Common use of Application of Subsidy Funds Clause in Contracts

Application of Subsidy Funds. With respect to each Subsidy Loan, the Company shall have deposited into the Custodial Account, no later than the last day of the month, Subsidy Funds in an amount equal to the aggregate undiscounted amount of payments that, when added to the amount the Mortgagor on such Mortgage Loan is obligated to pay on all Due Dates in accordance with the terms of the Subsidy Agreement, is equal to the full scheduled Monthly Payments which are required to be paid by the Mortgagor under the terms of the related Mortgage Note. If the Mortgagor on a Subsidy Loan defaults on such Mortgage Loan during the Subsidy Period and the Mortgaged Property securing such Subsidy Loan is sold in the liquidation thereof (either by the Company or the insurer under any related Primary Insurance Policy) the Company shall, on the Remittance Date following the date upon which Liquidation Proceeds or REO Disposition Proceeds are received with respect to any such Subsidy Loan, distribute to the Purchaser all remaining Subsidy Funds for such Mortgage Loan then remaining in the Subsidy Account or Custodial Account. Any amounts distributed to the Purchaser in accordance with the preceding sentence will be applied to reduce the outstanding principal balance of the related Subsidy Loan. If a principal prepayment by a Mortgagor on a Subsidy Loan, together with any Subsidy Funds then remaining in the Subsidy Account and Custodial Account related to such Subsidy Loan, would result in a principal prepayment of the entire unpaid principal balance of the Subsidy Loan, the Company shall distribute to the Purchaser on the Remittance Date occurring in the month immediately succeeding the month in which such Principal Prepayment is received, all Subsidy Funds related to such Mortgage Loan so remaining in the Subsidy Account and Custodial Account, together with any amounts required to be deposited into the Custodial Account.