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I ( SECTION 2. FUNDING AND TERM A) The Participating Bank hereby agrees to commit during the term of this Agreement the Participating Bank Funds for First Mortgage Loans to Eligible Borrowers, to be secured by fIrst mortgages on the respective Project Sites, at the Participating Bank Rate provided that such Rate does not exceed the Below-Market Interest Rate for the purpose of acquiring an Eligible Property under the Program. If at any time during the term of this Agreement the Participating Bank Rate exceeds the Below-Market Interest Rate, the Participating Bank shall notify the City that such is the case, as provided in Section 4.E) hereof, and the Participating Bank shall not make any First Mortgage Loans unless and until the Participating Bank Rate no longer exceeds the Below-Market Interest Rate or the Participating Bank has received the prior written consent of the City. The repayment term for a First Mortgage Loan shall be between 24-360 months with a maximum loan amount representing 95 % of the purchase price of the Eligible Property as determined by the Participating Bank. B) The Consortium hereby agrees to commit during the term of this Agreement the Committed Amount of HOME Funds to provide Consortium HOME Loans to Eligible Borrowers, to be secured by second mortgages on the respective Project Sites, at an interest rate of 0% per annum for the purpose of paying Eligible Acquisition Costs under the Program. The minimum amount of a Consortium HOME Loan shall be $1,000, and the maximum amount of a Consortium HOME Loan shall be $5,000. Repayment of a Consortium HOME Loan by an Eligible Borrower shall be deferred until the earliest to occur of (i) the sale of the acquired Eligible Property Site by the Eligible Borrower, (ii) the principal residence of the Eligible Borrower being other than the acquired Eligible Property or (üi) any other transfer of the acquired Eligible Property or any interest therein; provided, however, that the transfer by the Eligible Borrower of an interest in the acquired Eligible Property to a mortgagee for the purpose of granting a security interest in such acquired Eligible Property to secure indebtedness shall not constitute a transfer for purposes of the immediately preceding item (iii) if the aggregate of all indebtedness secured by one or more mortgages on such acquired Eligible Property does not exceed 97 % of the value of such acquired Eligible Property as established by an qualifIed, independent appraiser. With respect to a Consortium HOME Loan for Eligible Acquisition Costs consisting of down payment assistance, the Consortium agrees to provide an Eligible Borrower with down payment assistance in an amount not to exceed $5,000. C) This Agreement shall expire on the date immediately following the latest date permitted under the HOME Program for disbursement of the Committed Amount of HOME Funds or such earlier date as the Committed Amount of HOME Funds are fully disbursed, whichever fIrst occurs, or such other earlier date as may be mutually agreed upon between the Consortium, the City and the Participating Bank. This Agreement may be terminated by either the Participating Bank or the Consortium and the City upon receipt of written notice from the party electing to terminate the Agreement given to the other party any time after the Participating Bank Rate has exceeded the Below-Market Interest Rate for 30 consecutive days. 3