Exhibit
10.9






CUSTODIAL
AGREEMENT






Dated as
of October 30, 2007






Among






MINISTRY
PARTNERS FUNDING, LLC


as the
Borrower






EVANGELICAL
CHRISTIAN CREDIT UNION


individually
and as the Servicer






BMO
CAPITAL MARKETS CORP.


as the
Agent




LYON
FINANCIAL SERVICES, INC.


(d/b/a
U.S. Bank Portfolio Services)


as the
Back-up Servicer








and










U.S. BANK
NATIONAL ASSOCIATION


as the
Custodian






1












CUSTODIAL
AGREEMENT




CUSTODIAL
AGREEMENT, dated as of October 30, 2007 (this “Agreement”), among
U.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”), as
custodian (together with its successors and permitted assigns in such capacity,
the “Custodian”), LYON
FINANCIAL SERVICES, INC. (d/b/a U.S. Bank Portfolio Services) as back-up
servicer (together with its successors and permitted assigns in such capacity,
the “Back-up
Servicer”), MINISTRY PARTNERS FUNDING, LLC (the “Borrower”),
EVANGELICAL CHRISTIAN CREDIT UNION, individually (“ECCU”) and as
Servicer (together with its successors and permanent assigns in such capacity,
the “Servicer”)
and BMO CAPITAL MARKETS CORP. (“BMO”), as Agent (the
“Agent”).




W I T N E S S E T
H




WHEREAS,
pursuant to the Loan, Security and Servicing Agreement, dated as of the date
hereof (as amended, restated, supplemented and/or otherwise modified from time
to time, the “Loan
Agreement”), among Fairway Finance Company, LLC as the Lender named
therein (the “Lender”), the Agent,
the Borrower, ECCU, the Custodian, the Account Bank and the Back-up Servicer,
the Lender has agreed to provide financing for the purchase by the Borrower of
certain Mortgage Loans and the other Purchased Assets related
thereto;




WHEREAS,
pursuant to the Loan Agreement, the Borrower has granted to the Agent, for the
benefit of the Lender, a security interest in, among other things, all of the
Mortgage Loans and the related Mortgage Files for the purpose of securing the
due and punctual payment of all amounts due from the Borrower under the terms of
the Loan Agreement;




WHEREAS,
the Agent desires that the Custodian take possession of and hold the Mortgage
Files and other documents related thereto as the Custodian for, and bailee of,
the Agent, for the benefit of the Lender;




WHEREAS,
the Agent desires that the Custodian take certain other actions specified
herein;




NOW,
THEREFORE, in consideration of the mutual agreements herein contained and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:




1.           Definitions. Capitalized
terms used but not otherwise defined herein have the meanings ascribed thereto
in the Loan Agreement.  The following terms shall have the following
meanings when used in this Agreement:




“Collateral Receipt”
has the meaning set forth in Section 4(a)
hereof.




“Custodial Monthly
Report” has the meaning set forth in Section 6(d)
hereof.




“Deficiency” shall
mean as of any date and with respect to any Mortgage File and Mortgage Loan
related thereto (i) the failure of any one or more of the documents, instruments
or agreements
contained therein to appear on their face to be fully executed or to correspond
substantively to the information on the related Mortgage Loan Schedule; (ii) any
one or more of the documents, instruments or agreements contained therein are
mutilated, materially damaged, torn or otherwise physically altered; (iii) the
absence from a Mortgage File of any document, instrument or agreement required
to be contained therein as of such date, or (iv) any discrepancies between
the information set forth in the Mortgage Loan Schedule with respect to such
Mortgage Loan and the information set forth in the Mortgage File.




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“Material Adverse
Effect” means a material adverse effect on (i) the financial condition or
operations of the Custodian, (ii) the ability of the Custodian to perform its
obligations under this Agreement or any other Transaction Document, (iii) the
legality, validity or enforceability of this Agreement or any other Transaction
Document, (iv) the Agent’s first priority perfected security interest, for the
benefit of the Secured Parties, in the Mortgage Loans generally or in any
significant portion of the Mortgage Loans or any other Collateral, or (v) the
collectibility of the Mortgage Loans generally or of any material portion of the
Mortgage Loans.




“Mortgage File” has
the meaning given to such term in the Purchase Agreement.




“MPIC” means Ministry
Partners Investment Corporation, a California corporation.




“Notice of Pledge”
means a fully executed Confirmation and Notice of Pledge in the form of Exhibit 5 to
this Agreement.




“Purchase Agreement”
means either the ECCU Mortgage Loan Purchase Agreement or the MPIC Mortgage Loan
Purchase Agreement, as the context requires.




“Purchased Asset” has
the meaning given to such term in the Purchase Agreement.




“Request for Release of
Documents” means a request for release, appropriately completed,
substantially in the form of Exhibit 1 to
this Agreement.




“Specified Documents”
means, with respect to any Mortgage File, the documents required to be contained
therein pursuant to the definition of the term “Mortgage Files” contained in the
Purchase Agreement; provided,
that to the extent that the definition of “Mortgage File” includes any of the
phrases “as applicable”, “any” or “if any” in the description of any such
documents, then for the purposes of certification the Custodian is entitled to
assume that no such documents exist if they are not included in the file related
to such Mortgage Loan (unless otherwise specified in writing by the Servicer or
the Agent).




