Repair Rider

REPAIR RIDER

TO LOAN AGREEMENT

THIS REPAIR RIDER is made this day of , 19 , and is

incorporated into and shall be deemed to supplement the Loan Agreement of

the same date made by the undersigned Lender and the undersigned Borrower

and the Secretary of Housing and Urban Development ("Secretary").

I. Lender's Promises

A.The Lender shall set aside Dollars ($ )

from the initial Principal Limit under the Loan Agreement to

be used for the purpose of bringing the Property up to the

property standards required by the Secretary by repairing:

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B.The Lender may charge a repair administration fee not to

exceed the greater of fifty dollars ($50) or 1.5% of the

amounts advanced by Lender under this Repair Rider. This

fee shall be added to the Principal Balance as each Loan

Advance is made.

C.The Lender shall require one or more inspections by a

HUD-approved inspector during the course of the repair work.

The Lender shall not release any funds for work which is not

complete and which is not approved by a HUD-approved

inspector. The Lender certifies by executing this Repair

Rider that the repairs which are funded under this Repair

Rider will be completed in a manner to meet property

standards required by the Secretary as determined by a

HUD-approved inspector.

D.The Lender shall ensure that all mechanic's liens and

materialmen's liens are released of record prior to an

advance of funds under this Repair Rider. The Lender may

require the Borrower to obtain acknowledgment of payment and

releases of lien from all contractors, subcontractors, and

materialmen. Such acknowledgements and releases shall be in

the form required by local laws and shall cover all work

done, labor performed and materials (including equipment and

fixtures) furnished for the project.

E.Until a HUD-approved inspector finds that all repairs

required by Section LA of this Repair Rider have been

completed in a satisfactory manner, the Lender shall not

release funds in excess of (i) the total value of work

satisfactorily completed, and (ii) the value of materials or

equipment delivered to, and suitably stored at, the site but

not yet incorporated in the work, less (iii) ten percent

holdback, less (iv) prior advances under this Repair Rider.

F.Lender shall release the funds to Borrower and the

contractor(s) jointly when permitted by Section I. C. of

this Repair Rider and shall add the cost of the repairs to

the Principal Balance under the Loan Agreement.

II. Borrower's Promises

A.The Borrower will complete all repairs required by Section

I.A. of this Repair Rider so that the Property meets the

property standards required by the Secretary as determined

by a HUD approved inspector.

B.Borrower shall cause work to begin on , 19 .

Borrower shall have work completed by , 19 . Work is

to be performed with reasonable diligence. Should Borrower

fail to comply with these terms, until all repair work is

satisfactorily completed Borrower shall not request and

Lender shall not make any further payments under the Loan

Agreement except for payment of repairs required by Section

I.A. of this Repair Rider and Loan Advances required under

Section 4.5 of the Loan Agreement.

C.Borrower will cause all improvements to be made in a

workmanlike manner and in accordance with all applicable

statutes and regulations. All licenses, permits and

privileges required by local governmental authorities to

rehabilitate the property will be obtained by the

Borrower(s) or his/her contractor.

D.Borrower will furnish such records, contracts, bills and

other documents relating to the Property and improvements as

the Lender or the Secretary may require.

E.Without prior written consent of Lender, no materials,

equipment, fixtures or any part of improvements financed

with this loan shall be purchased or installed subject to

conditional sales contracts, security agreements, lease

agreements or other arrangements whereby title is retained

or the right is reserved or accrues to anyone to remove or

repossess any item, or to consider it as personal property.

___________________________ (SEAL)

Borrower

___________________________ (SEAL)

Borrower

___________________________ (SEAL)

Lender

___________________________ (SEAL)

Secretary of Housing and Urban Development

BY: ___________________________ (SEAL)