NACA MEMBERSHIP AGREEMENT1

I. INTRODUCTION
The Neighborhood Assistance Corporation of America ("NACA") and the Neighborhood
Stabilization Fund, Inc. (“NSF”) are affiliated Massachusetts non-profit membership corporations.
Through community outreach and aggressive advocacy activities, NACA has identified, exposed
and opposed predatory lending policies and exploitative practices by financial institutions.
Largely as a result of NACA’s advocacy activities, NACA provides the best homeownership
program in America, including an incredible mortgage product, comprehensive pre- and post-
purchase counseling, and other services and benefits for people who become members of NACA
(“Member” or “Members”).

NACA’s homeownership services were established to provide affordable homeownership

opportunities for low-to-moderate-income persons and people purchasing in low-to-moderate-
income communities. Members who satisfy the requirements of the NACA Program are eligible
to obtain mortgage loans to purchase, purchase and renovate a home, or refinance predatory
loans on their home, at a below-market interest rate with no down payment, no closing costs, no
mortgage fees, and no private mortgage insurance premiums. Members are also eligible to
receive additional benefits developed by NACA in its effort to bring full economic justice to
Members, including post-purchase counseling and financial assistance (the “NACA Program”).
Since NACA does not charge Members for its services, NACA raises the money it needs to
operate and administer the Program from a variety of sources. Some of these sources include
mortgage brokerage, real estate brokerage, and title insurance brokerage fees (paid by persons
other than Members), and Membership Dues. NACA encourages Members to contribute
additional funds to support all of NACA’s programs and advocacy. Such additional support is
greatly appreciated.

This Membership Agreement is very important and should be carefully read and understood
because it sets forth your rights, and the limitation thereof, in the NACA Program and with respect
to NACA and NSF. By signing this Membership Agreement, you acknowledge your agreement
with these terms as a condition of becoming a Member of NACA and participating in all aspects of
the NACA Program.

People interested in NACA can obtain information on NACA and attend a NACA Homebuyer
Workshop without becoming NACA Members. A Member in good standing can begin the home
buying process or refinancing, access the Membership Benefits, work with a NACA Mortgage
Consultant and/or other NACA staff, or access any other aspect of the NACA Program available
to Members. For a Member to be in good-standing, s/he must have completed this Membership
Agreement, be current on his/her Membership Dues if applicable,
and adhere to NACA’s requirements and conditions.

1
This Membership Agreement is subject to modification by NACA from time to time so it may differ from prior
versions. Hence, it is important that you obtain the most recent version and read it carefully prior to signing.

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II. NACA MEMBERSHIP
NACA Members are individual residents in a household who are jointly pursuing, or have
obtained homeownership or refinancing, through NACA, or persons who join for other reasons
and benefits: “Participating Members” are persons in a household who have not yet purchased
a home; “Homeowner Members” have purchased or refinanced through the NACA Program;
and, “Community Members” support NACA’s mission and access non-homeownership
benefits. NACA provides an extensive array of benefits to all Members and is working to
provide additional benefits. Participating and Homeowner Members are also entitled to any
non-homeownership benefits provided by NACA. The benefits and Member responsibilities
are described below as they relate to the Member’s status in the NACA Program:

A. Participating Member Benefits - Home buying Program

The NACA Program consists of comprehensive housing counseling for purchase and
refinance to help Members decide whether and how to purchase a home, how much of a
monthly mortgage payment they can afford, and how to address repairs issues to a home.
NACA’s Participating Members are eligible for a broad range of homeownership services
including: extensive written materials regarding home buying process and issues;
homebuyer classes, which include important real estate information; one-on-one
comprehensive financial and credit counseling; counseling and assistance regarding
documentation necessary to apply and qualify for a mortgage; Purchase Workshops, which
include information on the housing search, use of real estate agents, home repair issues,
mortgage submission and processing, and NACA’s post-purchase program; and, other
assistance as may be important to move Participating Members through the mortgage and
homeownership process. Homeowner Members are also entitled to extensive post-
purchase assistance reserved exclusively for these Members. NACA provides other
benefits to its Members whether or not the Member purchases and finances a home, or
refinances through the NACA Program.

NACA services to its Members are free. Members are required to pay for credit reports,
which are credited to the Member at closing,2 and home inspections. Renovation of a
Member’s home requires payment for services provided to assist the Member’s renovation
project, including but not limited to: administration, work write-ups, inspections during
renovation (Participating Lenders pay up to $600 of these inspection costs), and other non-
construction costs. These costs may have to be paid by the Member or may be financed
as part of the mortgage. Members will likely be required to provide a deposit when they
sign a purchase and sale contract, which is applied towards the purchase of the home.
NACA is not responsible for any of the costs incurred by a Member, including other fees
related to the purchase, financing, refinancing or renovation of a home, and NACA will not
reimburse or indemnify the Member for any costs if a Participating Lender denies the loan
application or for any other reason.

