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									         Affordable Housing Program – AHP Homeownership Set-Aside Program: HPS
                                     Promissory Note

This form document has been prepared to address the minimum retention requirements of the AHP
Regulations. The Federal Home Loan Bank of San Francisco makes no representation or warranty
that a court will enforce this form document in accordance with its terms under applicable state law
and, further, recommends that each Member review this document for suitability and have its counsel
review it for enforceability under all applicable laws.

Do not include this cover page in the use of this Note.
                                               PROMISSORY NOTE
                                     (AHP Homeownership Set-Aside Program: HPS)

$                                                                                                                    , 20
                                                                                                                , California

FOR VALUE RECEIVED,               ("Owner" or “Borrower”), promises to pay to       , (“Lender”) as holder of this Note, or
its successor, the principal sum of      Dollars ($       ), or so much thereof as may be provided below.

WHEREAS Owner had an original note in the amount of $            , which is now held by Lender, and dated as of (“Original
Note”); and

WHEREAS Owner and Lender have agreed to restructure or refinance the Original Note and replace it with a Subsequent
Note from the Owner to Lender in the amount of $ ; and

WHEREAS the restructuring or refinancing agreed to by Lender and Owner was made available based in part upon a
conditional commitment by the FHLB to disburse funds to Lender pursuant to the Homeownership Preservation Subsidy
Program (HPS), as permitted pursuant to the AHP Regulation.

THEREFORE, the Owner agrees to pay the Lender under the terms of this Promissory Note (“Note”) any amounts that
may be due under this Note as set forth below:

1.    Definitions. As used in this Note, the following capitalized terms have the following meanings:

      “AHP” means the Federal Home Loan Bank Affordable Housing Program Homeownership Set-Aside Program, as
      set forth in the FHLB’s Policies and Procedures.

      “AHP Agreement” means the agreement between Lender and the FHLB which establishes the conditions under
      which the funds are to be disbursed by the FHLB to Lender for the AHP Subsidy.

      “AHP Application” means the application submitted to the FHLB describing the proposed use of AHP Subsidy and
      setting forth commitments which obligate the Lender to the FHLB regarding the funds obtained by Lender.

      “AHP-Assisted Unit” means the real property commonly known as:            and more particularly described on
      Exhibit A of the Deed of Trust and the improvements now on or at any time constructed on such property.

      “AHP Deed of Trust” means a junior deed of trust or similar security instrument dated on or about the date of this
      Note securing the obligations under this Note, in favor of Lender and encumbering the AHP-Assisted Unit. In this
      Note, “AHP Deed of Trust” does not refer to a senior deed of trust or similar security instrument securing the
      Subsequent Note.

      “AHP Regulation” means the regulations set forth at 12 C.F.R. Part 951, as amended from time to time, of the
      Federal Housing Finance Board governing the AHP, and includes the conditions set forth in the resolution of the
      Federal Housing Finance Board dated January 15, 2008, granting the FHLB the waivers necessary to establish the
      Homeownership Preservation Subsidy Program.

      “AHP Subsidy” means the original principal amount of this Note set forth above.

      “Effective Date” means the date of this Note as set forth above.

      “FHLB” means the Federal Home Loan Bank of San Francisco.

      “FHLB Policies and Procedures” means the FHLB’s AHP Implementation Plan, and other AHP policies and
      procedures, as amended from time to time.

      “Lender” means the member of the FHLB that is the payee of this Note and identified above as “Lender.”

      “Loan” means the advance of the AHP Subsidy evidenced by this Note.

      "Loan Documents" means this Note, the AHP Deed of Trust, the Retention Agreement and all other documents
      relating to or securing this Note (as renewed, amended, modified, restated and extended from time to time), but
      does not include the documents pertaining to the Subsequent Note and the instruments securing the Owner’s
      obligations under the Subsequent Note.
                                                                                                                   Page 1 of 3
     “Owner” means the recipient of the AHP Subsidy and defined above as “Owner” or “Borrower.”

