Shared Appreciation Rider

SHARED APPRECIATION RIDER

THIS SHARED APPRECIATION RIDER is made this day of

, 19 , and is incorporated into and shall be deemed to amend

and supplement the Mortgage, Deed of Trust or Security Deed ("Security

Instrument") of the same date given by the undersigned ("Borrower") to

secure Borrower's Note ("Note") to ("Lender"),

of the same date covering the Property described in the Security Instrument

and located at:

[Property Address]

Notwithstanding anything to the contrary set forth in the Note,

Borrower hereby agrees to the following:

1. At the time that the Note is due and payable or is paid in full,

Borrower promises to pay Lender an additional amount of interest equal to

twenty-five percent (25%) of the net appreciated value of the property,

except that the total effective interest rate shall not exceed twenty

percent (20%).

2. If the principal balance is less than the appraised value of the

Property at origination, the Lender's share of appreciation shall be

calculated by subtracting the appraised value of the Property at the time

of the loan origination from the adjusted sales proceeds (i.e., sales

proceeds less costs and capital improvements, but excluding liens) and

multiplying by twenty-five percent (25%).

3. If the principal balance is greater than the appraised value at the

origination but less than the adjusted sales proceeds, the Lender's share

is calculated by subtracting the principal balance from the adjusted sales

proceeds and multiplying by twenty-five percent (25%).

4. If the principal balance is greater than the adjusted sales proceeds,

the net appreciated value is zero.

5. If there has been no sale or transfer at the time the Note is

satisfied, the "sales proceeds" in Paragraphs 2 through 4 shall be the

current appraised value of the Property.

6. The effective interest rate shall be calculated by adding the amount of

interest accrued in the twelve (12) month period prior to the sale of the

Property or prepayment in full, to the Lender's share of the net

appreciated value. The sum of the interest and Lender's appreciation share

shall be divided by the sum of the Principal Balance at the beginning of

the twelve (12) month period prior to sale or prepayment in full, plus the

total of the monthly payments to or on behalf of the Borrower in the twelve

(12) months prior to the sale or prepayment in full, to result in the

effective interest rate not in excess of twenty percent (20%).

7. Borrower and Lender have a debtor-creditor relationship only. Nothing

in this document is intended to create a partnership or joint venture.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and

covenants contained in this Shared Appreciation Rider.

___________________________ (SEAL)

Borrower

___________________________ (SEAL)

Borrower

[ADD ANY NECESSARY ACKNOWLEDGEMENT PROVISIONS.]