RALI Series 2006-QH1 Trust
EX 10.3
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>qh1ins.txt
<DESCRIPTION>EX 10.3
<TEXT>

                                                                EXECUTED VERSION


                CERTIFICATE GUARANTY INSURANCE POLICY ENDORSEMENT


Attached to and forming                           Effective Date of Endorsement:
part of Policy No. AB1044BE                                    November 29, 2006
issued to:



Deutsche  Bank  Trust  Company  Americas,  as  Trustee
on behalf of, and for the benefit of the  Holders  of,
the  Residential  Accredit  Loans,  Inc.  Class A-3
Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-QH1


        For all  purposes of this  Policy,  the  following  terms shall have the
following meanings:

        "Agreement"  shall mean the Series  Supplement,  dated as of November 1,
2006, among Residential Accredit Loans, Inc., as Depositor,  Residential Funding
Company,  LLC, as Master Servicer,  and Deutsche Bank Trust Company Americas, as
Trustee, to the Standard Terms of Pooling and Servicing  Agreement,  dated as of
November 1, 2006,  as such  Agreement may be amended,  modified or  supplemented
from time to time as set forth in the Agreement.

        "Deficiency  Amount"  shall,  as applied to the Class A-3  Certificates,
mean (A) with  respect to each  Distribution  Date prior to the Final  Scheduled
Distribution  Date,  an amount equal to the sum of (i) any  shortfall in amounts
available  in  the  Certificate  Account  to pay  one  month's  interest  on the
Certificate  Principal  Balance of the Class A-3  Certificates at the applicable
Pass-Through  Rate, net of any Relief Act  Shortfalls  and  Prepayment  Interest
Shortfalls  allocated  to the  Class  A-3  Certificates  and (ii) the  principal
portion of any Realized Losses  allocated to the Class A-3 Certificates for such
Distribution Date; (B) with respect to the Final Scheduled Distribution Date and
the  Class A-3  Certificates,  an amount  equal to the  outstanding  Certificate
Principal  Balance of the Class A-3  Certificates  due on such  Final  Scheduled
Distribution Date to the extent not paid from all sources other than this Policy
on that Distribution Date; and (C) for any date on which the acceleration of the
Certificates  has  been  directed  or  consented  to by  the  Certificateholders
pursuant to the Agreement,  the amount required to pay the Certificate Principal
Balance of the Class A-3 Certificates in full,  together with accrued and unpaid
interest thereon through the date of payment of the Class A-3 Certificates.  Any
Deficiency  Amount shall not include any  Prepayment  Interest  Shortfalls,  any
Relief Act Shortfalls or any shortfalls  attributable  to the Net Rate Cap or to
Net Deferred Interest. For purposes of the foregoing, amounts in the Certificate
Account  available for interest  distributions on any Distribution Date shall be
deemed to include all amounts in the Certificate  Account for such  Distribution
Date available for distribution on such Distribution Date.


                                       1
<PAGE>


        "Distribution  Date"  shall  mean the 25th day of each month (or if such
25th day is not a Business Day, the first  Business Day  immediately  following)
beginning with the First Distribution Date.

        "Due for Payment" shall mean, with respect to any Insured Amounts,  such
amount that is due and payable under the  Agreement on the related  Distribution
Date.

        "Final  Scheduled  Distribution  Date" shall mean,  with  respect to the
Class A-3 Certificates, the Distribution Date in December 2036.

        "First Distribution Date" shall mean December 26, 2006.

        "Holder" shall mean any person who is the registered owner or beneficial
owner of any of the Class A-3 Certificates.

        "Insurance  Policy" or  "Policy"  shall mean this  Certificate  Guaranty
Insurance Policy together with each and every endorsement hereto.

        "Insured Amounts" (1) shall mean, with respect to any Distribution Date,
any  Deficiency  Amount  plus any  Preference  Amount and (2) shall  mean,  with
respect to the Final Scheduled  Distribution Date, the Deficiency Amount for the
Final Scheduled Distribution Date.

        "Insured  Obligations"  shall mean the Class A-3  Certificates as issued
pursuant to the Agreement.

        "Insured  Payments" shall mean, with respect to any  Distribution  Date,
the aggregate  amount  actually paid by the Insurer to the Trustee in respect of
Insured Amounts for such Distribution Date.

        "Insurer"  shall  mean Ambac  Assurance  Corporation,  or any  successor
thereto, as issuer of the Insurance Policy.

