AMERICA FIRST MULTIFAMILY INVESTORS, L.P. (Form: 8-K, Received: 07/16/2014 16:11:29)

EXECUTION

[FM/ATAX II TEBS]

BOND EXCHANGE,

REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT

between

FEDERAL HOME LOAN MORTGAGE CORPORATION

and

ATAX TEBS II, LLC

as Sponsor

Relating to

Freddie Mac

Multifamily M Certificates

Series M-031

Dated as of July 1, 2014

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1	Definitions	2
Section 1.2	Interpretation	12

ARTICLE II
REPRESENTATIONS, COVENANTS, WARRANTIES AND CONDITIONS
Section 2.1	Representations and Warranties	12
Section 2.2	Other Representations and Warranties by the Sponsor and Representations and Warranties by Freddie Mac.	24
Section 2.3	Conditions	27
Section 2.4	Breach of Representations and Warranties	30

ARTICLE III
COVENANTS OF THE SPONSOR
Section 3.1	Freddie Mac Closing Fee and Closing Expenses; Other Closing Costs and Initial Deposits	31
Section 3.2	Reimbursement of Credit Advances	32
Section 3.3	Scheduled Payments and Deposits	32
Section 3.4	Reimbursement of Liquidity Advances	33
Section 3.5	Payment of Costs, Fees and Expenses	33
Section 3.6	Application and Timing of Payments	35
Section 3.7	[Reserved]	35
Section 3.8	Payment of Prepayment/Substitution Premium	35
Section 3.9	Substitution of Credit Enhancement or Liquidity Facility	36
Section 3.10	Additional Provisions Regarding Prepayment/Substitution Premium	36
Section 3.11	Remarketing Agent for the Class A Certificates	37
Section 3.12	Indemnification	37
Section 3.13	Freddie Mac Not Liable	38
Section 3.14	Pledged Class A Certificates	38
Section 3.15	Other Covenants of Sponsor	38
Section 3.16	Liability of the Sponsor	39
Section 3.17	Waivers and Consents	40
Section 3.18	Subrogation	41
Section 3.19	Substitution	41
Section 3.20	Freddie Mac Liquidity Pricing Term.	44
Section 3.21	Optional Series Pool Release Date.	45
Section 3.22	Rights of Sponsor Upon Freddie Mac Downgrade	45
Section 3.23	Release Event Upon Bond Event of Default	46
Section 3.24	Loans by Guarantor or Its Affiliates	46
Section 3.25	Credit Advances; Real Estate Taxes	46
Section 3.26	Substitution Upon Sale of Pre-Selected Mortgaged Property	47

ARTICLE IV
AGREEMENT TO EXCHANGE
Section 4.1	Exchange	47
Section 4.2	Mandatory Delivery; Ownership; Registration of Transfer	48
Section 4.3	Failure to Deliver	48

ARTICLE V
INTEREST RATE PROTECTION
Section 5.1	Hedge Requirement	48
Section 5.2	Hedge Agreement Terms	49
Section 5.3	Failure to Deliver Subsequent Hedge	51
Section 5.4	[Reserved]	52
Section 5.5	Pledge and Assignment of Security Interest in Hedge Collateral	52
Section 5.6	Obligations Remain Absolute	52

ARTICLE VI
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT

ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
Section 7.1	Events of Default	53
Section 7.2	Remedies; Waivers	55
Section 7.3	Rights with Respect to Defaults under Bond Mortgages; Bond Purchase Loan	56
Section 7.4	No Remedy Exclusive	58

ARTICLE VIII
PLEDGE, SECURITY AND CUSTODY OF PLEDGED SECURITY COLLATERAL
Section 8.1	Pledged Security Collateral	58
Section 8.2	Delivery of Pledged Security Collateral	58
Section 8.3	Amounts Received on Pledged Class A Certificates	59
Section 8.4	Amounts Received on Purchased Bonds	59
Section 8.5	Release of Purchased Bonds	60
Section 8.6	Release of Pledged Class A Certificates	60
Section 8.7	Loss to Pledged Security Collateral	60
Section 8.8	[Reserved]	60
Section 8.9	Ownership Restrictions	60
Section 8.10	Representations and Warranties of the Sponsor to the Pledge Custodian	60
Section 8.11	Custody Account	61
Section 8.12	Appointment and Powers of the Pledge Custodian	61
Section 8.13	Successor Pledge Custodian	62
Section 8.14	Qualifications of Pledge Custodian	63
Section 8.15	Application of Proceeds	63
Section 8.16	No Additional Waiver Implied by One Waiver	64
Section 8.17	Cooperation	64

Section 8.18	Termination	64
Section 8.19	Representations and Warranties of the Pledge Custodian	64

ARTICLE IX
MISCELLANEOUS
Section 9.1	Counterparts	65
Section 9.2	Amendments, Changes and Modifications	65
Section 9.3	Payment Procedure	65
Section 9.4	Payments on Business Days	65
Section 9.5	Governing Law; Severability	65
Section 9.6	Notices	66
Section 9.7	Further Assurances and Corrective Instruments	67
Section 9.8	Term of this Agreement	67
Section 9.9	Assignments; Transfers; Third-Parties Rights	67
Section 9.10	Headings	67
Section 9.11	Limitation on Personal Liability	67
Section 9.12	Consent of Freddie Mac	68
Section 9.13	Disclaimer; Acknowledgments	68
Section 9.14	Entire Agreement	68
Section 9.15	Survival of Representation and Warranties	69
Section 9.16	Waiver of Claims	69
Section 9.17	Waivers of Jury Trial	69

Schedule A:	Mortgaged Properties and Yield Maintenance Period
Schedule A-1:	Bonds
Schedule A-2:	Pre-Selected Bonds
Schedule B:	Qualifications to Representations and Warranties
Exhibit I:	Tax Credit Agency Letters Applicable to Mortgaged Properties
Exhibit II:	Prepayment Schedule
Exhibit III:
	Base Rate Quote Request
Exhibit IV:	Liquidity Election Notice

iii

BOND EXCHANGE, REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT

THIS BOND EXCHANGE, REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT dated as of July 1, 2014 (this “Agreement”) by and between the FEDERAL HOME LOAN MORTGAGE CORPORATION (“Freddie Mac”), a shareholder-owned government-sponsored enterprise organized and existing under the laws of the United States, and ATAX TEBS II, LLC , a limited liability company organized and existing under the laws of the State of Delaware, as Sponsor (the “Sponsor”).

R E C I T A L S:

1. Freddie Mac has agreed with the Sponsor to exchange certain Certificates described below for various series of multifamily housing revenue bonds owned by the Sponsor, the interest on which is excludable from the gross income of certain holders for federal income tax purposes and which have been issued by various state and local governmental entities (as further identified on Schedule A-1 , the “Bonds”).

2. Freddie Mac will deposit and pool the Bonds pursuant to a Series Certificate Agreement dated as of the date hereof (together with the Standard Terms attached thereto, the “Series Certificate Agreement”) between Freddie Mac, in its corporate capacity, and Freddie Mac, as Administrator.

3. Pursuant to the Series Certificate Agreement, Freddie Mac has agreed to provide credit enhancement with respect to the Bonds and the related Certificates issued thereunder and to provide liquidity support for Class A Certificates issued thereunder.

4. The Sponsor will arrange for the initial public sale of the Class A Certificates and the subordinate Class B Certificates will be initially registered in the name of and retained by the Sponsor, subject to transfer in accordance with Section 3.15 hereof.

5. The Class B Certificates will provide first loss support for Freddie Mac, as Freddie Mac shall have the right to receive and reimburse itself from Available Funds under the Series Certificate Agreement prior to the distribution of any such funds to the Holders of Class B Certificates. Freddie Mac will additionally be secured by the Sponsor's pledge of (i) any Pledged Class A Certificates purchased pursuant to Section 6.06 of the Series Certificate Agreement to be held for the benefit of Freddie Mac pursuant to Article VIII, (ii) any Purchased Bonds held for the benefit of Freddie Mac pursuant to Article VIII, (iii) the Hedge Collateral pursuant to Section 5.5, and (iv) the amounts held pursuant to the Stabilization Escrow Agreement. In addition, in order to vest in Freddie Mac the right to control remedies with respect to the Bonds, the Sponsor will cause Freddie Mac to be appointed or otherwise hold all rights as Bondholder Representative under the Bond Documents and the Bond Mortgage Documents contemporaneously with the execution hereof for all Bonds.

6. The Guarantor is providing the Guaranty to guaranty certain of the Sponsor’s obligations hereunder.

7. The Class A Certificates will initially be issued bearing a variable interest rate to be reset on a weekly basis.

NOW, THEREFORE, in consideration of the Recitals and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Freddie Mac and the Sponsor do hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1 Definitions . All initially capitalized terms included in the Recitals above and not specifically defined in this Agreement shall have the meanings therefor contained in Exhibit A to the Series Certificate Agreement. Unless otherwise expressly provided in this Agreement or unless the context clearly requires otherwise, the following terms shall have the respective meanings set forth below for all purposes of this Agreement.

“Administrator” means Freddie Mac in its capacity as Administrator under the Series Certificate Agreement and its successors or assigns in such capacity.

“Advance” means either a Credit Advance or a Liquidity Advance.

“Agreement” means this Bond Exchange, Reimbursement, Pledge and Security Agreement, as the same may be amended, modified or supplemented from time to time.

" Agreement Regarding Financial Monitors " means the Agreement dated as of the date hereof by and between Freddie Mac and America First Real Estate Group, LLC, as financial monitor with respect to certain of the Bonds, and acknowledged and agreed to by the Sponsor, as the same may be amended, modified or supplemented from time to time.

“ Base Rate ” means, with respect to the calculation of the Freddie Mac Liquidity Facility Fee, 0.30% (thirty basis points) during the Initial Freddie Mac Liquidity Pricing Term and thereafter, upon any Freddie Mac Liquidity Pricing Reset accepted by the Sponsor in accordance with Section 3.20 hereof, the percentage per annum established by Freddie Mac and accepted by the Sponsor in accordance with Section 3.20 hereof and set forth in an amendment to this Agreement.

" Base Rate Quote Request " means a written request of the Borrower in the form of Exhibit III attached hereto requesting a quote for a new Base Rate pursuant to Section 3.20.

" Bond Custody Agreement " means the Bond Custody Agreement dated as of the date hereof by and among Deutsche Bank AG, New York Branch, as custodian, Freddie Mac, The Bank of New York Mellon Trust Company, N.A., America First Multifamily Investors, L.P. and the Sponsor, as the same may be amended, modified or supplemented from time to time.

“Bond Documents” means, with respect to any Bond, the trust indenture, ordinance, resolution and any other agreements or instruments pursuant to which such Bond has been issued or secured (including any loan agreement, note, mortgage, deed of trust or any rate cap or interest rate protection agreement delivered to the applicable Bond Trustee) or governing the operation of the Project financed by such Bond, as the same may be amended or supplemented from time to time.

“Bondholder Representative” means Freddie Mac as assignee or holder, as applicable, of all rights to control remedies as “Bondholder Representative”, “Controlling Party”, “Servicing Agent”, "Significant Bondholder" or majority owner of the Bonds, as applicable, under the Bond Documents.

“Bond Event of Default” means, with respect to an issue of Bonds, the occurrence of a default under the related Bond Documents (following any applicable grace period or notice and cure period but only to the extent provided in the related Bond Documents).

“Bond Mortgage Documents” means, with respect to each Bond Mortgage Loan, the Bond Mortgage, the Bond Mortgage Note, the LURA, the Loan Agreement and any related documents evidencing the obligations of the Owner under the Bond Mortgage Note or securing payment or performance of such obligations or otherwise pertaining to such obligations, including any HUD Document, as each such document, agreement or instrument may be amended, modified or supplemented from time to time.

“Bond Purchase Loan” shall have the meaning set forth in Section 7.3(b).

“Bonds” means the tax-exempt multifamily housing revenue bonds listed on Schedule A-1 hereto.

“Breach” shall have the meaning set forth in Section 2.4(a).

“Cap” or “Cap Agreement” means an interest rate cap agreement delivered pursuant to and satisfying the requirements of Article V as the same may be amended, supplemented or restated, including any renewal or replacement thereof.

“Cap Documents” means each Cap Agreement and any and all other agreements evidencing the Cap and the obligations of the Counterparty and the Sponsor thereunder.

“Cap Fee Escrow” means the escrow account to be held by the Servicer in accordance with the terms hereof to provide for payments made or caused to be made by the Sponsor as required by Section 5.1 for the purchase of a Subsequent Hedge.

“Cap Payments” shall have the meaning provided in Section 5.5.

“Certificates” means the Class A Certificates and the Class B Certificates, as applicable.

“Class A Certificates” means the Class A Certificates designated as such and issued pursuant to the Series Certificate Agreement.

“Class B Certificates” means the Class B Certificates designated as such and issued pursuant to the Series Certificate Agreement.

“Class B Owners” means the Sponsor, any transferee from the Sponsor or any other Person so long as it owns an interest in any Class B Certificate.

“Closing Date” means the date the Series Certificate Agreement is delivered by Freddie Mac in its corporate capacity and as Administrator thereunder.

“Counterparty” means the counterparty approved in writing by Freddie Mac as being one of the parties on its approved list of counterparties not more than 15 days prior to the Closing Date or the date of delivery of a Subsequent Hedge, as applicable, named in the Hedge Agreement (or a Subsequent Hedge) that is obligated to make payments in accordance with the terms thereof.

“Credit Advance” means any advance by Freddie Mac under this Agreement or the Series Certificate Agreement (other than a Liquidity Advance), including but not limited to (i) an advance to pay principal or interest distributable with respect to any Class A Certificates or Bond, (ii) any advance to cure a Breach, (iii) an advance by Freddie Mac pursuant to the terms of this Agreement to purchase a Subsequent Hedge, (iv) any advance in connection with a Mandatory Tender Event pursuant to Section 6.04 of the Series Certificate Agreement or an Optional Disposition Right pursuant to Section 7.05 of the Series Certificate Agreement, (v) an advance in connection with a Release Event pursuant to Section 3.08 of the Series Certificate Agreement, (vi) an advance to pay any portion of the Fee Component or any other fee due and owing that the Sponsor fails to cause to be paid in accordance with the Sponsor Documents, the non-payment of which jeopardizes the security pledged hereunder, (viii) any advance to pay property taxes due but unpaid or any other unpaid assessments or impositions with respect to a Mortgaged Property and (ix) any advance in connection with an Enforcement Action.

“Credit Enhancement” has the meaning set forth in the Series Certificate Agreement.

“Custody Account” means a trust account in the name of the Pledge Custodian, as collateral agent for Freddie Mac, as further described in Section 8.11.

“Data Tape” means the data tape dated July 7, 2014 submitted by or on behalf of the Sponsor to Freddie Mac with respect to the Bonds and the Mortgaged Property.

“Default Rate” means the base rate or prime rate of Citibank, N.A. until such time as another “Money Center” bank is designated by Freddie Mac in its discretion by notice to the Sponsor, plus four percent (4%).

“ Discount Rate” means, for purposes of calculating the Prepayment/Substitution Premium under Section 3.8(a), the interest rate, as of the date which is five Business Days prior to the applicable Yield Maintenance End Date for the applicable Bond, which shall be found among the Daily Treasury Yield Curve Rates (commonly known as “Constant Maturity Treasury” rates) for an obligation with a maturity date corresponding to the applicable Yield Maintenance End Date, as reported on the U.S. Department of the Treasury website, expressed as a decimal to two digits. If no published Constant Maturity Treasury rate matches the remaining applicable Yield Maintenance Period, Freddie Mac shall interpolate as a decimal to two digits the interest rate between (a) the Constant Maturity Treasury rate with a maturity closest to, but shorter than, the expiration date of the applicable Yield Maintenance Period, and (b) the Constant Maturity Treasury rate with a maturity closest to, but longer than, the expiration date of the applicable Yield Maintenance Period, as follows:

A = the Treasury Constant Maturity rate with a maturity closest to, but shorter than, the expiration date of the Yield Maintenance Period

B = the Treasury Constant Maturity rate with a maturity closest to, but longer than, the expiration date of the Yield Maintenance Period

C = number of months to maturity for the Treasury Constant Maturity rate with a maturity closest to, but shorter than, the expiration date of the Yield Maintenance Period

D = number of months to maturity for the Treasury Constant Maturity rate with a maturity closest to, but longer than, the expiration date of the Yield Maintenance Period

E = number of months remaining in the Yield Maintenance Period

[

(

(B-A)

(D-C)

)

(E-C)

]

In the event the U.S. Department of the Treasury ceases publication of the Constant Maturity Treasury rates, the Discount Rate shall equal the yield on the first U.S. Treasury security that is not callable or indexed to inflation, which matures after the expiration date of the applicable Yield Maintenance Period.

“Enforcement Action” means, with respect to any Mortgaged Property, the advertising of or commencement of any foreclosure or trustee’s sale proceedings, the exercise of any power of sale, the obtaining of or seeking of the appointment of a receiver, the taking of possession or control or the collecting of rents, the commencement of any suit or other legal, administrative, or arbitration proceeding against the Mortgaged Property or the Owner based upon any of the Bond Mortgage Documents, or the taking of any other enforcement or remedial action against the Owner arising under or connected with the Mortgaged Property.

“Event of Default” means the occurrence of an event of default as described in Section 7.1.

“Fee Component” means, with respect to each Bond Mortgage Loan, the regular, ongoing fees due from time to time to the Issuer, the Bond Trustee and the rebate analyst, as such fees are set forth in the applicable Indenture.

“Foreclosure” shall be deemed to have occurred when title to the Mortgaged Property encumbered by a Bond Mortgage is acquired in the name of the Bond Trustee, Freddie Mac, the Sponsor, the Bondholder Representative, or the designee of any such party or in a third party purchaser’s name through foreclosure or deed-in-lieu.

“Freddie Mac” means the Federal Home Loan Mortgage Corporation, a shareholder-owned government-sponsored enterprise organized and existing under the laws of the United States, and its successors.

“ Freddie Mac Credit Enhancement Fee ” means the fee payable to Freddie Mac for providing the Credit Enhancement, and for serving as Administrator and Pledge Custodian. Such fee shall be an amount equal to one-twelfth of 0.76% (seventy six basis points) times the Current Class A Certificate Balance, and shall be calculated on the basis of a 365/366 day year for the actual number of days elapsed. Such fee shall be payable as provided in Section 3.3 and shall accrue monthly based upon the Current Class A Certificate Balance as of the first day of

each month. If an Administrator or Pledge Custodian other than Freddie Mac is appointed, Freddie Mac will allocate a portion of the Freddie Mac Credit Enhancement Fee to the payment of the fees of such substitute Administrator or Pledge Custodian. The Freddie Mac Credit Enhancement Fee does not include fees for extraordinary services of the Administrator or Pledge Custodian.

“Freddie Mac Fee” means the sum of the Freddie Mac Credit Enhancement Fee and the Freddie Mac Liquidity Facility Fee.

“ Freddie Mac Liquidity Facility Fee ” means a monthly amount equal to one twelfth (1/12) of the product of (A) (i) the applicable Base Rate, plus (ii) the Variable Liquidity Facility Fee Component, times (B) Current Class A Certificate Balance, computed on the basis of a 360 day year of twelve (12) thirty (30) day months. Such fee shall be payable as provided in Section 3.3 and shall accrue monthly based upon the Current Class A Certificate Balance as of the first day of each month during the period commencing on the Closing Date to, but not including, the Liquidity Commitment Termination Date. For purposes of determining the Variable Liquidity Facility Fee Component, both the applicable 3-Month Treasury Bill Rate and the 3-Month LIBOR Rate will be established and reset quarterly based upon such rates as determined as of each February 15, May 15, August 15 and November 15, such rates to be effective with respect to each monthly calculation of the Freddie Mac Liquidity Facility Fee on the immediately succeeding March 1, June 1, September 1 and December 1, as applicable.

“ Freddie Mac Liquidity Pricing Reset ” means the effective date of a new Base Rate for calculation of the Freddie Mac Liquidity Facility Fee pursuant to Section 3.20 hereof.

“Freddie Mac Liquidity Pricing Term” means the Initial Freddie Mac Liquidity Pricing Term and any subsequent five-year period (or such lesser term ending on the Liquidity Commitment Termination Date) following a Freddie Mac Liquidity Pricing Reset during which the Freddie Mac Liquidity Facility Fee is established and made effective in accordance with Section 3.20.

“Freddie Mac Purchase Notice” has the meaning set forth in Section 7.3(b).

“Freddie Mac Reimbursement Amount” means the amounts that the Sponsor is required to cause to be paid to Freddie Mac pursuant to this Agreement to reimburse Freddie Mac for any Advances, which amounts shall be equal to the sum of all Advances not previously reimbursed on behalf of the Sponsor, together with any interest thereon, late charges, default interest and other amounts payable to Freddie Mac under this Agreement (except any share of collected late charges that the Servicer is entitled to retain as additional servicing compensation) as a result of a default under the Owner Documents, and shall be paid as provided in Sections 3.2, 3.3 and 3.4 of this Agreement.

“Government Obligations” means direct and general obligations of the United States of America or obligations of any agency or instrumentality of the United States of the payment of the principal and interest of which are guaranteed by the full faith and credit of the United States of America.

“Guaranty” means the Limited Support Agreement dated as of the date hereof between the Guarantor and Freddie Mac, as amended, supplemented or restated.

“Guarantor” means America First Multifamily Investors, L.P., a Delaware limited partnership, and any permitted successor or assign thereof under the Guaranty.

“Guide” means the Freddie Mac Multifamily Seller/Servicer Guide, as amended from time to time.

“Hedge” or “Hedge Agreement” means a Cap.

“Hedge Collateral” has the meaning set forth in Section 5.5.

“HUD Document” means, with respect to any Mortgaged Property, any interest rate reduction payment agreement, housing assistance payment agreement or similar document delivered by or on behalf of the Department of Housing and Urban Development to provide support for rent or mortgage loan payments.

“Indenture” means, with respect to each issue of Bonds, the Trust Indenture or the Indenture of Trust, as applicable, between the Issuer and Bond Trustee or the Resolution of the Issuer pursuant to which the Bonds are issued and secured, as the same may be amended, modified or supplemented from time to time.

“Index Rate” means a rate equal to the index of the weekly index rate resets of tax exempt variable rate issues included in a database maintained by Municipal Market Data, a Thomson Financial Services Company, or its successors, which meet specific criteria established by The Securities Industry and Financial Markets Association, such index currently known as The Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Index or any successor to such index.

“ Initial Freddie Mac Liquidity Pricing Term ” means the initial period during which the Freddie Mac Liquidity Facility Fee is applicable hereunder commencing on the Closing Date and expiring on July 15, 2019 (or such lesser term ending on the Liquidity Commitment Termination Date).

“Initial Purchaser” means D.A. Davidson & Co., as initial purchaser of the Class A Certificates under the Remarketing Agreement.

“Issuer” means, with respect to each issue of Bonds, the governmental entity that issued such Bonds, and its successors.

“Liquidity Advance” means an advance by Freddie Mac pursuant to the terms of the Series Certificate Agreement to pay the Purchase Price of any Class A Certificates tendered optionally by Class A Certificateholders pursuant to Section 6.03 of the Series Certificate Agreement that have not been remarketed by the Remarketing Agent pursuant to the Remarketing Agreement and the Series Certificate Agreement and therefore, with respect to which there are no proceeds of remarketing.

“Liquidity Commitment Termination Date” means the first to occur of (a) the Stated Liquidity Commitment Termination Date, (b) the date the Class A Certificates shall have been redeemed in full, (c) the termination of the Series Certificate Agreement, (d) the conversion of the Reset Rate Method to a term interval that extends to the last day on which the Class A

Certificates will remain outstanding and (e) a Tender Option Termination Event under the Series Certificate Agreement.

“Liquidity Facility” has the meaning set forth in the Series Certificate Agreement.

" Liquidity Provider Termination Event " means the occurrence of either (a) an Event of Default hereunder, or (b) a Mode Reset Failure under Section 3.20.

“Liquidity Rate” means the base rate or prime rate of interest of Citibank, N.A. until such time as another “Money Center” bank is designated by Freddie Mac in its discretion by notice to the Sponsor, plus two percent (2%) per annum.

“Losses” shall have the meaning set forth in Section 3.12.

“LURA” shall have the meaning set forth in Section 2.1(gg).

“Mandatory Tender Event” shall mean each event defined as a "Mandatory Tender Event" in Section 6.04 of the Series Certificate Agreement.

“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, if such successors and assigns shall continue to perform the functions of a securities rating agency.

“Mortgaged Property ” means any of the properties listed as a Mortgaged Property in Schedule A attached hereto.

“Obligations” means the obligations of the Sponsor (a) to pay or cause to be paid all amounts, including fees, costs, charges and expenses payable under this Agreement and (b) to observe and perform each of the terms, conditions and provisions of the Sponsor Documents.

“Offering Circular” means in each case, the preliminary and final Offering Circular (together with the related Offering Circular Supplement) related to the sale of the Class A Certificates.

“Optional Series Pool Release Date” means either (i) July 15, 2019 or (ii) July 15, 2024.

“Owner” means, with respect to each Mortgaged Property, the owner of such Mortgaged Property, and any successor owner of the Mortgaged Property.

“Owner Documents” means, with respect to each Bond Mortgage Loan, the Bond Documents and the Bond Mortgage Documents.

“Person” means an individual, estate, trust, corporation, partnership, limited liability company or any other organization or entity (whether governmental or private).

“Pledge Custodian” means Freddie Mac, or any successor thereto as provided in Article VIII.

“Pledged Class A Certificate” means (a) any Class A Certificate following an optional tender by its Holder or the exercise by such Holder of its Optional Disposition Right during the

period from and including the date of its purchase by the Administrator on behalf of and as agent for the Sponsor with an Advance under Section 6.01(b) of the Series Certificate Agreement but excluding the date on which such Class A Certificate is remarketed to any person other than Freddie Mac, the Sponsor or any Affiliate of the Sponsor and (b) any Class A Certificate purchased by the Administrator on behalf of and as agent for the Sponsor from monies paid by Freddie Mac pursuant to the Liquidity Facility following the occurrence of a Mandatory Tender Event.

“Pledged Security Collateral” has the meaning set forth in Section 8.1

“Prepayment/Substitution Premium” means, when such premium is due and payable pursuant to Sections 2.4(c), 3.8 or 3.19 hereof, an amount equal to the present value (discounted at the applicable Discount Rate) of the monthly payments of the Freddie Mac Fee that would have been earned assuming scheduled principal payments of the Bond(s) during the remainder of the applicable Yield Maintenance Period for the applicable Bond(s) had the redemption, funding, Release Event, substitution or mandatory tender not occurred.

“Pre-Selected Bonds” means the Bonds indicated on Schedule A-2 that have been pre-selected by the Sponsor as of the Closing Date as being eligible for substitution from the Series Pool pursuant to Sections 3.19 and 3.26 due to the sale of the related Pre-Selected Mortgaged Property to an unrelated third party. Only two of such four Pre-Selected Deposited Assets may actually be substituted and released based on such circumstances.

“Pre-Selected Mortgaged Property” means a Mortgaged Property related to an Pre-Selected Bond.

“Purchase Date” means (a) during the Weekly Reset Period, any Business Day specified by a Class A Certificateholder as the date on which Class A Certificates owned by such Class A Certificateholder are to be purchased in accordance with the provisions of Section 6.03 of the Series Certificate Agreement, (b) any date on which the Class A Certificates are subject to mandatory tender in accordance with the provisions of Section 6.04 of the Series Certificate Agreement and (c) any date on which the Class A Certificates are subject to optional disposition in accordance with the provisions of Section 7.05 of the Series Certificate Agreement.

“Purchase Price” means, with respect to any Class A Certificate required to be purchased pursuant to Section 6.06 of the Series Certificate Agreement, the balance of such Class A Certificate plus interest accrued thereon to the Purchase Date.

“Purchased Bond” means a Bond purchased by Freddie Mac on behalf of the Sponsor from monies paid by Freddie Mac pursuant to the Credit Enhancement following the occurrence of a Release Event.

“Rating Agency” has the meaning provided in the Series Certificate Agreement.

“Released Bond” has the meaning set forth in Section 3.19 hereof.

“Remarketing Agent” means D.A. Davidson & Co., as remarketing agent under the applicable Remarketing Agreement, and any successor in such capacity.

“Remarketing Agent Fee” has the meaning set forth in the Remarketing Agreement with respect to the Class A Certificates.

“Remarketing Agreement” means the Certificate Purchase and Remarketing Agreement dated as of the date hereof among the Sponsor, Freddie Mac, the Initial Purchaser and the Remarketing Agent as amended, supplemented or restated.

“Release Purchase Price” means, with respect to any Bond, an amount equal to the then outstanding principal amount of such Bond plus accrued interest on such Bond to, but not including, the Release Event Date.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“Series Certificate Agreement” means the Series Certificate Agreement as defined in Recital 2 hereof, as amended, restated or supplemented.

“Series Pool” means a discrete pool formed by Freddie Mac consisting of the Bonds and other Assets therein described with respect to which Freddie Mac has elected partnership status, as set forth in the Series Certificate Agreement.

“Servicer” means the eligible servicing institution designated by Freddie Mac, or its successor, as servicer of each Bond Mortgage Loan. Initially, NorthMarq Capital, LLC shall act as the Servicer.

“Servicing Agreement” means the Servicing Agreement dated as of the date hereof between the Servicer and Freddie Mac concerning the servicing of the Bond Mortgage Loans, the Bonds and each Hedge, as the same may be amended from time to time, including any replacement Servicing Agreement entered into with a successor servicer.

“Servicing Fee” means the monthly fee due the Servicer under the Servicing Agreement in an amount equal to one-twelfth of 0.06% (six basis points) times the outstanding principal balance of each Bond Mortgage Loan, calculated on the basis of a 365/366 day year for the actual number of days elapsed.

“Sponsor Documents” means this Agreement, the Series Certificate Agreement, the Servicing Agreement, the Remarketing Agreement, the Guaranty, each Hedge Agreement, the Stabilization Escrow Agreement, the Subordinate Bonds Custody Agreement, Agreement Regarding Financial Monitors, the Bond Custody Agreement and any other agreement, instrument or certificate executed by the Sponsor or by the Guarantor in connection with the transactions contemplated thereby.

“Sponsor Paid Expenses” has the meaning set forth in Section 8.3(c).

" Stabilization Escrow Agreement " means the Stabilization Escrow Agreement dated as of the date hereof by and among Freddie Mac, the Sponsor and The Bank of New York Mellon Trust Company, N.A., as the same may be amended, supplemented or restated from time to time.

“ Stated Liquidity Commitment Termination Date ” means July 15, 2019 (as such date may be extended in accordance with Section 3.20 hereof).

“Strike Rate” shall have the meaning set forth in Section 5.2.

" Subordinate Bonds Custody Agreement " means the Subordinate Bonds Custody Agreement dated as of the date hereof by and among, the Sponsor, the Guarantor, The Bank New York Mellon Trust Company, N.A., as custodian, and Freddie Mac with respect to the Subordinate Bonds, as the same may be amended, supplemented or restated from time to time.

" Subordinate Bonds " means the subordinate bonds listed on Exhibit A to the Subordinate Bond Custody Agreement.

“Subsequent Hedge or Subsequent Hedge Agreement” shall mean a Hedge Agreement in place during any Subsequent Hedge Period.

“Subsequent Hedge Period” means a period during which a Subsequent Hedge Agreement is provided as required by the provisions of Article V.

“Substitute Bond” means an issue of multifamily housing revenue bonds substituted for an issue of Bonds pursuant to Section 3.19.

“Substitute Property” means a multifamily housing project that is substituted for a Project pursuant to Section 3.19.

“Tax Certificate” means the Tax Certificate, the Non-Arbitrage Certificate and Tax Agreement or any similar agreement or certificate executed by the Owner certifying to or agreeing to comply with the requirements of Section 103 of the Internal Revenue Code of 1986, as amended, in connection with the issuance of the related Bonds.

“Term” has the meaning set forth in Section 9.8.

“Terminating Mandatory Tender Date” shall have the meaning set forth in the Series Certificate Agreement.

“Title Insurance Policy” means, with respect to any Mortgaged Property, the title insurance policy insuring the lien of the related Bond Mortgage.

“Total Release Price” means an amount equal to the Release Purchase Price plus Hypothetical Gain Share, if any.

“Underwriting Package” means the documents and reports submitted by the Sponsor to Freddie Mac and relied upon by Freddie Mac in its decision to execute and deliver the Series Certificate Agreement.

“UCC Collateral” has the meaning set forth in Article VI hereof.

“Uniform Commercial Code” or “U.C.C.” means the Uniform Commercial Code as from time to time in effect in each applicable jurisdiction.

“ Variable Liquidity Facility Fee Component ” means the interest rate equal to the positive remainder, if any, achieved by subtracting the 3-Month Treasury Bill Rate from the 3-Month LIBOR Rate.

“Yield Maintenance Period” means, with respect to each Bond, the period beginning on the Closing Date and ending on the applicable Yield Maintenance End Date.

“Yield Maintenance End Date” means, either (a) July 15, 2019 with respect to events of the type set forth in Sections 3.8(a)(i), 3.8(a)(iv) and 3.8(a)(v) or (b) the applicable date indicated on Schedule A with respect to each Bond with respect to events of the type set forth in Sections 3.8(a)(ii) and 3.8(a)(iii).

“ 3-Month LIBOR Rate ” means the British Bankers Association’s (BBA) Three (3) month LIBOR Rate for United States Dollar deposits, as displayed on the LIBOR Index Page as of 11:00 a.m. (London time) on each date of determination thereof.

“ 3-Month Treasury Bill Rate ” means the interest rate announced as the 3-month “Daily Treasury Yield Curve Rate” at http://www.treasury.gov on each date of determination thereof, or if such website shall fail to publish the 3-Month Treasury Bill Rate at any time in the future, such other financial reporting website as may be designated by Freddie Mac.

Section 1.2 Interpretation . In this Agreement, unless the context otherwise requires, words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include partnerships, corporations and associations, including public bodies, as well as natural persons. The terms “hereby”, “hereof”, “hereto”, “herein”, “hereunder”, and any similar terms, as used in this Agreement, refer to this Agreement. Any reference in this Agreement to an “Exhibit”, a “Section”, a “Subsection”, a “Paragraph” or a “subparagraph” shall, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached to this Agreement, a section of this Agreement, a subsection of the section of this Agreement in which the reference appears, a paragraph of the subsection within this Agreement in which the reference appears, or a subparagraph of the paragraph within which the reference appears. All Recitals set forth above and all Exhibits attached to or referred to in this Agreement are incorporated by reference into this Agreement. Any reference to an executed agreement or instrument herein shall be to such agreement or instrument as amended, supplemented or restated in accordance with its terms.

ARTICLE II

REPRESENTATIONS, COVENANTS, WARRANTIES AND CONDITIONS

Section 2.1 Representations and Warranties . As of the Closing Date, the Sponsor represents and warrants the following as to each Bond Mortgage and, as applicable, the related Bond Documents with respect to the Bonds. The Sponsor acknowledges that such representations and warranties (as qualified by Schedule B hereto), together with the other representations, covenants, warranties and agreements of the Sponsor contained in this Agreement, are relied upon by Freddie Mac and serve as a basis for the agreement of Freddie

Mac to exchange the Certificates for the Bonds, and the undertakings of Freddie Mac contained in the Series Certificate Agreement with respect to the Credit Enhancement and the Liquidity Facility. Freddie Mac acknowledges that, except for the representations and warranties contained in Subsections 2.1(uu), 2.2(a)(iii), 2.2(a)(iv), 2.2(a)(v), 2.2(a)(vi) and 2.2(a)(vii), although the Sponsor has undertaken such review of each Bond Mortgage and Bond Documents with respect to the Bonds as it deems appropriate, the warranties and representations set forth in this Agreement are intended solely to allocate risk between the Sponsor and Freddie Mac and to establish the circumstances under which Freddie Mac may exercise certain remedies under this Agreement, are not personal assurances by the Sponsor that all matters represented and warranted to are factually correct or true as to each such Bond or Bond Mortgage, as applicable, and may not be the basis for a claim of personal liability, except as otherwise provided in Section 9.11(b) herein. The representations and warranties contained in Subsections 2.1(uu), 2.2(a)(iii), 2.2(a)(iv), 2.2(a)(v), 2.2(a)(vi) and 2.2(a)(vii) are intended to be personal assurances that the matters warranted to in those Subsections are factually correct, and any breach thereof may be the basis for a claim of personal liability against the Sponsor.