2.           Appointment of the
Custodian.




Subject
to the terms and conditions hereof, each of the Agent and the Borrower hereby
revocably appoints the Custodian, and the Custodian hereby accepts such
appointment and agrees, to act as custodian and bailee on behalf of the Borrower
and the Agent, for the benefit of the Lender, to maintain exclusive custody of
the Mortgage Files pertaining to the Mortgage Loans from time to time pledged
under the Loan Agreement in order to perfect the ownership interest of the
Borrower and the security interest of the Agent, for the benefit of the Lender,
in the Mortgage Notes evidencing such Mortgage Loans and the other items in the
Mortgage Files and any
and all proceeds of the foregoing.  In performing its duties
hereunder, the Custodian agrees to act with reasonable care, using that standard
of skill and attention that the Custodian would exercise with respect to the
files relating to all comparable mortgage loans that it services or holds for
itself or others (provided,
that if applicable industry standards of care, skill and attention are more
stringent than the Custodian’s standard of care, skill and attention, then the
Custodian shall be obligated to follow the more stringent industry
standards).  Whenever the term “bailee” is used in this Agreement, it
shall mean a Person in possession of collateral for a secured party’s benefit as
set forth in Section 9-313 of the UCC.




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3.           Delivery of Individual
Mortgage Files.




(a)           On
or prior to the fourth (4th) Business Day prior to any Purchase Date, (i) the
Borrower shall deliver (or cause to be delivered) to the Custodian and the Agent
a Notice of Pledge together with a Mortgage Loan Schedule listing each of the
Mortgage Loans to be pledged under the Loan Agreement on such Purchase Date,
(ii) the Borrower shall deliver (or cause to be delivered) and release to the
Custodian as custodian for, and bailee, and for the benefit, of the Agent, for
the benefit of the Lender, the Mortgage File pertaining to each of the Mortgage
Loans to be pledged under the Loan Agreement on such Purchase Date; provided, however, if more than
250 Mortgage Files are delivered to the Custodian with respect to any Purchase
Date, the Borrower and the Custodian shall agree to a reasonable longer time for
such review.




(b)           The
Custodian shall be entitled to rely upon the related Mortgage Loan Schedule
provided by the Borrower pursuant to Section 3(a) as
the conclusive schedule in its review, pursuant to Section 4 hereof, of
the related Mortgage Files.




(c)           In
the event that the Borrower (or the Servicer at the request of the Borrower and
on its behalf) cannot deliver the original recorded Mortgage, or all interim
recorded assignments satisfying the requirements of clauses (iii) and (iv) of
the definition of “Mortgage Files” set forth in Section 2.05(a) of the Purchase
Agreement on the related Purchase Date because such document or documents have
not been returned from the applicable public recording office, then Borrower (or
the Servicer at the request of the Borrower and on its behalf) shall promptly
deliver to the Custodian the original Mortgage or the interim assignment, as the
case may be, with evidence of recording indicated thereon, promptly following
its receipt thereof from such public recording office, or a copy of it,
certified, if appropriate, by the relevant recording office.  The
delivery by the Borrower to the Custodian of the original Mortgage and each
interim assignment or a copy of them, certified, if appropriate, by the relevant
recording office, shall be made not later than ninety (90) days following the
related Purchase Date.




(d)           From
time to time, the Borrower shall forward to the Custodian for inclusion in the
appropriate Mortgage File any additional documents (including without
limitation, the then-current Mortgage Appraisal) which come into existence and
are required to be included in a Mortgage File previously delivered to the
Custodian.  The Custodian shall add such additional documents to the
appropriate Mortgage File, and such documents shall thereafter be considered a
part of the related Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.




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(e)           Upon
its receipt of written instruction with respect thereto from the Agent after the
occurrence of an Event of Default or Unmatured Event of Default, the Servicer
shall insert the name of the Lender or its designee in the allonge or Assignment
of Mortgage related to a Mortgage Loan and shall record such Assignment of
Mortgage in the relevant recording office.




4.           Certification Regarding
Individual Mortgage Files.




(a)           Not
later than 10:00 A.M. (New York City time) on each Purchase Date, the Custodian
shall deliver to the Agent, the Servicer and the Borrower an acknowledged Notice
of Pledge and a certificate (each such certificate, a “Collateral Receipt”),
in the form annexed as Exhibit 2
hereto, to the effect that, as to each Mortgage Loan listed on the Mortgage Loan
Schedule delivered with respect to such Purchase Date to the Custodian and the
Agent pursuant to Section 3(a),
(i) such documents have been reviewed by it and no Deficiency exists with
respect to such Mortgage File and related Mortgage Loan, (ii) all signatures
appearing thereon are original signatures, (iii) none of such documents contains
any stamp or evidence of any Adverse Claim thereon, (iv) the Custodian has
received evidence that all Assignments of Mortgage or intervening assignments of
mortgage, as applicable, have been submitted for recording, and (v) each
Mortgage Note has been duly assigned (via endorsement or allonge) from the
Seller to blank without recourse, and endorsed with the manual signature of the
Seller and showing a complete chain of endorsement from the related
originator.




(b)           The
Custodian shall attach to the Collateral Receipt a listing (an “Exception Report”) of
any discrepancies identified from the requirements outlined above and any other
Deficiencies that it discovers.




