MOTLEY, SIBYL N. - Laserfiche WebLink

4.1 At the conclusion of the fifth year after the execution of this Note, Borrower shall begin principal and interest payments on the Note as specified in Section 1.0. Any payment of principal and /or interest shall not result in the proportion of the Borrower's income applied toward monthly housing costs, which include principal and interest on any first mortgage loan, private mortgage insurance, homeowner insurance, homeowners association fees and property taxes, exceed 38 percent of the Borrower's annual income. In the event that the required principal and /or interest payment due results in monthly housing costs in excess of 38% of the Buyer's annual income, the principal and /or interest payment due will be adjusted to an amount that will result in an income to housing cost ratio of 38 percent. However, Lender shall have the option to allow deferral of interest and /or principal payments or to allow partial payment of interest and /or principal payments as specified in Section 1.0 beyond the initial waiver period if necessary to address a financial hardship as determined by the City Manager. The method and amount of partial payment or length of additional deferment shall be determined by the Lender. 4.2 If, as determined by the initial two year review as stated in Section 4.0, the Borrower has acquired residential real property in addition to the Property or if the ratio of the Borrower's current housing costs to the Borrower's current gross monthly income has decreased by more than ten (10) percentage points below that ratio of housing costs to gross income which existed at execution of the Note, the Borrower shall be required to commence interest payments on the Note. At the time of the execution of this Note, the Borrower's monthly gross income is $2096 and Borrower's monthly housing expenses in accordance with Section 5 Program Eligibility of the City of Pleasanton Homeownership Assistance Program (PHAP), Deed of Trust are $671. Housing expense as a percentage of Borrower's monthly income is 34 %. As part of this review, Borrower shall provide documentation of income including the most recent year's tax returns and pay stubs from the three months preceding the review within thirty (30) days after the two and five year period as stated above. Failure to provide documentation with the thirty (30) day period will, at the discretion of the City Manager, result in an acceleration of payments due. 4.3 Any time the services of an appraiser or other appropriate professional are required by this Note, the Borrower shall use an appraiser or other professional approved by Lender and pay for the services of such appraiser or professional. 4.4 The purchase price shall be the price paid by the Borrower to the seller for the Property which secures this promissory note. The sales price shall be the price paid by the purchaser to the Borrower for the Property which secures this promissory note. Both purchase price and sales price shall mean the price on which the transfer tax is paid; except if the purchaser assumes existing loans or buys the Property subject to existing loans, the principal amount owing on such existing loans shall be added to the price on which the transfer tax is paid in determining the sale price. - 4 -