Common use of RESERVE FOR REPLACEMENT Clause in Contracts

RESERVE FOR REPLACEMENT. Borrower shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times remain under the control of Lender or Xxxxxx’s designee, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations. Borrower shall deposit at endorsement of the Note an initial amount of $__ _, if applicable, and Borrower shall deposit a monthly amount of $__ __, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount is established by HUD. At least every ten years, starting   [Insert New Project Capital Needs Assessment (PCNA) Due Date], and more frequently at HUD’s discretion, Borrower shall submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement. In connection therewith, every ten years starting   [Insert New PCNA Due Date], the Lender shall obtain a physical and capital needs assessment report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion, require Borrower to maintain a minimum balance in the account, in an amount to be set by HUD. [Insert if applicable: The amount of such required minimum balance is: __ __] [Insert the following sentence, if applicable: In addition to the required monthly deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA Project No. __ ___ [Insert old FHA Project Number] shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under FHA Project No. ___ __ [Insert New FHA Project Number]. Borrower shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement for use by the Project in accordance with this Section 13. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion. In the event of a notification of default under the terms of the Borrower Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Upon Borrower’s full satisfaction of all of its obligations under the Loan Documents, any monies remaining in the Reserve for Replacement account shall be released to Borrower or its designee. Borrower may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses as provided in Program Obligations. Such funds shall be repaid to the Reserve for Replacement by Borrower pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment requirements, Borrower shall repay the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower shall immediately repay the full amount of such loan from non-Project funds. [RESERVED.] [If a long-term debt service reserve is required, insert deal-specific provisions in accordance with Program Obligations and the Firm Commitment.]

RESERVE FOR REPLACEMENT. Borrower shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times remain under the control of Lender or Xxxxxx’s designee, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations. Borrower shall deposit at endorsement of the Supplemental Note an initial amount of $__ ________, if applicable, and Borrower shall deposit a monthly amount of $__ ________, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount is established by HUD. This amount is in addition to the monthly Reserve for Replacement amount required by the First Mortgage Documents, creating a newly combined monthly deposit of $__________. At least every ten years, starting   [Insert New Project Capital Needs Assessment (PCNA) Due Date]20____, and more frequently at HUD’s discretion, Borrower shall submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement. In connection therewith, every ten years starting   [Insert New PCNA Due Date]20____, the Lender shall obtain a physical and capital needs assessment report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion, require Borrower to maintain a minimum balance in the account, in an amount to be set by HUD. [Insert if applicable: The amount of such required minimum balance is: __ ________] [Insert the following sentence, if applicable: In addition to the required monthly deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA Project No. __ ________ [Insert old FHA Project Number] shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under FHA Project No. ___ _______ [Insert New FHA Project Number]. Borrower shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement for use by the Project in accordance with this Section 13. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion. In the event of a notification of default under the terms of the Borrower Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Upon Borrower’s full satisfaction of all of its obligations under the Loan Documents and the First Mortgage Documents, any monies remaining in the Reserve for Replacement account shall be released to Borrower or its designee. Borrower may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses as provided in Program Obligations. Such funds shall be repaid to the Reserve for Replacement by Borrower pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment requirements, Borrower shall repay the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower shall immediately repay the full amount of such loan from non-Project funds. In lieu of depositing funds into the Reserve for Replacement account pursuant to this Section 13, at the option of Lender, funds required to be deposited into the Reserve for Replacement account pursuant to this Section 13 shall be deposited into the Reserve for Replacement account required and established pursuant to the First Mortgage Documents. [RESERVED.] [If a long-term debt service reserve is required, insert deal-specific provisions in accordance with Program Obligations and the Firm Commitment.]

RESERVE FOR REPLACEMENT. Borrower shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times remain under the control of Lender or Xxxxxx’s designee, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations. Borrower shall deposit at endorsement of the Supplemental Note an initial amount of $__ ________, if applicable, and Borrower shall deposit a monthly amount of $__ ________, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount is established by HUD. This amount is in addition to the monthly Reserve for Replacement amount required by the First Mortgage Documents, creating a newly combined monthly deposit of $__________. At least every ten years, starting   [Insert New Project Capital Needs Assessment (PCNA) Due Date]20____, and more frequently at HUD’s discretion, Borrower shall submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement. In connection therewith, every ten years starting   [Insert New PCNA Due Date]20____, the Lender shall obtain a physical and capital needs assessment report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion, require Borrower to maintain a minimum balance in the account, in an amount to be set by HUD. [Insert if applicable: The amount of such required minimum balance is: __ ________] [Insert the following sentence, if applicable: In addition to the required monthly deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA Project No. __ ________ [Insert old FHA Project Number] shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under FHA Project No. ___ _______ [Insert New FHA Project Number]. Borrower shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement for use by the Project in accordance with this Section 13. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion. In the event of a notification of default under the terms of the Borrower Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Upon Borrower’s full satisfaction of all of its obligations under the Loan Documents and the First Mortgage Documents, any monies remaining in the Reserve for Replacement account shall be released to Borrower or its designee. Borrower may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses as provided in Program Obligations. Such funds shall be repaid to the Reserve for Replacement by Borrower pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment requirements, Borrower shall repay the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower shall immediately repay the full amount of such loan from non-Project funds. In lieu of depositing funds into the Reserve for Replacement account pursuant to this Section 13, at the option of Lender, funds required to be deposited into the Reserve for Replacement account pursuant to this Section 13 shall be deposited into the Reserve for Replacement account required and established pursuant to the First Mortgage Documents. [RESERVED.] [If a long-term debt service reserve or other reserve/escrow is required, insert deal-specific provisions in accordance with Program Obligations and the Firm Commitment.]