For the purposes of the representations and warranties made by the Sponsor in this Article II: (i) “diligent inquiry” and “due diligence” shall mean that the Sponsor has conducted such inquiry and diligence as would customarily be conducted by a Freddie Mac approved “Delegated Lender” contemplating making or purchasing mortgage loans on properties comparable to the properties securing the Bond Mortgage Loans, determined at the time the inquiry or diligence in question was conducted or should have been conducted; (ii) “constructive knowledge” shall mean knowledge obtainable (even if not actually obtained), assuming the exercise of either (a) reasonable care or diligence, or (b) diligent inquiry and due diligence in accordance with (i) above, as applicable; (iii) “employees” of the Sponsor shall include any employees of the Sponsor and of any Affiliates who have provided services to the Sponsor in connection with the transaction contemplated by this Agreement; (iv) “best knowledge” shall mean the best knowledge (which shall include actual knowledge and constructive knowledge in accordance with (ii) above) of the employees of the Sponsor and attorneys for the Sponsor working on the transaction contemplated by this Agreement; (v) “actual knowledge” shall mean the actual knowledge (excluding constructive knowledge) of the employees of the Sponsor and attorneys for the Sponsor working on the transaction contemplated by this Agreement; and (vi) “Sponsor Affiliates” means the Guarantor, and any other entity controlled by, or under common control with, any of them.

(a) Rent Schedule; Data Tape . The rent schedules submitted to Freddie Mac contain no material errors of which the Sponsor has knowledge, and accurately states the gross potential rents, the actual leased rents, the rent concessions provided (if any), and the rent subsidies (if any) for each Mortgaged Property as of the effective date thereof, and all other information regarding the Mortgaged Property contained in the Data Tape provided to Freddie Mac regarding the Mortgaged Property is true, complete and correct in all material respects.

(b) Location of Improvements . All improvements to the Mortgaged Property that have been included in its appraised value lie within the boundaries of the land as described in the legal description attached to the related Bond Mortgage, or to the extent that any such improvements encroach onto any adjoining land, each such encroachment falls within the exceptions for encroachments set forth in Guide Chapter 16 except as set

forth on Schedule B . No improvements on neighboring properties encroach onto the Mortgaged Property, or all such encroachments fall within the exceptions for encroachments set forth in Guide Chapter 16.

(c) No Damage . There exists no unrepaired or unrestored damage to the Mortgaged Property from fire or other casualty since the date of the Bond Mortgage that would materially and adversely affect its value as security for the Bond Mortgage, or, if such damage exists, sufficient funds have been escrowed to fully restore the Mortgaged Property to the same size and density as existed prior to such casualty, and such restoration is permitted under all applicable building and zoning laws and regulations.

(d) Mortgaged Property Condition and Operation .

(i) The Mortgaged Property is in good and habitable condition except as noted on Schedule B .

(ii) To Sponsor’s best knowledge, there is no material uncured violation at the Mortgaged Property of any building or housing code or similar law or ordinance.

(iii) Except for the Mortgaged Properties listed on Schedule B which are currently undergoing rehabilitation, all repairs and improvements to the Mortgaged Property required by the related repair escrow agreement have been completed in accordance with the terms thereof.

(iv) Sponsor has completed a site inspection of the Mortgaged Property on or after November 1, 2013. Sponsor’s inspection of the Mortgaged Property did not disclose any conditions that would materially adversely affect the value of the Mortgaged Property, which were not taken into account in the appraisal of the Mortgaged Property, including, but not limited to, environmental hazards, needed repairs, tenancy issues, the condition of adjoining properties and other similar matters.

(v) The Mortgaged Property is adequately served by public water and sewer systems and all necessary public utilities.

(vi) The Mortgaged Property is in material compliance with all applicable statutes, rules and regulations, including, but not limited to, subdivision, health, safety, fire and building codes. The Mortgaged Property is in material compliance with all regulatory agreements and restrictive covenants which affect the Mortgaged Property. The physical configuration of the Mortgaged Property is not in material violation of the Americans with Disabilities Act.

(vii) The Mortgaged Property is located in one of the fifty (50) states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands or other territories or possessions of the United States.

(viii) The Mortgaged Property consists of five (5) or more dwelling units. (For the purposes of this representation and warranty, a “dwelling unit” must include both a kitchen and a bathroom.)

(ix) No Mortgaged Property is operated as a manufactured housing park.

(x) If the Mortgaged Property includes any retail, commercial or other non-residential units (“mixed uses”), (A) (1) it is a single structure; or (2) it consists of multiple structures, some of which contain mixed uses, but none of which are exclusively retail or commercial; or (3) it consists of multiple structures, most of which are entirely residential, but one (or a small number) of which consists of retail stores primarily intended to serve residents of the Mortgaged Property; and (B) gross income from non-residential uses does not exceed 20% of the Mortgaged Property’s gross income; and (C) the area devoted to non-residential uses does not exceed 20% of the Mortgaged Property.

(xi) No Mortgaged Property is a Seniors Housing Property (as defined in the Guide).

(e) Condemnation . No part of the Mortgaged Property has been taken by condemnation or any similar proceeding since the date of the Bond Mortgage, and, to the best of Sponsor’s knowledge, there is no pending or threatened (in writing) condemnation or similar proceeding with respect to all or any part of the Mortgaged Property.

(f) Authorization and Execution of Documents . The Bond Mortgage and all documents delivered in connection with the Bond Mortgage have been validly authorized and executed by the parties thereto. With respect to each Mortgaged Property, all documents delivered in connection with the Bond Mortgage and the related issue of Bonds have been validly authorized and executed by the parties thereto.

(g) Loan Proceeds; Settlement Statement . To Sponsor’s best knowledge, all proceeds of the Bond Mortgage for any Mortgaged Property have been disbursed directly to, or for the account of, the Owner in a manner that satisfied the requirements of the Bond Documents other than the Mortgaged Properties set forth on and as described on Schedule B .

(h) Insurance . The Mortgaged Property is covered by hazard, flood, liability and rent loss insurance that meets the requirements of the Guide as of the applicable Closing Date except as set forth on Schedule B . Without limiting the generality of the foregoing, for any Bond Mortgage secured by a Mortgaged Property located in whole or in part in a Special Flood Hazard Area (“SFHA”) identified by the Federal Emergency Management Agency, (i) each building that lies within the SFHA is covered by flood insurance in an amount at least equal to the least of (A) its insurable replacement cost, (B) its prorated portion of the unpaid principal balance of the related Bonds as of the Closing Date in the case of a Mortgaged Property, or (C) the maximum limit of coverage available under the National Flood Insurance Program, and (ii) the community where the Mortgaged Property is located participates in the National Flood Insurance Program.

(i) Delinquencies and Defaults . Except as described on Schedule B , (i) all payments due under the terms of the Bond Mortgage Documents have been made, and there have been no delinquencies of 30 days or more since the origination of the Bond Mortgage, (ii) there are no material non-monetary defaults under the terms of the Bond Mortgage Documents, and (iii) there have been no material non-monetary defaults which have remained uncured for 30 days or more since the date of the origination of the Bond Mortgage. No Bond Mortgage Document is cross-defaulted, and no Bond Mortgage is cross-collateralized, with any other transaction, except as disclosed to, and approved by, Freddie Mac prior to the date hereof.

(j) Form 8038. Form 8038 relating to each series of Bonds that was “reissued” (for federal tax purposes) or is a new issue with respect to the Mortgaged Property has been or will be timely filed with the Internal Revenue Service.

(k) Bond Mortgage Ownership. Each Bond Trustee is the sole owner and holder (except for certain reserved rights of the Issuer) of the Bond Mortgage related to the issue of Bonds for which it is the Bond Trustee. The Bond Trustee’s interest in each such Bond Mortgage is free and clear of any third party security interests, claims and encumbrances of any kind (except for certain reserved rights of the Issuer).

(l) Third-Party Reports . The Sponsor has provided or caused to be provided to Freddie Mac all third party reports in its possession relating to the Mortgaged Property or the Owner, including, without limitation, any credit report, appraisal, engineering report, environmental report or audit, title insurance policy, flood zone determinations and surveys. With respect to each such report, the Sponsor represents and warrants that (i) a Sponsor Affiliate has examined the report, (ii) the preparer of the report is appropriately qualified and (iii) to the Sponsor’s best knowledge, the report is complete and accurate.

(m) Undisclosed Information about Owner . Except as disclosed to Freddie Mac in writing, the Sponsor has no actual knowledge of any fact or circumstance affecting the Owner or the Mortgaged Property that materially and adversely affects the Owner’s ability to meet its obligations under the Bond Mortgage in a timely manner.

(n) Insolvency . Except as specifically described on Schedule B , no bankruptcy, insolvency, reorganization or comparable proceeding has ever been instituted by or against the Owner or any guarantor or indemnitor of the Owner’s obligations at any time during the last seven (7) years, and no such proceeding is now pending against any such party.

(o) Information from Owner . No information provided by the Owner or any guarantor is untrue, inaccurate or misleading in any material and adverse respect, and the description of the Owner, and each principal of the Owner, contained in the Data Tape is true, complete and correct in all material respects.

(p) Negligence . To Sponsor’s best knowledge, there has been no negligent act or omission by the Sponsor, any principal of the Sponsor, any Sponsor Affiliate or

any employee of the Sponsor or Sponsor Affiliate that has a material adverse effect on the value of the Bond Mortgage.

(q) Enforceability . The Bond Mortgage and the related Bond Mortgage Documents are enforceable in accordance with their terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors, rights generally, and general principles of equity (whether such enforcement is considered in a proceeding at law or in equity) and any other qualifications set forth in any legal opinion delivered at the closing of the Bond Mortgage relating to such enforceability. The Owner has no rights of offset, defense, counterclaim or rescission with respect to the Bond Mortgage Documents. The Sponsor has complied with all applicable laws, regulations and administrative requirements, state, local and federal, which would affect in any material respect the enforceability of the Bond Mortgage Documents against the Owner, and the Bond Mortgage Documents comply with all applicable laws, regulations and requirements with respect to usury.

(r) Title; First Lien . Except as indicated on Schedule B , the Owner holds its interest in the Mortgaged Property in fee simple. The lien of each Bond Mortgage is insured by one or more lender’s title insurance policies insuring the applicable Bond Trustee, and its successors and assigns, as to the first priority lien (except as noted on Schedule B with respect to the Bonds of a subordinate series) of such Bond Mortgage in the aggregate principal amount of the Bonds to which it relates, subject only to: (i) the lien of current real property taxes, ground rents, water charges, sewer rents and assessments not yet due and payable; and (ii) the exceptions (general and specific) set forth in such title policies, including all covenants, conditions and restrictions, rights of way, easements and other matters of public record, none of which, individually or in the aggregate, materially interferes with (A) the current use of the Mortgaged Property or the security intended to be provided by such Bond Mortgage, (B) the Owner’s ability to pay its obligations when they become due, or (C) the value of the Mortgaged Property. No new liens or other matters of record have been filed against the Mortgaged Property since the date of the applicable title insurance policy that would not be insured by the title insurance policy as being subordinate to the lien of the Bond Mortgage, and no such lien, individually or in the aggregate, materially interferes with (A) the current use of the Mortgaged Property or the security intended to be provided by such Bond Mortgage, (B) the Owner’s ability to pay its obligations when they become due, or (C) the value of the Mortgaged Property or such lien has been released. Each such title policy contains all endorsements as are required as of the date hereof by Section 29.1(g) of the Guide, or equivalent affirmative insurance, and otherwise conforms in all respects with the Guide except as set forth on Schedule B . The Sponsor has made no claims under any of such title insurance policies.

(s) Taxes Paid . All taxes, water and sewer charges, ground rents, governmental assessments and other similar charges having a lien, or which would create a lien upon the Mortgaged Property if unpaid by their payment due date, have been paid, or amounts sufficient to cover the same in the ordinary course have been escrowed under the Bond Mortgage Documents consistent with the requirements of such Bond Mortgage Documents.

(t) Equal Opportunity . The origination of each Bond Mortgage by the Sponsor or its Affiliates did not violate any applicable federal, state and local laws and regulations, which if violated would materially and adversely affect the enforceability of the Bond Mortgage, including but not limited to each of the following and regulations issued under each of the following:

(i) Title VIII of the Civil Rights Act of 1968, as amended, 42 U.S.C. §§3601 et seq. (1996).

(ii) Title VII of the Consumer Credit Protection Act, as amended, 15 U.S. C. §§1691 - 1691f (1996).

(iii) Section 527 of the National Housing Act, as amended, 12 U.S.C. §1735f-5 (1996).

(u) Status . The Sponsor has complied with all laws relating to licensing, qualification to do business and approval to originate mortgages in the state in which the Mortgaged Property is located to the extent necessary to ensure the validity and enforceability of the Bond Mortgage Documents and performance of the Sponsor’s obligations under this Agreement.

(v) Environmental . Except as disclosed to Freddie Mac in environmental reports delivered to Freddie Mac or as listed on Schedule B , there is not now nor has there ever been:

(i) any storage, disposal or discharge of hazardous materials or substances on or affecting the Mortgaged Property,

(ii) any event or condition with respect to the Mortgaged Property, that constitutes a material violation of any applicable local, state, or federal environmental or public health law, or

(iii) any pending or threatened (in writing) environmental or public health litigation or administrative action by any private party or public authority with respect to the Mortgaged Property.

(w) Interest Computation . Each Indenture with respect to the related Bonds provides for computation of interest on the basis of a 360-day year comprised of twelve 30-day months to the maturity date of the Bonds. Each Bond Mortgage Note provides for computation of interest on the basis of a 360-day year comprised of twelve 30-day months to the maturity date of the Bond Mortgage Note.

(x) Bond Requirements . Except as indicated on Schedule B :

(i) any Bonds originally issued as “draw-down” Bonds have been completely drawn down;

(ii) all Bonds are secured by a recorded mortgage or deed of trust granted by the related Owner in favor of the related Bond Trustee (or granted to the Issuer and then assigned to the related Bond Trustee);

(iii) all Bonds bear interest at fixed rate to maturity or an earlier reset date (and in the case of any earlier reset date, will bear interest at a fixed rate thereafter to be determined in accordance with the related Bond Documents), and there are no other interest rate modes under the related Bond Documents or if there are other interest rate modes the Bonds can only be converted to such mode with the prior written consent of the Bondholder Representative;

(iv) with respect to each series of Bonds, neither the Issuer nor the Trustee nor any other third party may direct or cause an acceleration or redemption of the Bonds or the related Bond Mortgage Loan or a foreclosure of the lien of the related Bond Mortgage pursuant to the terms of the related Bond Documents or Bond Mortgage Documents based on a failure to pay the fees or expenses or any other amounts owed to the Issuer, the Trustee or any such third party without the prior consent of the Bondholder Representative;

(v) no third-party credit facility (other than the Freddie Mac Credit Enhancement) or liquidity facility is in effect with respect to any series of Bonds;

(vi) no interest rate swap or cap or other interest rate hedge is in effect with respect to any series of Bonds; and

(vii) no forward or standby bond purchase agreement is in effect with respect to any series of Bonds.

(y) Ineligible Bond Mortgages . The Bond Mortgage, the Bond Mortgage Documents and the Mortgaged Properties include none of the following features that would be applicable during the term of this Agreement, except as described on Schedule B :

(i) A principal balance that includes capitalization of interest, taxes, hazard insurance premiums or late charges.

(ii) [Reserved].

(iii) A Mortgaged Property in which any of the residential space is master leased to a single lessee or is master leased for military housing.

(iv) A Mortgaged Property more than 20 percent of which is used for student and/or military housing.

(v) A lender equity participation feature.

(vi) A Mortgaged Property with physical occupancy below 90 percent.

(vii) A ground lease.

(viii) A Mortgaged Property that is encumbered by financing that is on a parity with, or subordinate to, the Bonds or the Bond Mortgage (including any separate series of parity or subordinate bonds), except for subordinate financing which meets the requirements of the Guide for “soft” subordinate financing.

(ix) A Mortgaged Property that has not converted to the permanent phase or otherwise stabilized under the related Bond Mortgage Documents, except for those Mortgaged Properties identified in the Stabilization Escrow Agreement.

(z) Title Insurance . Each Title Insurance Policy in effect with respect to the related Bond Mortgage is identical to the policy previously submitted to Freddie Mac by the Sponsor. There are no conditions or encumbrances that have not been disclosed to the title insurer and that would provide a reasonable basis for the title company refusing to honor a claim. To the knowledge of Sponsor, there are no liens or encumbrances affecting the Bond Mortgage or the Mortgaged Property that are not identified in Section 2.1(r), in Schedule B to the Title Insurance Policy or in the title report delivered to Freddie Mac in connection with this transaction arising during the period from the effective date of the Title Insurance Policy to the Closing Date.

(aa) Survey . Except as set forth on Schedule B , the survey delivered to Freddie Mac as part of the Underwriting Package correctly depicts for the Mortgaged Property the boundary lines, improvements and exceptions to title that can be shown on a survey required to be shown on a survey under the ALTA/ACSM requirements for urban surveys, and otherwise meets the requirements of the Guide .

(bb) Single Tax Parcel . The Mortgaged Property consists of property identified as all of a single tax parcel or, if identified as multiple tax parcels, the Mortgaged Property constitutes the entirety of those tax parcels. Any tax parcel or parcels within which the Mortgaged Property is located does not include property that is not subject to the Bond Mortgage.

(cc) Access . Except as set forth on Schedule B , the Mortgaged Property does not share ingress and egress through an easement or private road, or share on-site or off-site recreational facilities and amenities that are not located on the Mortgaged Property and under the exclusive control of the Owner; or where there is shared ingress and egress or amenities, there exists an easement or joint use and maintenance agreement, such agreement meets the requirements of the Guide, and such agreement (i) provides that access to and use and enjoyment of the easement or private road and/or recreational facilities and amenities is perpetual, (ii) specifies the Owner’s responsibilities and share of expenses, and (iii) states that the failure to pay any maintenance fee will not result in a loss of usage of the easement.

(dd) Zoning . The overall character of the existing use of the Mortgaged Property is consistent with the zoning classification of the Mortgaged Property, except to the extent such use may constitute a legal nonconforming use. Except as disclosed to Freddie Mac in writing, the Mortgaged Property does not violate any density or building setback requirements of the applicable zoning law, and reconstruction of the Mortgaged

Property in its current configuration would be permitted by applicable zoning laws following destruction of part or all of the Mortgaged Property by fire or other casualty or, in lieu thereof, building law and ordinance insurance coverage satisfying the requirements of the Guide as of the Closing Date has been provided. The Mortgaged Property otherwise meets the requirements of the Guide relating to zoning, and no proceedings are pending or, to the best of Sponsor's knowledge, threatened that would result in a change of the zoning of the Mortgaged Property.

(ee) Bond Information . The information with respect to the Bonds set forth on Schedule 1 to the Series Certificate Agreement and Appendix A to the Offering Circular Supplement is true and correct in all material respects.

(ff) Owner Liability . Except as set forth in the Bond Mortgage and the documents related thereto, the Owner of the Mortgaged Property has no outstanding or continuing payment obligations to the Sponsor, the Issuer or the Bond Trustee, and, to Sponsor’s knowledge, the Sponsor, the Issuer and the Bond Trustee have not breached any obligation or duty owed to the Owner under the Bond Mortgage Documents or at law or in equity the Regulatory Agreement or other similar agreement imposing operating restrictions on the Mortgaged Property.

(gg) LURA and Bond Documents . (i) The use and operation of the Mortgaged Property is currently in compliance with the provisions of the Land Use Restriction Agreement, the Regulatory Agreement or other similar agreement (including any such agreement constituting or executed in connection with a Housing Assistance Payment contract from the U.S. Department of Housing and Urban Development) imposing operating restrictions on the Mortgaged Property executed in connection with the Bonds (the “LURA”), and no prior violations have occurred that would result in any related tax exempt bonds becoming taxable, loss or material diminution in value of the tax credits, forfeiture or reversion of title to the Mortgaged Property or other material loss or risk of loss on the part of the Owner or the Mortgaged Property; (ii) to the best of Sponsor’s knowledge, there have been no actions, claims, demands or proceedings brought against the Owner or related to the Mortgaged Property arising out of any violations or claimed violations of any Tax Regulatory Agreement; (iii) no circumstances exist which, with the giving of notice or the expiration of any applicable grace or cure period, would constitute an event of default under the Bond Documents; (iv) there are no fees currently due and owing under the Bond Documents which have not been paid; and (v) no claims for indemnification under the Bond Documents have been made or are pending, and no basis for such a claim for indemnification exists.

(hh) Nonexistent Documents . Except as indicated on Schedule B , none of the following documents is currently in effect with respect to the Bond Mortgage or the Mortgaged Property:

(i) A mortgage note or any other obligation payable to the Sponsor or any its Affiliates.

(ii) Except as disclosed in writing to Freddie Mac, an assignment of rents or leases in favor of the Sponsor or its Affiliates.

(iii) An escrow agreement for the benefit of the Sponsor or its Affiliates creating or governing the tax and insurance escrow, any repair escrow or any other escrow fund with respect to the Bond Mortgage (except pursuant to the Sponsor Documents) or the Mortgaged Property (other than the Mortgaged Properties set forth on Schedule B and in the amounts set forth on Schedule B ).

(ii) Perfection of Security Interest . Financing statements have been filed in all locations necessary to perfect a security interest in all of the Mortgaged Property described in the financing statements, including all furniture, fixtures, equipment, accounts, contracts rights, condemnation and casualty proceeds, general intangibles and all other personal property related to the ownership or operation of the Mortgaged Property, described in those financing statements, to the extent that applicable law permits a security interest in such collateral to be perfected by filing.

(jj) Single Asset Requirements . In the case of each of the Mortgaged Properties, except as disclosed to Freddie Mac on Schedule B , the Bond Mortgage prohibits the applicable Owner from owning substantial assets other than its Mortgaged Property and prohibits the applicable Owner from engaging in any business enterprises other than the operation of its Mortgaged Property. To the Sponsor’s best knowledge, each Owner is in compliance with the above-described provision of its Bond Mortgage.

(kk) Flood Zone Determination . The Flood Zone Determination form for the Mortgaged Property was prepared on the basis of the legal description of the Mortgaged Property and, notwithstanding any street address specified on the form, the determination evidenced by the form is applicable to all buildings comprising the Mortgaged Property.

(ll) Federal Income Tax Matters . To Sponsor’s best knowledge, (1) no Owner has taken any action, omitted to take any action, or permitted any action to be taken that would impair the exclusion from gross income for federal income tax purposes of the interest payable on any of the Bonds, and (2) no Owner is in violation of any material requirement of any tax certificate relating to the Bonds.

(mm) Payment of Fee Component . Payment of the Fee Component with respect to each Bond Mortgage Loan is current and no such fees are currently due and payable.

(nn) State Allocating Agency Requirements . The only operating restrictions imposed on any Mortgaged Property by any state tax credit allocating agency not reflected in the regulatory agreements, restrictive covenants or similar instruments recorded against the Mortgaged Properties are those reflected in the letters attached hereto as Exhibit I .

(oo) Rebate . No rebate is due and owing with respect to the Bonds related to any Mortgaged Property.

(pp) Exemption from Real Property Taxes . Except as indicated on Schedule B , the Mortgaged Property has qualified for an exemption from, and has not been subject to, payment of real property taxes since the date the Owner acquired the Mortgaged Property and to Sponsor’s best knowledge (i) the Owner is in compliance

with the requirements of the Regulatory Agreement applicable to the Mortgaged Property, (ii) the Mortgaged Property qualifies for exemption from real property taxes for the current real property tax year and (iii) no event has occurred which would cause the Mortgaged Property to lose its current exemption from real property taxes.

(qq) Amortization Schedules . The amortization schedules included in the Data Tape do not contain material errors of which the Sponsor has knowledge, and accurately state the maturity and the principal and interest payments for the applicable Bond Mortgage Loan and related Bond as of each monthly payment date.

(rr) Optional Redemption at Par . The first date on which the Bonds are permitted to be redeemed at par is set forth in Exhibit II .

(ss) Tax Credit Matters . Except as indicated on Schedule B , a Form 8609 has been issued by the applicable tax credit allocating agency with respect to each Mortgaged Property evidencing the final allocation of tax credits with respect thereto in an amount such that no adjustment to or repayment of any tax credit investor’s capital contribution is necessary, and all tax credit investor capital contributions have been fully funded to the Owner.

(tt) Laundry and Other Leases . Each laundry or telecommunications lease in effect with respect to a Mortgaged Property is in compliance with applicable requirements of the Guide , or the nature of any noncompliance is such that it would neither materially interfere with the security provided by the related Bond Mortgage, nor materially impair the value of the Mortgaged Property.

(uu) Ownership of Bonds . The Bonds are genuine and outstanding. The Sponsor has all necessary power and authority to transfer, and has duly authorized by all necessary action the transfer of, the Bonds to Freddie Mac. Immediately prior to such transfers, the Sponsor owned the Bonds free and clear of any lien, pledge, encumbrance or other security interest, and has not sold, assigned or pledged any of its interest in the Bonds to any Person except in accordance with the Sponsor Documents, and has not entered into any agreement to effect such a sale, assignment or pledge except as contemplated hereby. Upon such transfers, the Sponsor releases all right, title and interest in and to the Bonds (such release by the Sponsor in connection with its transfer of ownership of the Bonds in no way limits its rights to direct the funding of Release Events in certain cases or take other actions with respect to the Bonds as described in the Sponsor Documents).

(vv) Earthquake Insurance . With respect to each Mortgaged Property located in Seismic Risk Zone 3 or 4, a seismic analysis has been conducted by a recognized firm experienced in conducting such analyses, and no such analysis showed a Mortgaged Property with a probable maximum loss of greater than 40%. For each such Mortgaged Property with respect to which the applicable seismic analysis shows a probable maximum loss of greater than 20%, but not greater than 40%, earthquake insurance is currently maintained by the related Owner with a deductible not in excess of $50,000 from an insurance company with a rating meeting the requirements of the Guide for the

applicable size of the Bond Mortgage Loan related to the Mortgaged Property with Freddie Mac named as a loss payee or additional insured.

(ww) Owner Status . Neither the Owner nor any principal of an Owner is a person or entity that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov/ofac/t11sdn.pdf.

(xx) Replacement Reserves . The replacement reserve requirements with respect to each Mortgaged Property as set forth in the related Bond Documents and Bond Mortgage Loan Documents, are fully funded. All bond-level replacement reserves and tax and insurance escrows are held by the applicable Bond Trustee.

Section 2.2 Other Representations and Warranties by the Sponsor and Representations and Warranties by Freddie Mac .

(a) The Sponsor represents and warrants as of the Closing Date with respect to each Bond Mortgage Loan and Mortgaged Property related to the Bonds and the Sponsor Documents, as follows:

(i) To Sponsor’s best knowledge, the information contained in the Underwriting Package is true and accurate in all material respects and does not omit information in the possession of the Sponsor to make the provided information complete and accurate.

(ii) All copies of documents delivered to Freddie Mac under Section 2.3 of this Agreement are true and accurate copies of the originals. The Sponsor has in its possession no documents described in Section 2.3 of this Agreement for which either originals or copies have not been delivered to Freddie Mac.

(iii) The Sponsor Documents to which it is a party have been duly authorized by the Sponsor, are valid and binding agreements of the Sponsor, and are enforceable against the Sponsor in accordance with their terms except as may be limited by bankruptcy, insolvency, reorganization, moratoria, liquidation or readjustment of debt or similar laws now or hereafter affecting the enforcement of creditors’ rights generally, and as may be limited by the effect of general principles of equity regardless of whether such enforcement is considered in a proceeding at law or in equity. The Guaranty has been duly authorized by the Guarantor, is a valid and binding agreement of the Guarantor, and is enforceable against the Guarantor in accordance with its terms except as may be limited by bankruptcy, insolvency, reorganization, moratoria, liquidation or readjustment of debt or similar laws now or hereafter affecting the enforcement of creditors’ rights generally, and as may be limited by the effect of general principles of equity regardless of whether such enforcement is considered in a proceeding at law or in equity.

(iv) Since December 31, 2013, which is the date of the Guarantor’s most recent financial statements submitted to Freddie Mac, there has been no material adverse change in the general financial position of the Guarantor. For the purposes of this representation and warranty, the “general financial position of the Guarantor” shall be

deemed to exclude any short-term adverse changes that occur solely as a result of daily interest rate fluctuations.

(v) The Sponsor (A) is a limited liability company duly organized and existing pursuant to the laws of the State of Delaware, (B) has the power and authority to own its properties and to carry on its business as now being conducted and as contemplated by the Sponsor Documents and (C) has the power and authority to execute and perform all the undertakings in the Sponsor Documents and the other transactions and agreements contemplated by the Sponsor Documents. The Guarantor (1) is a limited partnership duly organized and existing pursuant to the laws of Delaware, (2) has the power and authority to own its properties and to carry on its business as now being conducted and as contemplated by the Guaranty and (3) has the power and authority to execute and perform all the undertakings in the Guaranty.

(vi) The execution and performance by the Sponsor of the Sponsor Documents to which it is a party and other agreements required pursuant to such agreements, and by the Guarantor of the Guaranty (A) will not violate in any material respect or, as applicable, have not violated in any material respect any provision of any law, rule or regulation or any order of any court or other agency or government applicable to the Sponsor or the Guarantor and (B) will not violate in any material respect, or as applicable, have not violated in any material respect any provision of any indenture, agreement or other instrument to which the Sponsor or Guarantor, as applicable, is a party or is otherwise subject, or, except as otherwise provided in the Sponsor Documents, result in the creation or imposition of any material lien, charge or encumbrance of any nature.

(vii) Neither the Sponsor nor the Guarantor is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party which default would in Sponsor’s good faith and reasonable judgment materially adversely affect the transactions contemplated by the Sponsor Documents or the Guaranty. There is no action, suit or proceeding at law or in equity or by or before any governmental instrumentality or other agency now pending or threatened in writing against or affecting the Sponsor or the Guarantor or any of its properties or rights, which, if adversely determined, would in Sponsor’s good faith and reasonable judgment (A) materially impair the right of the Sponsor or the Guarantor to carry on its business as now conducted or (B) have a material adverse effect on the financial condition of the Sponsor or the Guarantor.

(viii) Neither Sponsor nor any applicable Sponsor Affiliate, with respect to any period during which it has acted as Bondholder Representative under the Bond Documents, has taken, or omitted to take, any action that, if taken or omitted, would jeopardize or adversely affect the tax-exempt status of the interest payable on the Bonds.

(ix) Guarantor, as Bondholder Representative, is authorized under the Bond Documents to assign its rights, privileges and obligations as Bondholder Representative to Freddie Mac.

(x) None of the Bond Documents requires or obligates the Bondholder Representative to pay the fees and expenses of any party, including any obligations of the Owner, or to pay capitalized interest or any other costs during any construction rehabilitation period for any Mortgaged Property.

(xi) Each Owner has established all escrows and reserves required by the Bond Mortgage and the Owner Documents.

(xii) None of the Sponsor or the Guarantor nor the individuals who work for them, whether as employees, agents or independent contractors who have been, prior to the Closing Date, actively engaged in conducting Sponsor’s or Guarantor’s operations with the Owner, has:

(A) made any written representation to Freddie Mac or the Servicer respecting the Owner, the Bond Mortgage or the Mortgaged Property that it knew or now knows is materially untrue or misleading and that has a materially adverse effect on the value of the Bond Mortgage or the Mortgaged Property, or

(B) omitted to provide any written information to Freddie Mac or the Servicer that it knew or now knows, which omission renders the written information provided to Freddie Mac or the Servicer in connection with the Owner, the Bond Mortgage or the Mortgaged Property materially untrue or misleading and that has a materially adverse effect on the value of the Bond Mortgage or the Mortgaged Property.

The Sponsor and Freddie Mac agree that the individuals who provided such written information to them shall not incur personal liability arising from providing such written information.

(b) By its execution and delivery of the Series Certificate Agreement, Freddie Mac will be deemed to have represented and warranted as of the Closing Date as follows:

(i) It is a shareholder-owned government-sponsored enterprise organized and existing under the laws of the United States of America.

(ii) Each of this Agreement and the Series Certificate Agreement (the “Freddie Mac Documents”) is a valid and binding obligation of Freddie Mac, the making and performance of which by Freddie Mac have been duly authorized by all necessary corporate and other action, and neither the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of the Freddie Mac Documents by Freddie Mac, conflicts with, results in a breach of, or is a default under, in any material respect, any of the terms, conditions or provisions of any legal restriction or any instrument to which Freddie Mac is now a party or by which Freddie Mac is bound, or constitutes a violation of any law regulating the affairs of Freddie Mac or internal governing documents of Freddie Mac, and will not result in the creation of any prohibited encumbrance upon any of its assets.

Section 2.3 Conditions . The obligation of Freddie Mac to exchange the Certificates for the Bonds, execute and deliver the Series Certificate Agreement and provide the Credit Enhancement and the Liquidity Facility is subject to the satisfaction of the following conditions precedent on or prior to the Closing Date:

(a) Final Documentation Delivery with respect to each Bond Mortgage on a Mortgaged Property . The Sponsor has completed final delivery of the documentation in respect of each Bond Mortgage on a Mortgaged Property that relates to the Bonds by delivering the following (to the extent not previously delivered) to Freddie Mac, Legal Division, 8200 Jones Branch Drive, Mail Stop 204, McLean, VA 22102 Attention: Associate General Counsel, an accurate, complete and legible copy of the following documents, including all assignments of such documents:

(i) The Bond Mortgage.

(ii) The closing transcript from the original issue of the related Bonds and from any subsequent refunding issue, if applicable.

(iii) Each financing statement that purports to perfect a security interest related to the Bond Mortgage or the related Bonds.

(iv) The Title Insurance Policy insuring the Bond Mortgage and naming the applicable Bond Trustee as the insured, in a form approved by Freddie Mac.

(v) Each document listed as an exception to coverage in Schedule B to the title insurance policy to the extent requested by Freddie Mac.

(vi) A survey approved by Freddie Mac.

(vii) Each legal opinion received by the Sponsor and the Issuer from counsel to the Owner and the guarantor(s), if any, in a form acceptable to Freddie Mac.

(viii) All laundry leases and commercial leases and copies of all related subordination agreements.

(ix) Evidence satisfactory to Freddie Mac of insurance coverage including, as determined to be applicable by Freddie Mac, hazard, earthquake (unless waived by Freddie Mac), rent loss or business interruption, building ordinance, liability and (if any structure forming part of the Mortgaged Property is located in a special flood hazard area identified by the Federal Emergency Management Agency) flood insurance coverage.

(x) If a flood zone determination has been made by a third party on or after January 2, 1996, a copy of the flood zone determination, which must be on the Standard Flood Hazard Determination Form issued by the Federal Emergency Management Agency.

(xi) The rent schedule certified by the Owner as true and correct, most recently received by the Sponsor and acceptable to Freddie Mac.

(xii) Any separate assignment of leases and rents related to the Bond Mortgage, if any.

(xiii) Each guaranty of the obligations of the Owner with respect to the Bond Mortgage Loan.

