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• � .. � <br /> (a) The Owner's household has a gross annual income, as adjusted for family <br /> size, that is less than or equal to eighty percent (80%) of the median income for the <br /> metropolitan statistical area or county in which the Residence is located, as determined by <br /> the United States Deparhnent of Housing and Urban Development("HUD"). <br /> (b) The Owner will hold fee simple title to the Residence. <br /> (c) The Project will be the principal residence of the Owner. <br /> (d) Loan proceeds shall be used to pay only Eligible Costs (as that term is <br /> defined in Section 92.206 of the Regulations and in the rules and regulations promulgated <br /> pursuant to the American Dream Downpayment Initiative("ADDI")) of the Project. <br /> 4. TERMS AND CONDITIONS OF THE LOAN. The Loan shall be subject to the <br /> following terms and conditions: <br /> (a) Amount, Interest,Term and Security. The Loan shall be in the amount of_ �, <br /> Dollars ($ ), shall bear no interest, shall be for a term equal to , <br /> the applicable Recapture Period (as hereinafter defined) and shall be governed by the ', <br /> Recapture Agreement, as provided in Paragraph 4(c) hereof. Far purposes of this I, <br /> subparagraph, the "Recapture Period" shall mean five (5) years from the date that the ' <br /> Project is identified as "completed" in the United States Department of Housing and Urban , <br /> Development's("HUD")Integrated Disbursement Information System. <br /> (b) Use. The proceeds of the Loan shall be used to purchase the Residence, as <br /> more fully described herein. <br /> (c) Recapture Agreement. Contemporaneously herewith, the Owner shall <br /> execute a recapture agreement with the Sponsor in the form attached hereto as Exhibit A <br /> ("Recapture Agreement"), pursuant to which the Owner agrees, among other things, to <br /> repay to the Sponsar the Repayment Amount (as hereinafter defined) upon the occurrence <br /> of one or more of the following events,within the Recapture Period, of the following(each, <br /> a "Recapture Event"): (i)a sale, conveyance or other transfer of the Residence for <br /> consideration ("Recapture Conveyance"), excluding any one or more of the following <br /> (each, a "Permitted Transfer"): any sale, conveyance or transfer (A)to a spouse upon a <br /> dissolution of marriage, (B)to the surviving spouse upon the death of a joint tenant <br /> Homebuyer, (C)by will or(D)by foreclosure or deed in lieu of foreclosure or otherwise by <br /> operation of law; (ii)the Residence is no longer the Owner's principal residence or the <br /> Owner converts the Residence to a rental unit; (iii)the refinancing of the first mortgage, if <br /> any, encumbering the Residence during the Loan term, except for a Permitted Refmancing; <br /> or (iv)there exists a Default by the Owner, beyond any applicable cure period, under this <br /> Agreement or any other Loan Document (as hereinafter defined). In the event of such <br /> Recapture Event, the Owner shall repay to the Sponsor an amount ("Repayment <br /> Amount") equal to the unforgiven portion of the Loan, as set forth below; provided that, <br /> with respect to any Recapture Conveyance, the Loan shall be repaid only from the Net <br /> Proceeds, if any, of such Recapture Conveyance, and any portion of the Repayment <br /> Amount in excess of such Net Proceeds shall be forgiven. For purposes of this <br /> 2 <br />