Second Amendment to HPA — California 

TAMPA/134433.2

SECOND AMENDMENT TO 

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT 

and 

HFA PARTICIPATION AGREEMENT 

This Second Amendment to Commitment to Purchase Financial Instrument and HFA 

Participation Agreement (the “Second Amendment”) is entered into as of the date set forth on 

Schedule A attached hereto as the Second Amendment Date (the “Amendment Date”), by and 

among the United States Department of the Treasury (“Treasury”), the undersigned party 

designated as HFA whose description is set forth in Schedule A attached hereto (for 

convenience, a “state housing finance agency” or “HFA”) and the undersigned institution 

designated by HFA to participate in the program described below (“Eligible Entity”). 

Recitals 

WHEREAS, Treasury, HFA and Eligible Entity entered into that certain Commitment to 

Purchase Financial Instrument and HFA Participation Agreement (the “Original HPA”) dated as 

of the Closing Date, as previously amended by that certain First Amendment to Commitment to 

Purchase Financial Instrument and HFA Participation Agreement (the “First Amendment”; and 

together with the Original HPA as amended thereby, the “Current HPA”), dated as of the First 

Amendment Date, all as set forth on Schedule A, attached hereto in connection with Treasury’s 

federal housing program entitled the Housing Finance Agency Innovation Fund for the Hardest 

Hit Housing Markets (the “HHF Program”), which was established pursuant to the Emergency 

Economic Stabilization Act of 2008 (P.L. 110-343), as amended, as the same may be amended 

from time to time (“EESA”); 

WHEREAS, on September 24, 2010 Treasury indicated that it would make $3.5 billion of 

additional assistance available under the HHF Program for foreclosure prevention programs for 

homeowners struggling to make their mortgage payments in certain states that had previously 

received HHF Program funding for such purposes; 

WHEREAS, Treasury desires to increase the available HHF Program funds available to Eligible 

Entity and as such, Treasury, HFA and Eligible Entity wish to enter into this Second Amendment 

to document all modifications and additional provisions necessary to address the additional HHF 

Program funds; 

Accordingly, in consideration of the representations, warranties, and mutual agreements set forth 

herein and for other good and valuable consideration, the receipt and sufficiency of which are 

hereby acknowledged, Treasury, HFA and Eligible Entity agree as follows. 

Agreement 

1. Amendments

A. Definitions. All references in the Current HPA to the “Agreement” shall mean the 

Current HPA, as further amended by this Second Amendment; and all references in the 
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TAMPA/134433.2

Current HPA to Schedules A or B shall mean the Schedules A or B attached to this Second 

Amendment. All references herein to the “HPA” shall mean the Current HPA, as further 

amended by this Second Amendment. 

B. Schedule A. Schedule A attached to the Current HPA is hereby deleted in its entirety 

and replaced with Schedule A attached to this Second Amendment. 

C. Schedule B. Schedule B attached to the Current HPA is hereby deleted in its entirety 

and replaced with Schedule B attached to this Second Amendment. 

2. Representations, Warranties and Covenants

A. HFA and Eligible Entity. HFA and Eligible Entity, each for itself, make the 

following representations, warranties and covenants to Treasury and the truth and accuracy 

of such representations and warranties and compliance with and performance of such 

covenants are continuing obligations of HFA and Eligible Entity, each as to itself. In the 

event that any of the representations or warranties made herein cease to be true and correct or 

HFA or Eligible Entity breaches any of its covenants made herein, HFA or Eligible Entity, as 

the case may be, agrees to notify Treasury immediately and the same shall constitute an 

Event of Default under the HPA. 

(1) HFA and Eligible Entity each hereby certifies, represents and warrants as of the 

date hereof that each of the representations and warranties of HFA or Eligible Entity, as 

applicable, contained in the HPA are true, correct, accurate and complete in all material 

respects as of the date hereof. All covenants of HFA or Eligible Entity, as applicable, 

contained in the HPA shall remain in full force and effect and neither HFA, nor Eligible 

Entity is in breach of any such covenant. 

(2) Eligible Entity has the full corporate power and authority to enter into, execute, 

and deliver this Second Amendment and any other closing documentation delivered to 

Treasury in connection with this Second Amendment, and to perform its obligations 

hereunder and thereunder. 

(3) HFA has the full legal power and authority to enter into, execute, and deliver this 

Second Amendment and any other closing documentation delivered to Treasury in 

connection with this Second Amendment, and to perform its obligations hereunder and 

thereunder. 

