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13. Borrower shall enter into a loan agreement with the City of Pleasanton covering the total amount of funds loaned by the City via a Promissory Note secured by a Deed of Trust for each loan. Failure by borrower to make timely loan payments to the City may result in the default of the City's loan(s) and forfeiture of ownership by the borrower. Loan funds may be used only to purchase a house and to pay for any nonrecurring closing costs associated with purchasing the home. Buyer shall not use loan funds to finance repairs, room additions or to purchase any non- real property. Cash-out transactions are not eligible. 14. Borrower must have sufficient creditworthiness to qualify for a first mortgage from a Ca1HFA-approved lender. First mortgages must be fixed rate loans with no negative amortization, balloon payments or adjustable rate features and must be approved by the City. 15. Execution of the City's second mortgage documents shall be performed at close of escrow by the Escrow Company. 16. Fulfilling the above requirements is the sole responsibility of the homebuyer. Failure to fully satisfy the above Program requirements as determined by the City's Housing Division, may result in a delay in funding or in loan denial. 17. Borrower must submit a complete application package to the City's Housing Division at least four weeks prior to the scheduled close of escrow. Upon determination of eligibility for the Program, by the City's Housing Division, borrower shall receive apre-approval letter stating Program Eligibility. This letter shall indicate the maximum amount of loan funds for which the buyer has been pre-approved. This letter only serves as a determination of loan eligibility. Since funding is limited and is available on a "first-come, first-served" basis, apre-approval letter is not a guarantee that funds will be available to the borrower when requested. The specific steps for disbursement of loan funds following pre-approval are attached to these guidelines. 18. Homebuyer must successfully complete aCity-approved homebuyer training program prior to the close of escrow. 19. Priority shall be given to persons who live and/or work in the City of Pleasanton consistent with the City's adopted preference system for affordable housing projects.