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You MUST use the Loan Document forms developed by TDHCA and

provided in the HBA Manual

Down Payment Assistance Note (Form 1.05)Subordinate Deed of Trust (Form 1.06)

Transfer of Lien (Form 1.07)

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DOWN PAYMENT ASSISTANCE NOTE

SECOND LIEN (”NOTE”)(Form 1.05)

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HOME Contract # 1234567 Activity # 12345

Date: October 14, 2004

Property (which includes the real property and improvements thereon):

Address: 123 XYZ AvenueCity: AnywhereCounty: Anyplace, Texas

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1. BORROWER’S PROMISE TO PAY

The Borrower is Name of Homebuyer.

In return for a loan that I have received, I promise to pay U. S. $ Amount of HBA Assistance (this amount is called “principal”) to the order of the Lender.

The Lender is Name of Contract Administrator. Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the “Note Holder.”

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2. INTEREST

No interest will accrue on this loan at any time.

0%

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3. TIME AND PLACE OF PAYMENTS

Provided that the Borrower complies with the other

terms of this Note, the amounts due and payable

under this Note shall be deferred and repayable

as follows:

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From Signature Date to 1st anniversary 100%

From 1st anniversary to 2nd anniversary 90%

From 2nd anniversary to 3rd anniversary 80%

From 3rd anniversary to 4th anniversary 70%

From 4th anniversary to 5th anniversary 60%

From 5th anniversary to 6th anniversary 50%

From 6th anniversary to 7th anniversary 40%

From 7th anniversary to 8th anniversary 30%

From 8th anniversary to 0th anniversary 20%

From 9th anniversary to 10th anniversary 10%

After 10th anniversary 0%

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The events which will cause the balance of the Note to be declared due and payable are as follows:

(a) the note to Name of Mortgage Lender dated October 14, 2004 in the amount of $ Amount of Mortgage, hereinafter the First Lien Note (“FLN”), is paid in full according to its terms; or

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(b) the FLN is refinanced in whole or in part or is

assumed by a new borrower without the consent

of TDHCA; or

(c) the unpaid balance of the FLN becomes due

and payable in full for any reason; or

(d) all or any part of the Property, or any interest in

it, is leased, transferred, or foreclosed; or

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(e) all or part of the Property is sold; or

(f) the Borrower ceases to occupy the Property as

his or her principal residence.

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I will make my payment(s) at

Address of Administrator

or at a different place if required by the Note Holder.

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Witness the Hand and Seal(s) of the Undersigned:

____________________ __________ Borrower Date

____________________ __________ Borrower Date

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Endorsement

DATE: October 14, 2004

Pay to the Order of Texas Department of Housing andCommunity Affairs, an Agency of the State of Texas:

Name of Contract Administrator

Name of Contract Administrator

BY: Authorized Person’s Signature Title Authorized Signature Title

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Down Payment Assistance Note

NOT recorded

ORIGINAL must be submitted to the Department with Draw Request support documents.

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SUBORDINATEDEED of TRUST

(Form 1.06)

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HOME Contract # 1234567 Activity # 12345

This SUBORDINATE DEED of TRUST ( “Security Instrument” ) is made on Settlement Date (“Date”).

The grantor is Name of Borrower (“Borrower”).

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The trustee is Name of Contract Administrator

(“Trustee”), whose address is

Address of Contract Administrator.

The beneficiary is Name of Mortgage Lender,

(“Lender”), which is organized and existing under

the laws of State of Lender , and whose address

is Address of Lender.

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Borrower owes Lender the principal sum ofSpelled out Amount of HBA AssistanceDollars (U.S. $ Numerical Amount).

This debt is evidenced by Borrower’s note datedthe same date as this Security Instrument(“Note”), with the full debt due and payable on10 years from Date of Settlement (“FinalMaturity Date”).

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The Note provides for certain potential deferrals,

forgiveness or other payment terms. The Note

also provides that the full debt, if not paid or

forgiven earlier, shall be due and payable on the

sale of the property, refinance of the senior

purchase money note dated Settlement Date in

the original principal amount of Mortgage

Amount issued by Borrower and made payable

to Name of Mortgage Lender (“Senior Lien

Holder”), hereinafter the First Lien Note (“FLN”),

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This clause applies only in 3rd Lien situations:

[refinance of a prior note dated _____________in the original principal amount of ____________issued by Borrower and made payable to____________________ (“Prior Note Holder”), hereinafter the Second Lien Note (“SLN”)],

or acceleration of either the FLN, [SLN] or thisNote upon Borrower’s default, whichever is firstto occur.

