loan application instructions & checklist

Repeat Borrowers only need to supply items denoted with a Yellow R. These items are required on every Loan Application.

11289 Strang Line Rd Lenexa, KS 66215 • Phone: 913.956.7325 • Fax: 913.956.7326 • www.peakassetlending.com

Loan Application

Instructions & Checklist

Loan Application - R

- Required on ALL loans

- Form supplied by Peak

Vendor Deposit Payment Authorization - R



- Special Instructions

o Applicant can complete the Vendor Deposit Payment Authorization and return, OR go to this link

http://www.peakassetlending.com/makeDeposit and submit deposit online

Borrowers Information Release Authorization Form



Sales Contract - R

- Required on ALL loans (see Special Instructions)

- Borrower Supplied Form


o Purchase Loans: Please provide a copy of the Sales Contract.

o Refinance Loans: Please supply the HUD-1 / Closing Statement from your original purchase of

the Subject Property and documentation for any repairs/improvements made to Subject Property if

repairs/improvements were made

Vendor Contacts - R




o Please complete the Loan Application – Vendor Contacts Form

Point of Contact for Scheduling Appraisal

Home Inspection

Title Company

Construction Scope of Work – SOW - R

- Required on Rehab or Resale loans Only

- Borrower Supplied Form. Peak can supply Template upon request.


o Scope of Work (SOW) may also be your Construction Bid or Estimate

o The SOW will be used to determine the Investment Basis of the Loan

o The SOW will be used for any construction draw activity

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Loan Application


Organizational Documents


- Borrower supplied Form


o If the Legal Owner Type is anything but a Single Person – Individual, or Married Person, additional

documentation is required. This required documentation varies by Entity Structure. Please see

Checklists below based upon Entity Structure

Limited Liability Company (LLC)

Articles of Organization

Operating Agreement

Certificate of Good standing

Corporation

Certificate of Organization

Corporate Resolution to Borrow

Certificate of Good standing

Individual Retirement Account (IRA or Self-Directed IRA)

Contact Information for Custodian/Administrator

Trust

Copy of Trust

o Multiple Entity Titling: Organizational Documents are REQUIRED for every entity associated

with the Legal execution of the Loan Documents. For example: if the Legal Owner is an LLC, and

the Manager of the LLC is a Trust. Then Organizational Documents would be required for both the

LLC and the Trust.

Tax Identification Number




o Tax Identification Number must be presented on a Government or IRS issued document

Borrower Financial Statement




o Borrower is different than Legal Owner: The Borrower Financial Statement is a Consolidated

Financial Statement. A Consolidated Financial Statement includes the Assets, Liabilities, Income,

and Expenses for the Borrower and the Legal Owner (if different they are different).

o Foreign Borrower: Provide consolidated information for foreign and domestic Assets, Liabilities,

Income and Expenses.

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Loan Application


Vendor Contacts - R




o Please complete the Loan Application – Vendor Contacts Form

o Supply additional information as required

o Insurance Company

Evidence of Insurance – EOI - R

Required on ALL loans

Borrower supplied Form

Insurance Requirements vary by location/loan and can be provided upon request

o Lease and Property Management Information

Property Management Agreement- R

Required on 30 Year Mortgage loans when Applicable


Special Instructions

o Provide copy of Property Management Agreement when Applicable

Lease Agreement - R

Required on 30 Year Mortgage loans when Applicable


Special Instructions

o Provide a copy of the Current Lease Agreement when Applicable

Verification of Income




o Verification of Income can come in multiple forms with the most common being a copy of paystub /

tax returns / employer issued document / bank statements

Tax Returns – 2 Years

- Required on Credit loans Only


Proof of Funds

- Required on Purchase, Rehab, and Resale loans Only



o Proof of Funds can come in multiple forms with the most common being Bank Statements and/or

Investment Statements

Borrower Payment Authorization - R



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• 11289 Strang Line Rd Lenexa, KS 66215 • Phone: 913.956.7325 • Fax : 913.956.7326 • www.peakkc.com

Loan Application

Property Information and Purpose of Loan

Property Address: ______________________________________________________________________________________

City and State: ______________________________________________________________________________________