(xiv) To the extent obtained by the Sponsor or applicable Sponsor Affiliate, each replacement reserve agreement and repair escrow agreement or comparable agreements, relating to the Mortgaged Property.

(xv) A completed questionnaire by the Bond Trustee in form and scope satisfactory to Freddie Mac.

(b) Final Documentation and Fee Delivery with Respect to this Agreement . On or prior to the Closing Date, the following conditions precedent shall be satisfied prior to delivery by Freddie Mac of the Series Certificate Agreement:

(i) payment made or caused to be made by the Sponsor of (x) Freddie Mac’s fees, costs and expenses and (y) all other initial deposits, fees, costs and expenses which are due and payable by the Sponsor on or before the Closing Date in accordance with this Agreement and the other Sponsor Documents;

(ii) delivery to the title insurance company for filing and/or recording in all applicable jurisdictions (or such filing and/or recording having been provided for in a manner satisfactory to Freddie Mac) of all documents, including, without limitation, duly executed and acknowledged copies of each Bond Mortgage, UCC-1 financing statements and other appropriate instruments, in form and substance satisfactory to Freddie Mac and in proper form for recordation as may be necessary, in the opinion of Freddie Mac, to perfect the lien created by the foregoing, and each applicable Owner Document (or evidence of the prior recordation of such documents) and the payment of all taxes, fees and other charges payable in connection with such execution, delivery, recording and filing;

(iii) there shall have occurred no material adverse change in the financial condition, business or prospects of any Owner, or in the physical condition, operating performance or value of the Owner’s Mortgaged Property from that shown in the Underwriting Package for the Bonds delivered to Freddie Mac by the Sponsor;

(iv) there shall exist no default or “Event of Default” under any of the Owner Documents with respect to any Mortgaged Property; and

(v) receipt by Freddie Mac, on or prior to the Closing Date, of the following, each dated as of the Closing Date, except as otherwise agreed to in form and substance satisfactory to Freddie Mac in all respects:

(A) an executed copy of the Series Certificate Agreement, the Remarketing Agreement, and the satisfaction of all conditions precedent set forth in such documents;

(B) an executed counterpart of this Agreement;

(C) an executed copy of the Servicing Agreement and copies of any other servicing agreements or sub-servicing agreements applicable to the Bond Mortgage Loans;

(D) a pass-through opinion of Shearman & Sterling LLP to the effect that the interest on the Class A Certificates and the Class B Certificates are not includable in gross income to the holders thereof for federal income tax purposes to the same extent as though the holders of such certificates owned the Bonds;

(E) an opinion of special counsel to Freddie Mac with respect to the treatment of the Series Pool under applicable tax laws of the Commonwealth of Virginia, in form and substance acceptable to Freddie Mac;

(F) opinions of counsel to the Sponsor, the Guarantor and the Servicer dated the Closing Date and addressed to Freddie Mac, in form and substance acceptable to Freddie Mac;

(G) the most recent environmental report pertaining to the Mortgaged Property, and all related due diligence completed to Freddie Mac’s satisfaction;

(H) the most current survey relating to the Mortgaged Property in form and substance acceptable to Freddie Mac;

(I) such opinions of Bond Counsel and counsel to the Remarketing Agent as Freddie Mac shall require in form and substance satisfactory to Freddie Mac;

(J) the initial Hedge Agreement, containing terms and conditions consistent with this Agreement and in form and substance satisfactory to Freddie Mac;

(K) an ACCORD 28, Evidence of Policy naming the Bond Trustee as loss payee and mortgagee under each fire or casualty insurance policy covering the Mortgaged Property and a certified copy of all such policies;

(L) to the extent not previously received by Freddie Mac, a certificate from the Bond Trustee of each series of Bonds that were reissued prior to the Closing Date, stating that arbitrage calculations to be done in connection with reissuance of the Bonds for each Mortgaged

Property have been completed, and any amounts due and payable to the United States Treasury in connection therewith have been paid;

(M) the Guaranty;

(N) true and correct copies of rating letters from each Rating Agency rating the Class A Certificates;

(O) executed copies of each of the Stabilization Escrow Agreement, the Subordinate Bonds Custody Agreement and the Agreement Regarding Financial Monitors;

(P) evidence of the transfer to, or delegation of, all the servicing arrangements applicable to the Bonds to the Servicer; and

(Q) such other documents, instruments, certificates, approvals (and, if requested by Freddie Mac, certified duplicates of executed copies thereof) or opinions as Freddie Mac may request.

Where subsection (a) requires delivery of a copy of a Bond Mortgage, the related financing statement or other filed or recorded document, the copy must show the recorder’s stamp, book and page number, or instrument number.

(c) Document Deliveries . The delivery of copies required by Sections 2.3(a) and 2.3(b)(ii) above shall be carried out by or on behalf of the Sponsor, at no expense to Freddie Mac. If the Sponsor fails to deliver to Freddie Mac any above-required documentation, Freddie Mac may order recorder-certified copies of the missing items that are recorded items, and the Sponsor shall reimburse Freddie Mac upon demand for all costs and expenses incurred by Freddie Mac in doing so.

Section 2.4 Breach of Representations and Warranties .

(a) The Sponsor shall notify Freddie Mac within 15 days following a discovery by the Sponsor of a breach of any representation or warranty made by the Sponsor under this Agreement that materially and adversely affects the value of a Bond (a “Breach”). Freddie Mac agrees to use its best efforts to provide notice to the Sponsor within 30 days following a discovery by Freddie Mac of a Breach; provided, however, that the failure of Freddie Mac to so notify the Sponsor of such a Breach shall not relieve the Sponsor of its obligation to cure such Breach upon receiving notice from Freddie Mac or obtaining knowledge thereof.

(b) Within 60 days after the earlier of (i) discovery by the Sponsor of a Breach, or (ii) the Sponsor’s receipt of notice from Freddie Mac of such Breach, the Sponsor shall (x) commence commercially reasonable efforts to cure such Breach in all material respects or (y) solely in the event such Breach cannot be cured by the Sponsor’s commercially reasonable efforts in accordance with the terms of this Section 2.4, provide a Substitute Bond for a Bond with respect to which a Breach has occurred, but only in accordance with the terms of Section 3.19 hereof.

(c) Subject to the last sentence of this subsection (c), if a Breach is not cured by the Sponsor within 60 days after the discovery or receipt of notice of such Breach or a Substitute Bond is not provided, in each case as set forth in subsection (b) above, Freddie Mac shall have the right to pursue all remedies specified in this Section including, but not limited to, (i) the right to require the Sponsor to fund or cause the funding of the purchase from the Administrator of the series of Bonds related to the Breach, to the extent that Freddie Mac may exercise its purchase right following the occurrence of a Release Event with respect to the same (which funding by, or caused by, the Sponsor shall be accomplished via the exercise of such right of the Sponsor’s in accordance with Section 7.3(a) hereof and applicable provisions of the Series Certificate Agreement), and (ii) the right to require payment by the Sponsor of a Prepayment/Substitution Premium in connection with any such Release Event, which remedies in addition to the recovery of enforcement costs from the Sponsor, proceeding under the Guaranty, and taking action as provided in subsection (d) below shall be the sole rights and remedies available to Freddie Mac as the result of a Breach. In the event the Breach is non-monetary and such that it can be corrected, but not within 60 days, Freddie Mac shall not pursue any remedies hereunder if corrective action is instituted by the Sponsor within such 60 days and diligently pursued until the Breach is cured, provided such Breach must be cured not later than the earlier of 90 days after the discovery or receipt of notice of such Breach as set forth in subsection 2.4(b) above.

(d) If Sponsor fails to cure a Breach, or provide a Substitute Bond as set forth in subsection (b) above, within the time provided in subsection (c) above, or fails to diligently prosecute the cure of such Breach, in Freddie Mac’s reasonable judgment, Freddie Mac, after written notice to the Sponsor, shall have the right, but not the obligation, to cure any such Breach, and any costs, fees or expenses so incurred by Freddie Mac shall be a Credit Advance and shall be paid by the Sponsor in accordance herewith. Amounts expended by the Sponsor to cure a Breach shall be at the sole cost and expense of the Sponsor.

(e) The representations and warranties in this Agreement, Freddie Mac’s right to rely on them, and the Sponsor’s liability for a Breach, shall not be affected or limited by any investigation (including any pre-purchase review of documentation) made by, or on behalf of, Freddie Mac, except to the extent that the Sponsor can establish that one or more of the following Freddie Mac employees had actual knowledge (as opposed to imputed knowledge arising from the receipt of the documents required to be delivered by the Sponsor hereunder) of such Breach prior to the Closing Date and did not inform the Sponsor of such Breach prior to the Closing Date:

Clayton A. Davis, Dara Koller and Christopher B. Propert

provided that the inclusion of Christopher B. Propert in the list of Freddie Mac employees shall not imply a waiver of the attorney-client privilege, which may be asserted by Freddie Mac.

ARTICLE III

COVENANTS OF THE SPONSOR

Section 3.1 Freddie Mac Closing Fee and Closing Expenses ; Other Closing Costs and Initial Deposits . The Sponsor shall pay, or cause to be paid, to Freddie Mac on the Closing

Date a closing fee in the amount of $523,475 (comprised of a transaction fee of $150,000 and an initial liquidity facility fee of $373,475) together with Freddie Mac's expenses (including but not limited to printing costs in connection with the Offering Circular of $10,000 and the auditor’s fee in connection with the delivery of the comfort letter(s)), and the Sponsor shall also pay the fees and expenses of Freddie Mac’s outside counsel in accordance with the instructions of such counsel on the Closing Date. The Sponsor shall also pay, or cause to be paid or funded, as applicable, on or before the Closing Date, all other fees, costs, expenses and initial deposits required to be paid or funded by the Sponsor under any other Sponsor Documents, including the initial deposit required under the Stabilization Escrow Agreement which shall be funded with proceeds from the sale of the Class A Certificates.

Section 3.2 Reimbursement of Credit Advances . The Sponsor shall reimburse Freddie Mac the amount of each Credit Advance on the date such Credit Advance was made by Freddie Mac, together with interest on the Credit Advance that has accrued but has not been paid on the fifteenth day of the month in which such Credit Advance occurs, from the sources and in the priority established in accordance with the provisions of this Agreement and Section 4.03 of the Series Certificate Agreement or from the Pledged Security Collateral hereunder; provided, however, a Credit Advance that funded a Bond Purchase Loan pursuant to Section 7.3 shall be paid in accordance with the provisions thereof.

Section 3.3 Scheduled Payments and Deposits .

(a) Monthly Payments . The Sponsor shall pay, from the sources and in the priority established in accordance with the provisions of this Agreement and Section 4.03 of the Series Certificate Agreement, the following amounts on the fifteenth day of each month beginning on the fifteenth day of the first month following the Closing Date:

(i) Interest on Credit Advances . Accrued but unpaid interest on any outstanding Credit Advances from the date such Credit Advance was made by Freddie Mac to the date on which the Credit Advance is reimbursed at the Default Rate; provided, however, that interest on a Credit Advance that funded a Bond Purchase Loan pursuant to Section 7.3 shall be accrued in accordance with the provisions thereof.

(ii) Interest on Liquidity Advances . Accrued but unpaid interest on each outstanding Liquidity Advance, from the date such Liquidity Advance was made, at the Liquidity Rate, to the date on which reimbursement of such Liquidity Advance is due pursuant to Section 3.4 below, and thereafter at the Default Rate until such Liquidity Advance is reimbursed.

(iii) Freddie Mac Fee . The accrued but unpaid Freddie Mac Fee.

(iv) Remarketing Agent Fee. The accrued but unpaid Remarketing Agent Fee.

(v) Cap Fee Escrow Payment. The applicable monthly payment to fund the Cap Fee Escrow as required by Section 5.1.

(vi) Servicing Fee. The accrued but unpaid Servicing Fee.

(b) Certain Third Party Fees . To the extent not paid by the Owner with respect to any Bond Mortgage Loan, the Sponsor shall pay from the sources and in the priority established in accordance with the provisions of this Agreement and Section 4.03 of the Series Certificate Agreement the regular, ongoing fees due from time to time to the Bond Trustee and the rebate analyst appointed under the Indenture, as applicable, to the party entitled to payment thereof when such payment is due.

Section 3.4 Reimbursement of Liquidity Advances . The Sponsor shall reimburse or cause to be reimbursed Freddie Mac for each Liquidity Advance, from the sources and in the priority established in accordance with the provisions of this Agreement and Section 4.03 of the Series Certificate Agreement (except to the extent that remarketing proceeds have already become available for application to such reimbursement), together with interest on the Liquidity Advance that has accrued but has not been paid, under Section 3.3(a) on the first to occur of:

(a) 60 days following the Liquidity Advance.

(b) if the related Pledged Class A Certificates are remarketed by the Remarketing Agent, the date on which the proceeds of that remarketing are delivered to the Administrator;

(d) the Liquidity Commitment Termination Date; or

(e) the date on which the Series Certificate Agreement terminates.

Section 3.5 Payment of Costs, Fees and Expenses . In addition to the Sponsor’s other obligations set forth in this Article III and in the other Sponsor Documents, the Sponsor shall pay, upon written demand, to Freddie Mac (from the sources and in the priority established in accordance with the provisions of this Agreement and Section 4.03 of the Series Certificate Agreement) all of the following:

(a) all fees, costs, charges and expenses (including the reasonable fees and expenses of attorneys, and the fees and expenses of accountants and other experts) incurred by Freddie Mac in connection with, or related to, the execution and delivery of the Series Certificate Agreement, the deposit of the Bonds with the Administrator and deposit of the Subordinate Bonds pursuant to the Subordinate Bond Custody Agreement (including any fees, costs, charges or expenses associated with the re-registration and delivery of the Bonds or the Subordinate Bonds, or the review thereof, required after the Closing Date pursuant to the Bond Custody Agreement), the sale of the Class A Certificates, and the preparation and review of the Sponsor Documents and all other documents related to the transactions contemplated by the Sponsor Documents, and the consummation of the transactions contemplated hereby and thereby and any tax or governmental charge imposed in connection with the execution and delivery of the Series Certificate Agreement;

(b) any and all fees, costs, charges and expenses incurred by Freddie Mac (including the reasonable fees and expenses of attorneys, and the fees and expenses of

accountants and other experts) in connection with (i) any amendments, consents or waivers to this Agreement, the Sponsor Documents and any other documents related to the transactions contemplated by the Sponsor Documents (whether or not any such amendments, consents or waivers are entered into), (ii) any requests by the Sponsor for Freddie Mac to consider providing credit enhancement for any other certificate issue, (iii) any proposed Hedge arrangement or proposed investments under the Series Certificate Agreement, (iv) any adjustment or conversion of the interest rate on the Class A Certificates, (v) any tender, purchase, refunding, reoffering or remarketing of the Bonds or the Certificates, (vi) any collection, disbursement or application of insurance or condemnation awards, proceeds, damages or other payments including, without limitation, all costs incurred in connection with the application of insurance or condemnation awards to restore or repair the Mortgaged Property, including, reasonable appraiser fees, (vii) the transfer, assignment and re-registration of the Bonds to Freddie Mac, (viii) any audit of any Mortgaged Property, the Bonds or the Certificates by the Internal Revenue Service, and (x) requests by the Sponsor for Freddie Mac's consent to transfer its interest in the Class B Certificates;

(c) interest, fines and penalties, any and all documentary stamp, recording, transfer, mortgage, intangible, filing or other taxes (other than income taxes) or fees and any and all liabilities incurred by Freddie Mac or the Servicer with respect to or resulting therefrom which may be payable in connection with the execution and delivery of, or the consummation or administration of any of the transactions contemplated by, or any amendment, supplement, or modification of, or any waiver or consent under or in respect of, or any filing of record, recordation, release or discharge of, this Agreement, the Sponsor Documents, the Owner Documents and any other documents related to the transactions contemplated by the Sponsor Documents or the Owner Documents;

(d) any and all fees, costs, charges and expenses (including the reasonable fees and expenses of attorneys, and the fees and expenses of accountants and other experts) which Freddie Mac may pay or incur in connection with any payment under the Series Certificate Agreement, including payments of any fees and charges in connection with any accounts established to facilitate payments under the Series Certificate Agreement, or the performance of Freddie Mac’s obligations under the Series Certificate Agreement;

(e) any payments or advances made by Freddie Mac or the Servicer on behalf of the Sponsor pursuant to this Agreement, the other Sponsor Documents, the Owner Documents and any other documents related to the transactions contemplated by the Sponsor Documents or the Owner Documents;

(f) any and all fees, costs, or charges and expenses (including the reasonable fees and expenses of attorneys, and the fees and expenses of accountants and other experts) incurred by Freddie Mac or the Servicer in connection with the administration or enforcement or preservation of rights or remedies under the Sponsor Documents, the Owner Documents and any other documents related to the transactions contemplated by the Sponsor Documents or the Owner Documents or in connection with the foreclosure upon, sale of or other disposition of any security granted pursuant to the Sponsor

Documents or the Owner Documents and any other documents related to the transactions contemplated by the Sponsor Documents or the Owner Documents;

(g) all out-of-pocket expenses (including reasonable expenses for legal services) of, or incident to, the preservation of rights under, or enforcement of, any of the provisions of this Agreement, or performance by Freddie Mac of any obligations of the Sponsor in respect of the Hedge Collateral which the Sponsor shall have failed or refused to perform, or any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement of Collateral, and defending or asserting rights and claims of Freddie Mac in respect thereof, by litigation or otherwise;

(h) all reasonable out-of-pocket costs and expenses incurred by the Pledge Custodian in connection with the administration and enforcement of Article VIII of this Agreement; and

(i) interest at the Default Rate on any and all amounts referred to in Subsections (a) through (h) above from the date which is five (5) days following the date when due until payment of all such amounts in full,

provided, however, that the Freddie Mac Fee will compensate the Administrator for its fees (but not out of pocket expenses) for the performance of the Administrator’s duties pursuant to the Series Certificate Agreement.

Section 3.6 Application and Timing of Payments .

(a) Application of Payments . If the Servicer or Freddie Mac receives on any date less than the full amount that is due and payable on or before that date under Sections 3.2 through 3.5 of this Agreement, the amount received shall be applied in such order as Freddie Mac may, in its sole discretion, determine.

(b) Timing of Payments . Any amount payable to Freddie Mac hereunder shall be deemed paid only to the extent immediately available funds for that purpose are received by Freddie Mac (in any capacity) by 2:00 p.m., Washington, D.C. time, on the due date. Any such amount received after 2:00 p.m., Washington, D.C. time, on its due date shall be treated, and shall accrue interest, as if it were paid at 9:00 a.m., Washington, D.C. time, on the next Business Day.

Section 3.7 [Reserved] .

Section 3.8 Payment of Prepayment/Substitution Premium . (a) If the applicable Yield Maintenance Period has not expired, the Sponsor shall pay a Prepayment/Substitution Premium by remitting to Freddie Mac funds in the amount of such Prepayment/Substitution Premium from the sources and in the priority established in accordance with the provisions of this Agreement and Section 4.03 of the Series Certificate Agreement upon any of the following events:

(i) A redemption of a portion of the Class A Certificates as a result of a Release Event pursuant to Section 2.4(c) hereof hereof.

(ii) A redemption of any of the Certificates during the Yield Maintenance Period, due to an involuntary prepayment upon acceleration of the Bond Mortgage Note and mandatory redemption of the Bonds under the terms of the applicable Indenture after a Bond Event of Default thereunder but only if and to the extent that a prepayment premium is paid by the Owner in connection with such prepayment of the Bond Mortgage Note;

(iii) The occurrence of a substitution of a Substitute Bond due to a Bond Event of Default at the direction of the Sponsor in accordance with Section 3.19 hereof;

(iv) The mandatory tender of the Class A Certificates pursuant to Section 6.04(a) or (b) of the Series Certificate Agreement relating to a Mandatory Tender Event as a result of a Liquidity Provider Termination Event or (if applicable) a Sponsor Act of Bankruptcy;

(v) Upon the substitution of a Substitute Bond for a Pre-Selected Bond in connection with a sale of the related Mortgaged Property as directed by the Sponsor in accordance with Sections 3.19 and 3.26 hereof.

(b) Premium Not Payable . Except under the circumstances described in Sections 2.4(c), 3.8(a), 3.19 and 3.26 hereof, no Prepayment/Substitution Premium shall be payable, including without limitation under the following circumstances: any prepayment occurring as a result of (i) the application of any insurance proceeds or condemnation award under the Bond Mortgage, (ii) a voluntary prepayment of any Bond Mortgage Loan, (iii) redemption or other mandatory prepayment of any Bonds or the Class A Certificates as a result of the entry of any decree or judgment by a court of competent jurisdiction or the taking of any official action by the Internal Revenue Service or the Department of the Treasury, which decree, judgment or action shall be deemed to be final under applicable procedural law, which has the effect of a determination that the interest on such Bonds is includable in the gross income of the recipients thereof for Federal income tax purposes, (iv) exercise by any Class A Certificateholder of its Optional Disposition Right in accordance with Section 7.05 of the Series Certificate Agreement provided that the Class A Certificates so tendered are remarketed and the Sponsor pays the Hypothetical Gain Share related to the exercise of such right, (v) a redemption of Class A Certificates in connection with a Clean-Up Event, or (vi) a Release Event pursuant to either Section 3.21 or 3.22 hereof.

Section 3.9 Substitution of Credit Enhancement or Liquidity Facility . The Sponsor acknowledges that it does not have the right to substitute credit enhancement or liquidity for the Class A Certificates.

Section 3.10 Additional Provisions Regarding Prepayment/Substitution Premium . The Sponsor recognizes that any prepayment of the unpaid principal balance of the Class A Certificates for any reason set forth in Section 3.8(a) hereof will result in Freddie Mac’s incurring loss, including loss of income, additional expense and frustration or impairment of Freddie Mac’s ability to meet its commitments to third parties. The Sponsor agrees to pay from the sources and in the priority established in accordance with the provisions of this Agreement and Section 4.03 of the Series Certificate Agreement, upon demand, damages for the loss caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the

extent of such damages. The Sponsor therefore acknowledges and agrees that the formula for calculating the Prepayment/Substitution Premium represents a reasonable estimate of the damages Freddie Mac will incur because of a prepayment. The Sponsor further acknowledges that the Prepayment/Substitution Premium provisions of this Agreement are a material part of the consideration for the Series Certificate Agreement and the Credit Enhancement and Liquidity Facility provided thereunder, and acknowledges that the terms of this Agreement are in other respects more favorable to the Sponsor as a result of the Sponsor’s voluntary agreement to the Prepayment/Substitution Premium provisions. Freddie Mac acknowledges and agrees that the Prepayment/Substitution Premium shall be Freddie Mac’s sole compensation and remedy for such loss and damage.

Section 3.11 Remarketing Agent for the Class A Certificates . The Sponsor acknowledges that Freddie Mac shall retain, and shall have the ability, in its sole discretion, to remove or replace, the Remarketing Agent. The Sponsor shall not remove or replace the Remarketing Agent without Freddie Mac’s prior written consent, which consent shall not be unreasonably withheld.

Section 3.12 Indemnification . The Sponsor shall indemnify and hold harmless Freddie Mac, in its corporate capacity and in its capacity as Pledge Custodian, and its officers, directors, officials, employees, agents, attorneys, accountants, advisors, consultants and servants, past, present or future (each, an “Indemnified Party”), from and against any and all claims, losses, liabilities, damages, penalties, judgments, costs or expenses (including court costs and reasonable attorneys’ fees) (collectively, “Losses”) arising from any act or omission of the Sponsor, any Sponsor Affiliate, the Remarketing Agent (if an Affiliate of Sponsor) or any of their respective agents, contractors, servants, employees or licensees in connection with any of the Bond Mortgage Loans, the Bond Mortgages, Mortgaged Properties, the Owner Documents, the Sponsor Documents, the Offering Circular, the Series Certificate Agreement in connection with the issuance of the Certificates or the remarketing of the Class A Certificates or in connection with any failure to cause the re-registration of all of the Bonds in the name of Freddie Mac and the delivery thereto as required pursuant to Section 4.2 hereof; together with all costs, reasonable counsel fees, expenses or liabilities incurred in connection with any such claim or proceeding brought thereon; except that the Sponsor shall not be required to indemnify any Indemnified Party for damages caused by the willful misconduct, negligence or unlawful acts of such Indemnified Party or for any claims, costs, counsel fees, expenses or liabilities incurred by an Indemnified Party as a result of any action taken by an Indemnified Party at the direction of Freddie Mac. In the event that any action or proceeding is brought, or claim made, against any Indemnified Party, with respect to which indemnity may be sought hereunder, the Sponsor, upon written notice thereof from the Indemnified Party, shall assume the investigation and defense thereof, including the employment of counsel reasonably acceptable to Freddie Mac and the payment of all expenses associated therewith. The Indemnified Party shall have the right to approve a settlement to which it is a party and if the named parties to any such action include both the Sponsor and the Indemnified Party and the Indemnified Party has been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Sponsor, to employ separate counsel in any such action or proceedings and to participate in the investigation and defense thereof, and the Sponsor shall pay or cause to be paid the reasonable fees and expenses of such separate counsel. The provisions of this Section shall survive the termination of this Agreement.

Section 3.13 Freddie Mac Not Liable . None of Freddie Mac’s officials, officers, directors, members, shareholders, agents, attorneys, independent contractors or employees shall be responsible for, or liable to, the Sponsor or any of its officials, officers, directors, shareholders, members, partners, affiliates, independent contractors or employees for (a) any act or omission of Freddie Mac or any other Person made in good faith with respect to the validity, sufficiency, accuracy or genuineness of documents, or of any endorsement(s) thereon (except for documents and endorsements provided by Freddie Mac), even if such documents should be in fact, or prove to be in any or all respects, invalid, insufficient, fraudulent or forged; (b) the validity or sufficiency of any instrument transferring or assigning, or purporting to transfer or assign the Series Certificate Agreement or the rights or benefits under the Series Certificate Agreement or proceeds under the Series Certificate Agreement, in whole or in part, that may prove to be invalid or ineffective for any reason; (c) failure of the Administrator to comply fully with all conditions required in order to effect any applicable Advance; (d) errors, omissions, interruptions or delays in transmission or delivery of any messages by the Administrator, by mail, cable, telegraph, telex, telecopier or otherwise that may be required under the Series Certificate Agreement; (e) any loss or delay by the Administrator in the transmission or otherwise of any document or draft required in order to make any Advance; (f) failure of any trustee with respect to the Bonds to comply fully with all terms of the related Bond Documents; or (g) any consequences arising from causes beyond the control of Freddie Mac. In furtherance, and not in limitation of the foregoing, Freddie Mac may accept documents that appear on their face to be valid and in order, without any responsibility for further investigation. None of the above shall affect, impair, or prevent the vesting of any rights or powers of Freddie Mac under this Agreement.

In furtherance and extension, and not in limitation, of the specific provisions set forth above, any action taken or omitted by Freddie Mac (including in its capacity as Bondholder Representative) under or in connection with the Sponsor Documents or any Owner Document, or any related certificates or other documents, if taken or omitted in good faith and not in contravention of the terms hereof, shall be binding upon the applicable Owner, the Bond Trustee, the Issuer, the Sponsor, any Sponsor Affiliate, the Remarketing Agent, the Administrator and the Pledge Custodian, and shall not, under any circumstance, put Freddie Mac under any resulting liability to any of them.

Section 3.14 Pledged Class A Certificates . The Sponsor acknowledges that Pledged Class A Certificates will be purchased by the Administrator on behalf of the Sponsor, and registered in the name of the Pledge Custodian; provided that, to the extent that Freddie Mac has made a Liquidity Advance to purchase such Pledged Class A Certificates, such Pledged Class A Certificates will be pledged to Freddie Mac pursuant to Article VIII of this Agreement.

Section 3.15 Other Covenants of Sponsor .

(a) Sponsor Documents . Each of the covenants of the Sponsor set forth in the Sponsor Documents is hereby incorporated in this Agreement by this reference as if fully set forth herein. The Sponsor shall comply with all material terms and conditions of each Sponsor Document to which it is a party or by which it is bound and shall not, without the prior consent of Freddie Mac, provide directions or consents to the Bond Trustee or the Issuer except as otherwise permitted pursuant to the terms hereof and of the Servicing Agreement.

(b) Transfer of Project Ownership . The Sponsor shall not consent to any transfer of ownership of any Mortgaged Property without the prior written consent of Freddie Mac.

(c) Tax–Exempt Status of the Certificates . The Sponsor shall not take, or omit to take, any action within its power to take that, if taken or omitted, would jeopardize or adversely affect the exclusion of interest on the Certificates from gross income of the holders thereof for federal income tax purposes.

(d) Securities Acts . The Sponsor shall not take, or omit to take, any action within its power to take that, if taken or omitted, would subject the Certificates to registration under the Securities Act of 1933, or the Series Certificate Agreement to registration under the Trust Indenture Act of 1939 or the Investment Company Act of 1940.

(e) Certain Actions With Respect to the Certificates . The Sponsor shall not, without the prior written consent of Freddie Mac:

(i) appoint a “Successor Sponsor” (as defined in the Series Certificate Agreement);

(ii) provide its consent or waive any rights under the Series Certificate Agreement or any consents or waivers under the Bond Documents, the rights to which are granted to the Bondholder Representative or the Servicer except as otherwise permitted pursuant to the terms hereof and of the Servicing Agreement;

(iii) consent to amendment to any partnership agreement or other applicable organizational document of an Owner to allow such Owner to own substantial assets other than its Mortgaged Property or to engage in any business activities other than activities related to the ownership and operation of its Mortgaged Property; or

(iv) permit any change in the ownership or control of the Sponsor from the ownership structure in place on the Closing Date, or permit any corporate reorganization to occur that would result in the Sponsor and the Guarantor not being under common control.

(f) Amendment of Organizational Documents Of Sponsor. The Sponsor agrees not to amend its organizational documents without the prior consent of Freddie Mac.

(g) Restriction on Transfer of Class B Certificates . The Sponsor shall not, without the prior written consent of Freddie Mac, in whole or in part, sell, assign, pledge, hypothecate or otherwise transfer its ownership interest (including any beneficial ownership interest) in the Class B Certificates or grant any liens, security interests, options or other charges or encumbrances with respect to the Class B Certificates.

Section 3.16 Liability of the Sponsor . The obligation of the Sponsor to cause the Administrator and the Pledge Custodian, as applicable, to make any and all payments to Freddie

Mac required by this Agreement or any other Sponsor Document shall not be subject to diminution by set-off, recoupment, counterclaim, abatement or otherwise. Until the latest of the date on which (i) all the Class A Certificates have been fully paid in accordance with the Series Certificate Agreement, (ii) the Series Certificate Agreement has been terminated in accordance with its terms and (iii) all amounts due and owing to Freddie Mac under this Agreement or any other Sponsor Document shall have been paid, the Sponsor shall continue to have the obligation to perform and observe all of its obligations contained in this Agreement, the Sponsor Documents and all other documents contemplated hereby or thereby.

The obligations of the Sponsor under this Agreement shall be absolute, unconditional and irrevocable, and shall be paid and performed in accordance with the terms of this Agreement under all circumstances whatsoever, including, without limitation, the following circumstances: (a) any invalidity or unenforceability of any of the Owner Documents, the Sponsor Documents (other than the Series Certificate Agreement) or any other agreement or instrument related to the Owner Documents or the Sponsor Documents (other than the Series Certificate Agreement); (b) any waiver of, or any consent to or departure from, the terms of a Series Certificate Agreement, any of the Owner Documents or the Sponsor Documents, or any other agreement or instrument related to the Owner Documents or the Sponsor Documents, or any extensions of time or other modifications of the terms and conditions for any act to be performed in connection with the Series Certificate Agreement; (c) the existence of any claim, set-off, defense or other right that the Sponsor may have at any time against Freddie Mac, the Servicer, any Issuer, any Bond Trustee, the Guarantor, any Sponsor Affiliate, the Administrator, the Pledge Custodian, the Remarketing Agent or any other Person, whether in connection with this Agreement, any of the other Owner Documents, the Sponsor Documents, the Guaranty, any Mortgaged Property, or any unrelated transaction; (d) the surrender or impairment of any security for the performance or observance of any of the terms of this Agreement, the Owner Documents or the Sponsor Documents; (e) any defect in title to any Mortgaged Property, any acts or circumstances that may constitute failure of consideration, destruction of, damage to or condemnation of any Mortgaged Property, commercial frustration of purpose, or any change in the tax or other laws of the United States of America or of any state or any political subdivision of the same, (f) the breach by Freddie Mac, the Servicer, any Issuer, any Bond Trustee, the Administrator, the Sponsor, any Sponsor Affiliate, the Pledge Custodian, the Remarketing Agent or any other Person of its obligations under any Owner Document, the Guaranty or any Sponsor Document; or (g) any other circumstance, happening or omission whatsoever.

Section 3.17 Waivers and Consents . THE SPONSOR AGREES TO BE BOUND BY THIS AGREEMENT AND, TO THE EXTENT PERMITTED BY LAW, (A) WAIVES AND RENOUNCES ANY AND ALL REDEMPTION AND EXEMPTION RIGHTS AND THE BENEFIT OF ALL VALUATION AND APPRAISAL PRIVILEGES (EXCEPT AS EXPRESSLY PROVIDED IN THE SPONSOR DOCUMENTS) AGAINST THE INDEBTEDNESS AND OBLIGATIONS EVIDENCED BY THIS AGREEMENT AND THE OTHER SPONSOR DOCUMENTS OR BY ANY EXTENSION OR RENEWAL OF THIS AGREEMENT AND THE OTHER SPONSOR DOCUMENTS; (B) WAIVES PRESENTMENT AND DEMAND FOR PAYMENT, NOTICES OF NONPAYMENT AND OF DISHONOR, PROTEST OF DISHONOR AND NOTICE OF PROTEST; (C) WAIVES ALL NOTICES IN CONNECTION WITH THE DELIVERY AND ACCEPTANCE OF THIS AGREEMENT AND THE OTHER SPONSOR DOCUMENTS AND ALL OTHER NOTICES IN CONNECTION WITH THE PERFORMANCE, DEFAULT OR ENFORCEMENT OF THE PAYMENT OF

ANY OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER SPONSOR DOCUMENTS EXCEPT AS REQUIRED BY THIS AGREEMENT OR THE OTHER SPONSOR DOCUMENTS; (D) AGREES THAT ITS LIABILITIES UNDER THIS AGREEMENT AND THE OTHER SPONSOR DOCUMENTS SHALL BE UNCONDITIONAL AND WITHOUT REGARD TO THE LIABILITY OF ANY OTHER PERSON AND (E) AGREES THAT ANY CONSENT, WAIVER OR FORBEARANCE UNDER THIS AGREEMENT AND THE OTHER SPONSOR DOCUMENTS WITH RESPECT TO AN EVENT SHALL OPERATE ONLY FOR SUCH EVENT AND NOT FOR ANY SUBSEQUENT EVENT.

Section 3.18 Subrogation . The Sponsor acknowledges that, to the extent of any payment made by Freddie Mac in accordance with the Series Certificate Agreement pursuant to the Credit Enhancement or the Liquidity Facility and for which Freddie Mac has not been reimbursed, Freddie Mac is to be fully subrogated, to the extent of such payment and any additional interest due on any late payment, to the rights of the Sponsor to any moneys paid or payable under the applicable Bonds, the Certificates or the related Hedge and all security therefor under the Owner Documents and the Sponsor Documents, including the Bond Mortgage. The Sponsor agrees to such subrogation and further agrees to execute such instruments and to take such actions as, in the judgment of Freddie Mac, are necessary to evidence such subrogation and to perfect the rights of Freddie Mac to the extent necessary to provide reimbursement hereunder.