5.           Deficiencies in Mortgage
Files.




(a)           If
any Collateral Receipt discloses any Deficiencies in any Mortgage File, then the
Agent shall notify the Custodian, the Borrower and the Servicer in writing that
the Borrower or the Servicer (solely in its capacity as the Servicer, at the
direction and expense of the Borrower) must cure the Deficiencies noted in the
related Exception Report within thirty (30) days of the date of such
notification (it being understood by the parties hereto that any Mortgage Loan
as to which an unwaived Deficiency exists shall not be deemed an Eligible
Mortgage Loan under the Loan Agreement).




(b)           If
a notice given to the Custodian by the Agent pursuant to Section 5(a)
states that the Borrower or the Servicer shall take the action specified in
Section 5(a)
above and the Borrower or the Servicer fails to take such action, then the
Custodian shall note the continuing Deficiency in the next Custodial Monthly
Report and shall retain the deficient Mortgage File or, at the direction of the
Agent, return such Mortgage File to the Borrower.




(c)           Within
seven (7) Business Days after receipt by the Custodian of any additional
documents relating to a Mortgage Loan (including without limitation pursuant to
Section 3(d)
and Section 5(a)),
the Custodian shall review such documents and, no later than the third (3rd)
Business Day of the month following the Custodian’s receipt of such additional
documents, the Custodian shall make a revised loan list and Exception Report
electronically available to the Agent.




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(d)           If
at any time the Borrower, the Custodian, the Servicer, the Agent or the Back-up
Servicer finds any document constituting a part of a Mortgage File not to have
been executed or received or to be unrelated to the Mortgage Loans identified in
the related Mortgage Loan Schedule or, if in the course of its review, any such
Person determines that such Mortgage File does not include any of the documents
required to be included therein pursuant to Section 2.05(a) of the Purchase
Agreement or is otherwise defective in any material respect, then such Person
shall notify the other parties hereto to such effect; provided,
that no separate review obligation shall arise by operation of this
clause.  The Seller shall either (i) correct or cure any such defect,
(ii) purchase such Mortgage Loan at the Repurchase Amount relating to such
Mortgage Loan, or (iii) substitute such Mortgage Loan with a Qualifying
Substitute Mortgage Loan, each in accordance with and on the terms set forth in
the Purchase Agreement.




(e)           Upon
discovery by a party hereto of a breach of any of the representations and
warranties set forth in Section 3.01(e), (h), (i), (l) or (u) of the Purchase
Agreement, the party discovering such breach shall give prompt written notice to
the other parties hereto; provided,
that no separate review obligation shall arise by operation of this
clause.  The Seller shall thereupon either (i) cure such breach, (ii)
repurchase the related Mortgage Loan at the Repurchase Amount relating to such
Mortgage Loan, or (iii) substitute such Mortgage Loan with a Qualifying
Substitute Mortgage Loan, each in accordance with and on the terms set forth in
the Purchase Agreement.




6.           Obligations of the
Custodian.




(a)           The
Custodian shall segregate and maintain continuous custody of the Mortgage Files
in secure and fire resistant facilities in accordance with customary standards
for such custody in the State of Minnesota.  The Custodian shall
promptly report to the Borrower and the Agent any failure on its part to hold
the Mortgage Files and maintain its accounts, records and computer systems as
herein provided and shall promptly take appropriate action to remedy such
failure.




(b)           With
respect to the documents constituting each Mortgage File, the Custodian shall
(A) act as the custodian for, and the bailee of, the Borrower to perfect
the ownership interest of the Borrower in the documents constituting such
Mortgage File, (B) act as the custodian for, and the bailee for the benefit
of, the Agent (for the benefit of the Lender) to perfect the security interest
of the Agent (for the benefit of the Lender) in the documents constituting such
Mortgage File, (C) hold all documents constituting such Mortgage File
received by it for the exclusive use and benefit of the Agent, for the benefit
of the Lender, and (D) make dispositions thereof only in accordance with the
terms of this Agreement or with written instructions furnished by the
Agent.




(c)           In
the event that (i) the Agent, the Borrower or the Custodian shall be served
by a third party with any type of levy, attachment, writ or court order with
respect to any Mortgage File or a document included within a Mortgage File or
(ii) a third party shall institute any court proceeding by which any
Mortgage File or a document included within a Mortgage File shall be required to
be delivered otherwise than in accordance with the provisions of this Agreement,
the party receiving such service shall use its best efforts to promptly deliver
or cause to be delivered to the other parties to this Agreement copies of all
court papers, orders, documents
and other materials concerning such proceedings.  The Custodian shall
continue to hold and maintain all Mortgage Files that are the subject of such
proceedings pending a final non-appealable order of a court of competent
jurisdiction permitting or directing disposition thereof.  Upon final
non-appealable determination of such court, the Custodian shall dispose of such
Mortgage File or any document included within such Mortgage File as directed by
such determination or, if no such determination is made, in accordance with the
provisions of this Agreement.  Expenses of the Custodian incurred as a
result of such proceedings shall be borne by the Borrower, to the extent of
funds available to pay such expenses pursuant to clause tenth of Section 1.4(d) and
clause eighth of
Section 1.4(e) of the Loan Agreement, as applicable.




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(d)           The
Custodian shall deliver to the Agent and the Servicer no less frequently than
once per calendar month a report (the “Custodial Monthly
Report”), in a form to be agreed upon by the Custodian and the Agent,
that sets forth a list of all Mortgage Files held by the Custodian as of the
date of delivery of such Custodial Monthly Report and all Deficiencies with
respect to such Mortgage Files as of the date of delivery of such Custodial
Monthly Report.




