Appendix 7

CREDIT LINE DEED OF TRUST

THISCREDIT LINE DEED OF TRUST, (the “Deed of Trust”) made and entered into as of this * day of * , 200*, by and between * ,a * , whose address is * (the “Sub-recipient”), and SAMME L. GEE and LEW G. TYREE, both of whom reside in Kanawha County, West Virginia, as trustees (the “Trustees”).

WITNESSETH:

WHEREAS, Sub-recipient is the owner of certain real property situate in the * , * County, West Virginia (the “Land”), more particularly described on Schedule A hereto attached; and

WHEREAS, Sub-recipient and theWEST VIRGINIA DEVELOPMENT OFFICE (the “Grantee”) have entered into a certain Neighborhood Stabilization Program (NSP) Contract Agreement (the “NSP Agreement”) dated December 2, 2009, providing for a grant from the Grantee to the Sub-recipient in the principal amount of $* which grant is to be advanced pursuant to the terms and conditions of the NSP Agreement to finance certain improvements and land development upon certain real property related to the purchase and rehabilitation of ____ properties (foreclosed upon, and vacant houses) in ______(all as more particularly described and referred to in the NSP Agreement); and

WHEREAS, Pursuant to Title III of Division B of the Housing and Economic Recovery Act of 2008, Pub. Law. 110–289, as amended from time-to-time, and the regulations promulgated thereunder (collectively, the “Act”), the United Grantees created the “Emergency Assistance for Redevelopment of Abandoned and Foreclosed Homes” program (the “Neighborhood Stabilization Program”); and

WHEREAS, Section 2301(e) of the Act Grantees that except as otherwise provided by the Act, amounts appropriated, revenues generated, or amounts otherwise made available under the Neighborhood Stabilization Program shall be treated as though such funds were community development block grant (“CDBG”) funds under Title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301, et seq.), as amended, and the regulations promulgated thereunder (collectively, the “CDBG Act”); and

WHEREAS, TheSub-recipient proposes to acquire, rehabilitate, own, and operate a rental /ownership housing project known as ______(the “Project”), within the meaning of the Act and the CDBG Act. The Project is intended to increase the supply of decent, safe and sanitary rental housing for occupancy by families whose income does not exceed the income limits of the Neighborhood Stabilization Program. For the purposes of this Deed of Trust, the word “rehabilitate,” or any variations, as used in this Agreement shall include construction and/or rehabilitation activities; and

WHEREAS, The Project, which is being financed under the Neighborhood Stabilization Program, consists of ______(___) residential rental units (each, a “NSP Unit” and collectively, the “NSP Units”) within ______(___) buildings comprising a total of ______(____) residential rental units. The Project is expected to be developed on ______(____) properties (the “Project Site”). The Sub-recipient currently owns a portion of the Project Site consisting of fee simple interest in all of the Land. As the Sub-recipient acquires additional portions of the Project Site, the Sub-recipient shall, in accordance with the NSP Agreement, grant the Grantee a security interest in such after-acquired properties; and

WHEREAS, The Sub-recipient has received from Grantee a grant in the principal sum of ______AND 00/100 ($______.00) (the “Grant”), which Grant is made from the Neighborhood Stabilization Program and is evidenced by a NSP Promissory Note made by the Sub-recipient on even date herewith (the “Note”), or so much thereof as may be advanced by or on behalf of Grantee under the terms of this Deed of Trust and the NSP Agreement; and

WHEREAS, It is a condition precedent to the making of the Grant that the performance of all the Sub-recipient's obligations to Grantee now or hereafter contracted be secured by this Deed of Trust which will have a [first/second]lien position on the[fee simple interest of the Sub-recipient in the Premises.

NOW, THEREFORE, in consideration of the sum of $10.00 cash in hand paid and of the indebtedness hereinafter described, the Sub-recipient does hereby GRANT and CONVEY unto the Trustees, with power of sale, all those certain lots, tracts or parcels of land constituting the Land, together with all improvements now or hereafter situate thereon and all appurtenances thereunto belonging, and all right, title and interest of the Sub-recipient in and to the following property, rights and interests:

1.All machinery, equipment, fixtures, materials, supplies and other property of every kind and nature whatsoever, whether real, personal or mixed, now or hereafter owned by the Sub-recipient or in which the Sub-recipient has or shall have an interest, now or hereafter located upon or used or procured for use in connection with the Land or appurtenances thereto (the “Equipment”);

2.All right, title and interest of Sub-recipient in and to all awards or payments, including interest thereon, which may be made with respect to the Land, whether from the exercise of the right of eminent domain (including any transfer made in lieu of the exercise of said right), or for any other injury to or decrease in the value of the Land or Equipment;

3.All right, title and interest of Sub-recipient in and to all leases and other agreements affecting the use or occupancy of the Land now or hereafter entered into, and all rents, issues and profits of the Land now due or earned or hereafter to become due or earned, including without, limitation, the right to receive and apply such rents, issues and profits to the payment of the indebtedness secured hereby;

4.All proceeds of and any unearned or refunded premiums on any insurance policies affecting the Land or Equipment, including, without limitation, the right to receive and apply the proceeds of any insurance, judgments or settlements made in lieu thereof, for damage to or destruction of the Land or Equipment;

5.The right, in the name and on behalf of the Sub-recipient, to appear in and defend any action or proceeding brought with respect to the Land or Equipment or any interest or right related thereto and to commence any action or proceeding to protect the interest of the Grantee in the same; and

6.All streets, roads and public places, opened or proposed, in front of or adjoining the Land, and all easements and rights-of-way, public or private now or hereafter used in connection with the Land.

