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20110016R3 BORROWEI2 COVENANTS that Bnrrawer is lawfully seiscd of the estate hereby conveyed and has thc right to grant and convey the Property and thac the Property is unencumbered. Borrowar warrants and will defend generally the title to the Froperty against all claims and demands, subject to any encumbrances af rccord. TH1S SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. LTNIFORM COVENANTS. Borrower and Lender covenant and a�ree as follows: I. Payment of Principal and Interest. Borrpwer shall pay when duc the principal of, and interest on, the debt evidenced by the Notc. 2. Payment of Property Charges. �orrpwer shall pay all property charges consisting aF taxes, ground rents, flood and hazard insurance prcmiums, and special a5sessments in a timely manner, and shall provide evidence of payment to Lender, unless Lender pays properCy charges by withholding funds from monchly paymeats due to the Borrower or by charging such payments to a line of credit as provided for in thc Loan Agreemettt. 3. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether now in existence or subsequently erected, against any hazards, casualties, and contin�e�icies, including fire. This insurance shall be maintained in the amounts, to the extent and f'or the periods required by Lender or the Secretary of Housing and Urban Development ("Secretary"). Borrower shall also insure all improvements on the Property, whether now in existence or subsequc,Mntly erected, against lpss by tloods to the extent required by the Secretary. All insurance shall be carried with companies approved by Lender. Thc insurance policies and any renewals shall be held by Lender and shall include loss payable clauses in favor of, and in a form acceptable to, Lender. In thc cvent of loss, Borrawer shall give I,endcr immediate notice by mail. Lender may make proof of loss if not made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to rnakc payment for such loss to Lender instcad of to Borrower and Lender jointly. Insuratice proceeds shall be applied to restoratinn or repair of the damagcd Property, if thc restoration or repair is economically feasible and Lender's security is not lessened. If the restorarion or repair is not economically feasiblc or Lender's security would be lessened, the insurance proceeds shall be applied First to the reduction of any indebtedness iuidc�r a Second Nate and Second Security Instrumetit held by the Secretary on the Property and then to the retluction nf the indebtedness �uider the Note and tihis Security Instrumcnt. Any excess insurance proceeds over an amount required to pay all outstanding indebtedness under the Note and this Sccurity Iiistrument shall bc paid to the entity legally entitled thereto. In the event of foxeclosure of this Security Instrument or other transfer of title to thc Property that extinguishes the indebtedness, all right, title and interest of Borrower in and to insurance palicies in force shall pass to the purchaser. 4. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence after the execution of this Security Instrument and Barrower (or at least one Borrower, if initially more than one persan are Borrowers) shall continue to accupy the Properiy as Borrower's principal residcnce far the term of the Security Instrutnent. "Principal residence" shall have thc same meaning as in the Loan Agreement. Borrower shall not cammit waste or dcstroy, damage or substantially change the Property or allow the Property to deteriorate, reasonable wear and tear excepted. Borrower shall also be in default if Borrower, during the loan application praccss, gave materially false or inaccurate information ar statements ta Lender (or failed ta provide Lender with any material information) in conncction with the loan evidenced by the Notc, including, but not limited to, rcpresentarions concerning Borrower's occupancy of the Property as a principal residence. If this Security Instnunent is on a leaschold, Borrower shall comply with the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee title shall i�ot be merged unless Lender agrees to the merger in writing. 5. Charges to Borrawer and Protectinn of Lender's Rights in the Property. Barrower shall pay all Nebraska 1 Ueed oFTrust (Fixed)