Property Type: ______________________________________________________________________________________

(Choose One: Single Family Residence, Townhome, Condominium, Multi-Unit)

Number of Units: ______________________________________________________________________________________

(Choose One: 1 - Single Family Residence, 2 - Duplex, 3 - Triplex, 4 - Fourplex)

Home Owners Association (HOA): Yes

No

Purpose of Loan: ______________________________________________________________________________________

(Choose One: Purchase, Refinance, Rehab to Perm, Rehab for Resale)

Borrower and Legal Owner

Name of Borrower:___________________________________________________________________________________

Note: The Borrower and the Name in which the Property are Titled (Legal Owner) may be different.

Borrower Marital Status: Single Person-Individual

Married Person

Email Address: ______________________________________________________________________________

Phone Number: ______________________________________________________________________________

Legal Owner / Titling Information (If Different from Borrower)

Property Owner / Titled: ___________________________________________________________________

Type: Limited Liability Company (LLC)

Individual Retirement Account (IRA or Self-Directed IRA)

Trust

Corporation

Other - _____________________________________________________________

Does the Legal Owner have a “Layered” Entity Structure?: Yes No

Definition: A “Layered” Entity Structure is any Ownership whereby the Authorized Signor for the

Ownership Entity is another Entity.

• 11289 Strang Line Rd Lenexa, KS 66215 • Phone: 913.956.7325 • Fax : 913.956.7326 • www.peakkc.com

Loan Application

Loan Document Signor (If Different from Borrower)

Will there be a Signor other than the Borrower for the Loan Documents?: Yes No

If Yes, Whom: ______________________________________________________________________________

Relation/Structure: Power of Attorney

Corporate Resolution (Corporations)

Written Consent of the Manager (LLC)

Point of Contact Information

Is Borrower Primary Point of Contact?: Yes Yes, but Include Point of Contact in Correspondence

No No, but include Borrower in Correspondence

Point of Contact: ______________________________________________________________________________

(if not Borrower)

Relation: ______________________________________________________________________________

Email Address: ______________________________________________________________________________

Phone Number: ______________________________________________________________________________

Acknowledgement and Signatures

Applicant acknowledges that information supplied in this form will be used to further process their application, but is not a commitment of a

loan. Further the Applicant acknowledges that the Loan, should it materialize from this Loan Request/Application, is strictly and solely for the

purposes of investment activity. Investment Purposes/Activity specifically exclude owner-occupied residence, primary residence, and partial

residence.

Vendor Costs: Applicant further acknowledges that during the Application process the Lender may at their sole discretion use 3rd Party

Vendors to support their approval process, specifically, Appraisal Reports and Home Inspection Reports. Should the Applicant withdraw or

terminate their Loan Request/Application, they will become responsible for the cost of these services, but also will have the rights to receive

these reports.

Vendor Deposit Payment: Based upon information within this Loan Application, Applicant may be asked to submit a Vendor Deposit.

Pre-Approval: Applicant acknowledges that a Pre-Approval has been provided to them, offered to them, or can be supplied to them prior to

executing this Application. Applicant acknowledges that all Pre-Approvals are based upon information supplied by the Applicant and are not a

commitment of a loan.

Terms of Lending: Applicant acknowledges that the terms of the loan for which Applicant is applying for have been provided to them, offered

to them, or can be supplied to them prior to executing this Application.

Applicant / Borrower’s Signature

X _______________________________________________

Date: ___________________________________________

Co-Borrower’s Signature

X _______________________________________________

Date: ___________________________________________

11289 Strang Line Rd Lenexa, KS 66215 • Phone: 352.600.0504 • Fax. 913-956-7326 • www.peakassetlending.com

Vendor Deposit

Payment Authorization

Property: ______________________________________________________________________________

Borrower: ______________________________________________________________________________

Vendor Deposit Explanation and Process

During the Application process the Lender may at their sole discretion use 3rd Party Vendors to support their approval process, specifically,

Appraisal Reports, Home Inspection Reports, and HOA Information. The Vendor Deposit is collected upon Application to cover these

potential expenses. Should the loan application never materialize into a loan FOR ANY REASON, the Vendor Deposit will be used to cover

any and all Vendor Expenses. Applicant acknowledges that the Vendor Deposit is only an estimate and they are responsible for all 3rd Party

Vendor costs accrued in association with their Application, even if such costs exceed the estimated Vendor Deposit. Invoices of expenses

can be provided to Applicant upon request.