3. Administrative Expenses

Notwithstanding anything to the contrary contained in the Current HPA as amended by this 

Second Amendment, HFA and Eligible Entity may from time to time submit adjusted budgets to 

Treasury requesting approval to re-allocate HHF Funds to pay actual program expenses as set 

forth on a proposed Schedule C. In the event that Treasury shall approve an adjusted budget, in 

Treasury’s sole discretion, the parties shall enter into an amendment to the HPA to modify 

Schedules A, B and C as necessary. 
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TAMPA/134433.2

4. Miscellaneous

A. The recitals set forth at the beginning of this Second Amendment are true and 

accurate and are incorporated herein by this reference. 

B. Capitalized terms used but not defined herein shall have the meanings ascribed to 

them in the HPA. 

C. Any provision of the HPA that is determined to be prohibited or unenforceable in any 

jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or 

unenforceability without invalidating the remaining provisions of the HPA, and no such 

prohibition or unenforceability in any jurisdiction shall invalidate such provision in any other 

jurisdiction. 

D. This Second Amendment may be executed in two or more counterparts (and by 

different parties on separate counterparts), each of which shall be deemed an original, but all 

of which together shall constitute one and the same instrument. Facsimile or electronic 

copies of this Second Amendment shall be treated as originals for all purposes. 

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK] 
[Signature Page to Second Amendment to HPA — California] 

In Witness Whereof, HFA, Eligible Entity and Treasury by their duly authorized officials 

hereby execute and deliver this Second Amendment to Commitment to Purchase Financial 

Instrument and HFA Participation Agreement as of the Amendment Date. 

HFA: TREASURY: 

CALIFORNIA HOUSING FINANCE 

AGENCY 

UNITED STATES DEPARTMENT OF THE 

TREASURY 

By: /s/ L. Steven Spears By: 

Name: L. Steven Spears Name: Herbert M. Allison, Jr. 

Title: Executive Director Title: Assistant Secretary for 

 Financial Stability 

 

ELIGIBLE ENTITY:

CALHFA MORTGAGE ASSISTANCE 

CORPORATION 

By: /s/ Diane M. Richardson 

Name: Diane M. Richardson 

Title: President 

 

TAMPA/134433.2 

EXHIBITS AND SCHEDULES

Schedule A Basic Information 

Schedule B Service Schedules 
TAMPA/134433.2

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information: 

Name of the Eligible Entity: CalHFA Mortgage Assistance Corporation 

Corporate or other organizational form: Nonprofit Public Benefit Corporation 

Jurisdiction of organization: California 

Notice Information: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HFA Information: 

Name of HFA: California Housing Finance Agency 

Organizational form: Agency of the State of California 

Date of Application: April 16, 2010 

Date of Action Plan: September 1, 2010 

Notice Information: 

 

 

 

 

 
TAMPA/134433.2

 

 

 

 

 

 

 

 

 

 

Program Participation Cap: $1,975,334,096.00 

Portion of Program Participation Cap 

Representing Original HHF Funds: $ 699,600,000.00 

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $476,257,070.00 

Permitted Expenses: $88,189,280.25

Closing Date: June 23, 2010 

First Amendment Date: September 23, 2010 

Second Amendment Date: September 29, 2010 

Eligible Entity Depository Account Information: See account information set forth in the 

Depository Account Control Agreement 

between Treasury and Eligible Entity 

regarding the HHF Program. 
TAMPA/134433.2

SCHEDULE B

SERVICE SCHEDULES

The Service Schedules attached as Schedule B to the Current HPA are hereby deleted in their entirety and 

replaced with the attached Service Schedules (numbered sequentially as Service Schedule B-1, Service 

Schedule B-2, et. seq.), which collectively comprise Schedule B to the HPA. 
TAMPA/134433.2

SCHEDULE B-1

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”) 

UNEMPLOYMENT MORTGAGE ASSISTANCE PROGRAM 

Summary Guidelines 

1. Program Overview The Unemployment Mortgage Assistance Program (UMA) is one of 

CalHFA MAC’s federally-funded programs developed to provide 

temporary financial assistance to eligible California homeowners who 

wish to remain in their homes but have suffered a loss of income due to 

unemployment. 

CalHFA MAC is partnering with financial institutions to directly provide 

program funds to subsidize an eligible borrower’s mortgage payments. 