Section 3.19 Substitution . The Sponsor may at its option (subject to the conditions set forth below) substitute at any time, and from time to time, one issue of multifamily housing revenue bonds (each, a “Substitute Bond”) for (a) an issue of Bonds with respect to which a Bond Event of Default exists, or (b) a Pre-Selected Bond, solely if the Sponsor has elected to effect a substitution of such Pre-Selected Bond in connection with the sale of the related Pre-Selected Mortgaged Property pursuant to Section 3.26 hereof. The Bonds available to be substituted for in accordance with the foregoing sentence (each, a “Released Bond”) shall be released from the Series Certificate Agreement in accordance with the terms thereof, and the Substitute Bond(s) shall be deposited with the Administrator pursuant to the terms of the Series Certificate Agreement in accordance with the terms thereof, if each of the following conditions is met:

(a) The Substitute Property meets all of Freddie Mac’s then applicable underwriting criteria, program, policy and documentation requirements unless waived in writing by Freddie Mac. In furtherance and not in limitation of the foregoing, Freddie Mac in considering the eligibility of the Substitute Property under such criteria and requirements may take into account a variety of factors, including, but not limited to, local market conditions, portfolio concentration in the market where the Substitute Property is located, the condition and quality of the Substitute Property (which condition and quality shall not be less than the Mortgaged Property to be released (the “Released Project”)), the type of Substitute Property (which shall be of the same type as the Released Project), the internal risk rating for such Substitute Property as determined by Freddie Mac (which risk rating as so determined shall be equal to or better than the risk rating (as determined by Freddie Mac) for the Released Project) and pool diversification (the determination of any proposed Substitute Property’s eligibility under such criteria and requirement to be in Freddie Mac’s sole and absolute discretion);

(b) Freddie Mac shall have been provided by the Servicer (or otherwise) all applicable third party reports required pursuant to the Guide or otherwise required by Freddie Mac, in its sole and absolute discretion, to evaluate the proposed Substitute Property including but not limited to:

(i) An environmental report on the proposed Substitute Property in all respects reasonably satisfactory to Freddie Mac;

(ii) An engineering report on the proposed Substitute Property in all respects reasonably satisfactory to Freddie Mac;

(iii) A survey of the Substitute Property, in all respects reasonably satisfactory to Freddie Mac; and

(iv) An appraisal on the Substitute Property in all respects reasonably satisfactory to Freddie Mac;

(c) Sponsor shall pay all out of pocket fees and expenses of Freddie Mac, including the reasonable costs and expenses of outside counsel in connection with such substitution;

(d) The Substitute Property shall be subject to satisfactory inspection by Freddie Mac;

(e) The underlying bond documents related to the Substitute Property meet Freddie Mac’s then-applicable program requirements in all material respects or are otherwise waived by Freddie Mac;

(f) Unless waived by Freddie Mac, the terms of the Substitute Bond, including tax status, maturity, interest rate and interest mode, are substantially consistent with the terms of the Released Bond;

(g) After giving effect to such substitution, the geographic concentration of the Mortgaged Properties is not greater than that prior to the substitution;

(h) The ratio of the unpaid principal balance of the Substitute Bond to the value of the Substitute Property (the “Loan to Value Ratio” or “LTV”) at the time of the proposed substitution, as determined by Freddie Mac in accordance with its then current underwriting methodology, is less than or equal to the lesser of (i) the loan to value ratio of the Released Project as of the Closing Date or (ii) the loan to value ratio of the Released Project as of the date of the proposed release of the Released Project as determined by Freddie Mac in accordance with its then existing underwriting methodology and in all events the Loan to Value Ratio does not exceed 85%;

(i) The ratio of the net operating income and the annual debt service (the “Debt Service Coverage” or “DCR”) for the Substitute Property for the last twelve (12) calendar months preceding the proposed substitution, calculated in accordance with Freddie Mac’s then-existing underwriting methodology, is greater than or equal to the greater of (i) the Debt Service Coverage for the Released Project as of the Closing Date

for the Released Project or (ii) the current Debt Service Coverage for the Released Project for the prior twelve (12) calendar months, calculated in accordance with Freddie Mac’s underwriting methodology employed by Freddie Mac in determining the Debt Service Coverage for the Substitute Property and in all events the Debt Service Coverage is not less than 1.15%;

(j) No Event of Default shall exist and there shall have been no related Bond Event of Default with respect to such Substitute Bond during the immediately preceding twelve (12) month period;

(k) Contemporaneously with the request for a substitution, Sponsor shall pay (A) to the Servicer a $25,000 underwriting fee with respect to each new Bond to be underwritten, and (B) to Freddie Mac a deposit to cover associated third party costs and fees, as estimated by Freddie Mac, together with a mortgage review fee equal to the greater of $5,000 per substituted property or 0.10% of the unpaid principal balance of the Substitute Bond. On or prior to the closing date for the substitution, the Sponsor shall pay Freddie Mac the balance, if any, of any third-party costs and fees incurred in excess of the initial deposit amount, plus a substitution fee (i) equal to the greater of $5,000 or 0.25% of the unpaid principal balance of the Substitute Bond(s) (with a credit for the mortgage review fee previously paid) for a substitution relating to a Bond Event of Default or (ii) equal to the greater of $50,000 or 0.50% of the unpaid principal balance of the Substitute Asset(s) (with a credit for the mortgage review fee previously paid) for a substitution relating to a substitution of a Pre-Selected Bond pursuant to Section 3.26. In addition, the Sponsor shall pay the reasonable fees and out-of-pocket expenses of outside counsel, appraisers, environmental professionals and engineers, plus all reasonable out-of-pocket costs and expenses incurred by Freddie Mac in connection with the foregoing. Such amounts shall be paid on or prior to the closing date of such substitution. If such substitution fails to close, Sponsor shall pay Freddie Mac such reasonable fees and out-of-pocket expenses within (30) days of Sponsor’s receipt of invoices therefor;

(l) If the unpaid principal balance of the Substitute Bond is less than the unpaid principal balance of the Released Bond (a “Contraction”) the Sponsor shall pay any applicable Total Release Price with respect to the principal portion of the Released Bond that is in excess of the principal amount of the Substitute Bond(s) as and when required by the Series Certificate Agreement, and if the Contraction is greater than 5%, then, in addition to the fees required under Section 3.19(k) above, Sponsor shall pay or cause to be paid a Prepayment/Substitution Premium to Freddie Mac on the amount by which the unpaid principal balance of the Released Bond exceeds the unpaid principal balance of the Substitute Bond(s) on the date of substitution;

(m) The Sponsor and Freddie Mac shall have executed an addendum to this Agreement and any related agreements to reflect the substitution contemplated hereby; and

(n) Freddie Mac shall have received an opinion of Bond Counsel acceptable to Freddie Mac to the effect that such substitution does not adversely affect the exclusion of interest accrued on the related Certificates from gross income of the holders thereof for federal income tax purposes.

(o) If requested by Freddie Mac, Freddie Mac shall have received a 704(b) analysis with respect to the ownership of the Substitute Property which is satisfactory to Freddie Mac in its sole discretion.

Section 3.20 Freddie Mac Liquidity Pricing Term.

(a) The Sponsor acknowledges that the pricing for the Freddie Mac Liquidity Facility Fee shall expire at the end of each Freddie Mac Liquidity Pricing Term. Freddie Mac agrees to provide new pricing for the Freddie Mac Liquidity Facility Fee solely for one additional five-year Freddie Mac Liquidity Pricing Term (a "Second Freddie Mac Liquidity Pricing Term") following the Initial Freddie Mac Liquidity Pricing Term. The Freddie Mac Liquidity Facility Fee for the Second Freddie Mac Liquidity Pricing Term (if elected by the Sponsor) shall be based on a new Base Rate to be provided by Freddie Mac in accordance with this Section 3.20 and otherwise shall be calculated in accordance with the existing definition of the Freddie Mac Liquidity Facility Fee. No sooner than one hundred ninety (190) days prior to the expiration of the Initial Freddie Mac Liquidity Pricing Term, the Sponsor may submit a Base Rate Quote Request in the form attached as Exhibit III to Freddie Mac requesting that Freddie Mac provide a quote for the Base Rate that would be effective for the Second Freddie Mac Liquidity Pricing Term, and Freddie Mac shall provide such quote no later than 30 days after the receipt of the Base Rate Quote Request.

(b) On or prior to the end of the Initial Freddie Mac Liquidity Pricing Term, the Sponsor shall either: (i) accept the new Base Rate to be effective for the Second Freddie Mac Liquidity Pricing Term (if a Base Rate Quote Request was submitted in accordance with Section 3.20(a) above), (ii) convert the interest rate mode on the Class A Certificates to a Term Reset Rate upon satisfaction of all conditions to conversion to a Term Reset Rate set forth under the Series Certificate Agreement (and in connection therewith the Sponsor may request from Freddie Mac (at the same time as the Base Rate Quote Request) pricing for the Freddie Mac Liquidity Facility Fee under Freddie Mac's then current annual liquidity program for a Term Reset Rate of one year or for a Term Reset Rate of such longer duration as the Sponsor shall request and Freddie Mac shall provide such quote no later than 30 days after the receipt of such request), or (iii) exercise its election to fund (and thereafter fund) pursuant to Section 3.21 a Release Event with respect to all (but not less than all) of the Bonds on the first Optional Series Pool Release Date. Not later than ninety (90) days prior to the expiration of the Initial Freddie Mac Liquidity Pricing Term, the Sponsor shall submit a Liquidity Election Notice in the form attached as Exhibit IV notifying Freddie Mac of its election pursuant to the foregoing. Any new Base Rate accepted pursuant to this Section shall be set forth in an Amendment to this Agreement acceptable to Freddie Mac.

(c) The Sponsor acknowledges that Freddie Mac shall have no obligation to provide pricing for the Freddie Mac Liquidity Facility Fee after the Second Freddie Mac Liquidity Pricing Term. On or prior to the end of the Second Freddie Mac Liquidity Pricing Term (if elected by the Sponsor), the Sponsor shall either (i) convert the interest rate mode on the Class A Certificates to a Term Reset Rate upon satisfaction of all conditions to conversion to a Term Reset Rate set forth under the Series Certificate Agreement, or (ii) exercise its election to fund (and thereafter fund) pursuant to Section 3.21 a Release Event with respect to all (but not less than all) of the Bonds on the second Optional Series Pool Release Date. Not later than ninety (90) days prior to the expiration of the Second Freddie Mac Liquidity Pricing Term, the Sponsor shall provide written notice to Freddie Mac of its election pursuant to the foregoing.

(d) Any change to, or continuation of, the Term Reset Rate Method as the interest rate mode on the Class A Certificates (including in connection with Freddie Mac's annual liquidity program) may be subject, among other things, to (i) Freddie Mac's collection of a liquidity facility fee (or other separate fee) hereunder for its purchase price coverage at the end of such Term Reset Rate, and (ii) any hedge requirements that Freddie Mac may have at such times with respect to a Term Reset Rate of such duration (which hedge requirements shall be set forth in an amendment to this Agreement). Any changes to the fees or hedges required hereunder in connection with the establishment of a new Term Reset Rate pursuant to this Section shall be set forth in an amendment to this Agreement acceptable to Freddie Mac, which amendment shall be delivered on or prior to the related Term Effective Date.

(e) In the event (i) a new Base Rate is not accepted (to the extent requested after the Initial Freddie Mac Liquidity Pricing Term), (ii) the Sponsor fails to fund a Release Event on the applicable Optional Series Pool Release Date or (iii) for any reason the interest rate mode on the Class A Certificates is not converted to a Term Reset Rate, in each case in accordance with this Section 3.20, such event shall be a "Mode Reset Failure" hereunder and a Liquidity Provider Termination Event under the Series Certificate Agreement, in which event Freddie Mac may (in its discretion) provide notice to the Administrator of such Liquidity Provider Termination Event, in which event the funds advanced by Freddie Mac to purchase Class A Certificates shall be a Credit Advance and due and payable pursuant to Section 3.2 hereof.

Section 3.21 Optional Series Pool Release Date.

The Sponsor shall have the right, subject to the following terms and provided no Event of Default has occurred and is continuing, to direct Freddie Mac to exercise its right (provided the Class A Certificates then bear interest at a Weekly Reset Rate or Monthly Reset Rate) to cause a Release Event with respect to all (but not less than all) of the Bonds held under the Series Certificate Agreement on an Optional Series Pool Release Date by giving written notice of such election to Freddie Mac not less than ninety (90) days prior to such Optional Series Pool Release Date. Freddie Mac shall only exercise its right to cause such a Release Event to occur on an Optional Series Pool Release Date if by no later than the fifth (5th) Business Days prior to such Optional Series Pool Release Date the Sponsor shall have either (i) caused to be deposited with Freddie Mac in immediately available funds an amount necessary to pay in full the resulting Total Release Price due under the terms of the Series Certificate Agreement, together with amounts sufficient to pay all Obligations of the Sponsor due hereunder and any obligations of the Sponsor due under any other Sponsor Document or (ii) the Sponsor shall have provided evidence of the establishment of an escrow arrangement for the payment of the same satisfactory to Freddie Mac, in its sole discretion. Such monies provided by the Sponsor to Freddie Mac shall be applied as provided pursuant to the terms of the Series Certificate Agreement to effect such Release Event and the terms hereof to reimburse Freddie Mac for any amounts then due hereunder.

Section 3.22 Rights of Sponsor Upon Freddie Mac Downgrade . If the rating of the long-term senior debt of Freddie Mac is reduced below “A-” by the Rating Agency (which event shall constitute a material adverse credit condition under this Agreement), the Sponsor shall have the right to direct Freddie Mac to exercise its right (provided the Class A Certificates then bear interest at a Weekly Reset Rate or Monthly Reset Rate) to cause a Release Event with respect to all (but not less than all) Bonds held under the Series Certificate Agreement. If the Sponsor

elects to exercise such right by giving not less than thirty (30) days written notice to Freddie Mac, Freddie Mac shall exercise its right to cause such a Release Event to occur promptly following receipt by the Administrator of immediately available funds from the Sponsor in an amount necessary to pay in full the resulting Total Release Price due under the terms of the Series Certificate Agreement, together with amounts sufficient to pay all Obligations of the Sponsor due hereunder and any obligations of the Sponsor due under any other Sponsor Document. Such monies provided by the Sponsor to the Administrator shall be applied as provided pursuant to the terms of the Series Certificate Agreement and the terms hereof.

Section 3.23 Release Event Upon Bond Event of Default . In addition to the Sponsor’s rights under Section 3.19 hereof, if a material monetary event of default exists with respect to a series of Bonds (with respect to which the Sponsor or an Affiliate does not control the related Owner) and remains uncured for the shorter of (i) sixty (60) days or (ii) two consecutive scheduled payment dates (or such shorter period of time consented to by Freddie Mac), the Sponsor may direct Freddie Mac to declare a Release Event with respect to the related Bond and shall fund, or cause the funding of, the purchase of such Bond (which funding by, or caused by, the Sponsor shall be accomplished in accordance with Section 7.3(a) hereof and applicable provisions of the Series Certificate Agreement); provided, however, the Sponsor shall only have the right to cause a Release Event with respect to a Bond pursuant to this Section 3.23 if the Sponsor has funded, or caused the funding of, such Release Event within sixty (60) days of the date on which the right to direct a Release Event with respect to such Bond first arises under this Section 3.23.

Section 3.24 Loans by Guarantor or Its Affiliates . The Guarantor or an affiliate of the Guarantor may make a subordinate loan or loans to an Owner and enforce the terms of such loans if the such loan is made in accordance with the terms of this Section 3.24. Freddie Mac acknowledges that the making of such loan(s) by the Guarantor and their enforcement is not a breach of a covenant or a representation under this Agreement provided that:

(a) the Guarantor shall provide notice of such subordinate loan to Freddie Mac and the Servicer no later than 30 days prior to the funding of such loan (each notice shall include a representation as to the purpose of the subordinate loan),

(b) such subordinate loan shall be made only to fund shortfalls in operating expenses or to pay debt service on the related Bonds,

(c) the enforcement of remedies with respect to such subordinate loan(s) shall be done solely with Freddie Mac’s prior consent, and

(d) such subordinate loan: (i) is not secured by the applicable Mortgaged Property or an interest in the applicable Owner, (ii) is payable solely from 75% of surplus cash with respect to the related Mortgaged Property (as determined in accordance with Freddie Mac’s program standards), (iii) has a maturity date which extends beyond the maturity date on the related Bonds, and (iv) otherwise conforms to Freddie Mac’s then applicable program, policies and underwriting criteria for soft subordinate debt.

Section 3.25 Credit Advances; Real Estate Taxes . In the event any real estate taxes are assessed on a Mortgaged Property and are not timely paid when due by either the Owner or the

Sponsor (irrespective of whether the Owner or the Sponsor is contesting such assessment), Freddie Mac shall have the right (but not the obligation) to pay such taxes and such expenditure by Freddie Mac shall be treated as a Credit Advance hereunder to reimbursed from the sources and in the priority established in accordance with the provisions of this Agreement and Section 4.03 of the Series Certificate Agreement.

Section 3.26 Substitution Upon Sale of Pre-Selected Mortgaged Property . On or after the date which is thirty-six (36) months after the Closing Date, the Sponsor may elect, solely in connection with a sale of a Pre-Selected Mortgaged Property to a party that is not a Sponsor Affiliate and which party does not elect to assume the indebtedness of the related Bonds, to effect a substitution of the related Pre-Selected Bond in accordance with Section 3.19 and direct Freddie Mac to declare a Release Event for such purpose; provided, however, the Sponsor shall only have the right to effect a substitution of up to two Pre-Selected Bond pursuant to this Section 3.26. In connection with any election under this Section 3.26, the Sponsor shall also satisfy the following conditions:

(i) the Sponsor shall cause to be funded to Freddie Mac any applicable Prepayment/Substitution Premium required under Sections 3.8(a) and 3.19 hereof;

(ii) the Sponsor shall provide reasonably satisfactory evidence to Freddie Mac that the applicable Pre-Selected Mortgaged Property is under contract for sale, the proposed purchaser of such Pre-Selected Mortgaged Property is not a Sponsor Affiliate and the proposed purchase price is the market price for such Pre-Selected Mortgaged Property;

(iii) the Sponsor shall provide satisfactory evidence to Freddie Mac that the proposed purchaser is electing to payoff the related Bonds in connection with the sale; and

(iv) the Sponsor shall cause to be provided to Freddie Mac all fees required pursuant to Section 3.19 hereof.

ARTICLE IV

AGREEMENT TO EXCHANGE

Section 4.1 Exchange . Freddie Mac agrees to exchange the Certificates for the Bonds in accordance with and subject to the terms and provisions of this Agreement. In consideration for the transfer of ownership and possession of the Bonds from the Sponsor to Freddie Mac, Freddie Mac shall simultaneously deliver to the Sponsor the Class A Certificates issued pursuant to the Series Certificate Agreement and deliver the Class B Certificates to the Sponsor or upon its order. With respect to the Bonds, the Sponsor is transferring and assigning to Freddie Mac all of its right, title and interest in and to such Bonds together with all interest due thereon from and after July 1, 2014 (such transfer and assignment being intended as an absolute assignment to Freddie Mac of all of the Sponsor’s ownership, right, title and interest in such Bonds from such date forward, and not as a collateral assignment or pledge of such Bonds).

Section 4.2 Mandatory Delivery; Ownership; Registration of Transfer . No later than the Closing Date (the “Delivery Deadline”), the Sponsor shall complete the delivery of the Bonds to Freddie Mac in accordance with this Agreement, and ownership of the Bonds shall pass from the Sponsor to Freddie Mac on the Closing Date as provided in Section 4.1. The Sponsor shall execute and deliver any instrument necessary or appropriate to effect or evidence the transfer and delivery of all the Sponsor’s interest in and to the Bonds to Freddie Mac, and shall fully and promptly cooperate with Freddie Mac, and take any necessary action, to cause the ownership of the Bonds to be registered in the name of Freddie Mac.

The Sponsor acknowledges that certain of the Bonds (as such Bonds are identified in the Bond Custody Agreement) have not been re-registered in the name of Freddie Mac on the Closing Date but are held for the benefit of Freddie Mac under the Bond Custody Agreement pending such re-registration. The Sponsor shall cause such Bonds to be re-registered in the name of Freddie Mac and delivered to Freddie Mac by no later than August 15, 2014.

Section 4.3 Failure to Deliver . If the Sponsor fails to deliver the Bonds to Freddie Mac or fails to comply fully with any precondition to Freddie Mac’s obligation to exchange Certificates for the Bonds on or before the Closing Date, Freddie Mac shall have no obligation to exchange Certificates for the Bonds, and the Sponsor shall promptly reimburse Freddie Mac for all of its out-of-pocket expenses in connection with the proposed transaction, including, but not limited to, Freddie Mac’s legal and financial modeling costs.

ARTICLE V

INTEREST RATE PROTECTION

Section 5.1 Hedge Requirement .

(a) Hedge Requirement . To protect against fluctuations in interest rates, Sponsor shall deliver to Freddie Mac and shall make arrangements for third-party Hedge Agreements to be in place and maintained at all times, with respect to the Class A Certificates during any period in which the Class A Certificates bear interest at a Weekly Reset Rate or Monthly Reset Rate. The Hedge Agreement with respect to the Class A Certificates shall take the form one or more Caps that meets the requirements of this Article V. The initial Hedge Agreement with respect to the Class A Certificates shall be three Caps with counterparties acceptable to Freddie Mac. The initial Caps shall have a termination date of August 15, 2019 and a Strike Rate of 3%. The notional amount of the initial Caps shall equal the Initial Certificate Balance of the Class A Certificates on the Closing Date and shall decline based upon the scheduled amortization of the Class A Certificates. The initial Caps shall otherwise satisfy the terms hereof.

(b) Expiration of Hedge . Not later than the day following the expiration of the term of any Hedge, if a Subsequent Hedge is required pursuant to Section 5.1(a), the Sponsor shall deliver or cause to be delivered a Subsequent Hedge Agreement from a Counterparty acceptable to Freddie Mac.

(c) Terms of Subsequent Hedge . Except as otherwise permitted by Sections 5.2, 5.7 or otherwise consented to by Freddie Mac, each Subsequent Hedge shall be a Cap and shall have a term equal to the lesser of five (5) years or the remaining term of the related Series Pool.

(d) Documentation . Each Hedge and Subsequent Hedge shall be with a Counterparty acceptable to Freddie Mac. Prior to seeking any bids from any Counterparty for a Subsequent Hedge, the Sponsor shall obtain the prior written consent of Freddie Mac. Each Hedge shall be evidenced and governed by such documents (the “Hedge Documents”) as shall be in form and content be acceptable to, Freddie Mac. Without limiting the generality of the foregoing, each Hedge Agreement shall satisfy the requirements of Section 5.2.

(e) Performance Under Hedge Documents . The Sponsor shall comply fully with, and otherwise perform when due, its respective obligations under all Hedge Documents. The Sponsor shall not exercise without Freddie Mac’s prior written consent, and shall exercise at Freddie Mac’s direction, any rights or remedies under any Hedge Document.

(f) Termination; Transfer . The Sponsor shall not terminate, transfer nor consent to any transfer of any existing Hedge without Freddie Mac’s prior written consent as long as the Sponsor is required to maintain a Hedge with respect to the Class A Certificates pursuant to this Agreement. Prior to termination of an existing Hedge on a date prior to its scheduled termination date, the Sponsor shall, so long as a Weekly Reset Rate or Monthly Reset Rate is in effect, obtain a new Hedge satisfying the terms of this Agreement. Any new Hedge must be effective on or before or on the date immediately following the last date on which the existing Hedge is in effect. In no event shall the Sponsor terminate the Hedge if in connection with such termination Freddie Mac would be required to pay a termination fee pursuant to the Hedge, unless Freddie Mac expressly consents to the payment of such termination fee.

(g) Hedge Assignment; Delivery of Payments . The Sponsor shall assign to Freddie Mac each Hedge in effect from time to time pursuant to this Agreement. The Counterparty shall make all its payments to Freddie Mac to be allocated to the payment of fees, expenses, reimbursements and other Obligations of the Sponsor hereunder, and in no event paid to Class A Certificates. Any amounts received by the Sponsor from the Counterparty pursuant to the Hedge Agreement shall be paid by the Sponsor to Freddie Mac immediately and until paid to Freddie Mac, shall be held in trust for the benefit of Freddie Mac until applied in accordance with the terms of Article VIII hereof.

(h) Notice of Expiration . Not less than six (6) months prior to the expiration of each Hedge delivered hereunder, if a Subsequent Hedge will be required pursuant to Section 5.1(a), the Sponsor shall provide Freddie Mac written notice of the proposed terms of the Hedge expected to be delivered by the Sponsor to replace the expiring Hedge.

Section 5.2 Hedge Agreement Terms .

(a) Hedge Agreement Payment Terms . For each Hedge related to the Class A Certificates, the Counterparty shall pay a floating amount computed in accordance with the Hedge Documents to the extent the Index Rate exceeds the fixed cap rate (the “Strike Rate”). For each Hedge Agreement, the Strike Rate must not exceed 4.5% per annum or shall otherwise be acceptable to Freddie Mac. Each Hedge must provide for monthly settlement on the fifteenth day of each month with a grace period of no longer than three (3) Business Days. If the SIFMA Index Rate is not published on any reset date under the Hedge, the Counterparty must determine an appropriate index as a substitute for the SIFMA Index Rate on each such reset date. The index so determined shall provide a rate of interest that is equivalent to the prevailing rate of

interest borne by bonds that are rated in the highest short-term rating category by Moody’s and S&P for issuers of not less than five “high grade” component issuers selected by the Counterparty which shall include, without limitation, issuers of general obligation bonds, and that are subject to tender by holders thereof for purchase on not more than seven (7) days notice and the interest on which is (a) variable, determined on a weekly basis, (b) excludable from gross income for federal income tax purposes, and (c) not subject to a “minimum tax” or similar tax unless all tax-exempt bonds are subject to such tax.

(b) Notional Principal Amount of Hedge . The initial notional amount of any Hedge shall be equal to the Current Class A Certificate Balance immediately prior to the commencement of the applicable Hedge Period.

(d) Cap Fee Escrow . From amounts received with respect to the Pledged Security Collateral, the Pledge Custodian on behalf of the Sponsor shall pay to the Servicer for deposit to a Cap Fee Escrow monthly on the fifteenth (15 th ) day of each month (commencing on the fifteenth (15 th ) day of the month next preceding the date that is sixty (60) months prior to the expiration of each existing Hedge), an amount that will result in the accumulation by the expiration of the existing Hedge, without regard to earnings from investments of amounts in the Cap Fee Escrow, of funds estimated by Freddie Mac to be sufficient to pay the cost of a Cap with a term of five years in a notional amount that will equal the outstanding principal amount of the Class A Certificates at such time. During the first twelve (12) months after the commencement of deposits required hereunder, the monthly deposit shall be equal to a fraction, the numerator of which is 125% of the estimated cost of the Cap required hereunder and the denominator of which 60. Thereafter, the amount of the monthly deposit shall be recomputed by Freddie Mac annually based upon the Freddie Mac’s estimation of the cost of such Cap times 125% minus amounts already on deposit in the applicable Cap Fee Escrow divided by the number of months remaining until to the related expiration date of the preceding Hedge.

Amounts on deposit in the Cap Fee Escrow shall be invested and reinvested by the Servicer only in the following, having maturities of no more than six months:

(i) Bank accounts or certificates of deposit that are fully insured by the Federal Deposit Insurance Corporation.

(ii) Direct obligations of the U.S. Government, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Fannie Mae or the Federal Farm Credit Bank.

(iii) Obligations, the interest on which is excludable from gross income for federal income tax purposes, with a “Moody’s Investment Grade One” rating or bonds the interest on which is excludable from gross income for purposes of federal income taxation, that are rated not lower than “AA” or “Aa” by either S&P or Moody’s respectively, if only one rating from those agencies has been obtained, and if both agencies have rated the obligations or bonds, not lower than “Aa” or “AA,” as applicable; provided, however, not more than 10% of the total issue of any such obligations may be purchased and issues of at least $20,000,000 in total issue size must be selected.

(iv) Commercial paper with a rating of at least “A-1” by S&P and at least P-1 by Moody’s.

(v) Corporate notes and bonds with a rating of at least “AA” and “Aa” from S&P and Moody’s.

(vi) Shares or other interests in mutual funds that invest exclusively in (A) instruments the interest on which is exempt from federal income taxation and which are rated by at least one nationally recognized statistical rating agency in one of that agency’s two highest rating categories or (B) any of the categories of investments described in paragraphs (i) through (v) above.

During any period the Class A Certificates have been converted with the prior written consent of Freddie Mac to bear interest at a Term Reset Rate and no Hedge is required to be maintained pursuant to Section 5.1 of this Agreement, and provided no Event of Default is existing hereunder, any amounts then held on deposit in the Cap Fee Escrow shall be distributed to the Sponsor upon a written request therefor delivered to the Servicer and Freddie Mac.

(e) Additional Collateral . Each Hedge Agreement shall provide that if the long-term, unsecured and unsubordinated indebtedness of the Counterparty shall cease to be rated at least A1 by Moody’s or A+ by S&P (or Aa1 by Moody’s or AA+ by S&P in the case of counterparties that are insurance companies) or such indebtedness shall cease to be rated by Moody’s or S&P, then such party’s obligations under the Hedge Agreement shall be required to be collateralized on such terms and conditions as are acceptable to Freddie Mac including without limitation the delivery of cash collateral to a Trustee. If the Counterparty fails to escrow collateral as provided in the Hedge Agreement, the Sponsor shall enter into a Subsequent Hedge within thirty (30) days after such failure to escrow collateral.

Section 5.3 Failure to Deliver Subsequent Hedge .

If:

(a) the Sponsor fails to deliver a Subsequent Hedge as required by this Agreement, or

(b) the Sponsor has indicated that it will obtain a Subsequent Hedge and has not provided to Freddie Mac and the Servicer a copy of the executed and delivered Subsequent Hedge when required by Section 5.1(b),

then Freddie Mac at its option, may

(i) purchase a Subsequent Hedge upon such terms as it deems satisfactory in its own name or for the account of the Sponsor with funds on deposit in the Cap Fee Escrow, and if funds in the Cap Fee Escrow are insufficient for that purpose, Freddie Mac may advance the insufficient amount, which advance shall be deemed a Credit Advance; or

(ii) treat such failure by the Sponsor as an Event of Default.

If Freddie Mac exercises its right under clause (i) and is reimbursed with interest its Credit Advance within the time required by Section 3.2 hereof after it gives notice to the Sponsor that Freddie Mac purchased the Subsequent Hedge, the failure of the Sponsor to obtain the Hedge shall no longer constitute an Event of Default.

The Sponsor hereby appoints Freddie Mac as its attorney-in-fact, with full authority in the place and stead of the Sponsor and in the name of the Sponsor, from time to time in Freddie Mac’s discretion, to take any action and to execute any instrument which Freddie Mac may reasonably deem necessary or advisable to accomplish the purposes of this Section 5.3. The power of attorney established pursuant to this Section 5.3 shall be deemed coupled with an interest and shall be irrevocable.

Section 5.4 [Reserved] .

Section 5.5 Pledge and Assignment of Security Interest in Hedge Collateral . To secure the Obligations, the Sponsor hereby assigns, pledges and grants a security interest to Freddie Mac in and to all of its right, title and interest in and to the following (collectively, the “Hedge Collateral”):

(a) the Hedge Agreement and any Subsequent Hedge Agreements;

(b) any and all moneys (collectively, “Hedge Payments”) payable to the Sponsor, from time to time, pursuant to the Hedge Agreements or any Subsequent Hedge Agreements by the Counterparty thereunder;

(d) all rights of the Sponsor under any of the foregoing, including all rights of the Sponsor to the Hedge Payments and all contract rights and general intangibles now existing or hereafter arising with respect to any or all of the foregoing;

(e) all rights, liens, security interests and guarantees now existing or hereafter granted by the Counterparty, or any other person, to secure or facilitate payment of the Hedge Payments;

(f) all documents, writings, books, files, records and other documents arising from, or relating to, any of the foregoing, whether now existing or hereafter created;

(g) all extensions, renewals and replacements of the foregoing; and

(h) all cash and non-cash proceeds and products of any of the foregoing, including, without limitation, interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed or distributable in respect of or in exchange for any or all of the other Hedge Collateral.

Section 5.6 Obligations Remain Absolute . Nothing contained herein shall relieve the Sponsor of its primary obligation to pay or cause to be paid all amounts due in respect of the Obligations, subject to Section 9.11.

ARTICLE VI

UNIFORM COMMERCIAL CODE SECURITY AGREEMENT

This Agreement is also a security agreement under the Uniform Commercial Code with respect to the Hedge Collateral as provided in Article V and the Pledged Security Collateral as provided in Article VIII and all funds and accounts and investments thereof now or hereafter held by the Administrator under the Series Certificate Agreement (to the extent of any retained interested by the Sponsor therein) and all funds and accounts and investments thereof now or hereafter held for the benefit of Freddie Mac under the Custody Account, the Stabilization Escrow Agreement, and all cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and the Sponsor hereby grants to Freddie Mac a security interest in the UCC Collateral as security for all Obligations due under this Agreement and under any of the Sponsor Documents. The Sponsor shall execute and deliver to Freddie Mac, upon Freddie Mac’s request, financing statements, continuation statements and other account agreements and amendments, in such form as Freddie Mac may require to perfect or continue the perfection of this security interest. The Sponsor shall pay or cause to be paid all filing costs and all costs and expenses of any record searches for financing statements that Freddie Mac may reasonably require. Except as otherwise permitted herein, without the prior written consent of Freddie Mac, the Sponsor shall not create or permit to exist any other lien or security interest in any of the UCC Collateral. The Sponsor covenants and agrees that it will defend Freddie Mac’s rights and security interests created by this Article against the claims and demands of all Persons. If an Event of Default has occurred and is continuing, subject to Article VII hereof, Freddie Mac shall have the remedies of a secured party under the Uniform Commercial Code, in addition to all remedies provided by this Agreement or existing under applicable law. In exercising any remedies, Freddie Mac may exercise its remedies against the UCC Collateral separately or together, and in any order, without in any way affecting the availability of the other remedies available to Freddie Mac.