At Closing this Deposit will be credited to the Applicant/Borrower on the Closing Statement.

Vendor Deposit Amount and Servicer

The Vendor Deposit will be collected and held by Peak Asset Management, LLC as a Servicer to the Lender.

The Vendor Deposit amount is $400.00 (four hundred US Dollars).

Credit Card Payment Authorization

I authorize Peak Asset Management, LLC to charge my credit card account indicated below. I have read and understand the terms and

conditions of this charge as stated within and in the Loan Application.

Cardholder Name: __________________________________________________________________________________________

Account Number: __________________________________________________________________________________________

Expiration Date: ___________________

CVV2 (3 digit number on back of Visa/MC, 4 digits on front of AMEX): ____________________________

Billing Address: __________________________________________________________________________________________

City, State, Zip __________________________________________________________________________________________

SIGNATURE DATE

I authorize the above named business to charge the credit card indicated in this authorization form according to the terms outlined above. This

payment authorization is for the goods/services described above, for the amount indicated above only. I certify that I am an authorized user of

this credit card and that I will not dispute the payment with my credit card company; so long as the transaction corresponds to the terms

indicated in this form.

11289 Strang Line Rd Lenexa, KS 66215 • Phone: 352.600.0504 • Fax. 913-956-7326 • www.peakassetlending.com

Vendor Deposit

Payment Authorization

Online

Go to the following link: http://www.peakassetlending.com/makeDeposit

Payments by Check

Send Check Payable to: Peak Asset Management, LLC

11289 Strang Line Road

Lenexa, KS 66215

Payments by Wire

WIRE INSTRUCTIONS FOR

PEAK ASSET MANAGEMENT, LLC (Vendor Deposit – Merchant Services Account)

11289 Strang Line Road

Lenexa, KS 66215 Phone (913) 956-7325

Fax (913) 956-7326

Receiving Bank: Bank of America

Local Branch Bank of America, KS8-552-01-01 175 N. Clairborne Road Olathe, KS 6606 Phone: (816) 979-8561

ABA Routing Number: 026009593 Name on Account: Peak Asset Management, LLC Account Number: 518006228967




PEAK ASSET MANAGEMENT, LLC

PEAK EQUITY GROUP, LLC

HIGH PEAKS FINANCIAL, LLC

HIGH PEAKS INVESTMENT FUND IV, LLC

(Referred below as “Peak”)

11289 STRANG LINE RD, LENEXA, KS 66215

PHONE: (913) 956-7325 - FAX: (913) 956-7326

INFORMATION RELEASE AUTHORIZATION

I/We have applied for a purchase option, mortgage, consumer or business loan. In applying for the loan, I/We completed a loan

application containing various information on the purpose of the loan, the amount and the source of the down payment, employment

and income information, and assets and liabilities. I/We certify that all the information is true and complete. I/We made no

misrepresentations in the loan application or other documents, nor did I/We omit any pertinent information. I/We understand that under

Federal law, it is a crime punishable by fine and/or imprisonment to knowingly make any false statements when applying for this loan.

I/we give my/our consent for information contained in the loan application and in other documents required in connection with the loan

to be verified or reverified, either before the loan is closed or as part of Peaks’ quality control program and/or ongoing loan review.

This verification or reverification maybe made by Peak. (Service Provider), its agents, successors and assigns either directly or through

a credit-reporting agency. Such information includes, but is not limited to, employment history; criminal background, income and

licensing; bank, money market and similar account balances and deposits; credit history; and copies of income tax returns and/or W-2

forms.

A photographic or carbon copy of the signature(s) of the undersigned may be deemed to be equivalent of the original and may be used

as a duplicate original.

BUSINESS ENTITY INDIVIDUALS

By signing below you acknowledge that we

will verify the creditworthiness of the

below named Business Entity.