Mortgage Application and NACA Credit Access:

The Member’s request to submit a mortgage application to a Participating Lender will be
considered an application for NACA Credit Access, and no further paperwork or signature

2
NACA has negotiated a reduced-rate fee for credit reports charged by the reporting agencies; these fees are
collected by NACA in order to purchase a report. The credit report is used as part of the NACA Program and is
not provided to the Member.

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 shall be required for the application to be submitted. For NACA to review and accept the
Member’s application for NACA Credit Access, the Member must be NACA Qualified, have
a signed and executed Purchase and Sale Agreement, and have adhered to NACA’s other
program requirements. The application for NACA Credit Access is not a loan application to
a NACA Participating Lender. NACA may request that the Member’s information and
documentation be updated in order to reconsider and/or approve an application for NACA
Credit Access. The taking and submission of the mortgage application to a Participating
Lender reflects approval of the NACA Credit Access application. Regardless of the
outcome of the application for NACA Credit Access, NACA is under no obligation to submit
a mortgage application to a Participating Lender or any other lender. NACA’s approval of
the Member’s application for NACA Credit Access does not guarantee that a Participating
Lender will approve the loan application. The Member is free at any time to apply directly
for credit to any mortgage lender, including Participating Lenders or other lenders outside
of the NACA Program.

The Member can submit an application for NACA Credit Access in writing at their discretion
at any time. NACA can either accept or reject the application, within its sole discretion, and
its decision is final and non-reviewable. If the Member’s application for NACA Credit
Access is denied, NACA will communicate that to the Member and the Member may
request a formal denial from NACA’s national office. A written denial must be requested
before it can be processed. This may take some time, during which period NACA is not
responsible for any costs, damages, or consequences associated with any delays.

The Participating Member has the sole responsibility to apply for NACA Credit Access,
complete a mortgage application, and make sure that all requested documents and
information are timely provided. The act of submitting a mortgage application to a
Participating Lender is the application for NACA Credit Access, and no other actions
(including accessing credit reports as Members move through the NACA Program) by
NACA staff, its agents, or associated vendors constitute an application for credit or NACA
Credit Access. As part of a Member’s application for NACA Credit Access, an
investigation of the Member’s credit standing is conducted, which includes obtaining a
consumer credit report that discloses information concerning a Member’s credit standing,
creditworthiness, and credit capacity. The nature and scope of any such investigation will
be furnished to a Member upon written request made within a reasonable period of time. If
an application for NACA Credit Access is denied due to an unfavorable consumer credit
report, the Member will be advised of the identity of the Consumer Reporting Agency from
whom the credit report was received and of their right to request within sixty (60) days the
reason for the adverse action. This notice is given pursuant to the Fair Credit Reporting Act
of 1970, as amended.

B. Homeowner Members’ Benefits – Post-Purchase Program Benefits

Participating Members can become Homeowner Members by purchasing a home through
the NACA Program and meeting all NACA Program requirements. NACA provides
extensive assistance to Homeowner Members after they purchase their home for as long
as they have a mortgage through the NACA Program. This includes budget counseling,
payment arrangements, and access to financial assistance. This post-purchase program is
in contrast to standard Private Mortgage Insurance, which generally provides little or no
benefit, counseling, or assistance (counseling or financial) to homeowners.
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NACA provides Homeowner Members access to Home Save Counselors, who are
available to work with them if they have budgeting issues, encounter serious financial
difficulties, are late on their mortgage payments, or at risk of losing their home. NACA has
established procedures with its Participating Lenders to provide opportunities for
Homeowner Members to become current on their mortgage and save their home. This
includes assistance with forbearance agreements, which consist of making additional
payments to become current, and modification agreements, which restructure a mortgage
so payments can become current over time. If necessary, NACA can also assist the
Homeowner Members in selling their home even when the payoff would be less than the
amount due, to avoid a more damaging foreclosure sale.

In addition to this post-purchase counseling and assistance, NACA can make financial
assistance available to Homeowner Members in the NACA Program who have suffered a
serious financial setback and require financial help in order to retain their homes and
prevent foreclosure. All NACA Homeowner Members who are Members in good-standing
are eligible to apply for assistance if, at the time they seek assistance, they meet the
following criteria and any other criteria established by NACA in its sole discretion:
1. The Homeowner Member occupies the property purchased through the NACA
Program, and his/her membership is in good-standing;
2. The Homeowner Member has retained his/her mortgage through the NACA
Program, whether with the same lender or through a lender that purchased the
mortgage. Persons who refinance their mortgage forfeit entitlement to assistance
from NACA, the NSF Assistance, and post-purchase counseling and related
benefits;
3. The Homeowner Member has suffered a serious financial setback preventing
him/her from making regular monthly mortgage payment;
4. The Homeowner Member demonstrates a willingness to overcome the setback,
bring his/her mortgage current, and work with NACA’s Home Save Department;
5. The Homeowner Member does not have in excess of three months of mortgage
assistance from NACA or NSF outstanding and unpaid; and
6. The Homeowner Member executes a promissory note and lien securing his/her
promise to repay the assistance obtained from NACA, on such terms as NACA may
establish. The Homeowner Member must sign the Neighborhood Stabilization
Agreement at mortgage application, which incorporates his/her agreement to repay
any assistance that may be obtained. While the NACA lien ensures owner-
occupancy and re-payment of the post-purchase financial assistance provided by
NACA, it also protects Members from putting their home at risk with an unaffordable
second mortgage. Since the NACA lien is considered a soft-second, a lender
providing a second mortgage will ordinarily request that the NACA lien be
subordinated to its lien. NACA will not subordinate for debt consolidation and in
most other circumstances, except for renovations to the home or for a Member’s
education expenses. NACA will evaluate the Member’s financial situation, the
terms of the second mortgage, and the proposed use of the funds in making its
decision as to whether to subordinate. Hence, Members must understand that it is

