B. COST OF A HABITAT HOME: This includes price of the land and construction and administrative costs. This is the price the buyer actually pays. Buyer has a mortgage with WRHFH and pays equal monthly installments until the mortgage is paid in full. The maximum length of a Habitat mortgage is 30 years. This is a no-interest loan. WRHFH is an equal opportunity lender.

C. SHARED EQUITY: The difference between the appraised value and the cost of building a Habitat house is called shared equity. WRHFH will forgive a portion of the shared equity yearly as long as the Buyer owns the home and makes his/her monthly mortgage payments. The credit is given to the buyer in equal annual installments, beginning one year after the date of closing

Buyer's Obligation: The buyer contracts with WRHFH to buy the home for Appraised Value on a no- interest loan. This loan will be secured by a mortgage. Two mortgage notes will spell out the terms of payment.

The first mortgage note secures the cost of the home. This is the principal amount that the buyer will actually pay WRHFH. The buyer will make equal monthly payments to WRHFH over the agreed upon number of years until the principal is paid in full.

The second mortgage note will secure the shared equity. WRHFH will credit the buyer for the shared equity in equal annual installments, beginning one year after the date of closing and continuing through the life of the mortgage as long as the Buyer owns the home and makes all his/her monthly payments.

In the event that the buyer sells the property before the mortgage is paid in full, the buyer will receive whatever equity he or she has built up in the house. WRHFH will receive the amount still owed on the first and second mortgage notes. '

Along with the Mortgage payment, the buyer will pay into WRHFH's escrow account each month: $10 to cover incidental home repairs, 1/12 of the yearly insurance premium, and 1/12 of the estimated real estate taxes. In the event that the buyer makes only a partial payment, it will apply first to escrow for taxes and insurance, then to principal. .

Payments are due on the first of the month unless specified otherwise in the mortgage. If a payment is not received by the 15th of the month, a late fee will be assessed. The late fee will not reduce the principal amount.