_______________________________________

Business Entity Name

_______________________________________

Signature Date

_______________________________________

Name/Title

Business Tax ID Number __________________

By signing below, you authorize us to check your credit

account and employment history and/or have a credit

reporting agency prepare a credit report on you.

______________________________________________

Full Legal Name

Address

______________________________________________

Social Security Number Date of Birth

______________________________________________

Signature Date

______________________________________________

Full Legal Name

Address

_____________________________________________

Social Security Number Date of Birth

______________________________________________

Signature Date

• 11289 Strang Line Rd Lenexa, KS 66215 • Phone: 913.956.7325 • Fax : 913.956.7326 • www.peakassetlending.com

Loan Application

(Vendor Contacts)

Property: ___________________________________________________________________________________

Borrower: ___________________________________________________________________________________

Appraisal - Point of Contact for Access and Scheduling

The Appraisal will be ordered by the Lender. This Point of Contact Information will be provided to the Appraiser as part of the

order to schedule and determine access to the Property.

Point of Contact: ______________________________________________________________________________

Phone Number: ______________________________________________________________________________

Email Address: ______________________________________________________________________________

Home Inspection Information

A Home Inspection is an Application Requirement. Please Circle an Option below. If the Lender is to Order please provide

a Point of Contact Information below. If the Borrower is providing the Home Inspection, Borrower acknowledges that the Home

Inspection must meet Lender’s requirements. These requirements can be provided to Borrower upon request.

Options (Circle One): Borrower will Provide OR Lender to Order

Point of Contact: ______________________________________________________________________________

Phone Number: ______________________________________________________________________________

Email Address: ______________________________________________________________________________

Title Company Information

Company: ______________________________________________________________________________

Point of Contact: ______________________________________________________________________________

Mailing Address: ______________________________________________________________________________

Phone Number: ______________________________________________________________________________

Email Address: ______________________________________________________________________________

• 11289 Strang Line Rd Lenexa, KS 66215 • Phone: 913.956.7325 • Fax : 913.956.7326 • www.peakassetlending.com

Loan Application

(Vendor Contacts)

Insurance Company Information

Company: ______________________________________________________________________________

Point of Contact: ______________________________________________________________________________

Mailing Address: ______________________________________________________________________________

Phone Number: ______________________________________________________________________________

Email Address: ______________________________________________________________________________

Property Manager / Management / Lease Information

Is Property managed by 3rd Party Management? Yes No

If Yes, Complete below information. No, Owner Managed Property

or Resale Loan

.

Property Management Agreement

Property Management Contact Information

Company: ______________________________________________________________________________

Point of Contact: ______________________________________________________________________________

Mailing Address: ______________________________________________________________________________

Phone Number: ______________________________________________________________________________

Email Address: ______________________________________________________________________________

Current Lease Agreement

BORROWER FINANCIAL STATEMENT 4/9/2003 jmk

SUBMITTED TO: Peak Statement Date:

IMPORTANT: PLEASE CHECK THE APPROPRIATE BOX:

If you are applying for individual credit in your own name and are relying on your own income, or assets and not the income or assets of another person as the basis for repayment of the credit requested, or if this statement relates to your guaranty of the indebtedness of other person(s), firm(s), or corporation(s), complete only Section 1, 3 and 4.

If you are applying for joint credit with another person, complete all Sections, providing information in Section 2 about the joint applicant

If you are applying for individual credit but are relying on income from alimony, child support, or separate maintenance or on the income or assets of another person as a basis for repayment of the credit requested, complete all Sections. Provide information in Section 2 about the person whose alimony, support, or maintenance payments or income or assets you are relying on. Alimony, child support, or separate maintenance income, need not be revealed if you do not wish to have it considered as a basis for repaying this obligation.

Section 1 – 1st Party Individual Information (type or print) Section 2 – Other Party Information (type or print)

Name Name

Address Address

City State Zip City State Zip

Social Security # Social Security #

Date of Birth Date of Birth

Position or Occupation Position or Occupation

Business Name Business Name

Business Address Business Address

City State Zip City State Zip

Length of present address Length of present address

Length of employment Length of employment

Res. phone Bus. Phone Res. Phone Same Bus. phone

Have (either of) you or any firm in which you were a major owner ever declared bankruptcy, or settled any debts for less than the amounts owned? If yes, please provide details on separate sheet.

