Section 346-1-12 - Loan Document RequirementsA.Security. The Mortgage Loan shall be evidenced by a promissory note and secured by a perfected first lien Mortgage on an Eligible Residence.B.Binding Obligations. The Mortgage, note and any other instruments securing the Mortgage Loan shall create legal, valid, and binding obligations of the Mortgagor, enforceable in accordance with their terms, free from any right of set-off, counterclaim, or other claim or defense.C.Use of Funds. Mortgage Loan funds shall be used only to finance the acquisition, acquisition plus improvement, or qualified rehabilitation of an Eligible Residence. D.Term. The original term of the Mortgage Loan shall not exceed thirty years excluding any construction period.E.Amortization. The Mortgage Loan documents shall provide for monthly payments, interest payable in arrears, and full repayment by maturity. Amortization shall commence within two months after closing. Monthly amortization payments shall be due on the first day of each month, and the final payment date shall be shown on the loan documents.F.Late Fee. The Mortgage shall provide for a late charge in an amount not to exceed 5% on payments fifteen days or more past due.G.Escrow. The Mortgage shall provide for the monthly collection of escrow payments for real estate taxes, any mortgage insurance premiums, and hazard insurance premiums in addition to the monthly amortization payments.H.Good Repair. The Mortgage shall require the Mortgagor to keep the residence in good repair and condition, to keep the residence free from liens and encumbrances, and to maintain hazard insurance.I.Lender's Compliance with Laws. Lenders shall make the Mortgage Loans in compliance with all applicable federal and state laws, rules and regulations, including without limitation truth-in-lending laws, fair credit reporting laws, and equal opportunity laws.J.Mortgagor's Compliance with Rule. The Mortgage shall contain covenants and representations assuring the Mortgagor's compliance with this rule.K.Due-On-Sale. The Mortgage shall contain a due-on-sale clause.99- 346 C.M.R. ch. 1, § 12