ARTICLE VII

EVENTS OF DEFAULT; REMEDIES

Section 7.1 Events of Default . The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:

(a) Freddie Mac, as provider of credit enhancement and as liquidity provider, does not receive any amount payable under this Agreement when due, including, without limitation, any fees, costs or expenses (provided that if the Administrator or Pledge Custodian has such amounts in its possession pursuant to the Series Certificate Agreement or this Agreement and is directed thereunder or hereunder to pay such amounts to Freddie Mac, such occurrence will not be an Event of Default);

(b) the Sponsor shall fail to perform its obligations under Section 3.15 or Section 3.20;

(c) the Sponsor shall fail to observe or perform in all material respects any other term, covenant, condition or agreement set forth in this Agreement, and such failure shall continue, and remain uncured, for a period of thirty (30) days following notice to

the Sponsor of such failure, or actual knowledge by the Sponsor of such failure; provided, however, in the event such failure shall relate to a non-monetary term, covenant, condition or agreement that can be corrected but not within thirty (30) days, such failure shall not constitute an Event of Default hereunder if corrective action is instituted by the Sponsor within thirty (30) days and diligently pursued until such failure is cured, provided such failure must be cured not later than ninety (90) days after the initial date of such failure;

(d) the Sponsor (or any Affiliate thereof who is a party to such Sponsor Document) shall fail to observe or perform in all material respects any other term, covenant, condition or agreement set forth in any of the other Sponsor Documents, or there shall otherwise occur an event of default caused by the Sponsor (or any Affiliate thereof who is a party to such Sponsor Document) under any of the other Sponsor Documents (taking into account any applicable cure period);

(e) Freddie Mac shall have given the Sponsor written notice that Pledged Class A Certificates have not been remarketed as of the sixtieth (60th) day following purchase by the Administrator on behalf of the Sponsor, and Freddie Mac has not been reimbursed for the applicable Liquidity Advance, together with interest thereon, or has not been paid in full all fees and other amounts due to Freddie Mac under this Agreement;

(f) failure to pay principal of, and interest on, any Bond Purchase Loan when due pursuant to Section 7.03(b) hereof;

(g) failure of the Sponsor to deliver a Subsequent Hedge or replacement Hedge as required under Article V;

(h) an “event of default” by the institution providing the Hedge occurs under any Hedge Documents and the Sponsor does not provide a Subsequent Hedge within 10 Business Days;

(i) the Guarantor fails to perform its obligations when required under the Guaranty;

(j) Article VIII of this Agreement, or the validity or enforceability thereof, shall be contested by the Sponsor or any Class B Owner, or the Sponsor, or any Class B Owner shall deny that it has any further obligation under Article VIII of this Agreement or any instrument delivered thereunder, or that its beneficial interest in the Class B Certificates is subject to or subordinate to the terms of this Agreement, as applicable, prior to the termination of this Agreement;

(k) any representation made by the Sponsor in Sections 2.1(uu), 2.2(a)(iii), 2.2(a)(iv), 2.2(a)(v), 2.2(a)(vi) or 2.2(a)(vii) or in Section 8.10 of this Agreement shall prove to have been incorrect in any material respect when made (the breach of other representations made by the Sponsor herein shall not constitute an “Event of Default” but shall be dealt with pursuant to Section 2.4 hereof); or

(m) a subordinate loan is made by the Guarantor or an affiliate of the Guarantor not in accordance with Section 3.24 hereof.

Section 7.2 Remedies; Waivers .

(a) Remedies . Upon the occurrence of an Event of Default, (i) Freddie Mac may declare all of the Obligations hereunder to be immediately due and payable, in which case all such Obligations shall become due and payable, without presentment, demand, protest or notice of any kind, including notice of default, notice of intent to accelerate or notice of acceleration;(ii) Freddie Mac may direct the Administrator to deliver all amounts payable on the Class B Certificates to the Pledge Custodian for deposit into the Custody Account (which amounts shall be Pledged Security Collateral hereunder); (iii) at the written direction of a Freddie Mac Authorized Officer, the Pledge Custodian shall deliver all Pledged Security Collateral to Freddie Mac; (iv) Freddie Mac may, or the Pledge Custodian at the written direction of a Freddie Mac Authorized Officer shall, without further notice, exercise all rights, privileges or options pertaining to the UCC Collateral as if Freddie Mac were the absolute owner thereof, upon such terms and conditions as Freddie Mac may determine, all without liability except to account for property actually received by Freddie Mac or the Pledge Custodian (but neither Freddie Mac nor the Pledge Custodian shall have any duty to exercise any of those rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing); and (v) Freddie Mac may, or the Pledge Custodian at the written direction of a Freddie Mac Authorized Officer shall, exercise in respect of the UCC Collateral, in addition to other rights and remedies provided for in this Agreement or otherwise available to it, all of the rights and remedies of a secured party under the Uniform Commercial Code and also may, without notice except as specified below, sell the UCC Collateral at private sale, at any of the offices of Freddie Mac or the Pledge Custodian or elsewhere, for cash, on credit or for future delivery, and upon such other terms as may be commercially reasonable. The Sponsor agrees that, to the extent notice of sale shall be required by law, at least ten (10) days’ prior notice to the Sponsor of the time after which any private sale is to be made shall constitute reasonable notification. Neither Freddie Mac nor the Pledge Custodian shall be obligated to make any sale of UCC Collateral regardless of notice of sale having been given. Freddie Mac may, or the Pledge Custodian at the written direction of a Freddie Mac Authorized Officer shall, adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

Freddie Mac shall also have the right to provide notice to the Administrator of a Liquidity Provider Termination Event, in which event the funds advanced by Freddie Mac to purchase Class A Certificates shall be a Credit Advance and immediately due and payable hereunder. In addition to the foregoing, Freddie Mac shall have the right to take such action at law or in equity, without notice or demand, as it deems advisable to protect and enforce the rights of Freddie Mac against the Sponsor in and to the UCC Collateral, including, but not limited to, (i) the exercise of any rights and remedies available to Freddie Mac under any of the Sponsor Documents and (ii) the right to cause a mandatory tender of all Certificates and to require that the Sponsor elect to fund or cause the funding of the purchase of such Certificates.

Notwithstanding anything contained in this Section 7.2 to the contrary, following an Event of Default and prior to any liquidation of the UCC Collateral, the Class B Owners shall continue to be the owner(s) of all Class B Certificates, and the Sponsor shall continue to be the

beneficial owner of all Purchased Bonds, Pledged Class A Certificates and other Pledged Security Collateral, subject to any and all liens in favor of Freddie Mac created by this Agreement.

(b) Application of Proceeds . The Pledge Custodian shall apply the cash proceeds actually received from any sale or other disposition of the Pledged Security Collateral as follows: (a) first, to reimburse the Pledge Custodian for the reasonable expenses of preparing for sale, selling and the like and to reasonable attorneys’ fees and expenses and legal expenses incurred by the Pledge Custodian in connection therewith, (b) second, to Freddie Mac to be applied to the repayment of all amounts then due and unpaid on the Obligations and (c) then, to pay the balance, if any, to (i) the Sponsor, or (ii) as otherwise required by law. The Sponsor shall not be liable for any deficiency, subject to Section 9.11(b) of this Agreement, which sets forth circumstances under which personal liability applies to the Sponsor, if the proceeds of any final sale or other disposition of the Pledged Security Collateral and any other security provided by the Sponsor for its Obligations hereunder is insufficient to pay the Obligations.

(c) Waivers . Freddie Mac shall have the right, to be exercised in its discretion, to waive any Event of Default under this Agreement. Unless such waiver expressly provides to the contrary, any waiver so granted shall extend only to the specific event or occurrence which gave rise to the Event of Default so waived and not to any other similar event or occurrence which occurs subsequent to the date of such waiver.

Section 7.3 Rights with Respect to Defaults under Bond Mortgages; Bond Purchase Loan .

(a) Exercise of Right of Sponsor to Fund or Cause Funding in Connection with Release Event . Upon the occurrence of a Release Event under the Series Certificate Agreement and the exercise by Freddie Mac of its right to cause a purchase of the related series of Bonds, the Sponsor shall have the right (or where the Sponsor directs Freddie Mac to cause a Release Event pursuant to Sections 3.21, 3.22, 3.23 or 3.26 the obligation) economically to fund or cause the funding of the purchase of such Bonds as provided in this Section 7.3(a). If the Sponsor elects to exercise any such right by giving notice to Freddie Mac, the Sponsor shall provide or cause to be provided sufficient immediately available funds to Freddie Mac to fund the Total Release Price of the affected Bonds not later than 11:00 a.m. Washington, D.C. time, on the Business Day prior to the Release Event Date designated by Freddie Mac. If the Sponsor makes such election or directs Freddie Mac to declare a Release Event pursuant to the terms hereof and fails to provide or cause to be provided such funds to Freddie Mac when required, such Release Event shall be cancelled. All moneys provided or caused to have been provided by the Sponsor to Freddie Mac for the purchase of Bonds, shall be applied as provided in the Series Certificate Agreement.

(b) Exercise of Purchase Right by Freddie Mac . Upon the occurrence of a Release Event with respect to the Bonds, Freddie Mac shall have the right to fund the purchase of the related series of Bonds if the Sponsor declines or fails to exercise properly its right to fund or cause funding with respect to the same. Prior to any exercise of such right, Freddie Mac shall provide written notice to the Sponsor (the “Freddie Mac Purchase Notice”) not less than fifteen (15) days prior to the proposed Release Event Date (or such lesser time period necessary for the Release Event under Section 13.04 of the Series Certificate Agreement) identifying each series

of Bonds giving rise to a Release Event, the circumstances giving rise to such Release Event and the proposed purchase date and stating that the Sponsor may elect to fund or cause the funding of such purchase of the affected series of Bonds.

In the event the Sponsor elects to fund or cause the funding of the purchase of the affected series of Bonds, the provisions of subsection (a) above shall apply.

In the event the Sponsor does not elect to fund or cause the funding of the purchase of the affected series of Bonds, and Freddie Mac does not decide to terminate the Release Event, the affected series of Bonds are required to be purchased with funds drawn pursuant to the Credit Enhancement by Freddie Mac under the Series Certificate Agreement, and such Bonds shall be delivered to the Pledge Custodian and held in the name of the Pledge Custodian as applicable for the benefit of the Sponsor subject to the lien in favor of Freddie Mac. All such moneys for the purchase of such Bonds shall be applied as provided in Series Certificate Agreement.

Any Credit Advance by Freddie Mac under this Section 7.3(b) to fund the purchase of an affected series of Bonds, shall be deemed to be a loan from Freddie Mac to the Sponsor (a “Bond Purchase Loan”). The maturity date of any Bond Purchase Loan shall be the earliest of (1) two years from the date of purchase, or (2) the sale or transfer of all of the affected series of Bonds, or the foreclosure, deed in lieu of foreclosure or comparable conversion of the related Bond Mortgage, on which maturity date the outstanding principal of such Bond Purchase Loan shall be due and payable in full, or (3) the date of termination of the Series Pool in whole in accordance with Article XIII of the Series Certificate Agreement. (Any Bond Purchase Loan may be prepaid by the Sponsor at any time.) Interest on any Bond Purchase Loan shall accrue at a rate of interest equal to the prime rate of interest of Citibank, N.A., until such time as another “Money Center” bank is designated by Freddie Mac in its sole discretion by notice to the Sponsor, plus two percent (2%) per annum, which shall be payable on the fifteenth day of each calendar month. The principal of any Bond Purchase Loan shall be payable from amounts applied as provided in Section 4.03(b) of the Series Certificate Agreement except, prior to the payment in full of all Class A Certificates under the Series Certificate Agreement and prior to the termination thereof, the principal of any outstanding Bond Purchase Loan shall not be payable (nor be deemed due for payment) from amounts applied pursuant to the aforementioned Section 4.03(b) if such amounts are derived from a Credit Advance by Freddie Mac in connection with a subsequent Release Event. The principal of any outstanding Bond Purchase Loan shall also be payable from any payments of principal in respect of a Purchased Bond pursuant to Article VIII hereof. At any time prior to the Sponsor's funding of the purchase of such Bonds or causing to fund the same, (i) Freddie Mac shall retain all rights and remedies with respect to any such Mortgaged Property and the related Owner Documents and (ii) the Sponsor hereby acknowledges and agrees that it has relinquished and has no rights to exercise remedies with respect to the Mortgaged Property or the related Owner Documents except as specifically provided under any Sponsor Documents and that with respect thereto the Sponsor shall not exercise any such rights without the prior written consent of Freddie Mac.

(c) Material Adverse Credit Condition . Freddie Mac hereby acknowledges that a Release Event may not be declared solely because the DCR or LTV of a Mortgaged Property (as defined in Section 3.19 hereof) related to a Bond worsens following the Closing Date, and that any such event shall not in and of itself be treated as a “material adverse credit condition” for

such purpose. The foregoing statement does not in any way alter or change the DCR and LTV requirements for Substitute Bonds specified in Section 3.19 hereof.

Section 7.4 No Remedy Exclusive . Unless otherwise expressly provided, no remedy conferred upon or reserved in this Agreement is intended to be exclusive of any other available remedy, but each remedy shall be cumulative and shall be in addition to other remedies given under the Sponsor Documents or existing at law or in equity. No delay or omission to exercise any right or power accruing under any Sponsor Document upon the happening of any event set forth in Section 7.1 shall impair any such right or power or shall be construed to be a waiver of such event, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Freddie Mac to exercise any remedy reserved to Freddie Mac in this Article, it shall not be necessary to give any notice, other than such notice as may be required under the applicable provisions of any of the other Sponsor Documents. The rights and remedies of Freddie Mac specified in this Agreement are for the sole and exclusive benefit, use and protection of Freddie Mac, and Freddie Mac is entitled, but shall have no duty or obligation to the Sponsor, the Guarantor, any Sponsor Affiliate, the Pledge Custodian, the Administrator or otherwise, (a) to exercise or to refrain from any right or remedy reserved to Freddie Mac hereunder, or (b) to cause the Pledge Custodian, the Administrator or any other party to exercise or to refrain from exercising any right or remedy available to it under any of the Sponsor Documents.

ARTICLE VIII

PLEDGE, SECURITY AND CUSTODY OF PLEDGED SECURITY COLLATERAL

Section 8.1 Pledged Security Collateral . Subject to the provisions of Section 8.18, the Sponsor hereby assigns and pledges to the Pledge Custodian, and grants to the Pledge Custodian, for the benefit of Freddie Mac, a continuing security interest in, and a lien on, all of the Sponsor’s right, title and interest in and to the following property (collectively, the “Pledged Security Collateral”):

(a) all Purchased Bonds;

(b) all Pledged Class A Certificates;

(d) all amounts held under the Stabilization Escrow Agreement (the "Stabilization Escrow");

(e) all interest and other amounts payable on, and all rights with respect to, any Purchased Bonds, Class B Certificates, Pledged Class A Certificates, the Stabilization Escrow and all amounts on deposit in the Custody Account (including, without limitation, all payments of principal and interest thereon); and

(f) all proceeds of any of the foregoing.

Section 8.2 Delivery of Pledged Security Collateral . At such time as a Class A Certificate becomes a Pledged Class A Certificate or a Bond becomes a Purchased Bond in

accordance with the Series Certificate Agreement, and this Agreement, the Sponsor shall be the beneficial owner of each of the Pledged Class A Certificates and Purchased Bonds, as applicable, which, regardless of the identity of the beneficial owner thereof, shall be held by the Pledge Custodian subject to the security interest created by the terms of this Agreement. All Pledged Security Collateral shall be deposited in the Custody Account (as defined in Section 8.11 below), except for the Stabilization Escrow which shall be held under the Stabilization Escrow Agreement. The Pledge Custodian shall cause the Purchased Bonds and the Pledged Class A Certificates, as applicable, to be registered in the name of the Pledge Custodian or, if transfers are recorded in book-entry form only, cause the appropriate records of the applicable financial intermediary to reflect that the Pledge Custodian holds a security interest in the Purchased Bonds and the Pledged Class A Certificates, as applicable, for the benefit of Freddie Mac.

Section 8.3 Amounts Received on Pledged Class A Certificates .

(a) Provided that (i) no Advance has been made pursuant to the Series Certificate Agreement and remains unreimbursed, (ii) all fees and any other amounts due and owing to Freddie Mac under this Agreement have been paid and (iii) the Pledge Custodian has not received a written notice from Freddie Mac that an Event of Default has occurred and is continuing under this Agreement, subject to the provisions of Sections 8.3(b) and 8.3(c) and the Series Certificate Agreement, then the Pledge Custodian shall pay to the Sponsor within one (1) Business Day of receipt all amounts received by the Pledge Custodian with respect to any Pledged Class A Certificates until all Pledged Class A Certificates are released in accordance with the terms of this Agreement.

(b) If an Advance has been made pursuant to the Series Certificate Agreement and remains unreimbursed, or if all fees and any other amounts due and owing to Freddie Mac under this Agreement have not been paid, or if the Pledge Custodian receives a written notice from Freddie Mac that an Event of Default has occurred and is continuing under this Agreement, the Pledge Custodian shall pay, first , to Freddie Mac within one (1) Business Day of receipt such amounts received by the Pledge Custodian with respect to any Pledged Class A Certificates as are equal to the amount of any such unreimbursed Advance or other amounts due and owing to Freddie Mac under this Agreement and, second , subject to the provisions of Section 8.3(c) and the Series Certificate Agreement, the balance, if any, to the Sponsor until all Pledged Class A Certificates are released from the Custody Account in accordance with the terms of this Agreement.

(c) Before making any payments to the Sponsor pursuant to this Section 8.3, the Administrator shall confirm the aggregate amounts of the Freddie Mac Fee, and the Remarketing Agent Fee paid directly, or caused to be paid, by the Sponsor since the immediately preceding date on which payments were made to the Sponsor pursuant to this Section 8.3 (the “Sponsor Paid Expenses”). For purposes of such confirmation, the Administrator shall be entitled to rely on a statement setting forth such Sponsor Paid Expenses (separately and in the aggregate) delivered by facsimile by the Sponsor to the Pledge Custodian at least two (2) Business Days prior to the date payments are to be made pursuant to this Section 8.3.

Section 8.4 Amounts Received on Purchased Bonds . The Pledge Custodian shall pay to Freddie Mac within one (1) Business Day all amounts received by the Pledge Custodian with respect to any Purchased Bonds, for credit to the obligations of the Sponsor hereunder, until such

Purchased Bonds are released to the Sponsor in accordance with the terms of Section 8.5 of this Agreement.

Section 8.5 Release of Purchased Bonds . If the Pledge Custodian has received written notice from Freddie Mac that Freddie Mac (provided no written notice shall be required when Freddie Mac is also acting as the Pledge Custodian) has been fully reimbursed by the Sponsor for all Obligations relating to a Purchased Bond (and Freddie Mac agrees to give such notice promptly following full reimbursement), that no Advances remain unreimbursed, that all fees and other amounts currently owing to Freddie Mac have been paid and that no Event of Default exists hereunder, the Pledge Custodian shall release such Purchased Bond together with the proceeds thereof remaining in the possession of the Pledge Custodian, if any, to the Sponsor. The release of such Purchased Bond shall be free and clear of the security interest created by this Agreement.

Section 8.6 Release of Pledged Class A Certificates . If the Pledge Custodian has received written notice from Freddie Mac (provided no written notice shall be required when Freddie Mac is also acting as the Pledge Custodian) that Freddie Mac has been fully reimbursed by the Sponsor for all Obligations relating to any Available Remarketing Class A Certificate (and Freddie Mac agrees to give such notice promptly following full reimbursement), the Pledge Custodian shall release such Available Remarketing Class A Certificate to the Administrator for delivery to the Sponsor or, if applicable, in connection with a remarketing to the purchasers of such Pledged Class A Certificates. The release of any Pledged Class A Certificate shall be free and clear of the security interest created by this Agreement. If directed in writing by Freddie Mac if an Event of Default exists, the Pledge Custodian shall deliver Pledged Class A Certificates that are not Available Remarketing Class A Certificates to the Administrator for cancellation in exchange for the Bonds related thereto as soon as such Bonds have been received by the Pledge Custodian from the Administrator. Any such Bonds so received shall be held hereunder as Purchased Bonds and notice thereof shall be provided to the Sponsor.

Section 8.7 Loss to Pledged Security Collateral . The Pledge Custodian shall not be liable for any loss with respect to any Pledged Security Collateral in its possession (except for any loss resulting from the Pledge Custodian’s willful misconduct or negligence), nor shall such loss diminish the Obligations.

Section 8.8 [Reserved] .

Section 8.9 Ownership Restrictions . Notwithstanding any provisions of this Agreement, ownership by and release to the Sponsor of any Pledged Security Collateral as described hereunder shall be in all respects subject to the provisions of any documents restricting or governing transfers and ownership of such Pledged Security Collateral.

Section 8.10 Representations and Warranties of the Sponsor to the Pledge Custodian . The Sponsor represents and warrants to the Pledge Custodian on the Closing Date and on each date that Purchased Bonds or Pledged Class A Certificates are delivered to the Pledge Custodian hereunder with respect to such Purchased Bonds and Pledged Class A Certificates that:

(a) it is the legal and beneficial owner of (and has full right and authority to pledge and assign) the applicable Pledged Security Collateral, free and clear of all liens,

security interests, options or other charges or encumbrances (collectively, “ Liens ”) except Liens granted pursuant to this Agreement; and

(b) upon delivery of the Pledged Security Collateral to the Pledge Custodian (or notice to the financial intermediary, if applicable), the Pledge Custodian shall have a valid, enforceable and first priority security interest in all of the Pledged Security Collateral securing the Obligations.

Section 8.11 Custody Account . On or prior to the Closing Date, the Pledge Custodian shall establish on its books and in its records the Custody Account. The Pledge Custodian shall maintain the Custody Account until the termination of this Agreement. At no time shall the Custody Account be maintained on behalf of, or be payable to, any person other than Freddie Mac. The Sponsor and any Class B Owner shall not have any right of withdrawal from the Custody Account. No property other than Pledged Security Collateral shall be deposited by the Pledge Custodian in the Custody Account. Segregation of the Pledged Security Collateral in the Custody Account from other property maintained with the Pledge Custodian shall be accomplished by appropriate identification on the Pledge Custodian’s books and records. The Pledge Custodian shall, at all times prior to the termination of this Agreement, maintain a record of all Purchased Bonds, Pledged Class A Certificates and other property in the Custody Account separately identifying such Purchased Bonds, Class B Certificates, Pledged Class A Certificates, or other property received with respect thereto as being subject to the security interest granted to the Pledge Custodian on behalf of Freddie Mac in this Agreement. So long as the internal procedures set forth in this Section are met by the Pledge Custodian, the Pledge Custodian may hold the Pledged Security Collateral in its vaults or in a commingled account (whether book-entry or otherwise) of the Pledge Custodian, as agent for its customers, with any bank, central depository or clearing organization as the Pledge Custodian’s subcustodian, in nominee name or otherwise.

Section 8.12 Appointment and Powers of the Pledge Custodian .

(a) The Sponsor acknowledges the appointment of Freddie Mac in its capacity as the Pledge Custodian as collateral agent for Freddie Mac in its corporate capacity under this Agreement, and authorizes the Pledge Custodian to take such actions on behalf of Freddie Mac, and to exercise such rights, remedies, powers and privileges under this Agreement as are specifically authorized to be exercised by the Pledge Custodian by the terms of this Agreement. The Pledge Custodian may execute any of its duties as collateral agent under this Agreement by or through its agents (but only with the prior written consent of Freddie Mac) or employees and shall be entitled to retain experts (including counsel) and to act in reliance upon the advice of such experts concerning all matters pertaining to the agencies created by this Agreement and its duties under this Agreement, and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel selected by it. The Pledge Custodian agrees to perform only those duties specifically set forth in this Agreement, and no implied duties or obligations shall be read into this Agreement. So long as Freddie Mac is acting as Pledge Custodian hereunder, it shall have no duty to provide notice to, or seek the consent or direction of, Freddie Mac in its corporate capacity.

(b) The Pledge Custodian shall have no duty to exercise any discretionary right, remedy, power or privilege granted to it by this Agreement, or to take any affirmative action

under this Agreement, unless directed to do so by Freddie Mac in writing, and shall not, without the prior written approval of Freddie Mac, consent to any departure by the Sponsor from the terms of this Agreement, waive any default on the part of the Sponsor under this Agreement or amend, modify, supplement or terminate, or agree to any surrender of, this Agreement or the Pledged Security Collateral; provided, that the Pledge Custodian shall not be required to take any action that exposes the Pledge Custodian to personal liability, or which is contrary to this Agreement or any other agreement or instrument relating to the Pledged Security Collateral or applicable law.

(c) Neither the Pledge Custodian nor any of its directors, officers, employees or agents, shall be liable for any action taken or omitted to be taken by it or them under this Agreement, or in connection with this Agreement, except the Pledge Custodian shall be responsible for its own negligence or willful misconduct; nor shall the Pledge Custodian be responsible for the validity, effectiveness, value, sufficiency or enforceability against the Sponsor of this Agreement or any other document furnished pursuant to this Agreement or in connection with this Agreement, or of the Pledged Security Collateral (or any part thereof), or for the perfection or priority of any security interest purported to be granted under this Agreement.

(d) The Pledge Custodian shall be entitled to rely on any communication, instrument, paper or other document believed by it in good faith to be genuine and correct and to have been signed or sent by the proper person or persons. The Pledge Custodian shall be entitled to assume that no Event of Default shall have occurred and be continuing, unless the Pledge Custodian has received written notice from Freddie Mac that such an Event of Default has occurred and is continuing and specifying the nature of the Event of Default. The Pledge Custodian may accept deposits from, lend money to, and generally engage in any kind of business with, the Sponsor and its Affiliates as if it were not the agent of Freddie Mac.

(e) None of the provisions contained in this Article VIII shall require the Pledge Custodian to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers under this Article VIII except for any liability of the Pledge Custodian arising from its own negligence or willful misconduct.

(f) Notwithstanding any other provisions in this Agreement to the contrary, in no event shall the Pledge Custodian be liable for special, consequential or punitive damages.

Section 8.13 Successor Pledge Custodian .

(a) If Freddie Mac no longer acts as Pledge Custodian, if required by the successor pledge custodian or Freddie Mac, the Sponsor and the successor pledge custodian shall execute a new pledge, security and custody agreement that contains substantially the same terms as Article VIII of this Agreement and which is in form and substance satisfactory to Freddie Mac. The Pledge Custodian acting under this Agreement may at any time resign by an instrument in writing addressed and delivered to the Sponsor and, if applicable, Freddie Mac (provided, however, that, if the Pledge Custodian (if other than Freddie Mac) is Administrator under

the Series Certificate Agreement, the Pledge Custodian must have resigned as Administrator under the Series Certificate Agreement), and may be removed at any time with or without cause by an instrument in writing duly executed by or on behalf of Freddie Mac.

(b) Freddie Mac shall have the right to appoint a successor Pledge Custodian upon any such resignation or removal by an instrument of substitution complying with the requirements of applicable law, or, in the absence of any such requirements, without formality other than appointment and designation in writing (which appointment, provided no Event of Default exists hereunder, shall be subject to the prior consent of the Sponsor, which consent shall not be unreasonably withheld). Upon the making and acceptance of such appointment, the execution and delivery by such successor Pledge Custodian of a ratifying instrument pursuant to which such successor Pledge Custodian agrees to assume the duties and obligations imposed on the Pledge Custodian by the terms of this Agreement, and the delivery to such successor Pledge Custodian of the Pledged Security Collateral and documents and instruments then held by the retiring Pledge Custodian, such successor Pledge Custodian shall thereupon succeed to and become vested with all the estate, rights, powers, remedies, privileges, immunities, indemnities, duties and obligations by this Agreement granted to or conferred or imposed upon the Pledge Custodian named in this Agreement, and any such appointment and designation shall not exhaust the right to appoint and designate further successor Pledge Custodians under this Agreement. No Pledge Custodian shall be discharged from its duties or obligations under this Agreement until the Pledged Security Collateral and documents and instruments then held by such Pledge Custodian shall have been transferred or delivered to the successor Pledge Custodian, and until such retiring Pledge Custodian shall have executed and delivered to the successor Pledge Custodian appropriate instruments assigning the retiring Pledge Custodian’s security or other interest in the Pledged Security Collateral to the successor Pledge Custodian. The retiring Pledge Custodian shall not be required to make any representation or warranty in connection with any such transfer or assignment.

(c) If no successor Pledge Custodian shall be appointed, as provided above, or, if appointed, shall not have accepted its appointment within thirty (30) days after the resignation or removal of the retiring Pledge Custodian, then the retiring Pledge Custodian may appoint a successor Pledge Custodian. Each such successor Pledge Custodian shall provide the Sponsor and Freddie Mac with its address, to be used for purposes of Section 9.6, in a notice complying with the terms of Section 9.6. Notwithstanding the resignation or removal of any retiring Pledge Custodian under this Agreement, the provisions of this Agreement shall continue to inure to the benefit of such Pledge Custodian in respect of any action taken or omitted to be taken by such Pledge Custodian in its capacity as such while it was Pledge Custodian under this Agreement.

Section 8.14 Qualifications of Pledge Custodian . Any Pledge Custodian at any time acting under this Agreement must at all times be either Freddie Mac or a bank or trust company organized under the laws of the United States of America or any state of the United States, having a combined capital stock, surplus and undivided profits aggregating at least $50,000,000 (or be the wholly-owned subsidiary of a corporation or other entity meeting such requirement) or have at least $500,000,000 in assets under trust management.

Section 8.15 Application of Proceeds . The Pledge Custodian shall apply the cash proceeds actually received from any sale or other disposition of the Pledged Security Collateral following an Event of Default as provided in Section 7.2(b).

Section 8.16 No Additional Waiver Implied by One Waiver . If any provision of this Article VIII is breached by the Sponsor and thereafter waived by the Pledge Custodian, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach under this Article VIII; provided that no waiver of any breach or default hereunder may be granted by the Pledge Custodian without the prior written consent of Freddie Mac. Any forbearance by the Pledge Custodian to demand payment for any amounts payable under this Article VIII shall be limited to the particular payment for which the Pledge Custodian forbears demand for payment and will not be deemed a forbearance to demand any other amount payable under this Article VIII.

Section 8.17 Cooperation . At any time, and from time to time after the date of this Agreement, the Sponsor shall, at the request of the Pledge Custodian or Freddie Mac (if not serving as Pledge Custodian), execute and deliver any instruments or documents, including U.C.C. financing and continuation statements in favor of the Pledge Custodian, reflecting the Pledge Custodian’s security interest in the Pledged Security Collateral, and shall take all such further actions as such party may reasonably request in order to consummate and make effective the transactions contemplated by this Agreement.

Section 8.18 Termination . The assignments, pledges and security interests created or granted by this Article VIII shall terminate contemporaneously with the termination of this Agreement, at which time the Pledge Custodian shall reassign, without recourse to, or any warranty whatsoever by the Pledge Custodian, and deliver to the Sponsor all Pledged Security Collateral and documents then in the custody or possession of the Pledge Custodian, and, if requested by the Sponsor, shall execute and deliver to the Sponsor for recording or filing in each office in which any assignment or financing statement relative to the Pledged Security Collateral or the agreements relating thereto, or any part thereof, shall have been filed or recorded, a termination statement or release under applicable law (including, if relevant, the U.C.C.) releasing the Pledge Custodian’s interest therein, and such other documents and instruments as the Sponsor may reasonably request, all without recourse to or any warranty whatsoever by the Pledge Custodian, and at the cost and expense of the Sponsor. Freddie Mac shall notify the Pledge Custodian in writing of any such termination, and the Pledge Custodian shall be entitled to rely upon such notice.

Section 8.19 Representations and Warranties of the Pledge Custodian . The Pledge Custodian represents and warrants to the Sponsor that:

(i) it has the power and authority to execute and deliver, and perform its obligations under, this Agreement;

(ii) all corporate action required to authorize the acceptance of its appointment as Pledge Custodian hereunder and the execution, delivery and performance of this Agreement and the effectuation of the transactions provided for in this Agreement has been duly taken; and

(iii) this Agreement has been duly and validly executed by the Pledge Custodian and constitutes the valid and binding obligation of the Pledge Custodian, enforceable against the Pledge Custodian in accordance with its terms, subject only to

bankruptcy and other similar laws affecting creditors’ rights generally and general principles of equity.

ARTICLE IX

MISCELLANEOUS

Section 9.1 Counterparts . This Agreement may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original, and all such counterparts shall constitute one and the same instrument.

Section 9.2 Amendments, Changes and Modifications . This Agreement may be amended, changed, modified, altered or terminated only by a written instrument or written instruments signed by the parties to this Agreement. No course of dealing among the Sponsor and Freddie Mac, nor any delay in exercising any rights hereunder, shall operate as a waiver of any rights of Freddie Mac hereunder. Unless otherwise specified in such waiver or consent, a waiver or consent given hereunder shall be effective only in the specific instance, and for the specific purpose for which given.

Section 9.3 Payment Procedure . All amounts due to Freddie Mac under Article III of this Agreement shall be paid to Freddie Mac. All such payments shall be paid in lawful currency of the United States of America and in immediately available funds in accordance with instructions given to the Sponsor by Freddie Mac to an account designated in writing by Freddie Mac before 2:00 p.m. (Washington, D.C. time) on the date when due, unless the Sponsor is otherwise instructed in writing by Freddie Mac.

Section 9.4 Payments on Business Days . In any case where the date of payment to Freddie Mac or the expiration of any time period hereunder occurs on a day which is not a Business Day, then such payment or expiration of such time period need not occur on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the day of maturity or expiration of such period, except that interest shall continue to accrue for the period after such date to the next Business Day.

Section 9.5 Governing Law; Severability . This Agreement shall be construed, and the rights and obligations of Freddie Mac and the Sponsor hereunder determined, in accordance with federal statutory or common law (“federal law”). Insofar as there may be no applicable rule or precedent under federal law and insofar as to do so would not frustrate the purposes of any provision of this Agreement and the Freddie Mac Act, the local law of the State of New York shall be deemed reflective of federal law. The parties agree that any legal actions among Freddie Mac and the Sponsor regarding each party hereunder shall be originated in the United States District Court in and for the Eastern District of Virginia, and the parties hereby consent to the jurisdiction and venue of said Court in connection with any action or proceeding initiated concerning this Agreement.

The invalidity or enforceability of any provision of this Agreement shall not affect the validity of any other provision, and all other provisions shall remain in full force and effect.

Section 9.6 Notices . All notices, directions, certificates or other communications hereunder to Freddie Mac or the Sponsor shall be deemed to be given (unless another form of notice shall be specifically set forth in this Agreement) on the Business Day following the date on which the same shall have been delivered to a national overnight delivery service (receipt of which to be evidenced by a signed receipt for overnight delivery service) with arrangements made for payment of all charges, for next Business Day delivery, addressed as set forth below. All notices, directions, certificates or other communications to the Pledge Custodian or the Administrator shall be given and addressed in accordance with this Agreement and the Series Certificate Agreement.

Freddie Mac:	Freddie Mac
	Director of Multifamily Loan Servicing, Mail Stop B2E
	8100 Jones Branch Drive
	McLean, VA 22102
	Facsimile: 703-714-3273
	Telephone: 703-903-2000
	E-mail:
	carl_mclaughlin@freddiemac.com, with a copy to
	mfla@freddiemac.com
with a copy to:
	Freddie Mac
	Director, Structured Transactions, Multifamily Asset Management, Mail Stop B4F 8100 Jones Branch Drive
	McLean, VA 22102
	Facsimile: 703-714-3003
	Telephone: 703-714-3194
	E-mail: MF_Structured_Transactions@freddiemac.com.


with a copy to
	Freddie Mac
	Attention: Senior Director, Multifamily Production, Mail Stop B4U
	8100 Jones Branch Drive
	McLean, VA 22102
	Facsimile: 703-714-3003
	Telephone: 703-903-2000
	E-mail: clayton_davis@freddiemac.com

Sponsor:	ATAX TEBS II, LLC
	1004 Farnam Street, Suite 400
	Omaha, NE 68102
	Attention: Chad L. Daffer
	Facsimile: (402) 930-3047
	Telephone: (402) 930-3085
With a copy to:

	Mark Hiatt
	1004 Farnam Street, Suite 400
	Omaha, Nebraska 68102
	Phone: 402.930.3085
	Fax: 402.930.3047

with a copy to:
	Kutak Rock LLP
	1650 Farnam Street
	Omaha, Nebraska 68102
	Attention: Conal Hession
	Facsimile: (402) 231-8806
	Telephone: (402) 346-1148

Section 9.7 Further Assurances and Corrective Instruments . To the extent permitted by law, the parties to this Agreement agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements to this Agreement and such further instruments as Freddie Mac may request and as may be reasonably required in the opinion of Freddie Mac or its counsel to effectuate the intention of or to facilitate the performance of this Agreement or any other Sponsor Document.

Section 9.8 Term of this Agreement . The term of this Agreement (the “Term”) shall continue in full force and effect, and Sponsor shall not be released from liability under this Agreement until the later of (a) the Terminating Mandatory Tender Date, (b) the date on which Freddie Mac has no further liability (accrued or contingent) under the Series Certificate Agreement and (c) the date on which Freddie Mac has been paid all amounts due it under this Agreement, under the other Sponsor Documents and otherwise with respect to the Obligations. Notwithstanding such termination, the provisions of Sections 2.1, 2.2, 2.4 and Section 3.12 hereof shall survive the expiration or termination of this Agreement.