7.           Release of Mortgage
Files.




(a)           The
Custodian shall, upon three (3) Business Days’ prior written notice, release all
or any part of any Mortgage File (i) to the Agent, upon written request of the
Agent, and (ii) to the Seller, following the Seller’s deposit into the
Collection Account of the Repurchase Amount in connection with Seller’s
repurchase of a Mortgage Loan as required by the terms of the Purchase Agreement
and the Agent’s execution and delivery of instruments of release with respect
thereto, as set forth in Section 2.06 of the
Purchase Agreement.




(b)           In
addition, if the Servicer delivers a Request for Release of Documents to the
Custodian (which such Request for Release of Documents shall have been
acknowledged and signed by the Agent), the Custodian shall deliver a specified
Mortgage File to the Servicer.  All documents so released to the
Servicer shall be held by the Servicer in trust for the Borrower, the Agent and
the Lender.  If a Mortgage File is released to the Servicer pursuant
to the previous sentence for the purpose of facilitating the servicing or
enforcement of the Mortgage Note related to such Mortgage File, the Servicer
shall return such Mortgage File immediately upon its need for such Mortgage File
having come to an end.  At such time as the Servicer returns any such
Mortgage File to the Custodian, the Servicer shall provide written notice of
such return to the Agent and the Custodian in the form of Exhibit 3 to
this Agreement.  The Custodian shall acknowledge receipt of the
returned materials in its next Custodial Monthly Report.




(c)           The
Servicer shall indemnify the Custodian, the Borrower, the Agent and the Lender
and each of their respective officers, directors and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or asserted
against such Person as a result of the release of any Mortgage Loans or Mortgage
Files or portions thereof pursuant to this Section 7 to the
Servicer or the retention of any Mortgage Loans and Mortgage Files or such
portions thereof by the Servicer or any of its Affiliates; provided,
however,
that the Servicer shall not be liable to any of the foregoing Persons for any
amount and any portion of any such amount resulting solely from the willful
misfeasance, bad faith or gross negligence (or in the case of the Custodian, the negligence)
of such Person. The provisions of this Section 7(c) shall
survive the termination of this Custodial Agreement or the termination or
resignation of any party hereto.




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8.           Fees and Expenses of the
Custodian .  It
is understood that the Custodian shall be entitled to receive the Custodian Fee,
and receive reimbursement for reasonable out-of-pocket expenses under this
Agreement as specified in a separate fee agreement between the Custodian and the
Borrower.  Such Custodian Fees and expenses shall be payable solely
out of Available Funds pursuant to clause fifthof Section 1.4(d) and
clause fifth of Section 1.4(e)of the
Loan Agreement, as applicable.




9.           Inspection. Upon
reasonable prior written notice to the Custodian, each of the Agent, the
Borrower and their respective authorized auditors, attorneys, accountants and
representatives will be permitted during the Custodian’s normal business hours
(i) to examine the Mortgage Files, documents, records and other papers in the
possession or under the control of the Custodian relating to any or all of the
Mortgage Loans, and (ii) to discuss matters relating to the Custodian’s
performance under the Transaction Documents or the Custodian’s performance under
the documents comprising the Mortgage Files, in each case, with any of the
officers, directors and employees of the Custodian having knowledge of such
matters.  The reasonable out-of-pocket expenses incurred by the
Custodian, if any, in connection with any such examination shall be payable by
the Borrower from Available Funds pursuant to clause fifthof Section 1.4(d) and
clause fifth of Section 1.4(e) of the
Loan Agreement, as applicable.




10.           Insurance of the
Custodian. The
Custodian shall, at its own expense, maintain at all times during the term of
this Agreement and keep in full force and effect (a) fidelity insurance,
(b) theft of documents insurance, (c) fire insurance, and
(d) forgery insurance.  All such insurance shall be in amounts,
with standard coverage and subject to deductibles, as are customary for similar
insurance typically maintained by financial institutions that act as custodians
in similar transactions.  The parties hereto hereby agree that Fifty
Million Dollars ($50,000,000) in insurance coverage shall satisfy such
requirement on the Closing Date.  From time to time upon request (but
no more than twice per year) the Custodian shall deliver to the Agent and the
Borrower evidence to the Agent and the Borrower that such insurance is (and
remains) in full force and effect.




11.           Periodic Statements. Within
two (2) Business Days after the written request of the Agent, the Servicer or
the Borrower, the Custodian shall provide to the requesting party a list of all
the Mortgage Loans for which the Custodian holds a Mortgage File pursuant to
this Agreement.  Such list may be in the form of a Custodial Monthly
Report.




12.           Copies of Mortgage
Files. Within
three (3) Business Days after the written request of the Agent, the Custodian
shall provide the Agent, at the Borrower’s expense, with copies of the documents
in the Mortgage Files.




13.           Resignation by and Removal
of Custodian; Successor Custodian.




(a)           The
Custodian may at any time resign and terminate its obligations under this
Agreement upon at least sixty (60) days’ prior written notice to the Borrower
and the Agent; provided,
however,
that no such resignation or termination shall be effective until a successor Custodian
is appointed (and accepts such appointment) pursuant to the terms of this Section
13.  Promptly after receipt of notice of the Custodian’s
intended resignation, the Borrower shall appoint, by written instrument, a
successor custodian satisfying the provisions of Section 13(d) and acceptable to
the Agent in its sole discretion.  If the Borrower fails to appoint a
successor custodian pursuant to the terms hereof within thirty (30) days after
receipt of the Custodian’s notice of resignation, the Agent shall have the
exclusive right to appoint by written instrument a successor
custodian.  If the Agent fails to appoint a successor Custodian within
sixty (60) days after receipt of the Custodian’s notice of resignation, the
Custodian may petition a court of competent jurisdiction to appoint a successor
custodian.  One original counterpart of any aforementioned instrument
of appointment shall be delivered to each of the Borrower, the Agent and the
successor custodian.




