1. 1 You MUST use the Loan Document forms developed by TDHCA and provided in the HBA Manual Down Payment Assistance Note (Form 1.05) Subordinate Deed of Trust (Form 1.06) Transfer of Lien (Form 1.07)

2. 2 DOWN PAYMENT ASSISTANCE NOTE SECOND LIEN (NOTE) (Form 1.05)

3. 3 Page 1 of 6: HOME Contract # 1234567 Activity # 12345 Date: October 14, 2004 Property (which includes the real property and improvements thereon): Address: 123 XYZ Avenue City: Anywhere County: Anyplace, Texas

4. 4 1. BORROWERS PROMISE TO PAY The Borrower is Name of Homebuyer. In return for a loan that I have received, I promise to pay U. S. $ Amount of HBA Assistance (this amount is called principal) to the order of the Lender. The Lender is Name of Contract Administrator. Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the Note Holder.

5. 5 Page 2 of 6: 2. INTEREST No interest will accrue on this loan at any time. 0%

6. 6 3.TIME AND PLACE OF PAYMENTS Provided that the Borrower complies with the other terms of this Note, the amounts due and payable under this Note shall be deferred and repayable as follows:

7. 7 From Signature Date to 1st anniversary 100% From 1 st anniversary to 2nd anniversary 90% From 2 nd anniversary to 3rd anniversary 80% From 3 rd anniversary to 4 th anniversary 70% From 4 th anniversary to 5 th anniversary 60% From 5 th anniversary to 6 th anniversary 50% From 6 th anniversary to 7 th anniversary 40% From 7 th anniversary to 8 th anniversary 30% From 8 th anniversary to 0 th anniversary 20% From 9 th anniversary to 10 th anniversary 10% After 10 th anniversary 0%

8. 8 Page 3 of 6: The events which will cause the balance of the Note to be declared due and payable are as follows: (a)the note to Name of Mortgage Lender dated October 14, 2004 in the amount of $ Amount of Mortgage, hereinafter the First Lien Note (FLN), is paid in full according to its terms; or

9. 9 (b) the FLN is refinanced in whole or in part or is assumed by a new borrower without the consent of TDHCA; or (c) the unpaid balance of the FLN becomes due and payable in full for any reason; or (d) all or any part of the Property, or any interest in it, is leased, transferred, or foreclosed; or

10. 10 (e) all or part of the Property is sold; or (f) the Borrower ceases to occupy the Property as his or her principal residence.

11. 11 I will make my payment(s) at Address of Administrator or at a different place if required by the Note Holder.

12. 12 Page 6 of 6: Witness the Hand and Seal(s) of the Undersigned: ____________________ __________ Borrower Date ____________________ __________ Borrower Date

13. 13 Endorsement DATE: October 14, 2004 Pay to the Order of Texas Department of Housing and Community Affairs, an Agency of the State of Texas: Name of Contract Administrator BY: Authorized Persons Signature Title Authorized Signature Title

14. 14 Down Payment Assistance Note NOT recorded ORIGINAL must be submitted to the Department with Draw Request support documents.

15. 15 SUBORDINATE DEED of TRUST (Form 1.06)

16. 16 Page 1 of 11: HOME Contract # 1234567 Activity # 12345 This SUBORDINATE DEED of TRUST ( Security Instrument ) is made on Settlement Date (Date). The grantor is Name of Borrower (Borrower).

17. 17 The trustee is Name of Contract Administrator (Trustee), whose address is Address of Contract Administrator. The beneficiary is Name of Mortgage Lender, (Lender), which is organized and existing under the laws of State of Lender, and whose address is Address of Lender.

18. 18 Borrower owes Lender the principal sum of Spelled out Amount of HBA Assistance Dollars (U.S. $ Numerical Amount). This debt is evidenced by Borrowers note dated the same date as this Security Instrument (Note), with the full debt due and payable on 10 years from Date of Settlement (Final Maturity Date).

19. 19 The Note provides for certain potential deferrals, forgiveness or other payment terms. The Note also provides that the full debt, if not paid or forgiven earlier, shall be due and payable on the sale of the property, refinance of the senior purchase money note dated Settlement Date in the original principal amount of Mortgage Amount issued by Borrower and made payable to Name of Mortgage Lender (Senior Lien Holder), hereinafter the First Lien Note (FLN),

20. 20 This clause applies only in 3 rd Lien situations: [refinance of a prior note dated _____________ in the original principal amount of ____________ issued by Borrower and made payable to ____________________ (Prior Note Holder), hereinafter the Second Lien Note (SLN)], or acceleration of either the FLN, [SLN] or this Note upon Borrowers default, whichever is first to occur.