        "Late  Payment Rate" shall mean the lesser of (a) the greater of (i) the
per annum rate of interest  publicly  announced  from time to time by  Citibank,
N.A. as its prime or base lending rate plus one per centum per annum (any change
in such rate of interest to be effective on the date such change is announced by
Citibank,  N.A.), and (ii) the then applicable rate of interest on the Class A-3
Certificates  and (b) the maximum rate  permissible  under  applicable  usury or
similar laws limiting interest rates. The Late Payment Rate shall be computed on
the basis of the actual  number of days  elapsed over a year of 360 days for any
Distribution Date.


                                       2
<PAGE>


        "Letter  Agreement" shall mean the letter agreement,  dated November 29,
2006, between the Insurer and Residential Funding Company, LLC.

        "Nonpayment"  shall mean,  with  respect to any  Distribution  Date,  an
Insured  Amount  which  is Due for  Payment  but has not and will not be paid in
respect of such Distribution Date pursuant to the Agreement.

        "Notice"  shall mean the  telephonic  or  telegraphic  notice,  promptly
confirmed in writing by telecopy  substantially  in the form of Exhibit A to the
Policy,  the  original  of which is  subsequently  delivered  by  registered  or
certified  mail,  from the Trustee  specifying the Insured Amount which shall be
due and owing on the applicable Distribution Date.

        "Preference  Amount" shall mean any amount  previously  distributed to a
Class  A-3  Certificateholder  by or on  behalf  of the  Trust  Estate  that  is
recoverable and sought to be recovered as a voidable  preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code (11 U.S.C.), as amended
from time to time, in  accordance  with a final  nonappealable  order of a court
having competent jurisdiction.

        "Premium"  shall mean the premium  amount payable to the Insurer on each
Distribution Date as specified in this Policy.

        "Premium  Percentage"  shall  have the  meaning  set forth in the Letter
Agreement.

        "Reimbursement  Amount" shall mean, as of any Distribution Date, the sum
of (x) (i) all Insured  Payments paid by the Insurer,  but for which the Insurer
has not been reimbursed prior to such Distribution Date pursuant to Section 4.02
of the Agreement,  plus (ii) interest  accrued  thereon,  calculated at the Late
Payment Rate from the date the Trustee  received the related  Insured  Payments,
and (y) (i) any other  amounts  then due and  owing to the  Insurer  under  this
Policy  but  for  which  the  Insurer  has not  been  reimbursed  prior  to such
Distribution  Date pursuant to Section 4.02 of the Agreement  plus (ii) interest
on such amounts at the Late Payment Rate.

        "Term of the Policy"  shall mean the period from and  including the date
of issuance of the Policy to and including the date on which (i) the Certificate
Principal  Balance of the Class A-3  Certificates  is reduced to zero,  (ii) any
period  during which any payment of the Class A-3  Certificates  could have been
avoided in whole or in part as a preference payment under applicable bankruptcy,
insolvency,   receivership  or  similar  law  has  expired,  and  (iii)  if  any
proceedings  requisite to avoidance as a preference  payment have been commenced
prior to the  occurrence  of (i) and (ii),  a final and  nonappealable  order in
resolution of each such proceeding has been entered.

        "Trustee"  shall mean  Deutsche  Bank  Trust  Company  Americas,  or any
successor thereto under the Agreement.


                                       3
<PAGE>


        Capitalized  terms used herein and not otherwise  defined shall have the
meaning assigned to them in the Agreement.

        The Insurer hereby agrees that if, as of any  Distribution  Date, it has
become subrogated to the rights of Holders by virtue of a previous payment under
this  Policy,  no recovery of such  payment will occur unless the full amount of
the Holders' allocable  distributions for such Distribution Date can be made. In
so doing,  the  Insurer  does not waive its  rights to seek full  payment of all
Reimbursement Amounts owed to it under the Agreement and this Policy.

        As  provided  by the Policy,  the  Insurer  will pay any amount  payable
hereunder,  other than  Preference  Amounts,  no later than 12:00 noon, New York
City time, on the later of the Distribution Date on which the related Deficiency
Amount is due or the Business Day following actual receipt in New York, New York
on a Business Day by the Insurer of a Notice;  provided  that, if such Notice is
received after 12:00 noon, New York City time, on such Business Day, it shall be
deemed to be received on the  following  Business Day. If any such Notice is not
in proper form or is  otherwise  insufficient  for the purpose of making a claim
under the Policy,  it shall be deemed not to have been  received for purposes of
this  paragraph,  and the Insurer  shall  promptly so advise the Trustee and the
Trustee may submit an amended or corrected Notice.