     “Retention Agreement” means the Rider to AHP Deed of Trust - Affordable Housing Program Retention
     Agreement and Restrictive Covenants (AHP Homeownership Set-Aside Program: HPS), attached to and made a
     part of the AHP Deed of Trust encumbering the AHP-Assisted Unit.

     “Retention Period” means five years from the Effective Date.

     “Subsequent Note” means either (i) the Original Note, as modified on the Effective Date pursuant to a written
     modification agreement between Owner and Lender; or (ii) a new replacement note which Lender and Owner have
     agreed, as of the Effective Date, replaces the Owner’s obligations to Lender under the Original Note.

2.   The Loan. The Parties acknowledge and agree that Lender has modified the original obligations of the Owner
     through a restructuring or refinancing using the AHP Subsidy evidenced by this Note. The Original Note was
     secured by an instrument creating a security interest in the AHP-Assisted Unit, and the Subsequent Note remains
     secured by an instrument creating a security interest in the AHP-Assisted Unit.

3.   Interest. The indebtedness evidenced by this Note shall not bear any interest.

4.   Repayment. Owner shall be released from any obligation under this Note and Lender shall reconvey the AHP
     Deed of Trust at the end of the Retention Period.

5.   Notice. Owner shall give notice to Lender, and Lender shall give notice to the FHLB, of any proposed sale, transfer
     or refinancing of the AHP-Assisted Unit occurring prior to the end of the Retention Period, including a transfer by
     foreclosure or deed in lieu of foreclosure. Owner shall give such notice or cause such notice to be given at least 10
     business days in advance of the anticipated completion of the sale or refinancing. The notice shall include all
     information necessary for determining whether any repayment will be due and payable under the Note on account
     of the proposed transaction and, if any such payment will be due and payable, the amount of such payment and the
     basis for the determination of the amount.

6.   Required Repayment.

     (a)   Sale or Refinancing. In the case of a sale or refinancing of the Subsequent Note, prior to the end of the
           Retention Period of the AHP-Assisted Unit, an amount equal to a pro rata share of the AHP Subsidy,
           reduced on a pro rata basis for every year the Owner owned the AHP-Assisted Unit during the Retention
           Period, shall be repaid to the Lender from any equity in an amount equal to or less than the difference
           between the new appraised value and the appraised value at the time of the refinancing or restructuring,

           (i) in case of a sale, the AHP-Assisted Unit is sold to a very low-, low- or moderate-income household as
               defined in the AHP Regulation and the FHLB’s AHP Policies and Procedures; or

           (ii) in case of a refinancing of the Subsequent Note, following the refinancing of the Subsequent Note the
                AHP-Assisted Unit continues to be subject to a deed restriction or other legally enforceable retention
                agreement or instrument incorporating the notice requirements of section 5 herein and the requirements
                of this section 6(a) for the remainder of the Retention Period.

7.   Effect of Foreclosure. Any Owner obligation to repay AHP subsidy to Lender and to the FHLB shall terminate after
     any foreclosure, or a deed in lieu of a foreclosure, against the AHP-Assisted Unit.

8.   Manner and Place of Payment. All payments due under this Note shall be payable in lawful money of the United
     States of America at the office of Lender or at such other address as Lender may provide to Owner.

9.   Security. This Note is secured by the AHP Deed of Trust and Rider to AHP Deed of Trust – Affordable Housing
     Program Retention Agreement and Restrictive Covenants (AHP Homeownership Set-Aside Program: HPS).

                                                                                                                Page 2 of 3
10.   Modifications and Waivers. No provision of this Note may be waived, modified, discharged or canceled orally, but
      only in writing and signed by the party against whom enforcement of any waiver, modification, discharge or
      cancellation is sought. In case any one or more of the provisions contained in this Note shall for any reason be held
      to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
      other provisions hereof, and this Note shall be construed as if such invalid, illegal or unenforceable provision(s) had
      never been included.

11.   Governing Law. The provisions of this Note shall be governed by the laws of the jurisdiction in which the real
      property which is subject to the AHP Deed of Trust and Rider to AHP Deed of Trust securing this Note is located
      except to the extent such law is contrary to or inconsistent with the laws, rules or regulations of the United States.


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