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 very unlikely that they will be able to utilize any equity in their home to obtain a
second mortgage. NACA has sole discretion on this issue and its decision is final
and not subject to review or challenge in any court or arbitration proceeding brought
by a Member.

Serious financial setbacks include loss of a job or layoffs, unanticipated medical expenses,
loss of tenants in a purchased property, or unanticipated significant home repairs. In such
circumstances, the Homeowner Member applies for assistance to a Peer Lending
Committee (“PLC”) established by NACA that is comprised of other Homeowner Members.
As a condition of applying for assistance, the Homeowner Member may be required first to
consult with a NACA counselor as well as attend a PLC meeting. The PLC follows
guidelines established by NACA, including that the Homeowner Member can only apply for
one month of mortgage payment assistance at a time. The decision to allow or deny
assistance is discretionary and not subject to review or challenge in any court or arbitration
proceeding brought by a Member.

The assistance received by a Homeowner Member accrues no interest, and there is no

monthly repayment schedule unless specifically agreed upon at the time assistance is
rendered. Repayment by a Homeowner Member must occur as soon as possible, but
either before or when the Homeowner Member sells the property or refinances the
mortgage. To secure repayment, NACA requires the Homeowner Member to execute a
promissory note, and NACA also places a lien on the Homeowner Member’s property. The
lien is released and the promissory note discharged when the Homeowner Member repays
the assistance in full or sells or refinances the home. Repayment of the assistance is
required even if a lien and/or promissory note has not been executed and/or recorded.
Homeowner Members expressly authorize NACA to monitor their mortgage payments and
payment status in order to protect the interests and performance of the NACA Program.

NACA intends to operate the assistance substantially as described above, however, NACA
may determine in the future that it is necessary or appropriate to change the criteria,
payments and/or policies for various reasons, including to ensure compliance with
applicable laws or other requirements, meet the changing needs and circumstances of the
low- to- moderate-income persons and neighborhoods that NACA is dedicated to serve,
and/or satisfy NACA’s other goals, organizational needs, and programs. NACA reserves
the right to retroactively apply any such changes to future and existing Homeowner
Members.

Homeowner Members are encouraged to become part of a PLC as well as a Neighborhood

Stabilization Committee (“NSC”) as they are established by NACA. An NSC is a NACA
neighborhood association that usually consists of ten to twenty NACA Homeowner
Members and other residents of the same neighborhood or area. The NSCs meet
regularly, work together and form a powerful force in affecting neighborhood, city, and
national issues, including such issues as government services, safety concerns,
neighborhood events and other issues the NSC identifies. NACA staff and volunteers
assist in the establishment and on-going activities of the NSCs. While NACA Homeowner
Members form the foundation of the NSC, they can and do include other community
residents.

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C. General Benefits - Other Benefits, Advocacy and Information
NACA’s advocacy has provided the foundation and funding for its best in America
homeownership program. This is consistent with its goals of improving housing, economic
and living conditions, and opportunities for primarily low and moderate income persons and
communities throughout the United States and other countries. NACA shall address,
develop, provide, and/or administer housing, financial, lending, credit, employment,
community development, economic revitalization, educational, health care and other
programs and services to increase the prosperity and quality of life of low and moderate
income people and communities, particularly minority, and/or other persons who have may
have been victimized by abusive lending practices and/or deprived of equal access to such
opportunities, capital, and services. NACA is continually developing programs and benefits
for its Members. NACA is working to provide financial opportunities in the areas of banking
services, credit cards, automobile financing and insurance, and other consumer financial
products. NACA also, in its sole discretion, addresses economic and social justice issues
in all areas of society.

To accomplish the above, NACA will continue to utilize direct, high-profile (often
intentionally confrontational and uncompromising) advocacy campaigns that may include
protests, demonstrations, actions, and/or engaging in litigation against persons or
companies that discriminate against or victimize others. NACA will provide information,
positions and/or opportunities for its Members regarding the above activities and/or relating
to policies, legislation, initiatives, local and federal representatives, and persons to the
greatest extent permitted by law and regulations.

NACA also assists its Members in understanding and using internet technologies, including
web and email access. This helps reduce the technology divide, improve Members’
opportunities, and is important in effectively utilizing the NACA Program.