        The Insurer shall pay any Preference Amount when due to be paid pursuant
to the Order  referred  to below,  but in any  event no  earlier  than the third
Business  Day  following  receipt by the  Insurer of (i) a  certified  copy of a
final,  non-appealable order of a court or other body exercising jurisdiction in
such  insolvency  proceeding  to the  effect  that the  Trustee or the Holder is
required  to return such  Preference  Amount paid during the term of this Policy
because  such  payments  were  avoided as a  preferential  transfer or otherwise
rescinded or required to be restored by the Trustee or the Holder (the "Order"),
(ii) a  certificate  by or on  behalf  of the  Trustee  that the  Order has been
entered  and is not  subject  to any  stay,  (iii)  an  assignment,  in form and
substance  satisfactory  to the  Insurer,  duly  executed  and  delivered by the
Trustee or the Holder, as applicable,  irrevocably  assigning to the Insurer all
rights and claims of the Trustee or the Holder,  as  applicable,  relating to or
arising under the Agreement  against the estate of the Trustee or otherwise with
respect  to such  Preference  Amount and (iv) a Notice of  Nonpayment  (attached
hereto as Exhibit A) appropriately  completed and executed by the Trustee.  Such
payment shall be disbursed to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy  named in the Order, and not to the Trustee or the Holder,
as applicable,  directly,  unless the Trustee or the Holder, as applicable,  has
made  a  payment  of the  Preference  Amount  to the  court  or  such  receiver,
conservator,  debtor-in-possession  or trustee in bankruptcy named in the Order,
in which case the Insurer will pay the Trustee on behalf of the Holder,  subject
to the  delivery of (a) the items  referred to in clauses (i),  (ii),  (iii) and
(iv) above to the  Insurer and (b)  evidence  satisfactory  to the Insurer  that
payment   has   been   made   to   such   court   or   receiver,    conservator,
debtor-in-possession   or   trustee   in   bankruptcy   named   in  the   Order.
Notwithstanding the foregoing two sentences,  the Insurer shall not be obligated
to pay any Preference  Amount in respect of principal (other than principal paid
in connection with Realized  Losses) except on the Final Scheduled  Distribution
Date or  earlier  termination  of the Trust  Fund  pursuant  to the terms of the
Agreement.


                                       4
<PAGE>


        The terms and  provisions of the Agreement  constitute the instrument of
assignment referred to in the second paragraph of the face of the Policy.

        A Premium  will be payable on this Policy on each  Distribution  Date as
provided in Section 4.02 of the  Agreement and the Letter  Agreement,  beginning
with the First Distribution Date, in an amount equal to 1/12th of the product of
(i) the Premium Percentage applicable to the Class A-3 Certificates and (ii) the
aggregate  Certificate  Principal  Balance of the Class A-3  Certificates on the
prior  Distribution  Date (after giving effect to any distributions of principal
made on such Distribution  Date);  provided that on the First Distribution Date,
the  Premium  will be in an amount  equal to 1/12th  of the  product  of (i) the
Premium  Percentage  applicable  to the  Class  A-3  Certificates  and  (ii) the
aggregate  Certificate  Principal  Balance of the Class A-3  Certificates on the
Closing Date.

        Payments due under the Policy with respect to the Class A-3 Certificates
may  not,  except  with  the  consent  of the  Insurer,  be  accelerated  by the
Depositor, the Trustee or any paying agent for the Class A-3 Certificates.

        The Policy to which this Endorsement is attached and of which it forms a
part is hereby  amended to provide that there shall be no  acceleration  payment
due under the  Policy  unless  such  acceleration  is at the sole  option of the
Insurer.  The Policy  does not cover  shortfalls,  if any,  attributable  to the
liability of the Trust Fund, any REMIC or the Trustee for withholding  taxes, if
any  (including  interest and penalties in respect of any such  liability).  The
Policy  does not  provide  any  coverage  with  respect to  Prepayment  Interest
Shortfalls, Relief Act Shortfalls or any shortfalls attributable to the Net Rate
Cap or to Net Deferred Interest.

        Nothing herein contained shall be held to vary,  alter,  waive or extend
any of the terms, conditions, provisions, agreements or limitations of the above
mentioned  Policy  other than as above  stated.  Notwithstanding  the  foregoing
sentence,  if there is any conflict or inconsistency between the Policy and this
Endorsement, the terms of this Endorsement shall control.

        No waiver of any  rights or powers of the  Insurer,  the  Holders or the
Trustee or consent by any of them shall be valid unless  signed by an authorized
officer or agent thereof.

        On and after the completion of the Term of the Policy,  the Policy shall
be void and of no force and effect whatsoever.

        This  Policy is issued  under and  pursuant  to, and shall be  construed
under,  the laws of the State of New York (without giving effect to the conflict
of laws provisions thereof).