RESERVE FOR REPLACEMENT. Borrower shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times remain under the control of Lender or Xxxxxx’s designee, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations. Borrower shall deposit at endorsement of the Note an initial amount of $__ ___, if applicable, and Borrower shall deposit a monthly amount of $__ ____, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount is established by HUD. At least every ten years, starting   [Insert New Project Capital Needs Assessment (PCNA) Due Date]from the date of endorsement, and more frequently at HUD’s discretion, Borrower shall submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement. In connection therewith, every ten years starting   [Insert New PCNA Due Date]years, the Lender shall obtain a physical and capital needs assessment report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion, require Borrower to maintain a minimum balance in the account, in an amount to be set by HUD. [Insert if applicable: The amount of such required minimum balance is: __ _________] [Insert the following sentence, if applicable: In addition to the required monthly deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA Project No. __ ___________ [Insert old FHA Project Numberproject number] shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under FHA Project No. ___ _______ [Insert New FHA Project Numbernew project number]. .] Borrower shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement for use by the Project in accordance with this Section [13]. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion. In the event of a notification of default under the terms of the Borrower Borrower’s Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Where the Mortgaged Property is already subject to a security instrument insured or held by HUD as of the date hereof and this Agreement is now being executed by Borrower as of the date hereof, the Reserve for Replacement now to be established shall be equal to the amount due to be in such account under this Agreement, and payments hereunder shall begin with the first payment due on the Borrower’s Note after acquisition, unless some other method of establishing and maintaining the account is approved in writing by HUD. Upon BorrowerXxxxxxxx’s full satisfaction of all of its obligations under the Loan DocumentsLender and HUD obligations, Borrower shall receive any monies remaining in the Reserve for Replacement account shall be released to Borrower or its designeeReplacement. Borrower may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses as provided in Program Obligations. Such funds shall be repaid refunded to the Reserve for Replacement by Borrower pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment specific refunding requirements, Borrower shall repay refund the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If Borrower fails to timely make any repayment refunding installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower shall immediately repay the full amount of refund such loan from non-Project funds. [RESERVED.] [If a long-term debt service reserve is required, insert deal-specific provisions in accordance with Program Obligations and the Firm Commitment.]

RESERVE FOR REPLACEMENT. Borrower shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times remain under the control of Lender or Xxxxxx’s designee, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations. Borrower shall deposit at endorsement of the Supplemental Note an initial amount of $__ ________, if applicable, and Borrower shall deposit a monthly amount of $__ ________, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount is established by HUD. This amount is in addition to the monthly Reserve for Replacement amount required by the first/original mortgage,First Mortgage Documents, creating a newly combined monthly deposit of $__________. At least every ten years, starting   [Insert New Project Capital Needs Assessment (PCNA) Due Date]20____, and more frequently at HUD’s discretion, Borrower shall submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement. In connection therewith, every ten years starting   [Insert New PCNA Due Date]20____, the Lender shall obtain a physical and capital needs assessment report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion, require Borrower to maintain a minimum balance in the account, in an amount to be set by HUD. [Insert if applicable: The amount of such required minimum balance is: __ ________] [Insert the following sentence, if applicable: In addition to the required monthly deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA Project No. __ ________ [Insert old FHA Project Number] shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under FHA Project No. ___ _______ [Insert New FHA Project Number]. Borrower shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement for use by the Project in accordance with this Section 13. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion. In the event of a notification of default under the terms of the Borrower Borrower’s SecurityBorrower Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Upon Borrower’s full satisfaction of all of its obligations under the Loan Documents and the First Mortgage Documents, any monies remaining in the Reserve for Replacement account shall be released to Borrower or its designee. Borrower may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses as provided in Program Obligations. Such funds shall be repaid to the Reserve for Replacement by Borrower pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment requirements, Borrower shall repay the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower shall immediately repay the full amount of such loan from non-Project funds. In lieu of depositing funds into the Reserve for Replacement account pursuant to this Section 13, at the option of Lender, funds required to be deposited into the Reserve for Replacement account pursuant to this Section 13 shall be deposited into the Reserve for Replacement account required and established pursuant to the First Mortgage Documents. [RESERVED.] [If a long-term debt service reserve is required, insert deal-specific provisions in accordance with Program Obligations and the Firm Commitment.]