21. 21 Page 2 of 11: For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in Name of County County, Texas insert legal description: which has the address of Physical Street Address (Street), Name of City (City), Zip Code (Zip Code), Texas,(Property Address).

22. 22 Page 3 of 11: Payment of these amounts in escrow (if required under the terms of the approved purchase money Deed of Trust securing the FLN from Borrower herein to Name of Contract Administrator, Trustee, of even date with FLN, to be filed in the Official Public/Deed/Real Property Records of Name of County Where Property is Located County, Texas (First Lien Deed of Trust) instead of directly to the person owed payment, will not be a default under this Security Instrument, provided that the escrow agent in turn pays them on time to the person owed payment and the escrow agent or the Borrower promptly thereafter furnishes to Lender receipts evidencing the payments.

23. 23 This phrase applies only to 2 nd Lien situations: Except as to the First Lien Deed of Trust [and the prior deed of trust securing the SLN from Borrower herein to Name of Contract Administrator, Trustee, of even date with SLN, to be filed in the Official Public/Deed/Real Property Records of Name of County Where Property is Located County, Texas (Second Lien Deed of Trust),

24. 24 Page 11 of 11: Borrowers Signature Borrower SSN SSN______________ Social Security Number

25. 25 STATE OF TEXAS, County of County Where Deed of Trust is Being Signed BEFORE ME, the undersigned, a Notary Public in and for said County and State, on this day personally appeared Names of Borrowers, known to me to be the person(s) whose names(s) is/are subscribed to the foregoing instrument and acknowledged to me that he/she/they (s)(t)he(y) executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this Date day of ___Month_____, 20Year. Signature of Notary NOTARYS SEAL Notary Public or STAMP

26. 26 Instructions to County Clerks Office: Forward RECORDED Deed of Trust to: Texas Department of Housing and Community Affairs Single Family Finance Production Division Loan Closing, Suite 700 P.O. Box 13941 Austin, TX 78711

27. 27 Subordinate Deed of Trust (DOT) CERTIFIED COPY must be submitted to the Department with Draw Request. Original DOT Must be RECORDED. Recorded trailing document must be submitted to the Department within 90 days following Settlement Date or all future Draw Requests will be suspended.

28. 28 TRANSFER of LIEN (Form 1.07)

29. 29 Page 1 of 3: HOME Contract # 1234567 Activity #12345 DATE: Settlement Date HOLDERS MAILING ADDRESS (INCLUDING COUNTY): Name of Contract Administrator Address City

30. 30 NOTE: Date: Settlement Date Original Amount: $ Amount of HBA Loan Maker: Name of Homebuyer Maker Address: Property Address Unpaid Principal and Interest: $ HBA Loan Payee: Contract Administrator

31. 31 Page 2 of 3: Note and Lien are described in a Deed of Trust of even date executed by Maker and payable to Payee and recorded in the Real Property Records of County Where Recorded County, Texas. Property (including any improvements) subject to Lien (insert legal description): Prior Lien(s): Deed of Trust (describe first lien Deed of Trust) dated Date of DOT executed by Maker, payable to Payee as described in the note, securing a note in the amount of $ HBA Loan Amount and recorded in Records of County Where Recorded County, Texas.

32. 32 Name of Contract Administrator_________ Contract Administrator BY: Signature of Authorized Representative____ Authorized Signature Title of Authorized Representative_________ Title

33. 33 STATE of TEXAS County of County Where Transfer of Lien is Signed This instrument was acknowledged before me on Month and Date, 20Year. by Name of Authorized Representative, of Name of Contract Administrator, a Title of Representative, on behalf of said organization. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this Date day of Month, 20Year. Signature of NotaryNotarys Seal or Stamp Notary Public

34. 34 Instructions to County Clerks Office: Forward RECORDED Deed of Trust to: Texas Department of Housing and Community Affairs Single Family Finance Production Division Loan Closing, Suite 700 P.O. Box 13941 Austin, TX 78711

35. 35 Transfer of Lien (TOL) MUST be recorded ORIGINAL must be submitted to the Department with Draw Request support documents.