PRILIMINARY OFFIC STATEMENT 11-15-2001 44.

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No representations or assurances can be made that Revenues will be realized by the Borrower in the amounts necessary and at the times required to make any payments with respect to, or in amounts sufficient to pay, the principal of and interest on the Subordinate Bonds or that the Trustee, upon taking of remedial action under the Indenture and the Loan Agreement, will be able to realize amounts sufficient for such purpose. The remedies available to the Trustee in the event of a default in connection with the Subordinate Bonds are severely limited. See "—Risks of Subordination" below. Risks of Subordination The obligation of the Borrower to make payments under the Loan Agreement with respect to the Subordinate Bonds and the enforcement of remedies under the Subordinate Mortgage are subject to substantial limitations imposed by the Indenture,which limitations may affect the timely and ultimate payment of principal of and interest on the Subordinate Bonds. The Trustee may not exercise any remedies upon an Event of Default with respect to the Subordinate Bonds unless the Senior Bonds are paid in full, and any action taken by the Trustee to enforce the Subordinate Mortgage shall be subject to the provisions of the Mortgage. Because the Subordinate Bonds will be secured by a second lien that is subordinate and junior to the Mortgage, the proceeds from any liquidation, insurance or condemnation proceedings with respect to the Project will be available to satisfy the outstanding balance of the Subordinate Bonds only to the extent that the claims of the mortgagee under the Mortgage have been satisfied in full,including any related foreclosure costs. In addition,the Trustee as subordinate mortgagee may not foreclose on the Project unless it forecloses subject to the Mortgage, in which case it must either pay the entire amount due on the Mortgage at or prior to the foreclosure sale or undertake the obligation to make payments on the Mortgage in the event the Borrower is in default thereunder. The Trustee will not have any other source of funds to satisfy the Mortgage or make payments due on the Mortgage. An overall decline in the residential real estate market, the general condition of the Project, or other factors, could adversely affect the value of the Project such that the outstanding balance of the Subordinate Bonds, together with that of the Senior Bonds, exceeds the value of the Project. A decline in the value of the Project would affect the interest of the Trustee as subordinate mortgagee in the Project before having any effect on the interest of the senior mortgagee, and could cause the Trustee's interest in the Project, as subordinate mortgagee, to be extinguished. Maintenance of Sponsor's Tax-Exempt Status The exclusion of interest on the Series 2001 Tax-Exempt Bonds from gross income for federal income tax purposes depends on,among other things,the continued status of the Sponsor as a nonprofit charitable organization described in Section 501(c)(3) of the Code