14-Reservation system participant to the Texas Dept of Housing

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(i) If at any time prior to the end of the loan term following completion of construction or loan closing there occurs a sale of the property, the unit ceases to be the assisted Household's principal residence or default occurs, the First Lien and Second Lien shall become due and payable. (ii) In the event that the assisted Household refinances any superior lien, at Department's discretion, the Department will re-subordinate if the household can provide documentation, acceptable to the Department, showing that no funds are due the assisted Household as a result of the refinance; the Household will pay off the Department's lien; or that the refinance will not adversely impact the ability for the household to continue to meet the affordability requirements of the Department's loan. (iii) In the event of payoff of any superior lien, the assisted Household will have the option of: repaying the balance of the Department's loan(s) in full; or repaying the balance of the Department's loan(s) in equal monthly installments over a five (5) year period. ARTICLE IV RESERVATION, COMMITMENT, AND DISBURSEMENT OF HOME FUNDS Section 4.1 Reservation and Commitment of HOME Funds A. A Commitment of Funds shall not be made under this Contract until which time as the Board has ratified the Executive Director's approval of the RSP application and the authority of the Department to enter into this Contract. If the Board fails to ratify the Executive Director's approval of the RSP application, the Department's obligations hereunder shall terminate and Department shall have no liability to reimburse or otherwise compensate RSP for activities performed. B. For a Commitment of Funds to a Household, RSP must submit to the Department at its offices in Travis County, Texas, a properly completed electronic Reservation of Funds for an Activity and support documentation using the Housing Contract System in accordance with the Program Requirements and as required and specified by Department in its sole discretion. C. An approved Reservation of Funds and Commitment of Funds shall be required for each Activity that receives HOME Funds under this Contract and the Reservation System. D. A Reservation of Funds shall not constitute a Commitment of Funds until RSP has submitted all required documentation and such documentation has been accepted by Department. If, during review, the Department identifies Administrative Deficiencies, the Department will allow a cure period of ten (10) Business Days beginning at the start of the first Business Day following the date the RSP notified of the Administrative Deficiency. If any Administrative Deficiency remains after the cure period, the Department shall, in its sole 7 of 25 2010-0015 r~