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r ~ Capital Advance Program Regulatory Agreement Housing for the Elderly or Handicapped (Nonprofit) Section 202 of the Housing Act of 1959 or Section 811 of the National Affordable Housing Act. 200509638 U.S. Department of Housing and Urban Development Office of Housing Federal Housing Commissioner This agreement entered into 26th Goodwill Housing II, Inc. day of September 2005 between Central Nebraska , whose address is 1804 So. Eddy, Grand Island, Nebraska 68801 hereinafter called Mortgagor, and the undersigned Secretary of Housing and Urban development hereinafter called HUD. In consideration of the making of the capital advance by BUD and the disbursement of any part thereof, and in order to comply with the requirements of the Housing Act of 1959 or National Affordable Housing Act of 1990 and the Regulations adopted by the Secretary pursuant thereto, the Mortgagor agrees for itself, its successors and assigns, and any owner of the mortgaged property, that in connection with the mortgaged property and the project operated thereon and so long as the capital advance is outstanding: 1. The Note and Mortgage bear no interest and repayment is not required so long as the housing remains available for very low-income elderly persons or very low~income per- sons with disabilities (whichever is applicable). 2. Mortgagor will establish and maintain a special fund to be known as the revenue fund account in a bank which is a member of the Federal Deposit Insurance Corporation, Sav- ings Association Insurance Fund, or the National Credit Union Share Insurance Fund, into which will be deposited all rentals, charges, income and revenue arising from the operation or ownership of the project. The bank in which this account is established shall provide collateral accept- able to HUD to equal the maximum amount in the account at anyone time when such amount exceeds $100,000. If the bank will not provide appropriate collateral in such in- stances, the Mortgagor will be required to establish accounts in two or more banks so that the total amount on deposit at any time does not exceed $100,000 in anyone bank. Expen- ditures shall be made from the revenue fund account only in accordance with the operating budget submitted to and approved by HUD. 3. Not later than 30 days prior to the beginning of each fiscal year, the Mortgagor shall submit an operating budget for that fiscal year to BUD. The budget shall include all necessary operating expenses, current maintenance charges, expenses of reasonable upkeep and repairs, taxes and special assessment levies, prorated amounts required for insurance and all other expenses incident to the operation of the project; and shall show the expected revenue to pay such expenses, including reserve fund deposits. The expenses incurred and disbursements shall not exceed the reasonable and necessary amount thereof, and the Mortgagor will not expend any amount or incur any obligations in excess of the amounts approved in the annual operating budget except upon written certification by the Mortgagor to BUD that such expenses were unanticipated and are necessary and provided further, that nothing in this section shall limit the amount which the Mortgagor may expend from funds ob- Page 1 of5 tained from some other source than project revenues or other funds required of the Mortgagor pursuant to this Agreement or the Capital Advance Agreement. 4. As security for the Capital Advance for the required pay- ments under this Agreement into the reserve fund for re- placements, and for all other obligations of the Mortgagor under this Agreement, the Mortgagor hereby assigns, pledges and mortgages to HUD all its rights to the income and charges of whatever sort which it may receive or be entitled to receive from the operation of the mortgaged property, subject, however, to any assignment of rents or project income in the Mortgage referred to herein. Until a default occurs under this Agreement, however, permission is granted to Mortgagor to collect and retain under the provisions of this Agreement such rents, income, operating surplus and charges, but upon default this permission is terminated, as to all rents, income, operating surplus and charges due or collected thereafter. 5. (a) Mortgagor will establish and maintain a reserve fund for replacements in a separate account in a bank which is insured by the Federal Deposit Insurance Corporation, Savings Association Insurance Fund, or the National Credit Union Share Insurance Fund. Concurrently with the effective commencement of rental assistance pay- ments under the Project Rental Assistance Contract, the Mortgagor will deposit an amount equal to $ $233 per month unless a different date or amount is approved in writing by BUD. Such fund, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America shall at all times be subject to the control ofHUD. Disbursements from such fund, whether for the purpose of effecting replacement of structural elements and mechanical equipment of the project for any other purpose, may be made only after the consent in writing of HUD. In the event of a default in the terms of the mortgage, J-lUD may demand the full or partial application of the bal- ance in such fund to be amount due on the mortgage debt. (b) Mortgagor will deposit the minimum capital investment with an escrow agent acceptable to BUD purusant to Regulations. (c) Within 60 days after the end of each fiscal year, any residual receipts realized from the operation of the mortgaged property shall be deposited in a separate form H U D-92466.CA (4/92) ref. Handbook 4571.4 & 4571.5