        For your  protection  California law requires the following to appear on
this form:

        ANY PERSON WHO KNOWINGLY  PRESENTS A FALSE OR  FRAUDULENT  CLAIM FOR THE
PAYMENT  OF A LOSS  IS  GUILTY  OF A CRIME  AND  MAY BE  SUBJECT  TO  FINES  AND
CONFINEMENT IN STATE PRISON.


                                       5
<PAGE>


        IN THE EVENT AMBAC ASSURANCE  CORPORATION WERE TO BECOME INSOLVENT,  ANY
CLAIMS  ARISING  UNDER  THE  POLICY  WOULD  BE  EXCLUDED  FROM  COVERAGE  BY THE
CALIFORNIA INSURANCE GUARANTY ASSOCIATION.


                                       6
<PAGE>


        IN WITNESS  WHEREOF,  the  Insurer has caused  this  Endorsement  to the
Policy to be signed by its duly authorized officers.


Managing Director                            Assistant Secretary



___________________________________          ___________________________________


                                       7
<PAGE>


                                    EXHIBIT A
                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY
                               Policy No. AB1044BE


                         NOTICE OF NONPAYMENT AND DEMAND
                         FOR PAYMENT OF INSURED AMOUNTS

                                                               Date:  [        ]

AMBAC ASSURANCE CORPORATION
One State Street Plaza
New York, New York  10004
Attention:  General Counsel

        Reference is made to Certificate  Guaranty Insurance Policy No. AB1044BE
(the  "Policy")  issued  by  Ambac  Assurance   Corporation   ("Ambac").   Terms
capitalized  herein and not otherwise defined shall have the meanings  specified
in the  Series  Supplement,  dated as of  November  1, 2006,  among  Residential
Accredit Loans, Inc., as Depositor,  Residential Funding Company, LLC, as Master
Servicer,  and Deutsche Bank Trust Company Americas, as Trustee, to the Standard
Terms of Pooling and Servicing Agreement, dated as of November 1, 2006, (as such
Agreement  may be  amended,  modified or  supplemented  from time to time as set
forth in the  Agreement)  (the  "Agreement"),  as the case  may be,  unless  the
context otherwise requires.

        The Trustee hereby certifies as follows:

        1.   The  Trustee  is  the   Trustee   under  the   Agreement   for  the
             Certificateholders.

        2.   The relevant  Distribution  Date or Final  Scheduled  Distribution
             Date is  [date].

        3.   Payment  on   the  Class  A-3   Certificates   in  respect  of  the
             Distribution     Date    is     due    to    be     received     on
             ____________________________  under  the   Agreement,  in an amount
             equal to $_____________________.

        [3.  The amount to be  received on  ____________________  from the sale,
             liquidation or other disposition of the assets of the Trust Fund is
             $__________.]

        [3.  The amount to be paid to the Holders of the Class A-3  Certificates
             on the Final Scheduled Distribution Date is $__________.]

        4.   There  is  a  Deficiency  Amount  and/or  a  Preference  Amount  of
             $______________ due in respect of the Class A-3 Certificates, which
             amount is an Insured Amount pursuant to the terms of the Agreement.


                                       8
<PAGE>


        5.   The sum of  $__________________  is the Insured  Amount that is Due
             For Payment.

        6.   The Trustee has not heretofore made a demand for the Insured Amount
             in respect of the Distribution Date.

        7.   The Trustee hereby  requests the payment of the Insured Amount that
             is Due for  Payment be made by Ambac  under the Policy and  directs
             that payment under the Policy be made to the  following  account by
             bank wire transfer of federal or other immediately  available funds
             in accordance with the terms of the Policy to:

             ____________________________________ Trustee's account number.

        8.   The Trustee  hereby agrees that,  following  receipt of the Insured
             Amount  from  Ambac,  it shall (a) hold such  amounts  in trust and
             apply the same directly to the distribution of payment on the Class
             A-3  Certificates  when due; (b) not apply such funds for any other
             purpose;  (c) deposit such funds to the Certificate Account and not
             commingle  such funds with other  funds held by the Trustee and (d)
             maintain an accurate  record of such  payments  with respect to the
             Class A-3  Certificates and the  corresponding  claim on the Policy
             and proceeds thereof.

        For your  protection  California law requires the following to appear on
        this form:

        ANY PERSON WHO KNOWINGLY  PRESENTS A FALSE OR  FRAUDULENT  CLAIM FOR THE
        PAYMENT  OF A LOSS IS GUILTY OF A CRIME AND MAY BE  SUBJECT TO FINES AND
        CONFINEMENT IN STATE PRISON.



                                                      Trustee
                                    By:_________________________________________


                                    Title:______________________________________
                                                     (Officer)


                                       9
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