All Members must be aware of and understand these goals and activities since they
constitute an essential mission of NACA. While NACA respects any person’s or Member’s
right to disagree with these goals or tactics, any person seeking membership in NACA who
strongly disagrees with NACA’s mission, methods of advocacy, and services are advised to
discontinue pursuit of membership or homeownership through NACA. Joining NACA is an
person’s expression of approval of NACA’s mission and tactics, and Members specifically
authorize NACA to correspond with them on a regular basis to advise and update them on
these and other activities and issues of interest.

III. MEMBERSHIP REQUIREMENTS

To obtain the NACA mortgage and to receive all of NACA’s services and benefits for free,
NACA requires all Members to retain membership in good-standing by satisfying, adhering to
and agreeing to the below Membership requirements. The below requirements universally
apply to Members. Other NACA Program and Membership criteria may vary slightly from
office to office. NACA, in its sole and absolute discretion, determines whether a Member
satisfies the requirements and procedures of the NACA Program and is qualified to obtain or
retain membership. NACA reserves the right to deny, disqualify or terminate membership,
benefits and services to a Member at any time, or to change NACA Program and membership

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requirements to comply with applicable laws or other requirements, meet the changing needs
and circumstances of the low- to- moderate-income persons and neighborhoods, and/or satisfy
NACA’s other goals, organizational needs, and programs. NACA’s decisions regarding
Membership, NACA Program procedures, requirements, and the compliance thereof are final
and cannot be made the subject of any civil claim, suit, litigation, or arbitration brought by a
Member (or a person whose membership has been denied or terminated) against NACA.
These requirements include, without limitation:

1. Compliance with the policies, procedures, and requirements as set forth in this
Membership Agreement and such policies, procedures and requirements as they are
developed from time to time by NACA in its sole discretion. Any changes become
effective on the date specified by NACA and shall apply to all Members as
determined by NACA;

2. Meeting all deadlines and NACA Program requirements, including scheduling and
attending all required appointments and completing all required documentation on a
timely basis;

3. Participation in at least five activities a year to support neighborhood stabilization

initiatives and other issues in support of NACA’s Program and mission. Such
participation may be required as a condition for the Member to be NACA Qualified.
The Member can participate in whatever manner he/she feels comfortable. In this
regard, the Member makes the following pledge upon execution of this Agreement,
which will be signed at the initial counseling session:

I pledge to participate with NACA in future community outreach and advocacy

campaigns. I understand that community advocacy is the major reason that
NACA can provide America’s Best Homeownership Program including free
individualized comprehensive housing services to its Members. I embrace
NACA’s mission to revitalize communities, address financial exploitation,
promote economic justice, and eliminate predatory and discriminatory lending
practices.

I therefore pledge to stand with NACA in pursuit of this mission. I will

participate in at least five actions and activities a year, such as neighborhood
outreach, rallies, demonstrations and public education during my home buying
process and for as long as I have the loan I obtained through NACA.

4. All Members, including the applicant, co-applicant(s), and other household members
who will live in the home, cannot own other property at the time of the closing on the
home through the NACA Program;

5. Residence by the Member(s) in the home purchased or refinanced through the

NACA Program for as long as the Member has a mortgage obtained through the
NACA Program. Owner-occupied housing is fundamental to NACA’s mission of
stabilizing communities. To enforce this requirement and prevent the NACA
Program from being abused by investors or others with no long-term interest in the
community, NACA requires that a lien be placed on any property purchased through
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 the NACA Program, and that Member(s) execute a promissory note to NACA in an
amount and upon such terms as are determined by NACA in its sole discretion to be
paid if the property is not owner-occupied (e.g. converted to an “investment”). You
will need to sign the Neighborhood Stabilization Agreement that incorporates this
lien and promissory note at mortgage application. The lien and/or note do not limit
NACA or the lender from taking additional actions to enforce the owner-occupancy
requirement, such as foreclosing on the mortgage or NACA’s lien. NACA will
release the lien upon the sale or refinancing of the house upon payment of any post-
purchase received by the Member;

6. Payment of the NSF Fee/Membership Dues as stated in Section IV herein;

7. Membership in NACA does not carry with it any rights to participate or vote in the
election of NACA’s Directors, Officers, or on any amendments to its Bylaws or
policies or procedures. Members are not empowered to participate in any other
corporate matter or affair, unless specifically identified and agreed to by NACA.
Members are not entitled to any financial statements or information from NACA
regarding corporate affairs, programs, other Members or persons involved in any
aspect of the NACA Program, or use of funds including Membership Dues except to
the extent required by law;

8. Execution of the Member’s Authorization form;

9. Members are prohibited from paying any other fee or making any other payment to a
NACA employee, independent contractor or approved vendor in the NACA Program,
other than those specifically authorized in writing under the NACA Program. NACA,
at its discretion, can disqualify Members from the NACA Program and take other
appropriate action if the Member pays any unauthorized fee or payment. Any other
payments must be approved in advance in writing by NACA’s national office.
Members are to contact NACA’s Member Services Coordinator at 1-888-297-5568 if
they are requested to make any other payment or make payment to any person
other than NACA in connection with the NACA Program;

10. Refrain from engaging in any conduct deemed by NACA to be harmful, threatening,
demeaning, or contrary to its interests, staff, mission, and agents; and

11. Execution by the Member of this Agreement, whereby the Member forever and fully
releases, discharges, and holds harmless NACA, its affiliates, officers, and
employees from any and all damages, liability, or claims of any kind resulting from
the Member’s participation in the NACA Program, in accordance with the terms and
conditions further set forth below in this Membership Agreement.