All of the property described above shall secure the indebtedness herein described and covered by this Deed of Trust, and all of the foregoing property, interests in property and other rights and interests are herein sometimes referred to as the “Mortgaged Property”.

TO HAVE AND TO HOLD the Mortgaged Property, unto the Trustees and their successors in trust forever, and the Sub-recipient does hereby covenant to and with the Trustees and does hereby WARRANT GENERALLY the Land, and does further covenant and warrant that the Sub-recipient has the right to convey the Mortgaged Property to the Trustees and will defend the same to the Trustees against the claims and demands of all persons whosoever; that all of the same is free from any and all liens, encumbrances, security interests, reservations of title or conditional sales agreements; that the Trustee shall have quiet possession thereof and that the Sub-recipient shall execute such further assurances of said Mortgaged Property and any part thereof as may be requisite, including, but not limited to, the execution and delivery of financing Granteements and such other instruments as the Grantee may require to impose the lien hereof more specifically upon any item or items covered by this Deed of Trust.

IN TRUST NEVERTHELESS, to secure (i) the performance and payment of the Sub-recipient as and when due of its agreement and warranties under the NSP Promissory Note (including all amendments thereto and extensions thereof) between the Grantee and Sub-recipient, a copy of which is attached hereto as Exhibit A and by this reference incorporated herein and made a part hereof and to secure also any and all extensions, modifications and renewals of said NSP Promissory Note, or any part thereof, however changed in form, manner or amount and (ii) any indebtedness of Sub-recipient to Grantee or Trustees, at any time and from time to time arising hereunder or under the NSP Promissory Note or NSP Agreement (all of which indebtedness, together with the interest thereon, is sometimes hereinafter collectively referred to as the “Secured Debt”).

THIS IS A CREDIT LINE DEED OF TRUST FOR THE PURPOSES OF W. VA. CODE §38-1-14, AND SECURES A MAXIMUM GRANT AMOUNT OF $ * (the “Maximum Grant Amount”), and taxes, insurance premiums and other obligations, including interest thereon, undertaken by the Grantee herein or in the NSP Agreement or in any other agreement pertaining to the indebtedness hereby secured. Notice of other liens may be given to the Grantee in the manner and at the address set forth in paragraph 20 of this Deed of Trust. This Deed of Trust secures future advances which are intended to be obligatory within the meaning of W. Va. Code §38-1-14. In the manner and subject to the terms and provisions of the NSP Promissory Note and NSP Agreement, Grantee is required to make future advances of the grant up to an amount which, when added to the then outstanding balance of the grant secured hereby, will not exceed the Maximum Grant Amount. Any notice of intervening liens may be sent to Grantee at the address shown in paragraph 20.

1.Affirmative Covenant to Pay Indebtedness Secured Hereby. The Sub-recipient hereby covenants, warrants and agrees that it will pay each and every amount, installment and payment of the NSP Agreement and all other indebtedness secured hereby, together with all interest now or hereafter due thereon, as and when the same becomes due and payable.

2.Compliance withNSP Act, CDBG Act, and Code of Federal Regulations. The Sub-recipient will carry out, perform and comply with all of the agreements, provisions, stipulations and covenants contained in the NSP Agreement, of even date herewith between Sub-recipient and Grantee, and the NSP Act, CDBG Act, HOME Investment Partnership Program as set forth at Title 24, Part 92 of the Code of Federal Regulations and any other applicable regulations.

3.Affordability Requirements. The Sub-recipient shall comply with the affordability requirements set forth at Title 24, Part 92, Section 252 for a period of * (*) years from the date of the completion of the Project. The Affordability Requirements shall apply without regard to the term of the mortgage or the transfer of ownership. The Affordability Requirements shall be a covenant running with the land or other mechanism approved by the Grantee and shall be binding upon and inure to the benefit of the successors and assigns of the Grantee. Failure to comply with the Affordability Requirements shall represent a default under the terms of this Agreement.As a recipient of the NSP Grant from the Grantee, the Sub-recipient will ensure continued affordability for NSP-assisted housing by the use of a this enforceable recorded lien against the Project property for the maximum extent practicable and longest feasible term in order that the Project property that is assisted with NSP Grant funds will remain affordable to individuals or families whose incomes do not exceed 120% of the AMI or, for units originally assisted with NSP Grant Funds that meet the 25% set-aside will remain affordable to individuals and families whose incomes do not exceed 50% AMI. As a recipient of the NSP Grant from the Grantee, the Sub-recipient is subject to recapture restrictions under the Act and the NSP Grant is subject to repayment to the Grantee if the Sub-recipients’ Project does not meet the affordability requirements during the minimum affordability requirement periods set out below:

