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20 i 4 � 4 � � �� of the property. All replacements and additions shall also be covered by this Note and Mortgage. Ail of the foregoing is referred to in this Note and Mortgage as the Property. Borrower covenants that Borrower is lawfully seized of the estate hereby conveyed and has the right to mortgage, grant and convey the Property and,except for the First Mortgage and other encumbrances of record acceptable to Senior Lien Holder, the Property is unencumbered. Borrower warrants and will defend generally the title to the Property against all claims and demands,subject to such encumbrances of record. 1. BORROWER'S PROMISE TO PAY. In return for a (oan that the Borrower has received (Loan), the Borrower promises to pay U.S. $7,250.00 (this amount is called principal)to the order of Lender, the Federal Home Loan Bank of Topeka, a corporation organized and existing under the laws of the United States of America. Lender or anyone who takes this Note and Mortgage by transfer and who is entitled to receive payments under this Note and Mortgage is called Note and Mortgage Holder. The Loan evidenced by this Note and Mortgage is being made pursuant to the Affordable Housing Program (AHP) as implemented by Lender (12 U.S.C. 1430(j); 12 CFR Part 1291). 2. PAYMENTS and INTEREST.There will be no interest charged on the Loan. In the case of a sale or refinancing of the Property within five years of the date of this Note and Mortgage(the Retention Period),an amount equal to a pro rata share of the principal, reduced for every year Borrower has owned the Property, shall be repaid to the Lender from any net gain realized upon the sale or refinancing, unless: (1) the Property was assisted with a permanent mortgage loan funded by an AHP subsidized advance; (2)the Property is sold to a very low-,or low-or moderate-income household; or (3) following a refinancing, the Property continues to be subject to a deed restriction or other legally enforceable retention agreement or mechanism. Lender will have ultimate control over any funds repaid by the Borrower pursuant to this section. Lender shall be given notice of any sale or refinancing of the Property occurring prior to the end of the Retention Period. Provided that Borrower complies with the terms of this Note and Mortgage, the amounts due and payable under this Note and Mortgage shall not become due and payable, but shall be forgiven as follows:The principal amount of the Loan shall be reduced over the first 5 years by 1/60th of the original principal balance of the Loan for each month the Loan is outstanding. Such monthly reductions shall take effect in arrears on the same day of the month the Loan was originally made.The amount of the Loan due and payable at any time shall be determined after deducting the principal amount of the Loan which has been forgiven by Note and Mortgage Holder.The obligation to repay the Loan to Lender shall terminate after any foreclosure,deed-in-lieu of foreclosure,or death of the Borrower. 2. SUBORDINATION. This Note and Mortgage is subject and subordinate in all respects to the liens, terms, covenants and conditions of the First Mortgage and to all advances heretofore made or which may hereafter be made pursuant to the First Mortgage, including all sums advanced for the purpose of (a) protecting or further securing the lien of the First Mortgage, curing defaults by Borrower under the First Mortgage or for any other purpose expressly permitted by the First Mortgage; or(b) constructing, renovating, repairing,furnishing, fixturing or equipping the Property.The terms and provisions of the First Mortgage are paramount and controlling,and they supersede any other terms and provisions hereof in conflict therewith. In the event of foreclosure or deed-in-lieu of foreclosure of the First Mortgage,or if the First Mortgage is assigned to the Secretary of the U.S. Department of Housing and Urban Development, any provisions herein or any provisions in any other collateral agreement restricting the use of the Property or otherwise restricting Borrower's ability to sell the Property shall have no further force or effect on subsequent owners or purchasers of the Property. Any person, including his successors or assigns (other than Borrower or a related entity of Borrower), receiving title to the Property through a foreclosure or deec�in-lieu of foreclosure of the First Mortgage, or through the assignment of the First Mortgage to the Secretary of the U.S. Department of Housing and Urban Development,shall receive title to the Property free and clear from such restrictions. 3. NOTICES. Unless applicable law,requires a different method, any notice to Borrower provided for in this Note and Mortgage shall be given by delivering it or by mailing it 6y first class mail unless applicable law requires use of another method.The notice shall be directed to the Property Address or any other address Borrower designates by notice to the lender. Revised February 6,2014