Yes No

Are (either of) you a defendant in any suit or legal action? Yes No Are (either of) you presently subject to any unsatisfied judgments to tax liens? Yes No When, if ever, have (either of) you been audited by IRS?

Section 3 – State of Financial Condition

Assets (Do not include assets of doubtful value)

In dollars (omit cents) (Individual)

(Joint)

If Joint,

with whom

Liabilities In dollars (omit cents) (Individual)

(Joint)

If Joint,

with whom

Cash, Checking & Savings, CD’s - see Schedule A

Notes payable to banks & others -see Schedule H

U.S. Gov’t & marketable securities- See Schedule B

Due to brokers

Non-marketable securities – See Schedule C

Amounts payable to others-secured

Securities held by broker in margin accounts Amounts payable to others-unsecured

Restricted, control or margin account stocks Accounts & bills due

Real estate owned – see Schedule D Unpaid Income tax

Accounts, loans & notes receivable Other unpaid taxes & interest

Automobiles – Real estate mortgages payable – See Schedules D & H

Vested interest in deferred compensation/ Profit-sharing plans – see Schedule F

Business ventures – see Schedule G

Other assets/personal property itemize- See Schedule G if applicable

Total Liabilities

Net Worth

Total Assets Total Liabilities and Net Worth

Section 4 – Annual Income For Year: ←insert date Annual Income Individual Joint Annual Expenditures Individual Joint Contingent Liabilities Estimated Amounts Individual Joint

Salary, bonuses & commissions (NET)

Mortgage/rental payments Do you have any… Yes No

Dividends & interest Real estate taxes & assessments

Contingent liabilities (as endorser, co-maker or guarantor?)

Real estate income Taxes-federal, state & local (On leases? On contracts?)

Other income (alimony, child support, or

separate maintenance income need not be revealed if you do not wish to have it considered as a basis for repaying this obligation.)

Insurance payments Involvement in pending legal actions?

Other contract payments (car payments, charge cards, etc.)

Contested income tax liens?

Alimony, child support, maintenance

Any estimated capital gains tax on the unrealized asset appreciation?

Other expenses Other special debt or circumstances?

Total Income $ Total Expenditures $ If “yes” to any question(s) describe:

(COMPLETE SCHEDULES AND SIGN ON REVERSE SIDE OR NEXT PAGE)

Total contingent Liabilities $

SCHEDULE A – CASH, CHECKING AND SAVINGS ACCOUNTS, CERTIFICATES OF DEPOSIT, MONEY MARKET FUNDS, ETC.

Name of Financial Institution Type of Account Owner (J) If Pledged, to Whom? Balance

SCHEDULE B – U.S. GOVERNMENT & MARKETABLE SECURITIES (Use additional sheet if necessary)

Number of Shares or Face Value of Bonds

Description In Name of Are these Registered, Pledged, or Held by Others?

Market Value Exchanges Where Traded

SCHEDULE C –NON-MARKETABLE SECURITIES (Use additional sheet if necessary)

Number of Shares Description In Name of Are these Registered, Pledged, or Held by Others?

Value Method of Valuation

SCHEDULE D – INVESTMENTS IN REAL ESTATE (Use additional sheet if necessary)

Description/Location of Real Estate

Investment

(J) Date of Original Investment/Amount

% Owned By You

Market Value of Your % of Investment

Present Balance Monthly Payment

Mortgage Maturity Date

Mortgage Owed To

SCHEDULE E – LIFE INSURANCE CARRIED, INCLUDING GROUP INSURANCE

Name of Insurance Company

Owner of Policy Beneficiary and Relationship

Face Amount Policy Loans Cash Surrender Value

SCHEDULE F – VESTED INTEREST IN DEFERRED COMPENSATION/PROFIT-SHARING PLANS

% Vested

Company Name Account Number Manner of Payout (Annuity, Lump Sum, etc.)