Because these NACA Program requirements are serious and set forth the terms, rights, and
conditions of this non-profit program, any person who has questions or concerns about these
terms, or who does not fully understand or agree with such terms, should refrain from or delay
joining NACA. NACA encourages anyone who has any concerns about any of the rights,
responsibilities, limitations of the NACA Program (or the risk and benefits of
homeownership and financing) to seek independent legal, financial, and/or tax advice
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before executing this Agreement or becoming a NACA Member. Any person or Member
who has concerns about his/her membership and/or NACA’s services and benefits must
contact NACA’s Member Services Director at the National Office in Boston at 1-888-297-5568
so that NACA can be given a fair opportunity to evaluate and resolve the particular concerns.

IV. NSF FEE/MEMBERSHIP DUES

The Homeowner Member pays a monthly NSF Fee or Membership Dues (collectively the “NSF
Fee/Membership Dues”). Payment of the NSF Fee constitutes and automatically satisfies the
Membership Dues. Participating and Community Members pay Membership Dues that are set
by NACA, the amount of which may be ascertained from NACA’s staff, its local offices, or from
other methods of communication. All Membership Dues and the NSF Fee are non-refundable
and non-transferable, regardless of whether a Member ever obtains a purchase mortgage or
refinance loan. All fees are set, subject to change at any time, and used by NACA in its sole
discretion and do not constitute investments by a Member in NACA, or entitle Members to any
assets, principal or income of or that may be generated by NACA and/or its affiliates. NACA
may also from time to time make special assessments on its Members, and any such
assessments will be payable as an additional amount of the NSF Fee/Membership Dues.

Failure by a Homeowner Member to pay the NSF Fee/Membership Dues due to mortgage
delinquency shall not automatically affect the Homeowner Member’s membership status.
Failure to timely and fully pay NSF Fee/Membership Dues for other reasons may result in a
loss of good-standing and establish cause for immediate termination of eligibility to participate
in any programs benefits or services in the NACA Program and constitute being held in default
of this Agreement.

1. Participating Members
The Membership Dues are a set amount payable annually that covers and includes all
residents of a household who are jointly pursuing homeownership. This fee applies
regardless of when the person(s) or household become a Member (i.e. the Membership
Dues are not pro-rated). The Participating Member’s Membership Dues that covers all
aspects of pursuing home ownership through the NACA Program for 2007 are $20.
These Dues must be paid for all current and new participants in the NACA Program
prior to receiving counseling or any other aspect of the NACA Program, including
applying for NACA Credit Access and submitting a purchase mortgage application. The
Dues should be paid at the local NACA office or national office and are non-refundable,
even if the Member declines to pursue a mortgage or other services from NACA. For
people considering the NACA Program, they can only become Members after attending
a Homebuyer Workshop and for people seeking to refinance they must also be
approved as eligible for the NACA Program prior to becoming Members.

2. Homeowner Members
NACA Homeowner Members pay the monthly NSF Fee/Membership Dues of $50 per
month over a period ranging from five to ten years (total payments of between $3,000
and $6,000). This payment covers all residents of a household who have purchased or
refinanced a home through the NACA Program. The total NSF Fee/Membership Dues
depend on the mortgage amount: Mortgages less than $100,000 require Homeowner

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 Members to make monthly payments for five years; mortgages of $100,000 to $199,999
require Homeowner Members to make monthly payments for seven and one-half years;
and, mortgages of $200,000 and greater require Members to make monthly payments
for ten years.3 By executing this Membership Agreement, Homeowner Members agree
to the NSF Fee/Membership Dues, which are collected by the Participating Lender
along with mortgage payments.

The NSF Fee/Membership Dues eliminate the need for costly private mortgage
insurance (“PMI”). Historically, mortgage lenders have required that low- to moderate-
income persons pay PMI because they typically do not have enough savings to make
substantial down payments plus pay closing costs when purchasing a home. The
premiums charged for PMI are paid by the homebuyer in addition to the homebuyer’s
monthly mortgage payments. For example, the typical premiums for PMI for a home
that costs $100,000 could be greater than $9,000 over the life of a 30 year loan. PMI
provides no real benefit to the homeowner or to the community.

