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Attachment C (b) It will not take, or permit to be taken on its behalf, any action which would cause the interest payable on the Governmental Note to be included in gross income of the Funding Lender, for federal income tax purposes (excluding any action that causes such interest to be includable in gross income for federal income tax purposes as a result of the application of Section 147(a) of the Code or any successor provision of the Code and applicable Treasury Regulations or any successor law or regulation), and will take such action as may be necessary in the opinion of Bond Counsel to continue such exclusion from gross income, including, without limitation, the preparation and filing of all statements required to be filed by it in order to maintain the exclusion (including, but not limited to, the filing of all reports and certifications required by the Tax Regulatory Agreement); (c) No changes will be made to the Project, no actions will be taken by the Borrower and the Borrower will not omit to take any actions, which will in any way adversely affect the tax- exempt status of interest earned on the Governmental Note (except for any changes, actions, or omissions that adversely affect the tax-exempt status of the Governmental Note as a result of the application of Section 147(a) of the Code or any successor provision of the Code and applicable Treasury Regulations or any successor law or regulation); (d) It will comply with the requirements of Section 148 of the Code and the Regulations issued thereunder throughout the term of the Funding Loan and the Project Loan and will not make any use of the proceeds of the Funding Loan or the Project Loan, or of any other funds which may be deemed to be proceeds of the Governmental Note under the Code and the related regulations of the United States Treasury, which would cause the Governmental Note to be an Ðarbitrage bondÑ within the meaning of Section 148 of the Code; (e) If the Borrower becomes aware of any situation, event or condition which would, to the best of its knowledge, result in the interest on the Governmental Note becoming includable in gross income of the Funding Lender for purposes of federal income tax purposes (except to the extent such interest is includable in gross income for federal income tax purposes as a result of the application of Section 147(a) of the Code or any successor provision of the Code and applicable Treasury Regulations or any successor law or regulation), it will promptly give written notice of such circumstance, event or condition to the Governmental Lender, the Fiscal Agent, the Funding Lender Representative, the Servicer and during the Construction Phase, the Financial Monitor; (f) The full amount of each disbursement from the Project Loan Fund will be applied to pay or to reimburse the Borrower for the payment of Costs of the Project and, after taking into account any proposed disbursement, (i) at least ninety-five percent (95%) of the net proceeds of the Governmental Note (as defined in Section 150 of the Code) will be used to provide a qualified residential rental project (as defined in Section 142(d) of the Code); (ii) less than twenty-five (25%) of the net proceeds of the Governmental Note will have been disbursed to pay or to reimburse the Borrower for the cost of acquiring land; and (iii) no more than five percent (5%) of the proceeds of the Governmental Note (as defined for purposes of Section 147(g) of the Code) will be disbursed to provide working capital; 12 12502464v3