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(b)           The
Agent, with or without cause, upon at least forty five (45) days’ written notice
to the Custodian, may remove and discharge the Custodian (or any successor
custodian thereafter appointed) from the performance of its obligations under
this Agreement (and its obligations as Custodian under any other Transaction
Documents).  A copy of such notice shall be delivered to the Custodian
and the Borrower.  Promptly after the giving of notice of removal of
the Custodian, the Agent shall appoint, by written instrument, a successor
custodian.  One original counterpart of such instrument of appointment
shall be delivered by the Agent to each of the Borrower, the Custodian and the
successor custodian.  If the Agent fails to appoint a successor
custodian within sixty (60) days after giving notice of removal and discharge to
the Custodian, the Custodian may petition a court of competent jurisdiction to
appoint a successor custodian.




(c)           In
the event of any such resignation or removal, the Custodian shall promptly
transfer to the successor custodian, as directed in writing by the Agent, all
Mortgage Files being administered under this Agreement.




(d)           Each
successor Custodian shall be a depository institution supervised and regulated
by a federal or state banking authority, shall have combined capital and surplus
of at least Forty Million Dollars ($40,000,000), shall be qualified to do
business in each jurisdiction in which it will hold any Mortgage File and shall
not be an Affiliate of the Borrower, MPIC or the Servicer.




(e)           The
fees, costs and expenses incurred by any party hereto as a result of any
resignation or removal of the Custodian hereunder shall be paid on behalf of
such party by the Custodian or reimbursed to such Person by the Custodian,
unless the Custodian was removed without cause by the Agent, in which case the
fees, costs and expenses incurred as a result of such removal shall be for the
account of the Borrower.




14.           Indemnity. The
Borrower, to the extent of funds available to pay such amounts pursuant to
clause tenthof Section 1.4(d) and
clause ninthof Section 1.4(e) of the
Loan Agreement, as applicable, agrees to indemnify and hold harmless the
Custodian and each of its assigns, Affiliates, officers, directors, agents and
employees to the extent so set forth in Section 5.1 of the
Loan Agreement; provided,
however,
that this Section 14 shall
not relieve the Custodian from liability for its willful misfeasance, bad faith
or gross negligence.  The provisions of this Section 14 shall
survive the resignation or removal of the Custodian and the termination of
this Agreement.  Any
amounts payable by the Borrower hereunder shall be limited to funds available to
pay such amounts pursuant to clause tenthof Section 1.4(d) and
clause eighth of Section 1.4(e) of the
Loan Agreement, as applicable.




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15.           Limitation of
Liability.




(a)           In
connection with the Custodian’s timely performance of its obligations and duties
under Sections 4,
5 and 6 hereof, the
Custodian shall not be liable to the Borrower, the Agent or any other Person for
any loss, claim, damage, liability or expense resulting from or arising out of
any act or failure to act by it, other than for any loss, claim, damage,
liability or expense arising out of the Custodian’s failure to perform such
obligations in accordance with the standard of care set forth in Section 2.  Except
in connection with the Custodian’s timely performance of its obligations and
duties under Sections 4,
5, and 6 hereof (and its
obligations as Custodian under any other Transaction Documents), the Custodian
shall not be liable to the Borrower, the Agent or any other Person for any loss,
claim, damage, liability or expense resulting from or arising out of any act or
failure to act by it in connection with this Agreement, other than for any loss,
claim, damage, liability or expense arising out of willful misfeasance, lack of
good faith, negligence or reckless disregard of its obligations
hereunder.




(b)           In
the Custodian’s review of documents pursuant to Sections 4,
5, and 6 of this Agreement,
the Custodian shall be under no duty or obligation to inspect, review or examine
the Mortgage Files to determine that the contents thereof are genuine,
enforceable or appropriate for the represented purpose or that they are other
than what they purport to be on their face.




(c)           In
the absence of bad faith on the part of the Custodian, the Custodian may rely
upon and shall be protected in acting upon, or refraining to act upon (in each
case, in accordance with the terms of this Agreement and under any other
Transaction Document), any written instruction, notice, request, order,
direction, certificate, opinion or other instrument or document reasonably
believed by the Custodian to be genuine and conforming to the terms of this
Agreement or the related Transaction Document and to have been executed and
delivered by any Persons the Custodian reasonably believes to be authorized to
give such writings, who shall only be, with respect to the Borrower and the
Agent, persons the Custodian believes in good faith to be Authorized
Representatives.




(d)           The
Custodian may consult with counsel reasonably acceptable to the Agent and the
Borrower with regard to legal questions arising out of or in connection with
this Agreement (and/or any other Transaction Documents), and the written advice
or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by the Custodian
in reliance, in good faith and in accordance therewith.




(e)           The
Custodian shall not be responsible or liable for, and makes no representation or
warranty with respect to, the validity, adequacy or perfection of any lien upon,
or security interest in, any Mortgage Loans or related Mortgage Files purported
to be granted at any time pursuant to the Loan Agreement.