Section 9.9 Assignments; Transfers; Third-Parties Rights . The Sponsor shall not assign this Agreement, or delegate any of its obligations hereunder, without the prior written consent of Freddie Mac. This Agreement may not be transferred in any respect without the prior written consent of Freddie Mac. Nothing in this Agreement shall confer any right upon the owner or holder of any Certificate or upon any other Person other than the parties hereto and their successors and permitted assigns.

Section 9.10 Headings . Article and section headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

Section 9.11 Limitation on Personal Liability .

(a) Except as otherwise provided in Section 9.11(b), neither the Sponsor nor its officers, directors, partners, members, managers or employees, shall have personal liability under this Agreement or any other Sponsor Document for the payment of the payment Obligations or for the performance of any other Obligations of the Sponsor under the Sponsor Documents, and Freddie Mac’s only recourse for the satisfaction or performance of the Obligations shall be

Freddie Mac’s exercise of its rights and remedies with respect to the UCC Collateral and any other collateral held by Freddie Mac as security for the Obligations. The foregoing notwithstanding, the Sponsor acknowledges that this Section 9.11(a) shall not be construed as limiting the coverage of, or any of Freddie Mac’s rights under, the Guaranty.

(b) The Sponsor shall be personally liable to Freddie Mac for its damages, losses or expenses, as applicable upon the occurrence of any of the following: (1) fraud or written material misrepresentation by the Sponsor, or any Sponsor Affiliate, or any officer, director, partner, member, manager or employee of the Sponsor, or any Sponsor Affiliate, in connection with the application for or creation of the Obligations or any request for any action or consent by Freddie Mac, (2) any costs and expenses incurred by Freddie Mac in connection with the collection of any amount for which the Sponsor is personally liable under this Section, including fees and out of pocket expenses of attorneys and expert witnesses and the costs of conducting any independent audit of the Sponsor’s and any Sponsor Affiliate’s books and records to determine the amount for which the Sponsor has personal liability; and (3) any Breach that is uncured by the Sponsor in the event the Sponsor does not fulfill its obligations under Section 2.4(c). In addition, the Sponsor shall be personally liable to Freddie Mac for indemnification obligations under Section 3.12.

(c) To the extent that the Sponsor has personal liability under this Section 9.11, Freddie Mac may exercise its rights against the Sponsor personally without regard to whether Freddie Mac has exercised any rights against the UCC Collateral or any other security or pursued any rights against any guarantor or pursued any other rights available to Freddie Mac under this Agreement, any other Sponsor Document or applicable law.

Section 9.12 Consent of Freddie Mac . Whenever Freddie Mac shall have any right or option to exercise any discretion, to determine any matter, to accept any presentation or to approve any matter, such exercise, determination, acceptance or approval shall, unless otherwise specifically provided, be in Freddie Mac’s sole and absolute discretion.

Section 9.13 Disclaimer; Acknowledgments . Approval by Freddie Mac of the Sponsor, any Sponsor Affiliate, the Remarketing Agent, the Sponsor Documents, any Owner Documents, any Mortgaged Property, the Bonds, or otherwise shall not constitute a warranty or representation by Freddie Mac as to any matter. Nothing set forth in this Agreement, in any of the other Sponsor Documents or in the subsequent conduct of the parties shall be deemed to constitute Freddie Mac as the partner or joint venturer of the Sponsor, any Sponsor Affiliate, or any Person for any purpose whatsoever.

Section 9.14 Entire Agreement . This Agreement and the Sponsor Documents constitute the entire contract between the parties relative to the subject matter hereof. Any previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement and the Sponsor Documents. Nothing in this Agreement or the Sponsor Documents, expressed or implied, is intended to confer upon any party, other than the parties hereto and thereto, any rights, remedies, obligations or liabilities under or by reason of this Agreement or the Sponsor Documents; provided, however, that as to Persons other than Freddie Mac and the Sponsor that are parties to any of the Sponsor Documents, such Persons shall not have any rights, remedies, obligations or liabilities under this Agreement or any of the Sponsor Documents except under such Sponsor Documents to which such Persons are directly parties.

Section 9.15 Survival of Representation and Warranties . All statements contained in any Sponsor Document, or in any certificate, financial statement or other instrument delivered by or on behalf of the Sponsor pursuant to or in connection with this Agreement (including but not limited to any such statement made in or in connection with any amendment hereto or thereto) shall constitute representations and warranties made under this Agreement. All representations and warranties made under this Agreement (a) shall be made and shall be true at and as of the Closing Date and (b) shall survive the execution and delivery of this Agreement, regardless of any investigation made by Freddie Mac or on its behalf.

Section 9.16 Waiver of Claims . IN ORDER TO INDUCE FREDDIE MAC TO EXECUTE AND DELIVER THE SERIES CERTIFICATE AGREEMENT, THE SPONSOR HEREBY REPRESENTS AND WARRANTS THAT IT HAS NO CLAIMS, SET-OFFS OR DEFENSES AS OF THE CLOSING DATE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR IN CONNECTION WITH ANY OF THE OTHER SPONSOR DOCUMENTS. TO THE EXTENT ANY SUCH CLAIMS, SET-OFFS OR DEFENSES MAY EXIST, WHETHER KNOWN OR UNKNOWN, THEY ARE EACH HEREBY WAIVED AND RELINQUISHED IN THEIR ENTIRETY.

Section 9.17 Waivers of Jury Trial . THE SPONSOR AND FREDDIE MAC EACH (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP BETWEEN THE SPONSOR AND FREDDIE MAC AS CREDIT FACILITY PROVIDER, LIQUIDITY FACILITY PROVIDER, PLEDGE CUSTODIAN AND ADMINISTRATOR THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

[Signatures follow]

IN WITNESS WHEREOF , the Sponsor and Freddie Mac have executed this Reimbursement Agreement as of the day and year first above written.

	FEDERAL HOME LOAN MORTGAGE CORPORATION
	By:	/s/ Clayton A. Davis
		Clayton A. Davis Senior Director, Multifamily Production

[Signature page to ATAX II TEBS Reimbursement Agreement]

ATAX TEBS II, LLC , a Delaware limited liability company
By:	AMERICA FIRST MULTIFAMILY INVESTORS, L.P., a Delaware limited partnership
	By:	AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARNTERSHIP TWO, a Delaware limited partnership, its general partner

		By:	THE BURLINGTON GROUP, LLC, a Delaware limited liability company, its general partner

		By:	/s/ Mark Hiatt
			Mark Hiatt
			Chief Operating Officer

[Counterpart Signature page to ATAX II TEBS Reimbursement Agreement]

SCHEDULE A

MORTGAGED PROPERTIES AND YIELD MAINTENANCE PERIOD

Mortgaged Property, Location	Yield Maintenance End Date
Arbors of Hickory Ridge Apartments; Memphis, Tennessee	1/1/2029
Copper Gate Apartments; Lafayette, Indiana	12/1/2023
Dublin Apartments; San Antonio, Texas	8/1/2030
Greens of Pine Glen Apartments; Durham County, North Carolina	10/1/2022
Harden Ranch Apartments; Salinas, California	3/1/2027
Huebner Oaks Apartments; San Antonio, Texas	3/1/2030
Kingswood Apartments; San Antonio, Texas	8/1/2030
Las Colinas Apartments; San Antonio, Texas	3/1/2030
Perrin Crest Apartments; San Antonio, Texas	3/1/2030
The Palms at Premier Park Apartments; Columbia, South Carolina	2/1/2025
Tyler Park Townhomes Apartments; Greenfield, California	1/1/2027
Waterford Apartments; San Antonio, Texas	8/1/2030
Westside Village Apartments; Shafter, California	1/1/2027

A-1

SCHEDULE A-1

BONDS

1. Arbors of Hickory Ridge Apartments

The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee

Multifamily Housing Revenue Refunding Bonds

(Arbors of Hickory Ridge Project)

Series 2012

$11,450,000 Outstanding Amount Deposited

2.	Copper Gate Apartments

Indiana Housing and Community Development Authority

Multifamily Housing Revenue Bonds, Series 2013A

(Copper Gate Apartments Project)

$5,220,000 Outstanding Amount Deposited

3.	Dublin Apartments

Bexar County Housing Finance Corporation

Multifamily Housing Revenue Bonds

(Dublin Apartments Project)

Senior Series 2013A

$7,800,000 Outstanding Amount Deposited

4.	Greens of Pine Glen Apartments

Housing Authority of the City of Durham

Multifamily Housing Revenue Bonds

(Greens of Pine Glen Project)

Senior Series 2012A

$8,396,000 Outstanding Amount Deposited

5.	Harden Ranch Apartments

California Statewide Communities Development Authority

Multifamily Housing Revenue Bonds

(Harden Ranch Apartments Project)

2013 Series V-1

$6,960,000 Outstanding Amount Deposited

6.	Huebner Oaks Apartments

Bexar County Housing Finance Corporation

Multifamily Housing Revenue Bonds

A-1-1

(Huebner Oaks Apartments Project)

Senior Series 2013A

$16,525,000 Outstanding Amount Deposited

7.	Kingswood Apartments

Bexar County Housing Finance Corporation

Multifamily Housing Revenue Bonds

(Kingswood Apartments Project)

Senior Series 2013A

$5,389,000 Outstanding Amount Deposited

8.	Las Colinas Apartments

Bexar County Housing Finance Corporation

Multifamily Housing Revenue Bonds

(Las Colinas Apartments Project)

Senior Series 2013A

$10,000,000 Outstanding Amount Deposited

9.	Perrin Crest Apartments

Bexar County Housing Finance Corporation

Multifamily Housing Revenue Bonds

(Perrin Crest Apartments Project)

Senior Series 2013A

$9,700,000 Outstanding Amount Deposited

10.	The Palms at Premier Park Apartments

Public Finance Authority

Multifamily Housing Revenue Bonds

(The Palms at Premier Park Apartments Project)

Series 2013

$20,152,000 Outstanding Amount Deposited

11.	Tyler Park Townhomes Apartments

California Statewide Communities Development Authority

Multifamily Housing Revenue Bonds

(Tyler Park Townhomes Apartments Project)

2013 Series W-1

$6,075,000 Outstanding Amount Deposited

12.	Waterford Apartments

Bexar County Housing Finance Corporation

A-1-2

Multifamily Housing Revenue Bonds

(Waterford Apartments Project)

Senior Series 2013A

$6,735,000 Outstanding Amount Deposited

13.	Westside Village Apartments

California Statewide Communities Development Authority

Multifamily Housing Revenue Bonds

(Westside Village Apartments Project)

2013 Series X-1

$3,970,000 Outstanding Amount Deposited

A-1-3

SCHEDULE A-2

PRE-SELECTED BONDS

1. Arbors of Hickory Ridge Apartments

$11,450,000

The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee

Multifamily Housing Revenue Refunding Bonds

(Arbors of Hickory Ridge Project)

Series 2012

2. Copper Gate Apartments

$5,220,000

Indiana Housing and Community Development Authority

Multifamily Housing Revenue Bonds, Series 2013A

(Copper Gate Apartments Project)

3. Greens of Pine Glen Apartments

$8,515,000

Housing Authority of the City of Durham

Multifamily Housing Revenue Bonds

(Greens of Pine Glen Project)

Senior Series 2012A

4. The Palms at Premier Park Apartments

$20,152,000

Public Finance Authority

Multifamily Housing Revenue Bonds

(The Palms at Premier Park Apartments Project)

Series 2013

A-2-1

SCHEDULE B

QUALIFICATIONS TO REPRESENTATIONS AND WARRANTIES

With respect to representation 2.1(pp) Exemption from Real Property Taxes:

1. Arbors of Hickory Ridge

2. Copper Gate

3. Greens at Pine Glen

4. Colinas Chase Hill (property has a partial real property tax exemption—50% of the appraised value of property)

5. Huebner Oaks (property has a partial real property tax exemption—¬¬50% of the appraised value of property)

6. Kingswood Apartments (property has a partial real property tax exemption—¬¬50% of the appraised value of property)

7. Perrin Crest Apartments (property has a partial real property tax exemption—¬¬50% of the appraised value of property)

8. Dublin Apartments (property has a partial real property tax exemption—¬¬50% of the appraised value of property)

9. Waterford (property has a partial real property tax exemption—¬¬50% of the appraised value of property)

10. Tyler Park (property has a real property tax exemption—subject to separate special taxes and assessments)

11. Harden Ranch (property has a real property tax exemption—subject to separate special taxes and assessments)

12. Westside Village (property has a real property tax exemption—subject to separate special taxes and assessments)

With respect to representation 2.1(ss) Tax Credit Matters:

1. Greens at Pine Glen

2. Copper Gate

3. Harden Ranch

4. Tyler Park

5. Westside Village

B-1

EXHIBIT I

TAX CREDIT AGENCY LETTERS APPLICABLE TO MORTGAGED PROPERTIES

EXHIBIT II

PREPAYMENT SCHEDULES

MORTGAGED PROPERTIES AND FIRST OPTIONAL REDEMPTION DATES

Mortgaged Property, Location	First Optional Redemption Date at Par
Arbors of Hickory Ridge Apartments; Memphis, Tennessee	1/1/2029
Copper Gate Apartments; Lafayette, Indiana	12/1/2023
Dublin Apartments; San Antonio, Texas	8/1/2030
Greens of Pine Glen Apartments; Durham County, North Carolina	10/1/2022
Harden Ranch Apartments; Salinas, California	3/1/2027
Huebner Oaks Apartments; San Antonio, Texas	3/1/2030
Kingswood Apartments; San Antonio, Texas	8/1/2030
Las Colinas Apartments; San Antonio, Texas	3/1/2030
Perrin Crest Apartments; San Antonio, Texas	3/1/2030
The Palms at Premier Park Apartments; Columbia, South Carolina	2/1/2025
Tyler Park Townhomes Apartments; Greenfield, California	1/1/2027
Waterford Apartments; San Antonio, Texas	8/1/2030
Westside Village Apartments; Shafter, California	1/1/2027

EXHIBIT III

BASE RATE QUOTE REQUEST

Federal Home Loan Mortgage Corporation

8100 Jones Branch Drive

Mail Stop B4F

McLean, Virginia 22102

Attention: Director of Multifamily Loan Servicing

Re: Freddie Mac Multifamily M Certificates Series M-031

Pursuant to Section 3.20(a) of the Bond Exchange, Reimbursement, Pledge and Security Agreement dated as of July 1, 2014 (the “Reimbursement Agreement”) by and between the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and ATAX TEBS II, LLC (the “Sponsor”), the Sponsor hereby requests that Freddie Mac provide a quote for the Base Rate that would be effective for the ensuing Freddie Mac Liquidity Pricing Term.

Capitalized terms used in this notice not otherwise defined shall have their respective meaning set forth in the Reimbursement Agreement.

Date: ____________________

ATAX TEBS II, LLC , a Delaware limited liability company, as Sponsor


	By:
		Name:
		Title:

EXHIBIT IV

LIQUIDITY ELECTION NOTICE

Federal Home Loan Mortgage Corporation

8100 Jones Branch Drive

Mail Stop B4F

McLean, Virginia 22102

Attention: Director of Multifamily Loan Servicing

Re: Freddie Mac Multifamily M Certificates Series M-031

Pursuant to Section 3.20(b) of the Bond Exchange, Reimbursement, Pledge and Security Agreement dated as of July 1, 2014 (the “Reimbursement Agreement”) by and between the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and ATAX TEBS II, LLC (the “Sponsor”), the Sponsor hereby notifies Freddie Mac of its election to:

[SELECT ONE OF THE FOLLOWING]

[___] Accept the Base Rate Quote for the ensuing Liquidity Pricing Term.

[___] Convert the interest rate on the Class A Certificates to a Term Reset Rate pursuant to the terms of the Series Certificate Agreement and the Reimbursement Agreement.

[___] Fund a Release Event with respect to all (but not less than all) of the Bonds on the first Optional Series Pool Release Date pursuant to Section 3.21 of the Reimbursement Agreement.

Capitalized terms used in this notice not otherwise defined shall have their respective meaning set forth in the Reimbursement Agreement.

Date:____________________

ATAX TEBS II, LLC , a Delaware limited liability company, as Sponsor


	By:
		Name:
		Title:

EXECUTION

[FM/ATAX II TEBS]

Exhibit A to Standard Terms

DEFINITIONS

“ Accreted Price ” means, with respect to any Bond, the Deposit Price, adjusted for (i) the amortization of bond premium or the accrual of original issue discount, if any, as determined under applicable Code provisions, and (ii) the Accrued Market Discount, if any, calculated with respect to such Bond.

“ Accrual Commencement Date ” means the date upon which interest begins accruing on the Certificates.

“ Accrual Period ” means (i) as to the First Payment Date, the period that begins on (and includes) the Accrual Commencement Date, and ends on (and excludes) the first day of the month in which such Payment Date occurs and (ii) as to any other Payment Date, the calendar month preceding that Payment Date. The Accrual Period for each Payment Date ends fifteen days prior to the related Payment Date except when the fifteenth day is not a Business Day, in which event the Accrual Period ends more than fifteen days in advance of such Payment Date.

“ Accrued Interest on the Bonds ” means the amount set forth in the Series Certificate Agreement representing the portion of the interest on the Bonds that accrued prior to the Accrual Commencement Date.

“ Accrued Market Discount ” means, with respect to any Bond that is a “market discount bond” as defined in Section 1278(a) of the Code, determined as of the date such Bond is transferred to the Series Pool, the accrued market discount as defined in Section 1276(b) of the Code, calculated on a straight-line basis (without regard to whether the election set forth in Section 1276(b)(2)(A) of the Code had been made) and assuming no election has been made under Section 1278(b) of the Code.

“ Act of Bankruptcy ” shall mean an Owner or the Sponsor, as applicable, (i) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (iv) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy, insolvency, reorganization, liquidation or dissolution law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation; (v) has a resolution passed for its winding-up or liquidation (other than pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes subject to the appointment of a receiver, administrator, conservator, liquidator, custodian, trustee or other similar official for it or for all or substantially all of its assets; (vii) has a secured party or other creditor take possession of all or substantially all of its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all of its assets; (viii) causes or is subject to any event with respect

to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in the preceding clauses (i) to (vii) (inclusive); or (ix) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

“ Adjusted Capital Account Deficit ” will mean, with respect to any Holder, the deficit balance, if any, in such Holder’s Capital Account (as hereinafter defined) as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

(a) Credit to such Capital Account any amounts which such Holder is obligated to restore or is deemed to be obligated to restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and

(b) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.

“ Administrator ” means Freddie Mac, until a successor Person has been appointed the Administrator pursuant to the applicable provisions of the Series Certificate Agreement, and thereafter “Administrator” means such successor Person.

“ Administrator Advance ” means an advance by the Administrator to Holders of Class A Certificates pursuant to Section 4.09 of the Standard Terms.

“ Administrator Advance Charges ” means charges for the benefit of the Administrator in the aggregate amount of the Daily Administrator Advance Charges.

“ Administrator Fee ” means, if applicable, the annual amount payable to the Administrator (if other than Freddie Mac), determined by multiplying the Administrator Fee Rate by the Aggregate Outstanding Bond Balance.

“ Administrator Fee Rate ” means, if applicable, the rate set forth in the Series Certificate Agreement or provided by notice from Freddie Mac to the Administrator and the Sponsor.

“ Affected Bond ” means, (i) in the case of a Tender Option Termination Event relating to a rating downgrade as described in clause (c) of the definition of Tender Option Termination Event, each Bond; and (ii) in the case of a Tender Option Termination Event relating to a failure to pay or an event of taxability as described in clauses (a) or (b) of the definition of Tender Option Termination Event, each Bond giving rise to such event.

“ Affected Certificate ” means, upon the occurrence of a Tender Option Termination Event, each Certificate until the distributions required by Section 13.04 of the Standard Terms have been made.

“ Affiliate ” means, with respect to any specified Person, any other Person controlling, controlled by or under common control with such specified Person. For the purposes of this definition, “control”, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the

ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Aggregate Outstanding Bond Balance ” means the aggregate of the Outstanding Bond Balances.

“ Aggregate Outstanding Certificate Balance ” means, as of any date of determination, the sum of the Aggregate Outstanding Class A Certificate Balance and the Aggregate Outstanding Class B Certificate Balance.

“ Aggregate Outstanding Class A Certificate Balance ” means, as of any date of determination, the aggregate of the Current Class A Certificate Balances.

“ Aggregate Outstanding Class B Certificate Balance ” means, as of any date of determination, the aggregate of the Current Class B Certificate Balances.

“ Agreement ” means the Series Certificate Agreement, into which is incorporated the Standard Terms, including all exhibits, schedules, supplements, appendices and amendments to each.

“ Asset(s) ” and “ Series Pool Asset(s) ” means (i) the Bonds and all Bond Payments made from and after the Date of Original Issue and certificates and instruments, if any, representing the Bonds, (ii) the Distribution Account (including any amounts held therein), (iii) the Credit Enhancement and the Liquidity Facility and (iv) all proceeds of the foregoing of every kind and nature.

“ Authorized Denomination ” means, with respect to any Class A Certificate, an initial certificate balance of at least $5,000 with integral multiples of $5,000 in excess thereof, and with respect to any Class B Certificate, an initial certificate balance of at least $5,000, subject to, with respect to any Certificate, necessary adjustments due to redemptions after the Date of Original Issue.

“ Available Funds ” means with respect to any Payment Date, the sum of the deposit into the Distribution Account or related subaccount pursuant to Section 4.02 of the Standard Terms and any other funds available to the Administrator for payment to the Holders, including Administrator Advances; provided that Administrator Advances may only be treated as Available Funds for the purpose of making payments of the Required Class A Certificate Interest Distribution Amount.

“ Available Interest Amount ” means, as of any date of determination, accrued and to accrue Bond interest from the beginning of the Accrual Period to the next Reset Date, described as follows. Available Interest Amount is only used in the context of establishing the Maximum Reset Rate where all the Bonds are not fixed rate bonds and is only calculated on a Reset Date. Accrued and to accrue Bond interest will be determined on a Bond by Bond basis as the product of the Bond Rate and the related Outstanding Bond Balance, calculated for each preceding day in the applicable Accrual Period and each day up to and including the next Reset Date; however, if the Bond Rate has not been determined for any day up to and including the next Reset Date, then the Bond Rate for such day will be deemed to be the minimum stated rate of interest on the

Bonds. Available Interest Amount will never be more than interest on the Bonds regardless of any calculation previously made. Available Interest Amount is expressed as the variable “AIA” in the following formula:1

AIA = AI+TAI

where

AI =

TAI =

accrued interest for each preceding day in the Accrual Period

interest that will accrue for each day up to and including the next Reset Date (but only at the minimum stated interest unless the interest rate is known)

“ Available Remarketing Class A Certificates ” means (i) Tendered Class A Certificates, (ii) Class A Certificates subject to Mandatory Tender (A) on a Term Effective Date (that is not a Reset Rate Method Change Date), (B) on a Reset Rate Method Change Date relating to a change (but not a continuation) in the Reset Rate Method from a Weekly Reset Rate Method or a Monthly Reset Rate Method to a Monthly Reset Rate Method or a Term Reset Rate Method, (C) on a Reset Rate Method Change Date relating to a change (but not a continuation) in the Reset Rate Method from a Term Reset Rate Method or a Monthly Reset Rate Method to a Weekly Reset Rate Method or Monthly Reset Rate Method, (D) the date on which an amendment to the Standard Terms described in Section 12.01(b) becomes effective and (E) the date on which a successor Sponsor is appointed pursuant to Section 3.08 of the Standard Terms, and (iii) Class A Certificates with respect to which the Holder thereof has exercised the Optional Disposition

1 Example 1:

Assumptions:

1. Bonds bear variable interest tied to the SIFMA Municipal Swap Index (“SIFMA”) are reset on the same day as a Weekly Reset Date.

2. The applicable Weekly Reset Date is the beginning of the third reset period following the beginning of the Accrual Period, so there are 14 days of prior interest accrual.

3. During the first accrual week, SIFMA interest was 2.0%; during the second accrual week, SIFMA interest was 2.5%. SIFMA is established for the third week at 2.3%.

4. $100,000,000 in Outstanding Bond Balance

Interest Accruals:

1. First Week = $100,000,000 times 2% divided by 365 times 7 = $38,356.16

2. Second Week = $100,000,000 times 2.5% divided by 365 times 7 = $47,945.20

3. Third Week = $100,000,000 times 2.3% divided by 365 times 7 = $44,109.58

So Available Interest Amount = $130,410.94

Example 2:

Same assumptions except that the Reset Date is a Monthly Reset Date in a 31 day month.

Interest accruals are the same. Note that because we cannot determine the SIFMA for the last 10 days of the month, no additional accrued interest on the Bonds can be projected and taken into account.

So Available Interest Amount is the same as Example 1, or $130,410.94

Example 3:

Same assumptions except that the Reset Date is a Term Reset Date with a period of 6 months.

Interest accruals are the same as in Example 1.

So Available Interest Amount is the same as Example 1, or $130,410.94

Right. Available Remarketing Class A Certificates do not include Pledged Class A Certificates that are purchased in connection with a Special Adjustment Event.

“ Bankruptcy Code ” means the United States Bankruptcy Code of 1978, as amended in 1986 and as it may be further amended from time to time (Title 11 of the United States Code), and any successor statute thereto.

“ Bankruptcy Coverage Payments ” means any payments that are made in accordance with the Credit Enhancement with respect to amounts recovered after disgorgement pursuant to the Bankruptcy Code or under any applicable banking laws.

“ Bond Counsel ” means any attorney at law, or firm of attorneys, of nationally recognized standing in matters pertaining to the exclusion from gross income of interest on bonds for federal income tax purposes, issued by states and political subdivisions, and which is acceptable to Freddie Mac and to the Sponsor.

“ Bond Documents ” means, with respect to any Bond, the trust indenture, ordinance, resolution and any other agreements or instruments pursuant to which such Bond has been issued or secured (including any loan agreement, note, mortgage, deed of trust or any rate cap or interest rate protection agreement delivered to the applicable Bond Trustee) or governing the operation of the Project financed by such Bond, as the same may be amended or supplemented from time to time.

“ Bondholder Representative ” means Freddie Mac, in its capacity as bondholder representative, controlling party or majority owner of the Bonds, as applicable, under the Bond Documents.

“ Bond Interest Payment Date ” means the dates in each year on which interest is paid on the Bonds. Such dates are set forth in the Series Certificate Agreement.

“ Bond Mortgage ” means, with respect to each Project, the multifamily deed of trust or mortgage, as applicable, assignment of rents, security agreement and fixture filing delivered on the closing date for the related Bonds, together with all riders and addenda, from the Owner of the Project granting a first priority mortgage and security interest in the Project to secure the repayment of the Bond Mortgage Loan, which Bond Mortgage has been assigned by the Issuer to the Bond Trustee pursuant to the Indenture.

“ Bond Mortgage Loan ” means, with respect to each issue of Bonds, the loan by the Issuer to the Owner with respect to the Project in an amount equal to the aggregate principal amount of such issue of Bonds.

“ Bond Mortgage Documents ” means, with respect to each Bond Mortgage Loan, the Bond Mortgage, the Bond Mortgage Note, the LURA, the Loan Agreement and any related documents evidencing the obligations of the Owner under the Bond Mortgage Note or securing payment or performance of such obligations or otherwise pertaining to such obligations, including any HUD Document, as each such document, agreement or instrument may be amended, modified or supplemented from time to time.

“ Bond Mortgage Note ” means, with respect to each Bond Mortgage Loan, the promissory note from the Owner to the Issuer, including all riders and addenda, evidencing the Owner’s obligation to repay the Bond Mortgage Loan, as the same may be amended, modified or supplemented from time to time, which Bond Mortgage Note has been assigned by the Issuer to the Bond Trustee.

“ Bond Payment Subaccount—Holdback ” means, if applicable, the subaccount of the Distribution Account established pursuant to Section 4.02(a) of the Standard Terms into which payments up to the amount of the Holdback Requirement are deposited by the Administrator.

“ Bond Payment Subaccount—Interest ” means the subaccount of the Distribution Account established pursuant to Section 4.02(a) of the Standard Terms into which interest payments on the Bonds are deposited by the Administrator.

“ Bond Payment Subaccount—Principal ” means the subaccount of the Distribution Account established pursuant to Section 4.02(a) of the Standard Terms into which principal and Bond Redemption Premium payments on the Bonds and Hypothetical Gain Share are deposited by the Administrator.

“ Bond Payments ” means any payments of principal, Bond Redemption Premium or interest on any Bond (whether derived from amounts paid by or on behalf of the Issuer of or other obligor on the Bond, Freddie Mac, or otherwise) other than Bankruptcy Coverage Payments.

“ Bond Rate ” means, with respect to any Bond, as of any date of determination, the then applicable rate of interest payable on such Bond.

“ Bond Redemption Date ” means, with respect to any Bond, the date on which such Bond is redeemed pursuant to the applicable Bond Documents.

“ Bond Redemption Premium ” means, with respect to any Bond, any portion of a payment made in connection with the redemption of all or a portion of the Outstanding Bond Balance that is in excess of the sum of (i) the Outstanding Bond Balance or the portion of such Outstanding Bond Balance that was redeemed, as the case may be, and (ii) interest accrued at the Bond Rate on the applicable Outstanding Bond Balance (if any) from and including the last Bond Interest Payment Date to but excluding the Bond Redemption Date.

“ Bond Trustee ” means, with respect to any Bond, the financial institution designated as trustee for such Bond and any separate paying agent therefor, pursuant to the applicable Bond Documents. The term “Bond Trustee” will also be deemed to refer to, with respect to any series of Bonds, any separate paying agent for that series of Bonds.

“ Bonds ” means, collectively, the securities identified in the Series Certificate Agreement on the Date of Original Issue and “Bond” shall mean any one of such Bonds. The term “Bonds” shall include municipal securities as well as custodial receipts, trust receipts or any other similar instrument evidencing an ownership interest in municipal securities held in a pass-through arrangement.

“ Business Day ” means any day other than (i) a Saturday or a Sunday, (ii) a day on which federal government offices located in the District of Columbia generally are closed, (iii) a day on which the Federal Reserve Bank of New York (or other agent acting as Freddie Mac’s fiscal agent) is authorized or obligated by law or executive order to remain closed, (iv) a day on which the Freddie Mac permanent home office is closed, (v) a day on which DTC is authorized or obligated by law or executive order to remain closed or (vi) a day on which (a) banking institutions in the City of New York or in the city in which the principal office of the Administrator, the Remarketing Agent or Freddie Mac is located are closed or (b) the New York Stock Exchange is authorized or obligated by law or executive order to be closed.

“ Capital Account ” means the capital account established and maintained for each Holder pursuant to Section 11.02 of the Standard Terms.

“ Capital Account Balance ” means the Capital Account balance for each Holder adjusted pursuant to Section 11.02 of the Standard Terms for all events having occurred immediately prior to the time of determination.

“ Capital Contribution ” will mean the amount of money, and the Fair Market Value of any property other than money, contributed to the Series Pool pursuant to Article II of the Standard Terms by a Holder or any amount paid by the Sponsor pursuant to Section 3.04 or 3.05 of the Standard Terms or otherwise contributed to the Series Pool by the Sponsor. Any amounts paid by the initial purchasers of Certificates to acquire Certificates, including any amounts representing accrued interest, will be deemed to have been contributed to the Series Pool.

“ Capital Gains ” and “ Capital Losses ” will mean gains or losses from the Disposition of Bonds but will not include Market Discount Gain.

“ Certificate Payment Amount ” means for any Payment Date and Class of Certificates, the aggregate payment to be made to Holders of such Class of Certificates, which payment is equal to the amounts provided in Article IV of the Standard Terms.

“ Certificate Register ” means the register maintained by the Certificate Registrar that provides for the registration of Certificates and transfers of Certificates.

“ Certificate Registrar ” means the certificate registrar and transfer agent with respect to the Certificates, which will be Freddie Mac unless otherwise indicated in the Series Certificate Agreement.

“ Certificates ” means the Class A Certificates and the Class B Certificates.

“ Class ” means the class designation, either Class A or Class B, borne by any Certificate.

“ Class A Certificate ” means a Certificate designated as such issued pursuant to the Series Certificate Agreement, evidencing an ownership interest in the Bonds.

“ Class A Certificate Notional Accelerated Principal Paydown Amount ” means, if specified as applicable in the Series Certificate Agreement, with respect to any Payment Date, to the extent of remaining Available Funds, the amount identified on the Notional Accelerated

Principal Amortization Schedule that corresponds to such Payment Date, together with all such amounts for prior Payment Dates remaining unpaid. To the extent remaining Available Funds are not sufficient to pay in full to the Holders of Class A Certificates such current and prior amounts, any unpaid amounts will be deferred until the next Payment Date.

“ Class A Holder ” means a Holder of a Class A Certificate.

“ Class B Certificate ” means a Certificate designated as such issued pursuant to the Series Certificate Agreement, evidencing an ownership interest in the Bonds.

“Class Factor” means for any month with respect to the Class A Certificates, a truncated eight-digit decimal that, when multiplied by the Initial Certificate Balance of such Class, will equal its Current Certificate Balance. The Class Factor for any month reflects the payments of principal to be made on the Payment Date in the same month.

“ Clean-Up Event ” means a Mandatory Tender of the Class A Certificates pursuant to Section 6.04 of the Standard Terms, at the election of Freddie Mac or the Sponsor at any time after the Aggregate Outstanding Bond Balance is not more than 5% of the Aggregate Outstanding Bond Balance on the Date of Original Issue.

“ Clean-Up Notice ” means the notice given to the Administrator pursuant to Section 7.06 of the Standard Terms.

“ Code ” means the Internal Revenue Code of 1986, as it may be amended from time to time, and any successor statute thereto.

“ Commission ” means the Securities and Exchange Commission, as constituted from time to time, created under the Securities Exchange Act.

“ Commitment Price ” means, with respect to any date of determination, the highest cash purchase price for the Bonds subject to sale or distribution on such date obtained by the Administrator by soliciting in good faith at least three bids to purchase such Bonds from Persons (other than the Administrator, the Remarketing Agent, Freddie Mac, any Holder of a Class B Certificate, or any Affiliate of any such Person) that customarily provide such bids, including, but not limited to, investment dealers and brokers that customarily deal in municipal bonds.

“ Covered Payment ” means those certain payments to be made by Freddie Mac if required in connection with an Owner Act of Bankruptcy pursuant to the Credit Enhancement.

“ Credit Enhancement ” means the guaranty of Freddie Mac set forth in Section 4.11 of the Standard Terms.

“ Current Certificate Balance ” means the Current Class A Certificate Balance or the Current Class B Certificate Balance, as appropriate.

“ Current Class A Certificate Balance ” means with respect to any Class A Certificate, as of any date of determination, its Initial Certificate Balance minus the sum of all amounts previously distributed to the Holder of such Certificate (or any Predecessor Certificate) with

respect to principal payments on the Bonds, payments arising from a Release Event, and Class A Certificate Notional Accelerated Principal Paydown Amounts, if applicable.

“ Current Class B Certificate Balance ” means with respect to any Class B Certificate, as of any date of determination, its Initial Certificate Balance thereof (i) minus the sum of all amounts previously distributed to the Holder of such Certificate (or any Predecessor Certificate) with respect to principal payments on the Bonds and payments arising from a Release Event; (ii) plus, (A) on each Payment Date, the amount obtained by multiplying the Class A Certificate Notional Accelerated Principal Paydown Amounts, if any, distributed to the Holders of Class A Certificates under Section 4.03(a)(v) of the Standard Terms on such Payment Date by the ratio of the Current Certificate Balance of such Class B Certificate to the Aggregate Outstanding Class B Certificate Balance.