Distribution Date

Beneficiary Amount

SCHEDULE G – BUSINESS VENTURES (Use additional sheets if necessary)

List Name and Address of Any Business Venture In Which You

Are a Principal or Partner

Your Position/Title in the Business

Line of Business

Years in Business

Total Assets Listed in Section 3

Your % of Ownership

Net Worth of Business

Present Net Value of Your

Investment

SCHEDULE H – ALL LOANS OWING BANKS, BROKERS, FINANCE COMPANIES, AND OTHERS (MASTERCARD, VISA, ETC.) ATTACH LIST IF NOT SUFFCIENT SPACE PROVIDED

Owing to (Account No.)

(J) Date of Original Borrowing/Amount

Present Balance Due Monthly Payment

Date of Final Pmt.

Secured by

The information contained in this statement is provided to induce you to extend or to continue the extension of credit to the undersigned or to others upon the guaranty of the undersigned. The undersigned acknowledges and understands that you are relying on the information provided herein in deciding to grant or continue credit or to accept a guaranty thereof. Each of the undersigned represents, warrants and certifies that (1) the information provided herein is true, correct and complete and gives a correct and complete showing of the financial condition of the undersigned, (2) the undersigned has no liabilities direct, indirect or contingent except as set forth in this statement, and (3) legal and equitable title to all assets listed herein is in the undersigned’s sole name, except as may be herein otherwise notes. Each of the undersigned agrees to notify you immediately and in writing of any change in name, address, or employment and of any material adverse change (1) in any other information contained in this statement or (2) in the financial condition of any of the undersigned or (3) in the ability of any of the undersigned to perform its (or their) obligations to you. In the absence of such notice or a new and full written statement, this should be considered as a continuing statement and substantially correct. You are authorized to make all inquiries you deem necessary to verify the accuracy of the information contained herein, and to determine the credit-worthiness of the undersigned and the undersigned hereby authorizes all persons of whom you make such inquiries to respond thereto in full. Each of the undersigned authorizes you to answer questions about your credit experience with the undersigned. Each of the undersigned represents, warrants and certifies that none of the above assets are held in trust, and will notify you immediately if any of the above assets are transferred to a trust.

BEFORE SIGNING, SEE THAT ALL QUESTIONS HAVE BEEN ANSWERED AND ALL BLANKS FILLED

1st Party – Please sign below Other Party – Please sign below

X X

Date Signed: Date Signed:

BORROWER PAYMENT AUTHORIZATION

(ELECTRONIC SERVICING AND COLLECTION)

The undersigned Borrower(s) (collectively "Borrower") hereby request and authorize Peak Equity Group, LLC, or its assignee (herein "Lender"), to initiate withdrawals (debit transactions) from and deposits (credit transactions) to the deposit account (the "Account") having the account number listed below at the financial institution listed below (the "Financial Institution"). BORROWER AND LOAN INFORMATION

Borrower: ________________________________ Property Address: ________________________________ Loan Number: ________________________________ ELECTRONIC SERVICING – FINANCIAL INSTITUTION INFORMATION

Financial Institution: ________________________________ Financial Institution Address: ________________________________ ________________________________ ABA Routing #: ________________________________ Account Number: ________________________________ Name on Account: ________________________________ (If Different from Borrower’s Name)

Please verify with your Bank the Routing #’s applicable for deposits and withdrawals. With certain financial institutions it may be 2 separate routing numbers please ask your Bank Representative.

INITIAL TERMS AND CONDITIONS

1. IDENTIFICATION OF TRANSACTION. This Authorization is being executed by Borrower in connection with a loan from Lender to Borrower evidenced by a promissory note executed by Borrower in favor of Lender (the "Note"). This Authorization is for the purpose of permitting Lender to withdraw funds from the Account to make payments due by Borrower under the Note and related loan documents and to permit Lender to deposit into the Account disbursements of construction funds held by Lender in escrow in accordance with a certain Construction Agreement between Borrower and Lender. Payments due under the Note and other loan documents may vary from month to month and BORROWER AGREES THAT DEBIT TRANSACTIONS MAY VARY IN AMOUNT.