(f)           None
of the provisions of this Agreement shall require the Custodian to expend or
risk its own funds or otherwise to incur any liability, financial or otherwise,
in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it in its sole judgment shall believe that repayment of such funds or
indemnity satisfactory to it against such risk or liability is not assured to
it.




10


(g)           The
Custodian shall not be responsible for preparing or filing any reports or
returns relating to federal, state or local income taxes with respect to this
Agreement.




(h)           The
Custodian shall not be responsible or liable for, and makes no representation or
warranty with respect to, the validity, recordation, adequacy or perfection of
any lien upon or security interest in any Mortgage Files or Mortgage
Loans.




(i)           In
no event shall the Custodian, its agents, attorneys, directors, officers or
employees be liable for any indirect, special or consequential damages
(including lost profits) whether or not they have been advised of the likelihood
of such damages.




16.           Borrower, MPIC and the
Servicer Remain Liable. Notwithstanding
any term or provision of this Agreement, (a) MPIC, the Servicer and the
Borrower shall remain liable under the Loan Agreement, the Purchase Agreement
and the other agreements executed with respect to the Purchased Assets
(including, without limitation, the other Transaction Documents) to perform all
of their respective duties and obligations thereunder to the same extent as if
this Agreement had not been executed and (b) the exercise by the Agent or
the Custodian of any of their respective rights under this Agreement shall not
release the Borrower, MPIC or the Servicer from any of their respective duties
or obligations under the Loan Agreement, the Purchase Agreement or any other
agreement executed with respect to the Purchased Assets (including, without
limitation, the other Transaction Documents).




17.           Term of Agreement. This
Agreement shall be terminated upon written notice of termination from the Agent
to the Custodian and payment in full of all amounts due to the Custodian
hereunder.  If the Loan Agreement has terminated on or prior to the
termination of this Agreement, then, following receipt of written notice of such
termination from the Agent, the Custodian shall deliver all documents remaining
in the Mortgage Files to the Borrower or its designee at the Borrower’s
expense.  If the Loan Agreement remains in effect at the time this
Agreement is terminated, then, following receipt of written notice of such
termination from the Agent, the Custodian shall deliver all documents remaining
in the Mortgage Files to the Agent or such other person as may be designated by
the Agent at the Borrower’s expense.




18.           Authorized
Representatives.




(a)           The
names of the officers or representatives of the Borrower, the Servicer and of
the Agent who are authorized to give and receive notices, requests and
instructions and to deliver certificates and documents in connection with this
Agreement on behalf of the Borrower, the Servicer and the Agent (“Authorized
Representatives”) are set forth on Exhibit 4
hereto.  From time to time, the Borrower, the Servicer and the Agent
may, by delivering to the Custodian and such other Person a revised Exhibit 4, change the
information previously given therein, but the Custodian shall be entitled to
rely conclusively on the last Exhibit 4 until
receipt of a superseding Exhibit
4.




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(b)           The
parties hereto acknowledge and agree that ECCU has been appointed pursuant to
the Loan Agreement as Servicer to service, administer and collect the Mortgage
Loans and otherwise to enforce the rights and interests of the Borrower in and
under the Mortgage Loans and the other Purchased Assets.  Until
receipt by the Custodian of written notice, with a copy to the Borrower and
ECCU, from the Agent of the succession of the Back-up Servicer to the role of
Servicer, or of the appointment and acceptance of a successor Servicer pursuant
to the provisions of the Loan Agreement, the Borrower hereby authorizes and
instructs the Custodian to accept performance of ECCU, as Servicer, as the agent
of the Borrower with respect to matters relating to the servicing,
administration and collection of the Mortgage Loans and the enforcement of the
rights and interests of the Borrower in and under the Mortgage Loans and the
other Purchased Assets, including the discharge of such duties of the Borrower
hereunder.




19.           Notices.




(a)           All
notices and other communications hereunder shall, unless otherwise stated
herein, be in writing (which shall include facsimile communication) and sent or
delivered, to each party hereto, at its address set forth opposite its name
below or at such other address as shall be designated by such party in a written
notice to the other parties hereto.  Notices and communications by
facsimile shall be effective when sent and receipt has been confirmed, if sent
during business hours on a Business Day (if not sent during business hours on a
Business Day, then on the next Business Day) (and shall be followed by hard copy
sent by first class mail), and notices and communications sent by other means
shall be effective when received:




If
      to the Borrower:
            955
      West Imperial HighwayBrea,
      California 92821Attention:  Bill
      DodsonTelecopier
      No.:  (714) 671-5792Telephone
      No.: (714) 671-5700 x 1436If
      to the Servicer:
            Evangelical
      Christian Credit Union955
      West Imperial HighwayBrea,
      California 92821Attention:  CML
      Loan Servicing DirectorTelecopier
      No.:  (714) 671-5792Telephone
      No.:  (714) 671-5700 x 1434If
      to the Agent:
            BMO
      Capital Markets115
      S. LaSalle Street, 13th Floor WestChicago,
      IL  60603Attn:
      Conduit Management TeamGroup
      Email: FundingDesk@bmo.comGroup
      Fax: (312) 461-3189 / (312) 294-4908With a copy
      to:BMO
      Capital Markets115
      S. LaSalle Street, 13th Floor WestChicago,
      IL  60603Attn:
      Barbara BooneTelephone:  (312)
      293-4485






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With a copy
      to:BMO
      Capital Markets Corp.2100
      McKinney Avenue, Suite 1401Dallas,
      TX  75201Attention:  David
      PiotrowskiTelecopier
      No.: (214) 661-1510Telephone
      No.: (214) 661-1515If
      to the Custodian:
            U.S.
      Bank National AssociationDocument
      Custody Services1133
      Rankin Street, Suite 100St.
      Paul, MN 55116Attention:  Private
      Certifications/BMO-MinistryTelecopier
      No.:  (651) 695-6102Telephone
      No.:  (651) 695-5912








20.           GOVERNING LAW. THIS
AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THEREOF THAT
WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.