“ Daily Administrator Advance Charge ” means, for any day, the amount of outstanding Administrator Advances on such day multiplied by the prime rate in effect on such date and divided by 365. Prime rate will equal the prime or base lending rate of major banks as published in the Wall Street Journal.

“ Date of Original Issue ” means the day on which the Certificates are first executed, authenticated and delivered by the Administrator.

“ Delivery Office ” means the office of the Administrator located at Freddie Mac, 1551 Park Run Drive, MS D5B, McLean, Virginia 22102, Attention: Office of the Registrar, or such other address as the Administrator may designate from time to time by notice to the Registered Holders, the Remarketing Agent and Freddie Mac.

“ Deposit Price ” means, with respect to any Bond, the federal income tax basis of such Bond determined in accordance with the Code at the time of transfer and deposit as set forth in the Series Certificate Agreement with respect to Bonds transferred and deposited on the Date of Original Issue or on any Substitution Date.

“ Depositor Order ” means a written order or request signed in the name of Freddie Mac by any Responsible Officer of Freddie Mac.

“ Disposition ” means, with respect to any Bond, any redemption, maturation, sale or other disposition of such Bond, or portion thereof, that results in the realization of gain or loss under applicable Code provisions.

“ Disposition Gain ” means, with respect to a Disposition of any Bond or portion thereof, the excess, if any, of the amount realized from such Disposition as determined under applicable Code provisions, over the Accreted Price of such Bond (including, if applicable, any Bond Redemption Premium) or portion of such Bond.

“ Disposition Loss ” means, with respect to a Disposition of any Bond, or portion thereof, the excess, if any, of the Accreted Price of such Bond, or portion thereof, over the amount realized from such Disposition, as determined under applicable Code provisions.

“ Distribution Account ” means, collectively, the segregated subaccounts established and maintained pursuant to Section 4.02 of the Standard Terms.

“ Documents ” means, collectively, the Series Certificate Agreement, the Remarketing Agreement, the Reimbursement Agreement and the Certificates; and the term “Document” will mean any of the foregoing.

“ DTC ” means The Depository Trust Company or any successor securities depository institution selected or approved by Freddie Mac.

“ DTC Participant ” means a member of, or participant in, DTC, as provided in the rules and regulations of DTC.

“ Electronic Notice ” means notice given by telecopy, facsimile transmission, electronic mail (“e-mail”) or other similar electronic means of communication.

“ Event of Default ” means:

(a) The Administrator defaults in the payment to Holders of the applicable Certificate Payment Amount or Freddie Mac defaults in the payment of any amount pursuant to the Credit Enhancement or the Liquidity Facility when the same is due and payable as provided in the Series Certificate Agreement, and such default continues for a period of three (3) Business Days; or

(b) Freddie Mac or the Administrator fails to observe or perform any other of its covenants set forth in the Series Certificate Agreement, and such failure continues for a period of 60 days after the date on which written notice of such failure, requiring Freddie Mac or the Administrator to remedy the same, has been given to Freddie Mac or the Administrator, as appropriate, by the Holders representing not less than 60% of the then outstanding unpaid principal balance of the Class A Certificates or Class B Certificates, as applicable.

“ Excess Accrued Net Interest Amount ” means, as of any date of determination, the excess of accrued interest on the Bonds over the sum of the accrued interest on the Class A Certificates for each prior day in any Accrual Period. This definition is used in establishing the Maximum Reset Rate where all the Bonds are fixed rate bonds after the excess amount is converted to an interest rate related to the Class A Certificates as provided in the definition of Excess Accrued Net Interest Amount Rate. The calculation of Excess Accrued Net Interest Amount is determined as (i) the aggregate amount of interest calculated at the applicable Bond Rate on the Outstanding Bond Balance of each related Bond for each preceding day in the Accrual Period over (ii) the sum of the aggregate amount of interest calculated at the applicable Reset Rate on the Aggregate Outstanding Class A Certificate Balance for each such day (whether or not distributed to Holders).

“ Excess Accrued Net Interest Amount Rate ” means, with respect to the determination of the Maximum Reset Rate where all the Bonds are fixed rate bonds the following: a per annum rate equal to the product of (i) the quotient obtained by dividing (a) 365 (or 366 in a leap year) by (b) the number of calendar days during which a Reset Rate will be in effect and (ii) the quotient

(expressed as a percentage of the Aggregate Outstanding Class A Certificate Balance) obtained by dividing (a) the Excess Accrued Net Interest Amount as of the relevant day of determination by (b) the Aggregate Outstanding Class A Certificate Balance as of such day. This rate is expressed as the variable “ER” in the following:2

	ER =	[	365/6 D	]	[	EA CLA	]
	where

D =

EA =

CLA =

number of calendar days during which a Reset Period will be in effect

Excess Accrued Net Interest Amount

Aggregate Outstanding Class A Certificate Balance

“ Exchange Date ” means the date on which the Series Pool is liquidated in whole or in part in accordance with Section 13.04 of the Standard Terms, which date will be designated by Freddie Mac and will occur within five Business Days after the occurrence of a Tender Option Termination Event or Liquidity Failure.

“ Exchanging Holder ” means each related holder of class B certificates of another Series as described in Section 7.02(c) of the Standard Terms.

“ Exercise Notice ” means the notice delivered by a DTC Participant through which a Class A Certificate is held for a Holder of Class A Certificates on the records of DTC to the Remarketing Agent and the Administrator pursuant to Section 6.03 of the Standard Terms in connection with the exercise of the Tender Option.

“ Fair Market Value ” for any asset will mean its fair market value as determined in good faith by the Remarketing Agent pursuant to a valuation made (i) on the basis of current bid prices for such asset, (ii) if bid prices are not available for such asset, on the basis of current bid prices for comparable assets, (iii) by determining the value of such asset on the bid side of the market by appraisal, or (iv) by any combination of the foregoing. For purposes of the foregoing, the

2 Example 1:

Assumptions =

Weekly Reset Rate

Excess Accrued Net Interest Amount: $50,000

Aggregate Outstanding Class A Certificate Balance: $80,000,000

365 X $50,000

7 $80,000,000

(52.1428) (0.000625)

.03258

Example 2:

Assumptions:

Same assumptions except that there is a Monthly Rate

365 X $50,000

30 $80,000,000

(12.1666) (0.000625)

.00760

Remarketing Agent will utilize the services of Persons which are not the Administrator, the Remarketing Agent, Freddie Mac, any Holder of Class B Certificates or any Affiliate of any such Person.

“ First Optional Disposition Date ” means the date set forth as such in the Series Certificate Agreement.

“ First Payment Date ” means the initial Payment Date on which interest is scheduled to be payable on the Certificates, as set forth in the Series Certificate Agreement.

“ Fiscal Year ” will mean the fiscal year of the Series Pool for financial accounting purposes and for federal, state and local income tax purposes, or such shorter period for which income tax returns must be prepared. Such Fiscal Year initially will be the calendar year, unless a different Fiscal Year is required by Section 706(b) of the Code and the Regulations thereunder.

“ Fitch ” means Fitch, Inc. and its successors.

“ Freddie Mac ” means Federal Home Loan Mortgage Corporation, a shareholder-owned government-sponsored enterprise organized and existing under the laws of the United States.

“ Freddie Mac Act ” means Title III of the Emergency Home Finance Act of 1970, as amended, 12 U.S.C. §§ 1451-1459.

“ Freddie Mac Fee ” means the fees due Freddie Mac under the Reimbursement Agreement for providing the Credit Enhancement, the Liquidity Facility and serving as Administrator.

“ Gain Share ” means, (i) first, with respect to the Holders of Class A Certificates that have had their Certificates redeemed or exchanged (to the extent applicable to such a redemption or exchange pursuant to the operative provisions of the Series Certificate Agreement), the product of (a) 10% of the Disposition Gain and (b) the ratio of the Aggregate Outstanding Class A Certificate Balance to the Aggregate Outstanding Certificate Balance (as determined immediately prior to the redemption or exchange, as applicable, of Certificates); and (ii) second, with respect to the Holders of Class B Certificates, the remaining Disposition Gain. Gain Share with respect to the Holders of the Class A Certificates for any one Bond is expressed as the variable “GS” in the following formula:

GS = (.10)(DG)( CLA )

CLA+CLB

where

DG = Disposition Gain

CLA = Aggregate Outstanding Class A Certificate Balance

CLB = Aggregate Outstanding Class B Certificate Balance

Example:

Assumptions:

1. Disposition Gain = (2%)($50,000,000 Bonds)

2. Aggregate Outstanding Class A Certificate Balance = $80,000,000

3. Aggregate Outstanding Class B Certificate Balance = $20,000,000

(.10)(1,000,000)( 80,000,000 )

80,000,000+20,000,000

(100,000)(.8) = $80,000

In this example the Holders of Class A Certificates receive $80,000 and the Holders of Class B Certificates receive the balance, or $920,000.

“ Global Class A Certificate ” means with respect to any Series of book-entry Class A Certificates, a global certificate executed and authenticated by the Administrator, substantially in the form attached to the Standard Terms, evidencing all of the Class A Certificates of such Series. If the rules and regulations of DTC (or a successor securities depository, including, if designated by Freddie Mac, the Federal Reserve Bank) so require, a Series of book-entry Class A Certificates may be evidenced by more than one Global Class A Certificate which, together, will evidence all of the Class A Certificates of such Series, and which, together, will constitute the “Global Class A Certificate” for such Series.

“ Grant ” means to pledge or grant a lien upon or a security interest in, or a right of set-off to, the Administrator pursuant to a Series Certificate Agreement. A Grant of a security interest in the Bonds, or any other instrument, will include all rights but none of the obligations of the granting party.

“ Holdback Requirement ” means, on each Payment Date, the amount designated as such in the Series Certificate Agreement; provided, however, that the Holdback Requirement may be changed by Freddie Mac in accordance with the Series Certificate Agreement or the Registered Holders of not less than 51% of the Aggregate Outstanding Class B Certificate Balance with the written consent of Freddie Mac, by written notice to the Administrator not less than ten (10) Business Days prior to any Payment Date.

“ Holder ” means (i) with respect to a Class A Certificate, a Person who is listed as the beneficial owner of such Class A Certificate in the records of a DTC Participant or Indirect DTC Participant and (ii) with respect to a Class B Certificate, the beneficial owner of such Class B Certificate.

“ HUD Document ” means, with respect to any Mortgaged Property, any interest rate reduction agreement, housing assistance payment agreement or similar document delivered by or on behalf of the Department of Housing and Urban Development to provide support for rent or mortgage payments.

“ Hypothetical Gain Share ” means, for any Class A Certificate, with respect to a Release Event Date, an Optional Disposition Date or a Mandatory Tender Date relating to a Liquidity Provider Termination Event, a Sponsor Act of Bankruptcy (if applicable) or a Clean-Up Event, (i) the product of (a) the aggregate of, for each Bond, (1) the highest bid (not including accrued interest) obtained after the Remarketing Agent solicits three bids to purchase such Bond from Persons that customarily provide such bids, other than the Administrator, Freddie Mac, the

Remarketing Agent, any Holder of Class B Certificates, or any Affiliate of any such Person, including but not limited to investment dealers and brokers that customarily deal in municipal bonds, determined for the Business Day immediately preceding the Release Event Date, Optional Disposition Date, or Mandatory Tender Date, as applicable, minus (2) the Accreted Price of such Bond and (b) the ratio of the Current Certificate Balance of such Class A Certificate to be tendered to the Aggregate Outstanding Certificate Balance and (c) 0.10, minus (ii) any Hypothetical Gain Share previously paid to any Holder of such Class A Certificate. However, in no event may the Hypothetical Gain Share be less than zero. Hypothetical Gain Share is expressed as the variable “HGS” in the following formula: 3

HGS = (MV-AP)( ACAC )(.10) -HGSPP

(CLA+CLB)

where

MV = highest bid obtained from qualified bidder

AP = Accreted Price for that Bond

ACAC = Current Certificate Balance of applicable Class A Certificate

CLA = Aggregate Outstanding Class A Certificate Balance

CLB = Aggregate Outstanding Class B Certificate Balance

HGSPP = Hypothetical Gain Share previously paid to any Holder of the applicable Class A Certificate

“ Indirect DTC Participant ” means an entity holding securities through a DTC Participant as described in the rules and regulations of DTC.

3 Example:

Assumptions:

Market Value of First Bond = (110%)(10,000,000)

Accreted Price of First Bond = (100%)($10,000,000)

Current Certificate Balance of applicable Class A Certificate = $5,000,000

Aggregate Outstanding Class A Certificate Balance = $20,000,000

Aggregate Outstanding Class B Certificate Balance = $10,000,000

Market Value of Second Bond = (100%)($10,000,000)

Accreted Price of Second Bond = (100%)($10,000,000)

Market Value of Third Bond = (98%)($10,000,000)

Accreted Price of Third Bond = (100%)($10,000,000)

10.

Previously paid applicable Hypothetical Gain Share = $2,000 (100%)

Bond 1:

((110%)($10,000,000)-(100%)($10,000,000))( $5,000,000 )(.10) = $16,666

($20,000,000+$10,000,000)

Bond 2:

((100%)($10,000,000)-(100%)($10,000,000))( $5,000,000 )(.10) = zero

($20,000,000+$10,000,000)

Bond 3:

((98%)($10,000,000)-(100%)($10,000,000))( $5,000,000 )(.10) = ($3,333)

($20,000,000+$10,000,000)

However, Hypothetical Gain Share may not be less than zero, so the amount for Bond 3 equals zero.

Aggregating the hypothetical gain share

Bond 1 + Bond 2 + Bond 3 - HGSPP

$16,666 + 0 + 0 - $2,000 = $14,666

“ Initial Certificate Balance ” means the initial certificate balance of any Certificate set forth on the face of such Certificate.

“ Initial Purchaser ” means, if applicable, the initial purchaser(s) of the Class A Certificates named in the Remarketing Agreement.

“ Investment Company Act ” means the Investment Company Act of 1940, as amended from time to time, and any successor statute thereto.

“ Investor Letter ” means the investor letter executed by each Holder of Class B Certificates in the form attached to the Standard Terms or as otherwise approved by Freddie Mac.

“ Issuer ” means, with respect to each Bond, the entity specified as the Issuer in the Series Certificate Agreement.

“ Knowledge ” means actual knowledge.

“ Letter of Representations ” means the letter of representations from Freddie Mac to DTC in connection with each Series Certificate Agreement, relating to the Certificate or, if applicable, any blanket letter of representations from Freddie Mac to DTC, and any amendment or replacement of such letter.

“ Lien ” means a lien, charge, security interest, mortgage, pledge, encumbrance, or other type of preferential arrangement (including the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement).

“ Liquidity Commitment ” means, with respect to the Liquidity Facility, the amount for which Freddie Mac is obligated to honor demands for payment under the Liquidity Facility.

“ Liquidity Facility ” means the agreement of Freddie Mac set forth in Section 6.01(b) of the Standard Terms to pay the Purchase Price of certain Class A Certificates.

“ Liquidity Failure ” means the failure of Freddie Mac to comply with its obligations in accordance with the provisions of the Liquidity Facility, and the continuance of such failure for three (3) Business Days, to pay the Purchase Price of Class A Certificates subject to Mandatory Tender, Tendered Class A Certificates whose Holders have exercised the Tender Option or Class A Certificates whose Holders have exercised their Optional Disposition Right.

“ Liquidity Provider ” means Freddie Mac.

“ Liquidity Provider Termination Event ” means the occurrence of either (a) an "Event of Default" under the Reimbursement Agreement, or (b) a "Mode Reset Failure" under the Reimbursement Agreement.

“ Liquidity Provider Termination Notice ” means the notice given to the Administrator by Freddie Mac pursuant to Section 7.03 of the Standard Terms.

“ Loan Agreement ” means, with respect to any issue of Bonds, the loan agreement, financing agreement or other agreement providing for the Bond Mortgage Loan from the Issuer to the Owner.

“ LURA ” means with respect to any issue of Bonds, the land use restriction agreement, tax regulatory agreement or other similar agreement imposing operating restrictions on the related Project.

“ Mandatory Tender ” means the obligation of the Holders of Class A Certificates to tender such Certificates for purchase pursuant to Section 6.04 of the Standard Terms, subject to the right to retain such Certificates pursuant to Section 6.07 of the Standard Terms.

“ Mandatory Tender Date ” means any date on which Class A Certificates, other than Affected Certificates, are subject to Mandatory Tender pursuant to Section 6.04 of the Standard Terms following the occurrence of a Mandatory Tender Event.

“ Mandatory Tender Event ” means any of the events set forth in Section 6.04 of the Standard Terms.

“ Mandatory Tender Notice ” means the notice given by the Administrator to the Registered Holders of the occurrence of a Mandatory Tender Event pursuant to Section 6.05 of the Standard Terms.

“ Market Discount Gain ” means, with respect to a Disposition of any Bond or portion of a Bond, the amount of any gain recognized for federal income tax purposes on such Disposition, to the extent such gain does not exceed the Accrued Market Discount, if any, on such Bond or portion thereof.

“ Market Discount Share ” means 100% of the Market Discount Gain, which will be allocated solely to the Holders of Class B Certificates.

“ Maximum Reset Rate ” is to be calculated by the Remarketing Agent on any Reset Date immediately before determining the applicable Reset Rate. The Maximum Reset Rate is to be calculated, as applicable, using one of two different methods. One method applies only if all the Bonds are fixed rate bonds and the other method applies if any of the Bonds are not fixed rate bonds.

The Maximum Reset Rate, if all the Bonds are fixed rate bonds, is equal to the Excess Accrued Net Interest Amount Rate, if any, plus a rate determined by dividing the product of the lowest Bond Rate times the Aggregate Outstanding Bond Balance by the Aggregate Outstanding Class A Certificate Balance as of such day. For any Reset Rate Method other than a Weekly Reset Rate method, the calculation will not include the Excess Accrued Net Interest Amount Rate because the Maximum Reset Rate is calculated on a Reset Date and there will be no Excess Accrued Net Interest Amount on a Reset Date for a Monthly Reset Rate Method or a Term Reset

Rate Method. This Maximum Reset Rate is expressed as the variable MRR(FRB) in the following formula:4

MRR(FRB) = 365/6 EA PLUS ( LBRxBB )

D CLA CLA

4 Example 1:

Assumptions:

Aggregate Outstanding Bond Balance: $100,000,000

Lowest Bond Rate: 6.5%

Aggregate Outstanding Class A Balance: $80,000,000

Aggregate Outstanding Class B Balance: $20,000,000

Not a leap year

Weekly Reset Rate; 7 days previously accrued interest for Class A Certificates at 3.8%

The applicable Weekly Reset Date is the second such Reset Date in the Accrual Period

STEP ONE:

Bond Interest on $100,000,000@6.5% for 7 days = $124,657.53

Accrued interest on Class A Certificates for 7 days @3.8% = $58,301.37

($124,657.53)-($58,301.37) = $66,356.16

STEP TWO:

convert that amount to an annual interest rate related to Class A Certificates:

365 X EA

7 CLA

(52.1428)(.00082945) = 4.324995%

STEP THREE: Convert Bond interest to an interest rate related to Class A Certificates

(LBR)(BB)

CLA

(.065)(100,000,000)

80,000,000

8.125%

STEP FOUR: add STEP TWO and STEP THREE

4.324995%+8.125% = 12.449995%

Example 2:

1. Same assumptions as first six assumptions

2. 14 days of accrued interest on Class A Certificates at 3.8% and the applicable Weekly Reset Date is the third Weekly Reset Date in the Accrual Period

STEP ONE:

Bond interest on $100,000,000@6.5% for 14 days = $249,315.07

Accrued interest on Class A Certificates @3.8% for 14 days = $116,602.74

($249,315.07)-($116,602.74)=$132,712.33

STEP TWO:

convert that amount to an annual interest rate related to Class A Certificates

365 X EA

D CLA

365 X $132,712.33

7 $80,000,000

(52.1428)(.00165890) = 8.649991%

STEP THREE: Convert Bond interest to interest rate related to Class A Certificates. Same result as Example 1 = 8.125%

STEP FOUR:

add STEP TWO and STEP THREE

8.649991% + 8.125% = 16.774991%

This Maximum Reset Rate is determined in four steps.

STEP ONE: the Excess Accrued Net Interest Amount is determined, which is the excess of accrued interest on the underlying Bonds over the sum of interest on the Class A Certificates, in each case, for each prior day in the Accrual Period.

STEP TWO: the Excess Accrued Net Interest Amount is converted to an annual rate of interest (the Excess Accrued Net Interest Amount Rate) related to the Class A Certificates. This excess rate is expressed as the variable “ER” in the following formula:

ER = 365/6 EA

D CLA

where

D = Number of calendar days during which a Reset Period will be in effect

EA = Excess Accrued Net Interest Amount

CLA = Aggregate Outstanding Class A Certificate Balance

STEP THREE: interest on the Bonds at the lowest Bond Rate is converted to an interest rate related to the Class A Certificates. This converted rate is expressed in the following formula:

( LBRxBB )

CLA

where

LBR = Lowest Bond Rate

BB = Aggregate Outstanding Bond Balance

STEP FOUR: add the rates obtained in STEP TWO and STEP THREE.

The Maximum Reset Rate, if any of the Bonds are not fixed rate bonds, is equal to the product of (i) the quotient of the number of days in the year divided by the number of days in which a Reset Rate will be in effect times (ii) the quotient of (a) the Available Interest Amount minus the aggregate amount of interest accrued at the applicable Reset Rate on the Aggregate Outstanding Class A Certificate Balance for each preceding day in the Accrual Period divided by (b) the Aggregate Outstanding Class A Certificate Balance; provided however, that the Class A Certificates will never accrue more interest than the Available Interest Amount, regardless of any calculation previously made. Unlike the formula for determining the Maximum Reset Rate where all Bonds are fixed rate Bonds, this calculation will apply to all Reset Rate Methods because the determination of the Available Interest Amount includes both accrued interest on the Bonds and Interest on the Bonds that will accrue over the balance of the applicable Reset Period, to the extent that amount is known. This Maximum Reset Rate is expressed as the variable MRR(NFRB) in the following formula:5

5 Example 1:

Assumptions:

1. Weekly Reset for Class A Certificates

2. Available Interest Amount the same as Example 1 under definition of Available Interest

(continued . . .)

( . . . continued)

Amount

3. Not a leap year

4. Aggregate Outstanding Class A Certificate Balance:

$80,000,000

5. Interest accrued on Class A Certificates at 2.0% during first week and 2.5% during

second week

365 X ( $130,410.94 – (69,041.10)

$80,000,000

(52.1428)($61,369.84)

$80,000,000

3.9999% = Maximum Reset Rate

Example 2:

Assumptions:

1. Weekly Reset for Class A Certificates

2. Available Interest Amount assumptions

a. Bonds bear interest at 90% of 30 day LIBOR; LIBOR is 3.0% for applicable period and for this example, LIBOR is set on the same day as the first Weekly Reset Date in the Accrual Period

b. the applicable Weekly Reset Date is the beginning of the third reset period so there are 14 days of prior interest accrual on the Class A Certificates

c. $100,000,000 in Outstanding Bond Balance

3. Not a leap year

4. Aggregate Outstanding Class A Certificate Balance:

$80,000,000

5. Interest accrued on Class A Certificates at 2.0% during first week and 2.5% during second week

STEP ONE: establish Reset Rate period factor

365 = 52.1428

STEP TWO: determine the Available Interest Amount accruals on Bonds: $155,342.46

(21 days; 14 days have already accrued and since the rate is established for next 7 days that period is

included as well)

AIA = $155,342.46 then subtract Class A Certificates Accruals from AIA $155,342.46 – $69,041.10

=$86,301.36

STEP THREE: multiply STEP ONE times STEP TWO and convert to interest rate related to Class A Certificates

(52.1428)($86,301.36)

$80,000,000

(continued . . .)

5.62499% = Maximum Reset Rate

Example 3:

Assumptions: 1. Same as Example 2 except that the applicable Weekly Reset Date is the first one in the Interest

Accrual Period so there are no prior interest accruals on the Bonds or the Class A Certificates

STEP ONE: the applicable Reset Period factor is 52.1428

STEP TWO: determine the Available Interest Amount Interest accruals on Bonds: $51,780.82

(7 days until next Weekly Reset Date since rate on Bonds is established)

AIA = $51,780.82

STEP THREE: multiply STEP ONE times STEP TWO and convert to interest rate related to Class A Certificates

(52.1428)($51,780.82)

$80,000,000

3.337% = Maximum Reset Rate

Example 4:

Assumptions: 1. Same as Example 3 except that $20,000,000 of Bonds bear interest at 90% of 30 day LIBOR

and $80,000,000 of Bonds are fixed rate bonds bearing interest at 6.8%

STEP ONE: the applicable Reset Period factor is 52.1428

STEP TWO: determine the Available Interest Amount

Interest accruals on Bonds

$20,000,000 LIBOR-based Bonds =

($20,000,000)(2.7%)(7) = $10,356.16

365

($80,000,000)(6.8%)(7) = $104,328.76

365

AIA = ($10,356.16+$104,328.76) = $114,684.92

STEP THREE: multiply STEP ONE and STEP TWO and convert to interest rate related to Class A Certificates

(52.1428)($114,684.92)

$80,000,000

7.47499% = Maximum Reset Rate

MRR(NFRB) = 365/6 (AIA-ACI)

where

D = number of calendar days in which a Reset Period will be in effect

AIA = Available Interest Amount

ACI = Accrued Certificate Interest

This Maximum Reset Rate is determined in three steps.

STEP ONE: establish the Reset Rate period factor

365

D D = Number of calendar days in which a Reset Period will be in effect

STEP TWO: determine the Available Interest Amount; then subtract Accrued Certificate Interest

STEP THREE: multiply STEP ONE times STEP TWO and convert product to interest rate related to Class A Certificates by dividing by Aggregate Outstanding Class A Certificate Balance

“ Minimum Sponsor Interest ” means, (i) if the Series Certificate Agreement provides that the Partnership Factors apply, with respect to any day, an amount equal to the lesser of one percent of the Aggregate Outstanding Certificate Balance and $500,000 (adjusted for any capital contributions (actual or deemed) by any Holder) or (ii) in all other cases, an aggregate interest at all times in the capital of the Series Pool of $5,000.

“ Minimum Sponsor Percentage ” means, if the Series Certificate Agreement provides that the Partnership Factors apply, one percent and in all other cases, “Minimum Sponsor Percentage” will not apply to the related Series.

“ Monthly Closing Election ” means an election pursuant to Revenue Procedure 2003-84 (or any successor Revenue Procedure or other applicable Internal Revenue Service guidance) that, if available, and if made on behalf of an eligible Series Pool, permits items of income, gain, loss or deduction of the Series Pool to be determined for federal income tax purposes on the basis of a monthly closing of its books.

“ Monthly Reset Date ” means the Business Day immediately preceding the first day of the next succeeding calendar month, provided that if the Reset Rate Method is being changed to the Monthly Reset Rate Method, the Monthly Reset Date will be the Business Day immediately preceding the Reset Rate Method Change Date.

“ Monthly Reset Rate ” means a Reset Rate that is determined by the Remarketing Agent on a monthly basis as provided in Article V of the Standard Terms.

“ Monthly Reset Rate Method ” means the method used to determine the Monthly Reset Rate in accordance with Article V of the Standard Terms.

“ Moody’s ” means Moody’s Investors Service, Inc., and its successors.

“ Non-Monetary Default ” means the occurrence of any default, other than the failure to pay principal, premium or interest, on the Bonds or any document or instrument related to the Bonds.

“ Notice of Sponsor Bankruptcy ” means the notice given to the Remarketing Agent and Freddie Mac by the Administrator pursuant to Section 7.04 of the Standard Terms.

“ Notional Accelerated Principal Amortization Schedule ” means, if applicable to a Series, the schedule provided by Freddie Mac on the Date of Original Issue and attached to the Series Certificate Agreement, which schedule contains the Class A Certificate Notional Accelerated Principal Paydown Amount applicable to each Payment Date, and which may be amended by Freddie Mac to the extent the Remarketing Agent deems appropriate.

“ Odd-Lot Subaccount” means the segregated subaccount designated as such forming part of the Distribution Account.

“ Offering Circular ” means the Offering Circular, including any Offering Circular Supplement, describing the Class A Certificates.

“ Official Action ” means any formal action conducted by a Person, which results in a written statement of action duly approved by an authorized committee or governing body of such Person, as appropriate.

“ Offsetting Allocations ” will have the meaning set forth in Section 11.05(d) of the Standard Terms.

“ Opinion of Counsel ” means one or more written opinions of outside counsel for Freddie Mac satisfactory to the Administrator and Freddie Mac, and which opinion is addressed to the Administrator and Freddie Mac and is in form and substance satisfactory to the Administrator and Freddie Mac.

“ Opinion of Tax Counsel ” means one or more written opinions of an attorney or firm of attorneys duly admitted to the practice of law before the highest court of any state of the United States of America and experienced in matters pertaining to the tax-exempt status of interest on state and local obligations, as well as to the status of interests in trusts, partnerships and other structures containing such obligations, which counsel is satisfactory to the Administrator and Freddie Mac and which opinion is addressed to the Administrator and Freddie Mac, and is in form and in substance satisfactory to the Administrator and Freddie Mac.

“ Optional Disposition Date ” means with respect to any Class A Certificate, the First Optional Disposition Date and each Payment Date thereafter.

“ Optional Disposition Price ” means, with respect to any Class A Certificate, the sum of the Purchase Price and the Hypothetical Gain Share.

“ Optional Disposition Right ” means the right of a Holder of a Class A Certificate to tender such Class A Certificate in exchange for the Optional Disposition Price in accordance with the provisions of Section 7.05 of the Standard Terms.

“ Outstanding ” means, with respect to the Certificates, as of any date of determination, all such Certificates previously executed, authenticated and delivered under the Series Certificate Agreement except:

(i) Certificates previously canceled by the Certificate Registrar or the Administrator or delivered to the Certificate Registrar or the Administrator for cancellation; and

(ii) Certificates in exchange for which, or in lieu of which, other Certificates have been executed, authenticated and delivered pursuant to the Series Certificate Agreement, unless proof satisfactory to the Administrator is presented that any such Certificates are held by a bona fide purchaser.

“ Outstanding Bond Balance ” means, with respect to any Bond, as of any date of determination, the outstanding principal balance of such Bond as of the Date of Original Issue, as set forth in the Series Certificate Agreement (or in the case of a Substitute Bond, the outstanding principal balance of the Substitute Bond as of the Substitution Date), minus any payment of principal on such Bond received by the Administrator with respect to such Bond after the Date of Original Issue (or Substitution Date, if applicable) and on or before such date of determination.

“ Owner ” means, with respect to any Project, the owner of such Project and any successor owner.

“ Owner Act of Bankruptcy ” means an Act of Bankruptcy arising with respect to an Owner.

“ Partnership Factors ” means the provisions of the Series Certificate Agreement necessary for the arrangement created in the Series Certificate Agreement to be treated as a partnership under the tax laws of certain states and which will only apply to the Series Pool and the Certificates if the Series Certificate Agreement so states, in connection with the application of the definitions of “Minimum Sponsor Interest” and “Minimum Sponsor Percentage”, and Sections 3.05, 3.06, 7.04 and 11.05(e) of the Standard Terms.

“ Paying Agent ” means the Administrator or any other Person appointed as Paying Agent by the Administrator in accordance with Section 4.04 of the Standard Terms.

“ Payment Date ” means the fifteenth day of each calendar month, provided, that if such day is not a Business Day, the Payment Date will occur on the next Business Day.

“ Permitted Increment ” shall mean with respect to any redemption of Class A Certificates pursuant to Section 4.03 of the Standard Terms, $5,000 or any integral multiple of $5,000 in excess thereof.

“ Person ” means any individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

“ Placement Agent ” means, if applicable, the Placement Agent for the Class A Certificates designated in the Remarketing Agreement.

“ Pledge Custodian ” means Freddie Mac or any other entity appointed by Freddie Mac to serve in such capacity.

“ Pledged Class A Certificate ” means (i) any Available Remarketing Class A Certificate purchased with funds derived from a demand on the Liquidity Facility, which is registered in the name of the Pledge Custodian, pursuant to Section 6.06(d) of the Standard Terms, and which is pledged to Freddie Mac as security for the reimbursement obligation owed to Freddie Mac with respect to such demand on the Liquidity Facility and (ii) any Class A Certificate purchased in connection with a Special Adjustment Event and which is registered in the name of the Pledge Custodian and pledged to Freddie Mac as security for the obligations of the Sponsor under the Reimbursement Agreement.

“ Predecessor Certificate ” means, with respect to any Certificate, every previous Certificate evidencing all or a portion of the same Initial Certificate Balance as that evidenced by such Certificate. For the purpose of this definition, any Certificate executed, authenticated and delivered under Section 2.07 of the Standard Terms in lieu of a lost, destroyed or stolen Certificate will be deemed to evidence the same interest in the assets held by the Administrator.

“ Preliminary Class A Certificate Rate ” means the interest rate set pursuant to Section 5.02(b) or 5.03(a) of the Standard Terms, as applicable.

“ Proceeding ” means any suit in equity, action at law or other judicial or administrative proceeding.

“ Profits ” and “ Losses ” will mean, for each Fiscal Year or other period, an amount equal to the Series Pool’s taxable income or loss for such Fiscal Year or period, except for Market Discount Gains, Capital Gains and Capital Losses, determined in accordance with Section 703(a) of the Code, which for this purpose, will include all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code, with the following adjustments:

(a) Any income of the Series Pool that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition will be added to such taxable income or loss;

(b) Any expenditures of the Series Pool described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations, and not otherwise taken into account in computing Profits or Losses pursuant to this definition will be subtracted from such taxable income or loss; and

(c) Any amounts paid by the Sponsor pursuant to Sections 3.04 or 3.05 of the Standard Terms will be treated as payments of expenses by the Series Pool.

Notwithstanding any of the foregoing, any items which are specially allocated pursuant to Section 11.05 of the Standard Terms will not be taken into account in computing Profits or Losses.

“ Project ” means the related multifamily development financed with proceeds of a series of Bonds.

“ Purchase Date ” means any date on which the Class A Certificates, other than Affected Certificates and Pledged Class A Certificates, are eligible for purchase pursuant to an exercise of the Tender Option, as specified in Section 6.03 of the Standard Terms.

“ Purchase Price ” means, with respect to any Class A Certificate, an amount equal to the sum of (i) the Current Certificate Balance of such Class A Certificate and (ii) the accrued and unpaid Required Class A Certificate Interest Distribution Amount on such Current Certificate Balance to but not including the Purchase Date; provided, that “Class A Certificates”, for purposes of this definition, refers solely to Class A Certificates that are not Affected Certificates.

“ Purchase Price Excess ” will have the meaning set forth in Section 6.06(b) of the Standard Terms.

“ Rating Agency ” shall mean each institution that at the request of Freddie Mac provides a rating with respect to the Class A Certificates, as set forth in the Series Certificate Agreement. For purposes of the Series Certificate Agreement, “applicable Rating Agency” refers to all institutions that are rating such Class A Certificates at such time.

“ Redemption Date ” means any day on which payments of principal or Bond Redemption Premium with respect to any Bond are to be distributed to Holders of Class A Certificates, which day will be a Payment Date.

“ Redemption Premium Payment ” means the respective portions of the Bond Redemption Premium payable to Holders in accordance with the definitions of “Disposition Gain” and “Gain Share”.

“ Redemption Record Date ” means, with respect to a Redemption Date, the close of business on the last day of the month prior to the month in which such Redemption Date occurs.

“ Registered Holder ” means the Person in whose name a Certificate is registered on the Certificate Register.

“ Regular Record Date ” means, with respect to any Payment Date, including a Redemption Date, the last day of the month preceding the month in which such Payment Date occurs.

