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Loan Instrument and Recapture Provision
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| Deferred Forgivable Loan (DFL) - Non-recourse, no-interest, five or ten year non-amortizing forgivable loan will be used. The principal loan amount due to the City will be reduced by 1/60th (for five year loans) and 1/120th (for ten year loans) for each month that the applicant fulfills the note and lien requirements, until the total loan amount is forgiven or repaid. All DFL loans shall typically have a second lien holder position. Lien requirements include, but may not be limited to, prompt and current payment of homeowner's hazard insurance and property taxes. As a non-recourse loan, this only allows the repossession of the property without the personal liability of the borrower, but breach of the following covenants will result in foreclosure: |
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| | Principal residence requirement for full lien period |
| | First right of purchase to the City of Tyler |
| | Property use and maintenance requirements |
| | HUD HQS maintenance requirement for resale |
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