreement**); and/or

WHEREAS, the Authority has dedicated Capital Funds in the amount of
**\_\_\_\[8\]\_\_\_\_\_,** Grant No.,
**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** for use in developing the Project
(as applicable); and

WHEREAS, HUD has approved a Homeownership Proposal (as defined in the
Addendum, as defined below) for the Homeownership Replacement Units
which establishes the Authority's homeownership program; and

WHEREAS, the Authority and HUD are concurrent with execution of this
Declaration entering into a Grant Agreement Addendum (**the
"Addendum"**) that establishes the requirements pursuant to which the
Authority will use such funds to develop **\[9\]** replacement units for
sale to qualified purchasers (the "**Homeownership Replacement Units**")
upon real property situated in the City of **\[10\] [,]{.underline}**
County of **\[11\]** , in the **\[12\]** as more fully described in
Exhibit A to this Declaration (the "**Property**"), and which is made a
part hereof *(*which, together with the Homeownership Replacement Units,
any fixtures, rents, revenues, other income, and personalty related to
such units and appurtenances shall hereafter collectively be referred to
as the "**Project***");* and

WHEREAS, pursuant to the Addendum the Authority will **\[14\];** and

WHEREAS, the Authority and Owner acknowledge the continuing interest of
HUD in the Project, and agree that the use of Federal funds in
connection with the Project, is subject to all requirements applicable
to homeownership, including, without limitation, the United States
Housing Act of 1937, as amended, and any successor legislation, HUD
regulations thereunder (and, to the extent applicable, any HUD-approved
waivers of regulatory agreements), HOPE VI authorizing language included
in any Appropriation Acts, as applicable, the Grant Agreement, the
Addendum, this Declaration, and all pertinent Federal statutory,
executive order, and other regulatory requirements, as those
requirements may be amended from time to time (all such requirements
herein collectively referred to as the "**Applicable Homeownership
Requirements**"); and

NOW, THEREFORE, to assure HUD of the performance by the Authority and
Owner, and any successors in interest to the Authority or Owner of the
Applicable Homeownership Requirements in connection with the
development, operation and maintenance of the Project for the term of
the use restrictions, the parties hereby acknowledge and agree:

1.  *The Authority / Owner does hereby acknowledge and declare that it
    is possessed of and holds title to the Project for the benefit of
    HUD, for the purposes hereinafter stated;* **\[15\]**

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2.  The Authority and Owner hereby declare and acknowledge that the
    restrictive covenants set forth in this Declaration shall be, and
    are, covenants running with the land, and are binding upon the
    Authority and Owner, and their successors and assigns, until
    released in accordance with Section 8 herein;

3.  The Authority and Owner shall develop, sell, and market (or shall
    enter into agreements with other entities who shall develop, sell,
    and market) the Project in compliance with Applicable Homeownership
    Requirements;

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4.  The **\[Authority/Owner\]** shall not, without the prior written
    approval of HUD, or as may otherwise be authorized by law, dispose
    of the **Project** in a manner other than in accordance with the
    Addendum and any other Applicable Homeownership Requirements;

5.  The **\[Authority/Owner\]** shall remain seized of title to the
    **Project** and shall refrain from transferring, conveying,
    assigning, leasing, mortgaging, pledging, or otherwise encumbering
    or permitting or suffering any transfer of any kind of the Project,
    or any part thereof, or any rent, revenues, income, or receipts
    therefrom or in connection therewith, or any of the benefits or
    contributions, granted to it by or pursuant to the Addendum or
    Annual Contributions Contract (the "ACC"), if applicable, or any
    interest in any of the same, except to the extent permitted under
    the Addendum or as otherwise approved in writing by HUD, as
    otherwise authorized by the ACC, if applicable, or as authorized
    below:

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A.  Deeds of trust or mortgages and loan financing to effectuate the
    activities described in the Addendum, and transfer of the Project to
    the beneficiary under such approved loan financing, by foreclosure
    or deed-in-lieu of foreclosure, or to a third party purchaser at a
    foreclosure sale, provided that any such transfer shall be subject
    to the terms of this Declaration of Restrictive Covenants;

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B.  Sale of units at the Project in accordance with the Addendum;

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C.  Conveyance or dedication of land for use as streets, alleys, or
    other public rights-of-way, and grants and easements for the
    establishment, operation, and maintenance of public utilities; and

D.  Normal uses and encumbrances associated with the operation of the
    Project, to the extent authorized by the Addendum, if applicable.

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7.  No transfer, conveyance, or assignment shall be made without the
    approval of HUD of: (A) any interest of a managing member, general
    partner, or controlling stockholder (any such interest being
    referred to as a **"Controlling Interest")** of the Owner; or (B) a
    Controlling Interest in any entity which has Controlling Interest in
    the Owner; or (C) any other interest in the Owner, or in any partner
    or member thereof. HUD will not unreasonably withhold, delay, or
    condition a request by the Owner for HUD's consent to an internal
    reorganization of the corporate or limited liability company
    structure of the Owner or any of the partners, members, managers or
    stockholders of the Owner, as applicable.

8.  Prior to each sale of a Homeownership Replacement Unit to an
    eligible homebuyer the Owner shall prepare for HUD\'s signature, a
    Partial Release from Declaration of Restrictive Covenants of each
    such Homeownership Replacement Unit; and Owner shall properly record
    and file such Partial Release in the appropriate land records,
    immediately prior to the conveyance documents related to the sale of
    each Homeownership Replacement Unit to an eligible homebuyer.

9.  Except as provided herein this Declaration of Restrictive Covenants
    shall not be amended, modified or released without the prior written
    consent of HUD.

10. This Declaration may be executed in counterparts, each of which
    shall be deemed original, but all of which together, shall
    constitute one instrument.

11. Any Capitalized terms used in this Certification but not defined
    herein shall have the meanings provided in the Addendum.

**\[SIGNATURES APPEAR ON THE FOLLOWING PAGE\]**

IN WITNESS WHEREOF, the Authority and the Owner have caused this
Declaration to be executed by their duly authorized officers for proper
recording in the public records.

Housing Authority

> By: Name: Title:

Owner

By: Name: Title:

**Exhibit A**

**Legal Description of Development**

**Instructions for Completing this Form**

There may be instances when the recitals in this document may need to be
altered to reflect the circumstances of the transaction for which it is
being used. HUD must approve any changes to the Declaration form.

1.  The month, day, and year respectively.

2.  The name of the Authority executing the Declaration

3.  The State or Commonwealth in which the Authority is organized and
    existing.

4.  The Name of the Owner executing the Declaration.

5.  The Owner's organizational type (e.g., partnership).

6.  The amount of the HOPE VI grant dedicated to the project.

7.  The grant number assigned to the HOPE VI grant.

8.  The amount of Capital funds dedicated to the project.

9.  The number of units to be developed with HOPE VI funds or other
    public housing funds and which are subject to the Declaration.

10. The City in which the Homeownership Replacement Units are located.

11. The County in which the Homeownership Replacement Units are located.

12. The State or Commonwealth in which the Project is located.

13. 

14. Provide the names of the parties and a brief description of the
    parties' responsibilities (for instance, "Authority will convey the
    Property and will loan the HOPE VI funds to the Owner to enable the
    Owner to develop the Homeownership Replacement Unit."). The Project
    descriptions should include whether other HUD funds, e.g., Capital
    funds, are to be included in the deal.

15. This paragraph should be altered as appropriate to reflect the
    transaction as described in (12) above.

16.