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For properties acquired with NSP funds and sold to a qualifying household, the buyer household will obtain a principal mortgage from a financial institution, while the local government will provide the purchasing household with a second mortgage The second mortgage will be for an amount that reflects the difference between the purchase price and the principal mortgage amount. The second mortgage shall be in the form of a zero interest Deferred Payment Loan (DPL) The DPL will remain in place for a fifteen (15) year term and will be due and payable at the transfer of ownership of the property, if the transfer of ownership occurs during the fifteen (15) year period. The Second mortgage will be limited to the following* • An amount not to exceed one half of the down payment required by the conventional first mortgage lender or one and three quarters percent (1.75%) of the sales price of the property, whichever is less. • An amount not to exceed ten percent (10%) of the sales price of the property for closing cost assistance. This closing cost assistance may be used to pay the buyer's recording fees, intangible taxes, stamps on the note, mortgage title insurance, wood destroying organism inspections, appraisal fees, property survey fees, credit reports, lender's document preparation fees, underwriting fees, closing attorney's settlement fees, buyer's courier fees, prepaid property taxes, prepaid homeowner's insurance, prepaid flood insurance, and any other fees included on the Department of Housing and Urban Development (HUD) closing statement for the property agreeable to both the buyer and the seller. • An amount equal to the difference between the sales price of the property and the amount a mortgage lender selected by the buyer and approved by the County has committed to loan to the buyer for the purchase of the property through a thirty (30) year fixed rate conventional first mortgage utilizing the property being acquired as collateral. The amount of the Gap Financing Assistance may not exceed an amount equal to thirty-five percent (35%) of the sales price of the property. 5. HOMEOWNERSHIP ASSISTANCE Indian River County will utilize NSP funding to assist with closing cost assistance. All NSP funds utilized as closing cost assistance will be secured by a second mortgage on the residence. The second mortgage shall be in the form of a zero interest Deferred Payment Loan (DPL). The DPL will remain in place for a fifteen (15) year term and will be due and payable at the transfer of ownership of the property, if the transfer of ownership occurs during the fifteen (15) year period. The Deferred Payment Loan will be recorded as a second mortgage on the property. There will be no principal reduction during the life of the Deferred Payment Loan. The full amount of the Deferred Payment will be due and payable at the transfer of ownership of the property. 13