Which of the following could replace ‘it’ as used in the passage?

Directions: Read the following passage carefully and select the most suitable option according to the corresponding number in the passage.

The rolling waves of lush (1) green grass stretching from Montana to Mexico is the home (2) to prairie dogs. They are actually very big scquirals (3) that live together in large numbers. They live in holes in the ground, and connect the holes to each other by tunnels. Such tunnels connect all ground holes in a prairie dog town with each other. Prairie dogs are very conservative (4) and defensive. Before letting any other prairie dog into their homes, they hug and kiss each other to make sure that it (5) is family! Each prairie dog family has its own hole in the ground and they really are proper homes. Each has separate entry and exit tunnels and rooms for the family to stay. Each home has a special hole dug (6) near the bottom of the ceiling. These special holes trap in (7) pockets of air, if water floods the holes. They trap enough air for the family to keep on (8) breathing until the water goes down.