The minimum period of affordability requirements for the NSP Grant are:

Rental Projects
NSP Subsidy per Unit / Affordability Period
Less than $15,000 / 5 years
$15,000 - $40,000 / 10 years
More than $40,000 / 15 years
Acquisition of Building of New Construction Unit / 20 years

These are minimum requirements. The Grantee or Sub-recipient may propose to implement more stringent affordability requirements than the minimum listed above to ensure that the properties remain affordable for as long as possible.

4.Hazard Insurance. The Sub-recipient will keep any improvements constructed on the Land and the Equipment insured against loss or damage by fire and such other hazards as the Grantee shall from time to time require, and shall pay the premiums for such insurance as the same become due and payable. Losses thereunder shall be payable to the Grantee pursuant to the standard New York Mortgagee Endorsement (all policies of such insurance being hereinafter referred to as the “Insurance Policies”). At the request of the Grantee, the Sub-recipient will assign and deliver the Insurance Policies to the Grantee. Not later than 15 days prior to the expiration date of each of the Insurance Policies, the Sub-recipient will deliver to the Grantee satisfactory evidence of the renewal of such insurance policy. Sums paid to the Grantee by any insurer may be retained and applied by the Grantee toward payment of the NSP Agreement and other indebtedness hereby secured, in such priority and proportions as the Grantee in its discretion shall deem proper or, at the direction of the Grantee, the same may be paid either in whole or in part to the Sub-recipient for such purposes as the Grantee shall designate. If the Grantee shall receive and retain such insurance proceeds, the lien of this Deed of Trust shall be reduced only by the amount thereof received and retained by the Grantee and actually applied by it in reduction of the indebtedness hereby secured. If the Sub-recipient defaults in obtaining such Insurance Policies or in so assigning and delivering such policies, the Grantee may at its option effect such insurance from year to year and pay the premiums therefore, and the Sub-recipient will reimburse the Grantee for any premiums so paid, with interest at the rate of 8% per annum on demand, and the same shall be secured by this Deed of Trust.

5.Other Insurance. The Sub-recipient will also maintain public liability insurance, and if requested by the Grantee, property damage insurance and such other insurance as the Grantee may reasonably require, in such amounts as specified from time to time by the Grantee.

6.Payment of Taxes and Other Charges. The Sub-recipient will pay as and when due all taxes, assessments and other governmental charges and fees and other charges on or by reason of the Mortgaged Property and which might, in any manner, result in the creation or existence of a lien thereon, and furnish semi-annually to the Grantee a receipt showing payment of such taxes, assessments, fees and charges.

7.Maintenance of Mortgaged Property. The Sub-recipient will keep and maintain the Mortgaged Property in good condition and repair and not abandon the same or any part thereof, nor commit or permit the commission of waste on, in or of such property or any part thereof, nor cause or permit any building improvements or any item of personal property covered hereby to be removed, destroyed demolished or structurally altered in whole or in part, and the Sub-recipient shall comply and cause all occupants of the Mortgaged Property to comply, with all laws, ordinances, rules and regulations relating to the maintenance or use thereof and with all requirements, directions, orders and notices of violation thereof issued by any governmental body, agency or officer. The Sub-recipient will not permit or suffer the use of the Mortgaged Property for any purpose other than as expressly contemplated by the NSP Agreement.

8.Inspection of Mortgaged Property and Books and Records. The Grantee or the Trustees and any authorized representative of any of them shall have the right to enter and inspect the Mortgaged Property and the books and accounts relating thereto at all reasonable times. The Sub-recipient will keep or will cause to be kept adequate books and records of account with respect to all of the Mortgaged Property in accordance with generally accepted accounting practices consistently applied, and will furnish the Grantee with financial Granteements and other information concerning the affairs of the Sub-recipient as the Grantee may reasonably request. The Sub-recipient agrees that it will furnish to the Grantee at any time and from time to time a duly acknowledged written Granteement setting forth the unpaid principal balance of the NSP Agreement and the total unpaid amount of any other indebtedness secured hereby, with all interest thereon, and stating that no setoffs, counterclaims or defenses exist against the NSP Agreement or other indebtedness secured hereby, or if such exist, the nature and amount thereof.

9.Maintenance of Existence. The Sub-recipient will maintain, preserve and keep in full force and effect its existence as a Sub-recipient under the laws of the Grantee of West Virginia and all franchises, rights and privileges with respect thereto.