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8. Occunauy of Pro ert Borrow r`s Loan AR121igatign. Borrower shall occupy, establish, and
<br />maintain the use of the Property as Borrower's principal residence within sixty (60) days after the execution of this
<br />Security Instrument. Borrower's principal residence shall mean the Property is occupied by the Borrower for at
<br />least ten (10) months out of each year. The Borrower shall not lease the Property for more than two (2) months
<br />without the written consent of the Agency during any twelve (12) month period and shall not lease the Property
<br />without providing the Agency with a copy of the lease.
<br />Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal, is
<br />begun that in Lender's good faith judgment could result in forfeiture of the Property or otherwise materially impair
<br />the lien created by this Deed of Trust or Agency's security interest. Borrower may cure such a default and
<br />reinstate, as provided in paragraph 19, by causing the action or proceeding to be dismissed with a ruling that, in
<br />Agency's good faith determination, precludes forfeiture of the B orrower's interest in the Property or other material
<br />impairment of the lien created by this Deed of Trust or Agency's security interest. Borrower shall also be in default
<br />if Borrower, during the loan application process, gave materially false or inaccurate information or statements to
<br />Agency (or failed to provide Agency with any material information) in connection with the loan evidenced by the
<br />Note, including, but not limited to, representations concerning (i) Borrower's occupancy of the Property as a
<br />principal residence and (ii) Borrower's income.
<br />9. Protection of the Agency's Securi . If Borrower fails to perform the covenants and agreements
<br />contained in this Deed of Trust or if any action or proceeding is commenced which materially affects the Agency's
<br />interest in the Security, including, but not limited to, default under the Deed of Trust securing the First Lender
<br />Note, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or
<br />decedent, then the Agency, atthe Agency's option, upon notice to Borrower, may make such appearances, disburse
<br />such sums and take such action as it determines necessary to protectthe Agency's interest, including but not limited
<br />to, disbursement of reasonable attorney's fees and entry upon the Security to make repairs.
<br />Any amounts disbursed by the Agency pursuant to this paragraph, with interest thereon, will become an
<br />indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Agency agree to other terms of
<br />payment, such amount will be payable upon notice from the Agency to Borrower requesting payment thereof, and
<br />will bear interest from the date of disbursement atthe rate payable from time to time on outstanding principalunder
<br />the Note unless payment of interest at such rate would be contrary to applicable law, in which event such amounts
<br />will bear interest at the highest rate permissible under applicable law. Nothing contained in this paragraph will
<br />require the Agency to insure any expense or take any action hereunder.
<br />10. Inspection. The Agency may make or cause to be made reasonable entries upon and inspections
<br />of the Security; provided that the Agency will give Borrower reasonable notice of inspection.
<br />11. Avolication of Payments. Unless applicable law provides otherwise, anypayments received by
<br />the Agency under the Note shall be applied by the Agency first to interest, if any, and then to the principal due on
<br />the Note.
<br />12. Condemnation.
<br />(A) The proceeds of any award or claim for damages, director consequential, in connection with
<br />any condemnation, exercise or eminent domain, or other taking of the Property, or part thereof, or for conveyance
<br />in lieu of condemnation, are hereby assigned and shall be paid to the Agency subject to the terms and rights of the
<br />First Deed of Trust.
<br />(B) In the event of a total taking of the Property, the proceeds shall be applied to the sums
<br />secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. In the event of
<br />a partial taking of the Property, unless Borrower and the Agency otherwise agree in writing, the sums secured by
<br />this Security Instrument shall be reduced by the amount of the proceeds multiplied by the following fraction: (1)
<br />Redwood City First Time Homebuyer Silent Loan Program Deed of Trust April 23, 2000
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