21.           CONSENT TO SERVICE;
SUBMISSION TO JURISDICTION; WAIVER OF TRIAL BY JURY. EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH IN SECTION 19
HEREOF.  WITH RESPECT TO ANY CLAIM ARISING OUT OF THIS AGREEMENT, EACH
PARTY HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND EACH PARTY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY HAVE AT
ANY TIME TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING HERETO BROUGHT IN ANY SUCH COURT.  EACH PARTY IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN ANY INCONVENIENT FORUM AND FURTHER IRREVOCABLY WAIVES
THE RIGHT TO OBJECT, WITH RESPECT TO SUCH CLAIM, SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH
PARTY, PROVIDED THAT SERVICE OF PROCESS IS MADE AS SET FORTH IN THIS SECTION 21, OR
BY ANY OTHER LAWFUL MEANS.  TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH PARTY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY MATTER ARISING HEREUNDER.




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The
prevailing party in any action, suit or proceeding shall be entitled to recover
its fees and expenses incurred from the non-prevailing party in addition to
other remedies which may be available to the prevailing party.




22.           Assignment; Binding
Effect. No party
to this Agreement may assign its rights or delegate its obligations under this
Agreement without the express written consent of the other parties
hereto.  This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
assigns.  In addition, the Lender shall be a third party beneficiary
hereof.




23.           Counterparts. This
Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed to be an original, and together shall constitute and be
one and the same instrument.  Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement.




24.           Heading. The
Section headings are not part of this Agreement and shall not be used in its
interpretation.




25.           Representations, Warranties
and Covenants of the Custodian.




(a)           The
Custodian hereby represents and warrants to, and covenants with, the Agent, for
the benefit of the Lender, and the Borrower that as of the date hereof and as of
each Purchase Date:




(i)           The
Custodian is a national banking association duly organized, validly existing and
in good standing under the laws of the United States of America.  The
Custodian is duly qualified to do business and is in good standing as a foreign
entity, and has and holds all organizational power and all licenses,
authorizations, consents and approvals of Governmental Authorities and tax,
accounting, licensing and regulatory bodies required to carry on its business in
each jurisdiction in which its business is conducted;




(ii)           The
Custodian has the full power and authority to hold each Mortgage Loan and each
other item in any Mortgage File on behalf of the Agent, for the benefit of the
Lender, and to execute, deliver and perform, and to enter into and consummate
all transactions contemplated by, this Agreement and the Loan Agreement and the
other Transaction Documents to which it is a party.  The Custodian has
duly authorized the execution, delivery and performance of this Agreement, the
Loan Agreement and the other Transaction Documents to which it is a party and
has duly executed and delivered this Agreement, the Loan Agreement and the other
Transaction Documents to which it is a party.  This Agreement, the
Loan Agreement and the other Transaction Documents to which the Custodian is a
party constitute the legal, valid and binding obligations of the Custodian,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, rearrangement, liquidation, conservatorship, fraudulent conveyance,
and general principles of equity;




14


(iii)           None
of the execution and delivery of this Agreement, the Loan Agreement or the other
Transaction Documents to which the Custodian is a party, nor the delivery of
Mortgage Files to the Custodian, nor the consummation of the transactions
contemplated hereby or thereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement and/or the Loan Agreement or other
Transaction Documents, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Custodian’s charter or bylaws or any
agreement or instrument to which the Custodian is a party or by which it is
subject or bound, or constitute a default or result in an acceleration under any
of the foregoing, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Custodian or any of its property is
subject;




(iv)           There
is no litigation pending or threatened which, if determined adversely to the
Custodian, would adversely affect the execution, delivery or enforceability of
this Agreement, the Loan Agreement or any other Transaction Document to which
the Custodian is a party, or any of the duties or obligations of the Custodian
thereunder;




(v)           No
consent, approval, authorization or order of any court or Governmental
Authority, or licensing, accounting, tax or regulatory body or other body, is
required for the execution, delivery and performance by the Custodian of or
compliance by the Custodian with this Agreement, the Loan Agreement or any other
Transaction Document to which it is a party or the consummation of the
transactions contemplated hereby or thereby;




(vi)           Upon
written request of the Agent, the Custodian shall take such reasonable steps as
requested by the Agent to protect or maintain any interest in any Purchased
Asset;




(vii)           All
information heretofore furnished by the Custodian to the Borrower, the Agent or
the Lender for purposes of or in connection with this Agreement, any of the
other Transaction Documents or any transaction contemplated hereby or thereby
is, and all such information hereafter furnished by the Custodian (or any of its
officers or employees) to the Borrower, the Agent or the Lender will be, true
and accurate in every material respect on the date such information is stated or
certified and does not and will not contain any material misstatement of fact or
be otherwise misleading in light of the circumstances under which such
information was furnished.  The Custodian has not been notified by any
party that any third party claims an interest in the Mortgage Loans or other
documents related thereto as a bailee with respect to the Mortgage Files, except
such interests as are created under the Loan Agreement;




(viii)          The
principal place of business and chief executive office of the Custodian, and the
offices where it keeps all of its Records, are located at the address set forth
below:




1133
      Rankin Street, Suite 100St.
      Paul, MN 55116








15


The
Custodian agrees to provide twenty (20) Business Days’ prior written notice to
the Borrower and the Agent of any change to such address in accordance with the
terms of this Agreement.





