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2p�104463 1023110097 mortgage insurance premium if this Security Instrument is held by the Secretary. Each monthly installment of the mortgage insurance premium shall be in an amount sufficient to accumulate the full annual mortgage insurance premium with Lender one month prior to the date the full annual mortgage insurance premium is due to the Secretary, or if this 5ecurity Instrument is held by the Secretary, each monthly charge shall be in an amount equal to one-twelfth of one-half percent of the outstaading principal balance due on the Note. If Bonower tenders to Lender the full payment of all sums secured by this Security Instrument, Bonower's account shall be credited with the balance remaining for all installments for items (a), (b) and (c) and any mortgage insurance premium installment that Lender has not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Bonower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender, Bonower's account shall be credited with any balance remaining for all installments for items (a), (b), and (c). 3. Application of Payments. All payments under paragraphs 1 and 2 shall be applied by Lender as follows: Firs to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly charge by the Secretary instead of the monthly mortgage insurance premium; Second, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazard insurance premiums, as required; � to interest due under the Note; Fourth, to amortizarion of the principal of the Note; Fifth, to late charges due under the Note. 4. 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 contingencies, including fire, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. Bonower shall also insure all improvements on the Property, whether now in existence or subsequently erected, against loss by floods to the extent required by the Secretary. All insurance shall be carried with companies approved by Lender. The 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 the event of loss, Borrower shall give Lender 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 make payment for such loss directly to Lender, instead of to Bonower and to Lender jointly. All or any part of the insurance proceeds may be applied by Lender, at its oprion, either (a) to the reducrion of the indebtedness under the Note and this Security Instivment, first to any delinquent amounts applied in the order in paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair of the damaged Property. Any application of the proceeds to the principal shall not extend or postpone the due da.te of the monthly payments which are refened to in paragraph 2, or change the amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally enritled thereto. In the event of foreclosure of this Security Instrument or other transfer of title to the Property that extinguishes the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser. 5. Occupancy, Preservation, Maintenance and Protection of the property Borrower's Loan Application; Leaseholds. Bonower shall occupy, establish, and use the Property as Bonower's principal residence within sixty days after the execution of this Security Instivment and shall continue to occupy the Property as Bonower's principal residence for at least one year after the date of occupancy, unless the Secretary determines this requirement will cause undue hardship for Bonower, or unless extenuating circumstances exist which are beyond Borrower's control. Borrower shall notify Lenders of any extenuating FHA Nebraska Deed Of Trast - 07/08 � 391.8 Page 3 of 9 � a Q A