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<br />. The interest rate for these loans will be zero percent. No <br />loan payments will be due during the term of the loans which <br />will be 30 years. <br />. The entire loan will be due and payable upon sale or transfer <br />of the property, when the property ceases to be owner occupied, <br />or upon the loan maturity date. <br />· Upon the loan maturity date, and in accordance with CalHome <br />Program regulations, these loans may be amortized over a period <br />of time to be determined by Loan Committee, or may be deferred <br />for an additional period of time to be determined by Loan <br />Committee. <br /> <br />Agency Replacement Loan <br />. The Agency loan will be amortized for 30 years. <br />. Interest rates will be as follows: <br /> <br />Household Income Interest Rate <br />0 - 50 Percent of Area 1. 00% Per Annum or 300 basis points below <br />Median the 11th District Federal Home Loan Bank <br /> Monthly Cost of Funds Index, whichever is <br /> higher. <br />51 - 80 Percent of Area 1. 50% Per Annum or 250 basis points below <br />Median the 11th District Federal Home Loan Bank <br /> Monthly Cost of Funds Index, whichever is <br /> higher. <br /> <br />. Determination of the interest rate will be made at the time of <br />loan approval. <br />. During the term of the loan, upon sale or transfer, when the <br />home is no longer owner-occupied, or upon loan maturi ty date, <br />the entire principle is due and payable to the Agency along <br />with the applicable interest rate. <br />. Borrower(s) whose monthly housing debt, inclusive of the Agency <br />loan, is less than or equal to 30 percent of their gross <br />monthly income will make equal monthly payments in an amount <br />that will fully amortize that loan by its scheduled maturity <br />date. <br />. Borrower(s) whose monthly housing debt allows for partial <br />payments only of the Agency loan will be required to make such <br />payments. Partial loan payments will be applied first to <br />accrued interest and then to principal. Such borrower(s) must <br />be income-certified every five years to insure that their <br />monthly housing debt still allows for partial payments only. <br />. Borrower(s) whose monthly housing debt, exclusive of the Agency <br />loan, is equal to or more than 30 percent may have their loan <br />payments deferred. Such borrower (s) must be income-certified <br />every five years to insure that their monthly housing debt is <br />still equal to or greater than 30 percent. <br /> <br />EXHIBIT 1 <br />Page 4 <br />JT20B-7 <br /> <br />