Payment of the NSF Fee/Membership Dues begins at the time the mortgage is
obtained. This payment is sometimes included as a part of settlement costs with the
first installment collected at the time of closing. Thereafter, the NSF Fee/Membership
Dues are included in the Homeowner Member’s monthly mortgage payment to the
Participating Lender. The lender’s sole responsibilities with respect to the NSF
Fee/Membership Dues are to collect and remit payments to NACA. The Homeowner
Member releases the Lender from any liability, claims, or damages of any kind related
to the administration and collection of the NSF Fee/Membership Dues, and may be
required to sign a release giving further evidence of this agreement (the “Lender’s
Release”). The Lender’s Release must be signed by the Homeowner Member at or
prior to the closing on the mortgage.

The NSF Fee/Membership Dues are not refundable under any circumstance, even if the
Homeowner Member never receives any post-purchase assistance or financial
assistance, or fails to meet the eligibility requirements. Thus, the NSF Fee/Membership
Dues are retained by NACA and made available for use by NACA and/or other
Homeowner Members and programs consistent with legal or other restrictions.

Once the Homeowner Member has paid all NSF Fee/Membership Dues required (i.e.
between $3,000 and $6,000 depending on the mortgage amount), the Homeowner
Member may stop making additional payments. The Homeowner Member is not
obligated to make payments if they sell their home or refinance through another
program or lender. The Homeowner Member is then a Lifetime Member of NACA,
eligible to receive all of the benefits associated with the NACA Program, subject to the
eligibility requirements: post-purchase assistance, including the NSF Assistance, is only
available for Members who continue to have the mortgage obtained through NACA and
meet all other NACA Program requirements. The Life Time Membership is not
dependent on having a NACA Mortgage or owning the home they purchased through

3
These periods may be extended by NACA to account for any Homeowner Member who fails to timely make all
required monthly payments. NACA may change the monthly contribution and/or the total time period for making
such payments.

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 NACA, although they must remain a Member in good- standing and NACA will continue
to have the sole discretion in terminating members as stated herein. If the Homeowner
Member sells or refinances prior to making full payment of the NSF Fee/Membership
Dues, they will not be Life Time Members but can remain Members of NACA by paying
the yearly Membership Dues for Participating and Community Members.

3. Community Members
The Membership Dues are a set amount determined by NACA payable annually.
These dues apply regardless of when the person(s) become a Member (i.e. the
Membership Dues are not pro-rated). All persons must pay the required Membership
Dues to be eligible for NACA Program benefits. These Dues are non-refundable, even
if the Member declines to pursue a mortgage or other services from NACA. The
Community Member’s Dues for 2007 are $20. These Dues need to be sent to NACA’s
national office.

V. EXPRESS LIMITATIONS ON RIGHTS, REPRESENTATIONS, AND WARRANTIES

The following sections are very important and should be carefully read and understood
because they set forth specific limitations and restrictions on, and waivers of, your rights in the
NACA Program and with respect to NACA and its affiliates.

A. Compliance with Law and Non-Discrimination

NACA promotes fair housing and equal credit and complies with all applicable laws and
regulations. NACA does not unlawfully discriminate against any applicants, persons or
Members on the basis of race, color, religion, national origin, sex, marital status, age
(provided the person has the capacity to enter into a binding contract); because all or part
of an Member’s income is derived from any public assistance program; because such
person has in good faith exercised any right under the Consumer Credit Protection Act; or,
on the basis of any other protected status. Members need not reveal income derived from
alimony, child support or separate maintenance payments, unless they want this income
considered in determining their creditworthiness. NACA will request information from the
Member regarding the number and ages of any dependents or about dependent-related
financial obligations or expenditures; however, NACA shall not inquire about childbearing or
child rearing intentions. Any information a Member is asked to provide regarding race,
national origin, citizenship, sex, age, religion, gender, marital status, disability, and source
of income, NACA may request for its own information or is required to request by the
Federal Government in order to monitor compliance with the Equal Credit Opportunity Act
or other applicable regulations. Unless expressly required by law, a Member is not
required to supply this information.

B. Notice of Risk of Homeownership and Related Disclaimers

The process of looking for, buying, financing, and owning a home is filled with emotional,
legal, important obligations and financial risks. All persons are strongly advised not to
pursue membership in NACA, sign a binding Purchase and Sale agreement for a home, or
submit a mortgage loan application through NACA or any other entity until they have
consulted with an attorney and/or other qualified professionals who can advise them in
connection with the purchase, refinance, or renovation of their home and the closing of their

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 mortgage loan. NACA does not, and does not claim to, advise about, indemnify, or protect
any Member from these or related risks. NACA cannot (and does not undertake any duties
to) protect the Member from these risks. For example, the Member makes the decision to
purchase a home and is responsible for the required deposit, but the Participating Lenders
in the NACA Program make the final underwriting decision. In addition, the Member may,
through no fault of his/her own, suffer a serious financial setback that could prevent him/her
from making monthly mortgage payments. If problems arise, NACA may be available to
provide counseling, but Members must understand that NACA may not be able to suggest
and/or provide the best or most appropriate solution that is acceptable to them.