2. TERM AND CANCELLATION. This Authorization shall remain in effect until (a) the Note is paid in full, or (b) the Authorization is terminated by borrower by providing written notice of termination at least thirty (30) days prior to the designated termination date. This Authorization may be terminated by Lender for any reason in Lender's sole discretion, including, without limitation, if a debit transaction from the Account cannot be made due to, but not limited to, insufficient funds, a stop payment order, or closure of the account.

3. ACCOUNT INFORMATION. The above Account information was supplied to Lender by Borrower or an authorized agent of Borrower. The Borrower, or authorized agent, as the case may be, has reviewed this information for accuracy. Lender may request that the Financial Institution provide a "Verification of Deposits," however it is the Borrower's responsibility to insure the accuracy of all Account information. Borrower and/or its authorized agent hereby indemnify and hold harmless Lender and its members, officers, employees, agents, successors and assigns from and against any claims, actions, damages, liability and expense (including reasonable attorneys' fees), directly or indirectly arising out of the inaccuracy of the Account information or the undersigned's authority to authorize the transactions contemplated herein. If any action or proceeding is brought against Lender or any of its members, officers, employees, agents, successors or assigns by reason of the aforementioned causes, Borrower and/or its authorized agent agrees to defend such action or proceeding at its own expense by counsel satisfactory to Lender.

4. DELIVERY METHODS. Funds from debit transactions initiated by Lender will be transferred from the Account via the ACH (Automated Clearing House) System. Funds from credit transactions will be transferred from Lender to the Account via a wire transfer.

5. DEBIT TRANSACTIONS

a. Debit transactions may include amounts for Principal, Interest, and Late Charges (as defined in the Note), and other additional debits as approved by the Borrower. Debit amounts may vary on a monthly basis as described in the Note.

b. Debit transactions will be made on the 2nd of every month

c. In the event a debit transaction from the Account cannot be made due to, but not limited to, insufficient funds, a stop payment order, or closure of the account, Lender may re-initiate the debit transaction on the 12th of the month.

d. Should the 2nd or 12th of the month fall on a non-business day (Saturday, Sunday, Federal Reserve Bank Holiday or other day on which the Financial Institution is not open for business), the debit transaction will take place on the next business day.

e. In the event a debit transaction has been made from the Account in error, or the Financial Institution's statement discloses a debit transaction not in accordance with this Authorization, Borrower must notify Lender of the alleged error for resolution within 30 days after the earlier of Borrower's discovery of the alleged error or the date of the statement reflecting the alleged error. In the event a debit transaction is made from the Account, not in accordance with this Authorization, Lender will operate in accordance with Federal Reserve Regulation E. In the event Borrower protests a debit transaction that was in accordance with this Authorization, Borrower may be liable for certain damages or penalties and Borrower may incur legal fees.

6. CREDIT TRANSACTIONS

a. Credit transactions may include deposits of construction funds, refunds for erroneous debits, or other additional credits as approved by Lender.

b. Credit transactions will be initiated as described in the “Construction Agreement”, or as described herein.

c. In the event a credit transaction has been made to the Account in error, Lender reserves the right to use any and all methods to recover such funds credited in error. Such methods include, but are not limited to, wire cancellation, wire recovery, and the debiting of the Account for funds credited in error.

7. ADDITION. In addition to the Terms and Conditions of this Authorization, Lender will not be liable if:

a. Available funds in Account are insufficient to support a debit transaction;

b. The funds held in the Account are subject to legal process or other encumbrances or restrictions which prevent the making of a debit transaction;

c. Acts of God, technical malfunction or other circumstances not within the control of Lender prevent making a debit transaction or credit transaction, despite reasonable precautions taken;

d. Debit transactions result in an overdraft on the Account and cause Borrower to be liable for fees or penalties;

e. The Financial Institution does not subscribe to the Federal Reserve’s Automated Clearing House (ACH) Banking System, or will not provide Lender with access to transfer funds on Borrower's behalf.

8. ATTORNEYS' FEES. In the event of any litigation relating to or arising from this Authorization, the prevailing party shall be entitled to recover from the other party the reasonable attorneys' fees and expenses incurred by the prevailing party in such litigation.

By signing below the Borrower accepts and agrees to the Terms and Conditions contained within this Borrower Payment Authorization.

________________________________ ________________________________

Borrower Date Borrower Date