RESERVE FOR REPLACEMENT. Borrower shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times remain under the control of Lender or Xxxxxx’s designee, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations. Borrower shall deposit at endorsement of the Note an initial amount of $__ _, if applicable, and Borrower shall deposit a monthly amount of $__ __, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount is established by HUD. At least every ten years, starting   20_ _ [Insert New Project Capital Needs Assessment (PCNA) Due Date], and more frequently at HUD’s discretion, Borrower shall submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement. In connection therewith, every ten years starting   20_ _ [Insert New PCNA Due Date], the Lender shall obtain a physical and capital needs assessment report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion, require Borrower to maintain a minimum balance in the account, in an amount to be set by HUD. [Insert if applicable: The amount of such required minimum balance is: __ __] [Insert the following sentence, if applicable: In addition to the required monthly deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA Project No. __ ___ [Insert old FHA Project Number] shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under FHA Project No. ___ __ [Insert New FHA Project Number]. Borrower shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement for use by the Project in accordance with this Section 13. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion. In the event of a notification of default under the terms of the Borrower Borrower’s Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Upon Borrower’s Xxxxxxxx’x’x full satisfaction of all of its obligations under the Loan Documents, any monies remaining in the Reserve for Replacement account shall be released to Borrower or its designee. Borrower may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses as provided in Program Obligations. Such funds shall be repaid to the Reserve for Replacement by Borrower pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment requirements, Borrower shall repay the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower shall immediately repay the full amount of such loan from non-Project funds. [RESERVED.] [If a long-term debt service reserve is required, insert deal-specific provisions in accordance with Program Obligations and the Firm Commitment.]

RESERVE FOR REPLACEMENT. Borrower shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times remain under the control of Lender or Xxxxxx’s designee, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations. Borrower shall deposit at endorsement of the Note an initial amount of $__ ________, if applicable, and Borrower shall deposit a monthly amount of $__ ________, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount is established by HUD. At least every ten years, starting   [Insert New Project Capital Needs Assessment (PCNA) Due Date]20____, and more frequently at HUD’s discretion, Borrower shall submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement. In connection therewith, every ten years starting   [Insert New PCNA Due Date]20____, the Lender shall obtain a physical and capital needs assessment report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion, require Borrower to maintain a minimum balance in the account, in an amount to be set by HUD. [Insert if applicable: The amount of such required minimum balance is: __ ________] [Insert the following sentence, if applicable: In addition to the required monthly deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA Project No. __ ________ [Insert old FHA Project Number] shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under FHA Project No. ___ _______ [Insert New FHA Project Number]. Borrower shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement for use by the Project in accordance with this Section 13. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion. In the event of a notification of default under the terms of the Borrower Borrower’s Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Upon BorrowerXxxxxxxx’s full satisfaction of all of its obligations under the Loan Documents, any monies remaining in the Reserve for Replacement account shall be released to Borrower or its designeeBorrower. Borrower may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses as provided in Program Obligations. Such funds shall be repaid to the Reserve for Replacement by Borrower pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment requirements, Borrower shall repay the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower shall immediately repay the full amount of such loan from non-Project funds. [RESERVED.] [If a long-term debt service reserve is required, insert deal-specific provisions in accordance with Program Obligations and the Firm Commitment.]

RESERVE FOR REPLACEMENT. Borrower shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times remain under the control of Lender or Xxxxxx’s designee, whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations. Borrower shall deposit at endorsement of the Note an initial amount of $__ _, if applicable, and Borrower shall deposit a monthly amount of $__ __, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount is established by HUD. At least every ten years, starting   [Insert New Project Capital Needs Assessment (PCNA) Due Date]20_ _, and more frequently at HUD’s discretion, Borrower shall submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement. In connection therewith, every ten years starting   [Insert New PCNA Due Date]20_ _, the Lender shall obtain a physical and capital needs assessment report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion, require Borrower to maintain a minimum balance in the account, in an amount to be set by HUD. [Insert if applicable: The amount of such required minimum balance is: __ __] [Insert the following sentence, if applicable: In addition to the required monthly deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA Project No. __ ___ [Insert old FHA Project Number] shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under FHA Project No. ___ __ [Insert New FHA Project Number]. Borrower shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement for use by the Project in accordance with this Section 13. Disbursements from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD’s sole discretion. In the event of a notification of default under the terms of the Borrower Borrower’s Security Instrument pursuant to which the Indebtedness has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated or for such other purposes as may be determined solely by HUD. Upon Borrower’s full satisfaction of all of its obligations under the Loan Documents, any monies remaining in the Reserve for Replacement account shall be released to Borrower or its designee. Borrower may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses as provided in Program Obligations. Such funds shall be repaid to the Reserve for Replacement by Borrower pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment requirements, Borrower shall repay the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower shall immediately repay the full amount of such loan from non-Project funds. [RESERVED.] [If a long-term debt service reserve is required, insert deal-specific provisions in accordance with Program Obligations and the Firm Commitment.]