(ix)           The
Custodian is a depository institution subject to supervision or examination by a
federal or state authority, has a combined capital and surplus of at least Forty
Million Dollars ($40,000,000) and is (and, at all times during the term of this
Agreement, shall remain) qualified to do business in the jurisdictions in which
it will hold any Mortgage File; and




(x)           The
Custodian has not been notified by any party that any third party claims an
interest in any Mortgage Loan or Mortgage File or is requesting the Custodian to
act as a bailee with respect to any Mortgage File, except such interests as are
created under the Loan Agreement.




(b)           The
Custodian covenants and warrants to the Agent, the Lender and the Borrower that
as of each Purchase Date: (i) it currently holds, and during the term of
this Agreement it shall hold, no adverse interest, by way of security or
otherwise, in any Mortgage Loan or Mortgage File; (ii) the execution of
this Agreement and the creation of the custodial relationship hereunder does not
create any interest, by way of security or otherwise, of the Custodian in or to
any Mortgage Loan or Mortgage File, other than the Custodian’s rights as
custodian hereunder; and (iii) it hereby waives and releases any such adverse
interest or interest which it has or may have in any Mortgage Loan or Mortgage
File.




26.           ADVICE FROM INDEPENDENT
COUNSEL. THE
PARTIES HERETO UNDERSTAND THAT THIS AGREEMENT IS A LEGALLY BINDING AGREEMENT
THAT MAY AFFECT SUCH PARTY’S RIGHTS.  EACH PARTY REPRESENTS TO THE
OTHERS THAT IS HAS RECEIVED LEGAL ADVICE FROM COUNSEL OF ITS CHOICE REGARDING
THE MEANING AND LEGAL SIGNIFICANCE OF THIS AGREEMENT AND THAT IT IS SATISFIED
WITH ITS LEGAL COUNSEL AND THE ADVICE RECEIVED FROM IT.




27.           Merger or Consolidation of
the Custodian. Any
corporation, banking association or trust company into which the Custodian may
be merged or converted or consolidated with, or any corporation, banking
association or trust company resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any corporation,
banking association or trust company succeeding to all or substantially all of
the corporate trust business of the Custodian, shall be the successor of the
Custodian hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.




28.           Certain Remedies;
Instructions of the Agent.




(a)           The
Custodian may, in its discretion (with the prior written consent of the Agent),
and shall, at the direction of the Agent, perform the Custodian’s duties and
protect and enforce the Custodian’s rights and the rights of the Agent and the
Lender under this Agreement by such appropriate actions and proceedings as the
Custodian (with the prior written consent of the Agent) or the Agent shall deem
most effective to protect and enforce any such rights, whether by bringing suit
for the specific enforcement of any covenant or agreement in this Agreement
or any other Transaction Document or by the exercise of any power granted herein
or therein, or by any other proper remedy or legal or equitable right, vested in
the Custodian under this Agreement, any other Transaction Document or applicable
law.




16


(b)           Without
limitation to any provision of Section 28(a)
hereof the Custodian hereby agrees to follow the instructions of the Agent with
respect to the performance of the Custodian’s duties, the exercise of the
Custodian’s powers and the enforcement of the Custodian’s rights (in any
capacity) and the rights of the Agent and the Lender under this
Agreement.




29.           Amendments. No
amendment or modification of any provision of this Agreement shall be effective
without the written agreement of each of the parties hereto, and no termination
or waiver of any provision of this Agreement or consent to any departure
therefrom by the Custodian, the Borrower or the Servicer shall be effective
without the written concurrence of the Agent.




30.           No Proceedings. The
Custodian hereby agrees that it will not institute against, or join any other
Person in instituting against, the Borrower any proceedings of the type referred
to in the definition of “Event of Bankruptcy” in the Loan Agreement until there
shall have elapsed one year and one day since the Final Payout Date under the
Loan Agreement.




31.           Recordation of
Agreement. To the
extent permitted by applicable law, this Agreement is subject to recordation in
all appropriate public offices for real property records in all the counties or
other comparable jurisdictions in which any or all of the properties subject to
the Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Servicer and at the
Borrower's expense on direction by the Agent.




[Signature
page follows]




17


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives as of the day and year first
above written.




MINISTRY
      PARTNERS FUNDING, LLC, as
      the BorrowerBy:
      _________________________________________Name:Title:EVANGELICAL
      CHRISTIAN CREDIT UNION, as
      the ServicerBy:
      _________________________________________Name:  Mark
      G. HolbrookTitle:     President
      & Chief Executive OfficerU.S.
      BANK NATIONAL ASSOCIATION, as the CustodianBy:
      _________________________________________Name:Title:LYON
      FINANCIAL SERVICES, INC. (d/b/a U.S. Bank Portfolio Services), as the
      Back-up ServicerBy:
      _________________________________________Name:Title:BMO
      CAPITAL MARKETS CORP., as the AgentBy:
      _________________________________________Name:Title:









18