R2005-112 AUTHORIZING THE PARTICIPATION IN THE ILLINOIS HOUSING DEVELOPMENT AUTHORITY

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applicable cure period, under the Homebuyer Program Agreement or any other document evidencing the Loan. In the event of such Recapture Event, the Homebuyer shall repay to the Sponsor the unforgiven portion of the Loan, as set forth in subparagraph(a) above, provided that, with respect to any sale, conveyance or transfer described in clause(i) above, the Loan shall be repaid only from the "net proceeds," if any, of such sale, conveyance or transfer, and any portion of the Repayment Amount in excess of such "net proceeds" shall be forgiven. For purposes of this subparagraph, "net proceeds" shall mean the proceeds of sale minus documented capital improvement costs incurred by the Homebuyer, principal payments made to the first mortgagee and the Homebuyer's initial contribution to the cost of acquiring the Residence. If none of the events described in clauses(i), (ii), (iii) or (iv) above occurs prior to the expiration of the Loan term, or if any sale, conveyance or transfer of the Residence occurs due to a foreclosure or deed in lieu of foreclosure as aforesaid, the Loan shall be forgiven in its entirety. All repayment obligations described in this subparagraph shall be set forth in a recapture agreement between the Sponsor and each Homebuyer, which agreement shall be recorded in the office of the County Recorder for the County in which the Residence is located. As used herein, the term "Permitted Refinancing" shall mean a refinancing to lower the interest rate, decrease the loan term or lower the monthly payment of such first mortgage loan, shall not include a refinancing that increases the outstanding balance of such first mortgage loan, increases the interest rate or by any other means reduces the Homebuyer's equity in the Residence or increases the Homebuyer's obligations. Any Permitted Refinancing must be approved by the Sponsor,in writing, in advance. 4. Income Limitation. Homebuyers selected to participate in the Homebuyer Program shall have a gross annual income, adjusted for family size, less than or equal to eighty percent (80%) of the median income for the area in which the Residence is located, as determined by HUD. 5. Residence Value. The appraised value of each Residence shall not exceed the sum of One Hundred Seventy-Two Thousand Six Hundred Thirty-Two and No/100 Dollars ($172,632). 6. Disbursement of Grant Proceeds. The Authority shall disburse the proceeds of the Grant to the Sponsor as provided in the Grant Agreement. Grant proceeds shall be used only for (i) downpayment and closing cost assistance for a Residence and (ii) "project delivery" costs payable to the Sponsor. Proceeds of the Grant allocated to any single Residence ("Maacimum Allocation") shall not exceed (x) Ten Thousand and no/100 Dollars ($10,000) or (y) if the purchase price of the Residence exceeds One Hundred Sixty-Six Thousand Six Hundred Sixty- Seven and no/100 Dollars ($166,667), six percent (6%) of the purchase price not to exceed Fourteen Thousand Nine Hundred Ninety-Nine and no/100 Dollars ($14,999); and such Maximum Allocation may include (a) assistance for closing costs in connection with the acquisition of the Residence not to exceed Two Thousand Dollars ($2,000), and (b) "project delivery" costs payable to the Sponsor with respect to each Loan not to exceed fifteen percent (15%) of the applicable Loan amount. All costs described in clauses (a) and(b) above must be Eligible Costs and must be approved in advance by the Authority. 7. Limitation on HOME Pro�ram Downpavment Subsidv. The HOME Program downpayment subsidy combined with the homebuyer's contribution (including cash, grants from other sources, and gifts) shall not exceed twenty-five percent (25%) of the purchase price without the prior written authorization of the Authority. If the analysis of sources of 4