“ Regulations ” means the Treasury Regulations promulgated under the Code, as such regulations are in effect on the date of the Series Certificate Agreement.

“ Regulatory Allocations ” will have the meaning set forth in Section 11.05(d) of the Standard Terms.

“ Reimbursement Agreement ” means the Bond Exchange, Reimbursement, Pledge and Security Agreement between the Sponsor and Freddie Mac, as amended or supplemented, which agreement is executed and delivered concurrently with the Series Certificate Agreement.

“ Release Event ” means, with respect to any series of Bonds, the occurrence of either (i) a Tax Event with respect to such Bonds, (ii) an event of default pursuant to the related Bond Documents, (iii) a material adverse credit condition with respect to the Bonds or under the related Bond Documents or Bond Mortgage Documents or the Reimbursement Agreement (including but not limited to a loss of or failure to establish a real estate tax abatement for a related Project where applicable), (iv) the Sponsor’s delivery of notice to the Administrator that the Sponsor has elected to purchase a portion of the Bonds in connection with a substitution of Bonds as provided in Section 3.10 of the Standard Terms, (v) the termination of the Series in accordance with Article XIII of the Standard Terms, (vi) a breach of a representation or warranty made by the Sponsor with respect to a series of Bonds or related Project is not cured pursuant to the Reimbursement Agreement, or (vii) the Sponsor’s delivery of notice to the Administrator that the Sponsor has elected to purchase all of the Bonds in the Series Pool on either July 15, 2019 or July 15, 2024.

“ Release Event Date ” means the date on which the payment of the Release Purchase Price is received by the Administrator concurrent with the provision of notice to the Holders that a Release Event has occurred.

“ Release Purchase Price ” means, with respect to any Bond, an amount equal to the then outstanding principal amount of such Bond plus accrued interest on such Bond to, but not including, the Release Event Date.

“ Remarketing Agent ” means the remarketing agent named in the Series Certificate Agreement, and its successors and assigns.

“ Remarketing Agent Fee ” will have the meaning set forth in the Remarketing Agreement.

“ Remarketing Agent Fee Rate ” will have the meaning set forth in the Remarketing Agreement.

“ Remarketing Agent Notice ” means the notice given by the Remarketing Agent to the Administrator and Freddie Mac pursuant to Section 6.06(a)(iii) of the Standard Terms with respect to remarketing proceeds received by the Remarketing Agent related to remarketed Class A Certificates.

“ Remarketing Agreement ” means, with respect to each Series of Class A Certificates, the related Certificate Purchase and Remarketing Agreement among Freddie Mac, the Sponsor, the Initial Purchaser and the Remarketing Agent (or, as applicable, the related Certificate Placement and Remarketing Agreement among Freddie Mac, the Sponsor, the Placement Agent and the Remarketing Agent), as amended or supplemented.

“ Required Class A Certificate Interest Distribution Amount ” means, subject to Section 1.02 of the Standard Terms, with respect to any Class A Certificate and for any Payment Date, the aggregate of the amounts of interest accrued for each day in the Accrual Period related to such Payment Date, at the Reset Rate in effect on each such day, on the Current Certificate Balance of such Certificate for each such day.

“ Required Class B Certificate Consent ” means the prior consent of the Holders of Class B Certificates representing at least 51% of the Aggregate Outstanding Class B Certificate Balance, which consent will be deemed to have been given without any action being taken by the applicable Holder unless the Holder provides to the Administrator an executed notice of refusal of consent in form reasonably acceptable to the Administrator.

“ Reset Date ” means a Weekly Reset Date, a Monthly Reset Date or a Term Reset Date on which the Reset Rate is to be determined by the Remarketing Agent.

“ Reset Rate ” means the per annum rate at which interest accrues on the Current Certificate Balance of the Class A Certificates from time to time, as determined from time to time by the Remarketing Agent pursuant to Article V of the Standard Terms, subject to, on any day in an Accrual Period, the Maximum Reset Rate for such day.

“ Reset Rate Method ” means, on any day, the method in effect for determining the Reset Rate for a weekly, monthly or term interval, as applicable, pursuant to Article V of the Standard Terms.

“ Reset Rate Method Change Date ” means any date on which a change in the Reset Rate Method from a Weekly Reset Rate Method, a Monthly Reset Rate Method or a Term Reset Rate Method to another Reset Rate Method takes effect pursuant to Article V of the Standard Terms.

“ Reset Rate Method Change Notice ” means the notice given to the Remarketing Agent and the Administrator, and by the Administrator to the Registered Holders, pursuant to Section 5.02(c) or Section 5.03(c) of the Standard Terms.

“ Responsible Officer ” means, as to Freddie Mac or the Administrator, any of the President, any Vice President, any Managing Director, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of such entity.

“ Retention Notice ” means the notice delivered by or on behalf of a Holder of a Class A Certificate pursuant to Section 6.07 of the Standard Terms.

“ Section 761 Election ” means the election to exclude the Series Pool from the application of all of the provisions of Subchapter K of the Code, if such election is permitted to be taken pursuant to the Regulations.

“ Securities Act ” means the Securities Act of 1933, as amended from time to time, and any successor statute thereto.

“ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute thereto.

“ Selected by Lot ” means, with respect to Class A Certificates held by DTC, the procedure by which Holders of Certificates are selected to be affected by a given action affecting less than all of the Holders under any CUSIP number are selected, which procedure will be initiated by the Administrator by notifying DTC of a requirement for such a selection. With respect to such Certificates, DTC will select, in such manner as it determines from a position listing of the aggregate Current Certificate Balances of such Class A Certificates as of the close of business on the date of such notice, the interests in Class A Certificates held by DTC Participants with respect to which such action will be taken. DTC will give the DTC Participant(s) for the interests so selected written notice of the selection, which will specify the date and nature of such action and the aggregate Current Certificate Balance of Class A Certificates to be selected. Each such DTC Participant will thereupon select, in such manner as it determines, the Holders with respect to whose interests such action will be taken. The Remarketing Agent will contact each such DTC Participant to request such DTC Participant to disclose to the Remarketing Agent the Holders so selected. With respect to the Class B Certificates and any Class A Certificates not held by DTC, “Selected by Lot” means selected by the Administrator by lot or in such other manner as the Administrator, in its discretion, deems fair.

“ Series ” means a separate series of Certificates issued pursuant to a Series Certificate Agreement and having the numerical or other designation specified therein.

“ Series Certificate Agreement ” means the Series Certificate Agreement into which the Standard Terms have been incorporated, including all schedules, exhibits, appendices and amendments, and pursuant to which the related Series Pool is created and related Certificates are issued.

“ Series Expiration Date ” means the date on which the final payment of principal and interest with respect to the Class A Certificates has been distributed by the Administrator pursuant to Article IV of the Standard Terms.

“ Series Pool ” means a discrete pool formed by Freddie Mac consisting of Assets with respect to which Freddie Mac has elected partnership status.

“ Series Termination Event ” means the occurrence of any of the following events:

(i) the Series Expiration Date;

(ii) the Exchange Date on which all Certificates are exchanged for Bonds or sales proceeds in connection with a Tender Option Termination Event or a Liquidity Failure;

(iii) the Mandatory Tender Date relating to a Mandatory Tender Event arising in connection with a Liquidity Provider Termination Event or following a Sponsor Act of Bankruptcy (if applicable) or a Clean-Up Event; or

(iv) the date on which the Optional Disposition Right has been exercised with respect to the last Class A Certificate (unless such Class A Certificate has been remarketed).

“ Servicer ” means the party designated as the Servicer in the Series Certificate Agreement.

“ Servicing Fee ” means the fee payable to the Servicer in accordance with the servicing arrangement between Freddie Mac and the Servicer.

“ Special Adjustment Date ” means the Mandatory Tender Date arising from a Special Adjustment Event.

“ Special Adjustment Event ” means, if specified as applicable to a Series Pool in the related Series Certificate Agreement, the occurrence of (i) the receipt of principal paid with respect to any “Class B Certificates” of another Series, as described in Section 7.02 of the Standard Terms, or, if applicable, (ii) any other event specified in the Reimbursement Agreement as giving rise to a Special Adjustment Event.

“ Special Adjustment Event Notice ” means the notice given to the Administrator by Freddie Mac pursuant to Section 7.02 of the Standard Terms.

“ Specified Party ” means, collectively, the Administrator, Freddie Mac, the Remarketing Agent and any Holder of Class B Certificates or any Affiliate of any such Person.

“ Sponsor ” means the party designated as the Sponsor in the Series Certificate Agreement.

“ Sponsor Act of Bankruptcy ” means an Act of Bankruptcy arising with respect to the Sponsor.

“ S&P ” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc, or its successor in interest. If neither such rating agency nor any successor remains in existence, “S&P” shall be deemed to refer to such other nationally recognized statistical rating agency or other comparable Person designated by Freddie Mac, notice of which designation shall be given to the Administrator, the Sponsor and the Remarketing Agent, and specific ratings of S&P referenced herein shall be deemed to refer to the equivalent ratings of the party so designated.

“ Standard Terms ” means the Standard Terms of the Series Certificate Agreement, together with all exhibits, as it may be amended or supplemented from time to time.

“ State ” means any one of the 50 states of the United States of America, or the District of Columbia.

“ Substitute Bonds ” means any new series of Bonds delivered in substitution for an existing series of Bonds in accordance with Section 3.10 of the Series Certificate Agreement on a Substitution Date.

“ Substitution Date ” means any date on which a substitution of Bonds is effected in accordance with the Series Certificate Agreement.

“ Tax Event ” means, with respect to any Bond (i) a determination that interest on such Bond is includable in the gross income of the owners thereof for federal income tax purposes, as a result of the entry of any decree or judgment by a court of competent jurisdiction; or (ii) the taking of any official action by the Internal Revenue Service, in either case, whether or not such decree, judgment or action is appealable or deemed to be final under applicable procedural law, which has the effect of a determination that interest on such Bond is includable in gross income of the owners thereof for federal income tax purposes.

“ Tender Advice ” means the notice delivered by the Administrator to Freddie Mac pursuant to Section 6.03 or 6.05 of the Standard Terms.

“ Tender Option ” means the right granted to the Holders of Class A Certificates pursuant to Section 6.01(a) of the Standard Terms to tender or cause to be tendered such Class A Certificates (other than Affected Certificates or Pledged Class A Certificates) for purchase by the Administrator from amounts deposited pursuant to Section 6.06 of the Standard Terms.

“ Tender Option Termination Event ” means:

(a) there shall have occurred (A) a failure to pay when due any installment of principal of or premium, if any, or interest with respect to any Bonds (whether by scheduled maturity, regular repayment, acceleration, demand or otherwise), and (B) a failure by Freddie Mac to pay under the Credit Enhancement set forth in Section 4.11 of the Standard Terms, which failure or failures continues for a period of three (3) Business Days;

(b) upon the entry of any decree or judgment by a court of competent jurisdiction or the taking of any official action by the Internal Revenue Service or the Department of the Treasury, which decree, judgment or action is deemed final under applicable procedural law, and which has the effect of a determination that the interest on any of the Bonds is includable in the gross income of the recipients thereof for federal income tax purposes; or

(c) if the rating of the long-term senior debt of Freddie Mac is reduced below “investment grade” (being “Baa3” in the case of Moody’s and “BBB-” in the case of Fitch and S&P) by each Rating Agency rating such debt.

“ Tender Option Termination Notice ” means the notice given by the Administrator to the Registered Holders pursuant to Section 7.01 of the Standard Terms in connection with the occurrence of a Tender Option Termination Event.

“ Tendered Class A Certificates ” means any Certificate as to which an Exercise Notice has been given.

“ Term Effective Date ” means the date on which a particular Term Reset Rate will be effective.

“ Term Reset Date ” means the Business Day immediately preceding a Term Effective Date.

“ Term Reset Method Notice ” means the notice given to the Remarketing Agent and the Administrator, and given by the Administrator to the Registered Holders, pursuant to Section 5.03(b) of the Standard Terms.

“ Term Reset Rate ” means a Reset Rate determined by the Remarketing Agent for a specified term as provided in Article V of the Standard Terms.

“ Term Reset Rate Method ” means the method used to determine the Term Reset Rate in accordance with Article V of the Standard Terms.

“ Terminating Mandatory Tender Date ” means a Mandatory Tender Date relating to a Mandatory Tender Event arising in connection with a Liquidity Provider Termination Event, a Clean-Up Event or, if applicable, following a Sponsor Act of Bankruptcy.

“ UCC ” means the Uniform Commercial Code as in effect in the relevant jurisdiction.

“ Vice President ” means, with respect to Freddie Mac and the Administrator, any Senior Vice President, Vice President, or Assistant Vice President.

“ Weekly Reset Date ” means Wednesday of each week, or if Wednesday is not a Business Day, the immediately preceding Business Day, provided that, if the Reset Rate Method is being changed to the Weekly Reset Rate Method, the initial Weekly Reset Date will be the Business Day preceding the Reset Rate Change Date.

“ Weekly Reset Rate ” means a Reset Rate that is determined by the Remarketing Agent on a weekly basis as provided in Article V of the Standard Terms.

“ Weekly Reset Rate Method ” means the method used to determine the Weekly Reset Rate in accordance with Article V of the Standard Terms.

“ Weighted Average Bond Rate ” means, as of any date of determination, (i) the aggregate of, for each Bond, the product of the Outstanding Bond Balance and the related Bond Rate, divided by (ii) the Aggregate Outstanding Bond Balance, expressed as a percentage.

Date of report (Date of earliest event reported): July 10, 2014

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
(Exact name of registrant as specified in its charter)

Delaware	000-24843	47-0810385
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1004 Farnam Street, Suite 400, Omaha, Nebraska		68102
(Address of principal executive offices)		(Zip Code)

(402) 444-1630
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

	Exhibit No.		Description

	10.1		Sale, Contribution and Assignment Agreement dated July 10, 2014 between America First Multifamily Investors, L.P. and ATAX TEBS II, LLC.

	10.2		Subordinate Bonds Custody Agreement dated July 10, 2014 by and among The Bank of New York Mellon Trust Company, N.A., the Federal Home Loan Mortgage Corporation, America First Multifamily Investors, L.P., and ATAX TEBS II, LLC.

	10.3		Bond Exchange, Reimbursement, Pledge and Security Agreement dated July 1, 2014 between the Federal Home Loan Mortgage Corporation and ATAX TEBS II, LLC.

	10.4		Series Certificate Agreement dated July 1, 2014 between the Federal Home Loan Mortgage Corporation, in its corporate capacity, and the Federal Home Loan Mortgage Corporation, in its capacity as administrator.

	10.5		Limited Support Agreement dated July 1, 2014 between America First Multifamily Investors, L.P. and the Federal Home Loan Mortgage Corporation.

	10.6		Rate Cap Agreement dated July 7, 2014 between ATAX TEBS II, LLC and Barclays Bank PLC.

	10.7		Rate Cap Agreement dated July 7, 2014 between ATAX TEBS II, LLC and the Royal Bank of Canada.

	10.8		Rate Cap Agreement dated July 7, 2014 between ATAX TEBS II, LLC and Sumitomo Mitsui Banking Corporation.

	99.1		Press Release dated July 11, 2014.

	AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
Date: July 16, 2014

	By:	/s/ Mark A. Hiatt
		Printed Name: Mark A. Hiatt
		Title: Chief Executive Officer

Exhibit No.		Description

10.1		Sale, Contribution and Assignment Agreement dated July 10, 2014 between America First Multifamily Investors, L.P. and ATAX TEBS II, LLC.

10.2		Subordinate Bonds Custody Agreement dated July 10, 2014 by and among The Bank of New York Mellon Trust Company, N.A., the Federal Home Loan Mortgage Corporation, America First Multifamily Investors, L.P., and ATAX TEBS II, LLC.

10.3		Bond Exchange, Reimbursement, Pledge and Security Agreement dated July 1, 2014 between the Federal Home Loan Mortgage Corporation and ATAX TEBS II, LLC.

10.4		Series Certificate Agreement dated July 1, 2014 between the Federal Home Loan Mortgage Corporation, in its corporate capacity, and the Federal Home Loan Mortgage Corporation, in its capacity as administrator.

10.5		Limited Support Agreement dated July 1, 2014 between America First Multifamily Investors, L.P. and the Federal Home Loan Mortgage Corporation.

10.6		Rate Cap Agreement dated July 7, 2014 between ATAX TEBS II, LLC and Barclays Bank PLC.

10.7		Rate Cap Agreement dated July 7, 2014 between ATAX TEBS II, LLC and the Royal Bank of Canada.

10.8		Rate Cap Agreement dated July 7, 2014 between ATAX TEBS II, LLC and Sumitomo Mitsui Banking Corporation.

99.1		Press Release dated July 11, 2014.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P., a Delaware limited partnership

	By:	AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO, a Delaware limited partnership
	Its:	General Partner

		By:	THE BURLINGTON CAPITAL GROUP LLC, a Delaware limited liability company
		Its:	General Partner

		By:	/s/ Mark A. Hiatt
			Mark Hiatt
			Chief Operating Officer

ATAX TEBS II, LLC, a Delaware limited liability company

By:	AMERICA FIRST MULTIFAMILY INVESTORS, L.P., a Delaware limited partnership
Its:	Member

	By:	AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO, a Delaware limited partnership
	Its:	General Partner

		By:	THE BURLINGTON CAPITAL GROUP LLC, a Delaware limited liability company
		Its:	General Partner

		By:	/s/ Mark A. Hiatt
			Mark Hiatt
			Chief Operating Officer

	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Custodian
	By:	/s/ Michael J. Alfano
		Michael J. Alfano Associate

		CUSIP Number
	Class A Certificates	31350ABK3
	Class B Certificates	31350ABL1

	FEDERAL HOME LOAN MORTGAGE CORPORATION , in its corporate capacity
	By:	/s/ Clayton A. Davis
		Clayton A. Davis
		Senior Director, Multifamily Production
	FEDERAL HOME LOAN MORTGAGE CORPORATION , as Administrator
	By:	/s/ Clayton A. Davis
		Clayton A. Davis
		Senior Director, Multifamily Production

Bond Issue and Series	Original Issue Date	Project Name and Location	CUSIP #	Outstanding Amount Deposited	Interest Rate	Stated Maturity Date	Bond Trustee	Bond Counsel	Deposit Price	Bond Interest Payment Dates	Subject to Stabilization 1
The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee Multifamily Housing Revenue Refunding Bonds (Arbors of Hickory Ridge Project) Series 2012	12/11/2012	Arbors of Hickory Ridge Apartments Memphis, Tennessee	586169 EQ3	$11,450,000	6.25% per annum	1/1/2049	The Bank of New York Mellon Trust Company, N.A.	Kutak Rock LLP	100%	First day of each month	No
Indiana Housing and Community Development Authority Multifamily Housing Revenue Bonds, Series 2013A (Copper Gate Apartments Project)	12/31/2013	Copper Gate Apartments Lafayette, Indiana	45506C AJ6	$5,220,000	6.25% per annum	12/1/2029	U.S. Bank N.A.	Ice Miller LLP	100%	First day of each month	No
Bexar County Housing Finance Corporation Multifamily Housing Revenue Bonds (Dublin Apartments Project) Senior Series 2013A	6/1/2013	Dublin Apartments San Antonio, Texas	088379 ZB1	$7,800,000	6.00% per annum	8/1/2050	U.S. Bank N.A.	Norton Rose Fulbright	100%	First day of each month	Yes
Housing Authority of the City of Durham Multifamily Housing Revenue Bonds (Greens of Pine Glen Project) Senior Series 2012A	10/10/2012	Greens of Pine Glen Apartments Durham County, North Carolina	266785 AG9	$8,396,000	6.50% per annum	10/1/2047	Wells Fargo Bank, N.A.	Hunton & Williams LLP	100%	First day of each month	No
California Statewide Communities Development Authority Multifamily Housing Revenue Bonds (Harden Ranch Apartments Project) 2013 Series V-1	2/13/2014	Harden Ranch Apartments Salinas, California	13079P VK6	$6,960,000	5.75% per annum	3/1/2030	Wilmington Trust, N.A.	Orrick, Herrington & Sutcliffe LLP	100%	First day of each month	No

ARTICLE I DEFINITIONS, CERTAIN CALCULATIONS AND RULES OF CONSTRUCTION
Section 1.01	Definitions	1
Section 1.02	Certain Interest Calculations	1
Section 1.03	Other Definitional Provisions	1
Section 1.04	Rules of Construction	1

ARTICLE II
THE CERTIFICATES AND THE SERIES POOL
Section 2.01	Classes of Certificates	2
Section 2.02	Book-Entry Only for Class A Certificates	2
Section 2.03	Denominations	4
Section 2.04	Execution and Authentication; Persons Deemed Owners	4
Section 2.05	Registration of Transfer and Exchange	4
Section 2.06	Transfer Restrictions Related to Class B Certificates	5
Section 2.07	Mutilated, Destroyed, Lost or Stolen Certificates	5
Section 2.08	No Additional Liabilities or Indebtedness	5
Section 2.09	Initial Authentication and Delivery of Certificates	5
Section 2.10	Identification of the Assets to a Series Pool	6
Section 2.11	Delivery and Possession of Bonds	6
Section 2.12	Purposes and Powers	7
Section 2.13	Recharacterization	7
Section 2.14	Decrease of Aggregate Outstanding Class B Certificate Balance	7

ARTICLE III
SPONSOR COVENANTS; RELEASE EVENT
Section 3.01	Negative Covenants	8
Section 3.02	Other Obligations	8
Section 3.03	Maintenance of Office or Agency	8
Section 3.04	Payment of Certain Fees and Expenses	8
Section 3.05	Liabilities and Recourse Against Freddie Mac and the Sponsor for Liabilities of the Series Pool	9
Section 3.06	The Sponsor’s Interest and Net Worth	11
Section 3.07	Successor Sponsor	11
Section 3.08	Release Event	11
Section 3.09	Sponsor’s Indemnification of the Administrator	12
Section 3.10	Substitution of Bonds After Date of Original Issue.	12

ARTICLE IV
ACCOUNTS AND DISBURSEMENTS; CREDIT ENHANCEMENT
Section 4.01	Collection of Money	14
Section 4.02	Distribution Account; Establishment	14
Section 4.03	Distributions and Payments from Bond Payment Subaccounts	15
Section 4.04	Administrator May Appoint Paying Agents	18
Section 4.05	General Provisions Regarding Accounts	19

Section 4.06	Pledged Class A Certificates	19
Section 4.07	Reports to Holders	19
Section 4.08	Reductions of the Aggregate Outstanding Amounts	19
Section 4.09	Administrator Advances and Daily Administrator Advance Charges	20
Section 4.10	[Reserved]	21
Section 4.11	Credit Enhancement	21

ARTICLE V
RESET RATES; RESET RATE METHOD; RESET DATES
Section 5.01	Determination of Reset Rates, Reset Rate Methods and Reset Dates	23
Section 5.02	Weekly Reset Rate; Monthly Reset Rate	23
Section 5.03	Term Reset Rate; Term Reset Date	24
Section 5.04	Notice of Reset Rate	27
Section 5.05	No Changes in Reset Rate Method During the Two Business Days Preceding Mandatory Tender Date	27
Section 5.06	Maximum Reset Rate	27

ARTICLE VI
THE LIQUIDITY FACILITY; THE TENDER OPTION; MANDATORY TENDER
Section 6.01	Tender Option; Rights of Holders; Liquidity Facility	27
Section 6.02	Funds Held by Administrator	29
Section 6.03	Exercise of Tender Option	29
Section 6.04	Mandatory Tender Events	30
Section 6.05	Notice of Mandatory Tender	31
Section 6.06	Funding Procedures; Payment of Purchase Price	32
Section 6.07	Right of Holder to Elect to Retain Class A Certificates Upon the Occurrence of Certain Mandatory Tender Events	36
Section 6.08	Sole Sources of Payment of Purchase Price	37

ARTICLE VII
TENDER OPTION TERMINATION EVENTS AND CERTAIN MANDATORY TENDER EVENTS; OPTIONAL DISPOSITION RIGHT
Section 7.01	Tender Option Termination Events	37
Section 7.02	Special Adjustment Event	38
Section 7.03	Liquidity Provider Termination Event	40
Section 7.04	Sponsor Act of Bankruptcy	40
Section 7.05	Optional Disposition Date	41
Section 7.06	Clean-Up Event	42

ARTICLE VIII
THE REMARKETING AGENT
Section 8.01	Duties of the Remarketing Agent	42
Section 8.02	Resignation or Removal of the Remarketing Agent	42
Section 8.03	Successor Remarketing Agent	43
Section 8.04	Merger or Consolidation of the Remarketing Agent	43
Section 8.05	Notices by Remarketing Agent	43

ARTICLE IX
EVENTS OF DEFAULT AND RIGHTS AND REMEDIES OF HOLDERS
Section 9.01	Event of Default	43
Section 9.02	Remedies	44
Section 9.03	Waiver of Past Defaults	45

ARTICLE X
THE ADMINISTRATOR; HOLDERS’ LISTS AND REPORTS; BONDHOLDER REPRESENTATIVE
Section 10.01	Certain Duties and Responsibilities	45
Section 10.02	Notice of Non-Monetary Default	46
Section 10.03	Certain Rights of the Administrator	46
Section 10.04	Parties that May Hold Certificates	48
Section 10.05	Information Regarding Holders	48
Section 10.06	Corporate Administrator Required; Eligibility	48
Section 10.07	Resignation	48
Section 10.08	Preservation of Information; Communications to Holder	50
Section 10.09	Bondholder Representative	52

ARTICLE XI
PROFITS AND LOSSES
Section 11.01	Tax Information	52
Section 11.02	Capital Accounts	52
Section 11.03	Allocations of Profits, Market Discount Gains and Capital Gains	53
Section 11.04	Allocations of Losses and Capital Losses	54
Section 11.05	Special Allocations	54
Section 11.06	Tax Allocations; Code Section 704(c)	56
Section 11.07	Allocation Among Holders	56
Section 11.08	Tax Matters; Tax Election	57
Section 11.09	Accounting Method	57
Section 11.10	Tax Matters Partner	57
Section 11.11	Compliance with Code Requirements	58

ARTICLE XII
AMENDMENTS
Section 12.01	Amendments	58
Section 12.02	Execution of Amendments	60
Section 12.03	Effect of Amendment	60
Section 12.04	Reference in Certificates to Amendments	60

ARTICLE XIII
TERMINATION
Section 13.01	Termination	60
Section 13.02	Final Distribution on the Series Expiration Date	61
Section 13.03	Terminating Mandatory Tender Date	62
Section 13.04	Exchange Date	63

ARTICLE XIV
MISCELLANEOUS
Section 14.01	Acts of Holders	67
Section 14.02	Notices	68
Section 14.03	Notices to Holders; Waiver	68
Section 14.04	Successors and Assigns	68
Section 14.05	Severability	68
Section 14.06	Benefits of Series Certificate Agreement	68
Section 14.07	Governing Law	69
Section 14.08	Counterparts	69
Section 14.09	Non-Petition Covenants	69

Exhibit A -- Definitions	A-1
Exhibit B -- Form of Class A Certificates	B-1
Exhibit C -- Form of Class B Certificates	C-1
Exhibit D -- Form of Class B Investor Letter	D-1

Dated as of: _______________________	FEDERAL HOME LOAN MORTGAGE CORPORATION , as Administrator



Attest: ___________________________	By:
Secretary		Chief Executive Officer

	FEDERAL HOME LOAN MORTGAGE CORPORATION, as Administrator or Certificate Registrar


	By:
		Chief Executive Officer

	[Name of Purchaser]


	By:
	Name (Print):
	Title:
	Mailing Address of Purchaser:

	LENDER:
	FEDERAL HOME LOAN MORTGAGE CORPORATION

	By:	/s/ Clayton A. Davis
		Clayton A. Davis
		Senior Director, Multifamily Production

Notional Amount:	USD $31,565,000 (amortizing pursuant to Schedule 1 attached hereto)

Trade Date:	July 7, 2014

Effective Date:	July 10, 2014

Termination Date:	August 15, 2019

Fixed Amount:

Fixed Rate Payer:	Buyer

Buyer’s Payment Date:	July 10, 2014

Fixed Amount:	USD $315,200

Floating Amounts:

Floating Rate Payer:	Seller

Cap Rate:	3.00% per annum

Payment Dates:	Fifteenth (15 th ) calendar day of each month, commencing on August 15 th , 2014, and ending on the Termination Date, subject to adjustment in accordance with the Following Business Day Convention.

Period End Dates:	Fifteenth calendar day of each month, not subject to adjustment.

Floating Rate Option:	USD-SIFMA Municipal Swap Index

Floating Rate Day

Count Fraction:	Actual/Actual

Reset Dates:	Effective Date and thereafter Weekly on Thursday.

Weighted Average Method:	Applicable

Business Days:	A day other than (a) a Saturday or a Sunday, (b) any day on which banking institutions located in the city of New York, New York are authorized or required by law to close, (c) a day on which the New York Stock Exchange is closed or (d) any day on which Freddie Mac is closed.

Rounding Convention:	The simple arithmetic mean of rates expressed as a percentage rounded to five decimal places.

Calculation Agent:	The Seller

	BARCLAYS BANK PLC
	By	/s/ Linda Alexander
	Name	Linda Alexander
	Title	Authorised Signatory

From and Including	To but Excluding	Notional Amount
7/10/2014	7/15/2014	$31,565,000.00
7/15/2014	8/15/2014	$31,565,000.00
8/15/2014	9/15/2014	$31,563,000.00
9/15/2014	10/15/2014	$31,561,000.00
10/15/2014	11/15/2014	$31,559,000.00
11/15/2014	12/15/2014	$31,557,000.00
12/15/2014	1/15/2015	$31,555,000.00
1/15/2015	2/15/2015	$31,553,000.00
2/15/2015	3/15/2015	$31,546,550.34
3/15/2015	4/15/2015	$31,540,077.34
4/15/2015	5/15/2015	$31,525,105.67
5/15/2015	6/15/2015	$31,510,068.34
6/15/2015	7/15/2015	$31,494,964.67
7/15/2015	8/15/2015	$31,479,794.34
8/15/2015	9/15/2015	$31,464,557.34
9/15/2015	10/15/2015	$31,444,591.67
10/15/2015	11/15/2015	$31,424,535.67
11/15/2015	12/15/2015	$31,404,388.34
12/15/2015	1/15/2016	$31,372,482.00
1/15/2016	2/15/2016	$31,351,817.34
2/15/2016	3/15/2016	$31,325,657.34
3/15/2016	4/15/2016	$31,299,378.00
4/15/2016	5/15/2016	$31,271,253.34
5/15/2016	6/15/2016	$31,242,998.67
6/15/2016	7/15/2016	$31,214,613.67
7/15/2016	8/15/2016	$31,186,097.67
8/15/2016	9/15/2016	$31,157,449.67
9/15/2016	10/15/2016	$31,128,670.00
10/15/2016	11/15/2016	$31,099,757.00
11/15/2016	12/15/2016	$31,070,710.00
12/15/2016	1/15/2017	$31,028,195.00
1/15/2017	2/15/2017	$30,998,878.34
2/15/2017	3/15/2017	$30,969,426.67
3/15/2017	4/15/2017	$30,939,838.67
4/15/2017	5/15/2017	$30,910,114.00
5/15/2017	6/15/2017	$30,880,251.67
6/15/2017	7/15/2017	$30,850,250.34
7/15/2017	8/15/2017	$30,820,109.67
8/15/2017	9/15/2017	$30,789,829.34
9/15/2017	10/15/2017	$30,759,408.67
10/15/2017	11/15/2017	$30,728,846.34
11/15/2017	12/15/2017	$30,698,141.67

Payments to Seller:
	Bank:	Barclays Bank Plc, New York
	ABA No.:	026-0025-74
	A/C:	Barclays Bank Plc London
	Favour:	Barclays Swaps & Options Group, New York A/C No.: 050-01922-8

	Remaining Maturity
ICAD Code	One (1) year or under	More than one (1) year up to and including five (5) years	More than five (5) years up to and including ten (10) years	More than ten (10) years

US-CASH	100%	N/A	N/A	N/A
US-TBILL	99%	N/A	N/A	N/A
US-TNOTE	99%	98%	95%	N/A
US-TBOND	99%	98%	95%	95%

Long Term Debt Rating (the lower of S&P/Moody’s)	Threshold

A+/A1 or above	Infinity
A/A2	$1,000,000
At or below A-/A3	$0

Notional Amount:	USD $31,565,000 (amortizing as set forth in Schedule 1 hereto).

Trade Date:	July 7, 2014

Effective Date:	July 10, 2014

Termination Date:	August 15, 2019

Fixed Amount:

Fixed Rate Payer:	Buyer

Buyer’s Payment Date:	July 10, 2014

Fixed Amount:	USD $ 343,000.00

Floating Amounts:

Floating Rate Payer:	Seller

Cap Rate:	3.00% per annum

	ROYAL BANK OF CANADA

	By	/s/ Suzanna Mezzanotte
	Name	Suzanna Mezzanotte
	Title	Authorized Signatory

Payments to Seller:	Bank Name:	JPMorgan Chase Bank, New York
	ABA#:	021000021
	Account Name:	Royal Bank of Canada, Toronto
	Account Number:	001-1-153004
	Beneficiary Swift No.:	ROYCCAT3IMM

Notional Amount:	USD $31,565,000 (amortized as set forth m Schedule 1 hereto)

Trade Date:	July 7, 2014

Effective Date:	July 10, 2014

Termination Date:	August 15, 2019

Fixed Amount:

Fixed Rate Payer:	Buyer

Fixed Rate Payment Date:	July 10, 2014

Fixed Amount:	USD $ 333,200.00

Floating Amounts:

Floating Rate Payer:	Seller

Cap Rate:	3.00% per annum

Floating Rate Payment Dates:	Fifteenth (15th) calendar day of each month, commencing on August 15, 2014 and ending on the Termination Date, subject to adjustment in accordance with the Following Business Day Convention.

Period End Dates:	Fifteenth calendar day of each month, not subject to adjustment.

Initial Period:	From and including the Effective Date to but excluding August 15, 2014.

Floating Rate Option:	USD-SIFMA Municipal Swap Index (formerly known as BMA Municipal Swap Index)

Floating Rate Day

Count Fraction:	Actual/Actual

Reset Dates:	Effective Date and thereafter Weekly on Thursday, provided that the Floating Rate shall be determined on Wednesday of each Week, subject to the Following Business Day Convention, and the Floating Rate will be effective for the seven (7) day period from and including the following Thursday (or if Thursday is the day the Floating Rate is determined, from and including such Thursday) to and including the following Wednesday, without regard to the Following Business Day Convention.

Weighted Average Method:	Applicable

Business Days:	A day other than (a) a Saturday or a Sunday, (b) any day on which banking institutions located in the city of New York, New York are authorized or required by law to close, (c) a day on which the New York Stock Exchange is closed or (d) any day on which Freddie Mac is closed.

Rounding Convention:	The simple arithmetic mean of rates expressed as a percentage rounded to five decimal places.

Calculation Agent:	The Seller

	SMBC CAPITAL MARKETS, INC.
	By:	/s/ Danny Boodram
	Name:	Danny Boodram
	Title:	Vice President


	By:	/s/ Larry Weissblum
	Name:	Larry Weissblum
	Title:	Deputy General Manager

Address:	SMBC Capital Markets, Inc.
	277 Park Avenue, Fifth Floor
	New York, NY 10172
	Attention: President
	Telephone: (212) 224-5022
	Facsimile: (212) 224-4938
	(212) 225-5111 (for payment and reset notices)

Payments to Seller:	Depository:	JPMorgan Chase Bank, N.A. New York Branch
	ABA Routing No.:	021000021
	Address:	New York, NY
	In Favor of:	SMBC Capital Markets, Inc.
	Account No.:	544-7-77993
	CHIPS:	295277