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For this purpose, Borrower irrevocably grantsand conveys to Trustee, in trust, with power ofsale, the following described property located inName of County County, Texasinsert legal description:

which has the address ofPhysical Street Address (Street), Name of City (City), Zip Code (Zip Code),Texas,(“Property Address”).

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Payment of these amounts in escrow (if required underthe terms of the approved purchase money Deed of Trustsecuring the FLN from Borrower herein to Name ofContract Administrator, Trustee, of even date withFLN, to be filed in the Official Public/Deed/Real PropertyRecords of Name of County Where Property is Located County, Texas (“First Lien Deed of Trust”) insteadof directly to the person owed payment, will not be a defaultunder this Security Instrument, provided that the escrowagent in turn pays them on time to the person owed paymentand the escrow agent or the Borrower promptly thereafterfurnishes to Lender receipts evidencing the payments.

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This phrase applies only to 2nd Lien situations:

Except as to the First Lien Deed of Trust [and

the prior deed of trust securing the SLN from

Borrower herein to Name of Contract

Administrator, Trustee, of even date with SLN,

to be filed in the Official Public/Deed/Real

Property Records of Name of County Where

Property is Located County, Texas (“Second

Lien Deed of Trust”),

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Borrower’s Signature Borrower’s SignatureBorrower Borrower

SSN SSN______________

Social Security Number Social Security Number

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STATE OF TEXAS, County of County Where Deed of Trustis Being Signed

BEFORE ME, the undersigned, a Notary Public in and for said County and State, on this day personally appeared Names ofBorrowers, known to me to be the person(s) whose names(s) is/are subscribed to the foregoing instrument and acknowledgedto me that he/she/they (s)(t)he(y) executed the same for thepurposes and consideration therein expressed.GIVEN UNDER MY HAND AND SEAL OF OFFICE, thisDate day of ___Month_____, 20Year.

Signature of Notary NOTARY’S SEAL Notary Public or

STAMP

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Instructions to County Clerk’s Office:

Forward RECORDED Deed of Trust to:

Texas Department of Housing and Community AffairsSingle Family Finance Production Division Loan Closing, Suite 700 P.O. Box 13941Austin, TX 78711

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Subordinate Deed of Trust (DOT)

CERTIFIED COPY must be submitted to the Department with Draw Request.

Original DOT Must be RECORDED.

Recorded “trailing document” must be submitted to the Department within 90 days following Settlement Date or all future Draw Requests will be suspended.

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TRANSFER of LIEN(Form 1.07)

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HOME Contract # 1234567 Activity #12345

DATE: Settlement Date

HOLDER’S MAILING ADDRESS(INCLUDING COUNTY):

Name of Contract Administrator

Address

City

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NOTE:

Date: Settlement Date

Original Amount: $ Amount of HBA Loan

Maker: Name of Homebuyer

Maker Address: Property Address

Unpaid Principal and Interest: $ HBA Loan

Payee: Contract Administrator

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Note and Lien are described in a Deed of Trust of evendate executed by Maker and payable to Payee andrecorded in the Real Property Records of  CountyWhere Recorded     County, Texas.Property (including any improvements) subject to Lien(insert legal description):     Prior Lien(s):Deed of Trust (describe first lien Deed of Trust) dated Date of DOT executed by Maker, payable to Payee as described in the note, securing a note in theamount of $ HBA Loan Amount  and recordedin Records of County Where Recorded County, Texas.

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Name of Contract Administrator_________Contract Administrator

BY:

Signature of Authorized Representative____Authorized Signature Title of Authorized Representative_________Title

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STATE of TEXASCounty of County Where Transfer of Lien is Signed

This instrument was acknowledged before meon Month and Date, 20Year.

by Name of Authorized Representative, of

Name of Contract Administrator, a Title of Representative,on behalf of said organization.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, thisDate day of Month, 20Year.

Signature of Notary Notary’s Seal or StampNotary Public

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Instructions to County Clerk’s Office:

Forward RECORDED Deed of Trust to:

Texas Department of Housing and Community AffairsSingle Family Finance Production Division Loan Closing, Suite 700 P.O. Box 13941Austin, TX 78711

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Transfer of Lien (TOL)

MUST be recorded

ORIGINAL must be submitted

to the Department with Draw Request support documents.