NACA, its employees and agents do not now, and are not later authorized to, make any
representations, statements, warranties or assurances of any kind that its mortgage
product or services (or those of outside vendors participating in the NACA Program) are
appropriate, the best for, or the only ones available to a particular person or Member.
NACA encourages all persons and Members to research and identify other mortgage
products, real estate broker and agent services, real estate settlement and title insurance
services, and any other services that may also or better meet their needs than the
programs and services provided by NACA (or by others to whom Members may be
referred). If requested, NACA can help Members evaluate other mortgage products and
services. Members ultimately decide which mortgage product, real estate services and
other venders and services to select, and whether or not to pursue a mortgage through the
NACA Program on its terms, conditions, and limitations

C. No Representations or Warranties
No Member should, or is entitled to, rely upon any statement, representation, or alleged
warranty that is different from or inconsistent with the provisions and restrictions herein.
NACA employees or agents do not have the authority to warrant, recommend, require or
encourage any Member to purchase, refinance or renovate a particular property even when
the Member meets the eligibility requirements and/or is qualified to submit a mortgage
(“NACA Qualification”), or make any representations or warranties regarding the benefits,
risks, rights, interests, quality, or any conditions relating to the purchase, refinance, home
renovation, and/or participation in the NACA Program. NACA also cannot and does not
offer legal, tax or accounting advice to Members. Members should discuss these issues
with a lawyer and/or the person who helps the Member prepare their taxes. Members must
understand that NACA disclaims and denies any obligations (including any obligation
to indemnify a Member), and does not make any representations, warranties or
promises, express or implied, to Members, or upon which Members should rely, concerning
any of the below disclaimers and denials:
1. That NACA represents the Member’s interests, either as a fiduciary, agent, broker, or in
some other capacity wherein it would owe a duty of care to the Member;
2. That the Member will qualify for a mortgage loan from one of the Participating Lenders;
3. That a Member who is NACA Qualified or NACA Credit Access approved will have their
mortgage application approved by a Participating Lender;
4. That the Member will receive financial or other assistance and that NACA is responsible
for any damages that may result if assistance is not provided;
5. That participating in the NACA Program and purchasing, refinancing or renovating a
particular home is the correct financial, tax, legal, or personal decision for the Member;

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 6. That the home the Member purchases, refinances or renovates through the NACA
Program is suitable and will meet his/her purposes or expectations;
7. That the home the Member purchases, refinances or renovates is free of defects, has
only those defects identified during a home inspection, or that any defects in the
property can be resolved through renovation or for a specific price;
8. That participating in the NACA Program is free from risk, including risks associated with
the purchase, refinancing and renovation of a home such as, without limitation, loss of
financing, default, faulty, incomplete or substandard construction services, and property
loss through natural or other causes;
9. That the property is worth the amount of the mortgage or that the property’s value will
remain the same or increase in value;
10. That NACA is responsible for scheduling any appointment and ensuring that all
deadlines will be met, including, but not limited to: taking and submitting the mortgage
application; Purchase and Sale Agreement requirements and commitments; Mortgage
approval date; Closing Date; Payoff Date; stopping submission to foreclosure;
preventing property auction; home renovations by third-party contractors, vendors, and
inspectors; and/or any other contractual or other requirements. That NACA has any
financial, contractual or other obligation if these, other deadlines, or other obligations of
the Members are not met;
11. That the services performed by vendors, contractors, inspectors, or other third-parties
will be cost-effective, satisfactorily performed, or free of defect. NACA makes no
representations, warranties, or guarantees whatsoever regarding the performance of
such third-parties, and denies and does not assume any obligations to monitor, inspect,
indemnify the Member against losses, poor workmanship, theft, or be in any way
responsible for the quality, completeness, and performance of their work.

D. General Program and Membership Requirements and Disclaimers

NACA materials, procedures and requirements apply generally to the NACA Program and
are not intended to specifically address Member’s unique financial situation or issues.
NACA undertakes no duty, and has no obligation, to the Member to monitor or ensure that
s/he satisfies each requirement or procedure regarding the NACA Program and his/her
loan, home, or other NACA Program benefit. Any obligation on behalf of NACA to provide
any benefits under any aspect of the NACA Program is expressly conditioned upon the
Member first satisfying all of the NACA Program requirements.

If NACA is requested to obtain documentation or take actions on the Member’s behalf that
result in costs to NACA, such costs may be passed on to the Member. NACA may provide
Members with referrals or lists of third-party vendors or refer Members to them. NACA may
require that Members use venders who meet certain requirements as determined by
NACA. These third-party venders could include, but are not limited to: Home Inspectors,
Attorneys, Appraisers, Homeowner Insurance Agencies, Rehabilitation Specialists, general
contractors and construction tradespersons, and/or Real Estate Agents/Brokers. NACA
makes absolutely no representations or warranties as to the qualifications, skills or
appropriateness of these persons or companies, and NACA makes absolutely no
representations concerning, and does not in any circumstance warrant or guarantee any
aspect of their performance. NACA will not reimburse or indemnify Members for any funds

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 paid to these or any other vendors or for any damages incurred by Members as a result of
any actions, inaction, negligence or misconduct of any kind by such persons, third-parties,
or companies.

Members should not leave any original or copies of any documents with NACA. NACA has
created a paperless mortgage counseling, processing and underwriting system. Thus,
Members’ documents should be scanned into the system and returned as a matter of
standard practice. While NACA may retain documents and/or copies, they will not be
returned to the Member unless required by law. Any and all documentation obtained by
NACA employees and staff becomes NACA’s privileged work-product and property. NACA
is not responsible for the loss, theft or destruction of data, financial information, and/or
documents, including identity theft excepting such liability as required by laws and
regulations. NACA strongly recommends that all Members maintain a file of their
documents.

E. EXPRESS WAIVERS OF LIABILITY AGAINST NACA, AND REQUIRMENT OF

ARBITRATION OF ANY AND ALL CLAIMS
The Member understands the benefits and obligations of participating in the NACA
Program and that they may, at any time prior to the closing on their mortgage loan cease
participating in the NACA Program without obligation to NACA. In addition, by the
signatures below, the Member acknowledges and understands the risks involved in
purchasing, refinancing, renovating and owning their own home and hereby forever and
fully releases and agrees to hold harmless NACA, its affiliates, directors, officers, staff,
agents, independent contractors, consultants and programs from and against any and all
claims (including claims of negligence), suits, losses, costs, expenses or damages
(including attorneys’ fees) of any kind that may result from, arise out of, or otherwise relate
in any way to his/her application, membership, or participation in NACA including, without
limitation, from the purchase, financing, refinancing, renovation of his/her home, or
participation in or exclusion from NACA or other NACA Program benefits and services.

In addition to the foregoing, the Member agrees that should there ever arise a controversy
or claim with NACA, its affiliates, directors, officers, staff, agents or independent contractors
resulting from, or otherwise relating in any way to, the NACA Program, the purchase,
financing, refinancing, renovation of the Member’s home, or participation in or exclusion
from NACA, or other NACA Program benefits and services including, without limitation,
whether any such claim or dispute is subject to arbitration, the Member knowingly, willingly,
and after having time to consult with legal counsel waives the right to trial by jury and
agrees to submit any and all such controversies, dispute, suits, demands, or claims of
damage of any kind for resolution to the American Arbitration Association or other
arbitration service agreed to by the parties, to be resolved in accordance with its rules and
procedures. Any arbitration hereunder shall be held in Boston, Massachusetts, or at such
other convenient venue or forum as NACA may designate following receipt of a written
demand for arbitration in order to comply with law. If this venue provision is ever rendered
unenforceable for any reason, it shall not affect the parties’ unconditional agreement and
obligation to submit the controversy or claim to arbitration in a lawful venue. The judgment
in the arbitration proceeding shall be final and binding on the parties, and the judgment on
such award rendered by the Arbitrator may be entered in any court having competent
jurisdiction. Each party required to participate shall be personally responsible for their
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 share of the costs of arbitration (or those required by the arbitration tribunal); provided,
however, that if NACA prevails in any such arbitration NACA shall, in addition to all other
remedies provided by law, be entitled to an award of its reasonable attorneys’ fees and
costs.

F. THE MEMBERSHIP AGREEMENT

This Membership Agreement is the only such agreement between NACA and the Member,
thereby replacing any other agreements or statements of any kind on the subject matter
addressed in this Agreement. The Membership Agreement cannot be changed unless the
Member and NACA agree to a change in writing. If NACA does not enforce a particular
provision of the Agreement at any given time, it does not mean that it has given up its rights
to insist that the Member comply with the Agreement on all other occasions. If the
Membership Agreement contains any term(s) that are found to be invalid or overbroad for
any reason, the overbroad provision may be narrowed to comply with the law. The
Agreement shall nevertheless remain in force. The Membership Agreement is binding on
all persons who execute the Agreement, as well as their heirs and other legal
representatives. Membership in NACA, as well as this Agreement, cannot be assigned by
a Member to someone else. For convenience, this Agreement may be signed in
counterparts without causing any change in the Agreement or its terms. Because NACA
encourages every Member to take the time to review this and any other agreement with
NACA with his/her own legal counsel, any ambiguity in the terms of this Agreement should
not be interpreted against NACA.

By the signature(s) below, the Undersigned acknowledges and agrees that s/he has had time
and the full opportunity to carefully read, and understand his/her rights and obligations as a
NACA Member and agrees to be bound by the terms, statements, requirements, disclaimers,
and restrictions as described and set forth in this Membership Agreement.4

Member One:
Electronic Signature
Name: _______________________________ Signature: _____________________________
Date: _____________ Social Security Number: _______

Member Two:
Name: _______________________________ Signature: _____________________________
Date: _____________ Social Security Number: _______

Member Three:
Name: _______________________________ Signature: _____________________________
Date: _____________ Social Security Number: _______

If the Member wishes to have a copy of this signed Membership Agreement, s/he should request it from a NACA staff
4

person.

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