UMA provides mortgage payment assistance equal to the lesser of $3,000 

per month or 100% of the PITIA (principal, interest, tax, insurance and 

escrowed homeowner’s association dues) for up to six (6) months, with 

the purpose of preventing avoidable foreclosures until such time that the 

borrower retains employment sufficient to meet the demands of satisfying 

their regular mortgage payment. 

2. Program Goals UMA’s goal is to help homeowners remain in their homes and prevent 

avoidable foreclosures despite loss of income due to unemployment. 

The UMA program will minimize past due payments, and provide a 

borrower with additional time to find alternate employment and replace 

income needed to make their mortgage payment. 

UMA was designed to assist borrowers who are currently eligible to 

receive unemployment benefits. 

UMA was designed to complement other loss mitigation programs, 

including increasing a borrower’s eligibility for an extended written 

forbearance plan and/or loan modification. 

3. Target Population / 

Areas 

UMA is designed to target low-to-moderate income homeowners and 

address the needs of a borrower’s specific situation in lieu of targeting 

certain regions or counties. 

4. Program Allocation

(Excluding 

Administrative 

Expenses) 

$1,304,714,816.75 

5. Borrower 

Eligibility Criteria 

• Borrower must qualify as a low-to-moderate income household, as 

follows: 

o Low-to-moderate income of 120% or less of the Area 
TAMPA/134433.2

Median Income in the county where borrower resides. 

o A loan financed in whole or in part by bonds that are taxexempt under IRC section 143, the borrower is presumed 

to satisfy income limits. 

• Borrower must complete and sign a Hardship Affidavit and 3rd 

Party Authorization documenting the reason for the hardship. 

• Borrowers who have recently encountered a financial hardship due 

to underemployment or unemployment related to their military 

service. 

• Borrower must agree to provide all necessary documentation to 

satisfy program guidelines established by CalHFA MAC. 

• Borrower must be currently eligible to receive unemployment 

benefits. 

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by borrower’s hardship documentation. Loans in 

foreclosure are not eligible. 

• General program eligibility is determined by CalHFA MAC, the 

housing counselor or servicer based on information received from 

the borrower. Program-specific eligibility is determined by 

CalHFA MAC on a first-come/first-approved basis until program 

funds and funding reserves have been exhausted. Loan servicer 

will implement the HHF program based on participation 

agreement terms and conditions. 

• Funding allocation will be tracked, monitored and performed by 

CalHFA MAC in a centralized processing operation.

6. Property / Loan 

Eligibility Criteria 

• Property is encumbered by a first lien mortgage loan that was 

originated on or before January 1, 2009. 

• Current unpaid principal balance (UPB) of the first lien mortgage 

loan is not greater than $729,750 (GSE conforming limit for a oneunit property). 

• The property securing the mortgage loan must not be abandoned, 

vacant, condemned or in a serious state of disrepair. 

• The subject property is the borrower’s principal residence and the 

property is located in California. 

• The applicant must own and occupy the single family, one-unit 

home (an attached or detached house or a condominium unit) 

located in California and must currently reside in the home as their 

primary residence. 

7. Program 

Exclusions 

• Mortgage payments are delinquent 90 days or greater at time of 

program application. 

• Loan is in foreclosure. 

• Borrower owns other real property. 

• Borrower’s “hardship” is a result of voluntary resignation of 

employment. 

• The borrower is no longer eligible for unemployment benefits 

from the California Employment Development Department (EDD) 
TAMPA/134433.2

benefit or such benefits will expire within 90 days. 

• Borrower consummated a “cash-out” refinance of the subject first 

lien mortgage property. 

o Refinancing for the sole purpose of obtaining a new 

interest rate and loan term is permissible. 

o Costs associated with the first mortgage refinance may be 

financed in the new loan. 

o Junior liens used to purchase the subject property first 

mortgage property are not excluded from eligibility. 

• Stand-alone second liens including home equity lines of credit are 

considered “cash-out.” Borrowers with junior liens that meet this 

description are not eligible for program assistance. 

8. Structure of 

Assistance 

CalHFA MAC will structure the assistance as a non-recourse, non-interest 

bearing subordinate loan in favor of the Eligible Entity (CalHFA MAC) 

secured by a junior lien recorded against the property in the amount of the 

total reduced PITIA and equal to the total amount of HHF unemployment 

assistance. At the conclusion of (3) three years, the subordinate loan will 

be forgiven provided the loan remains in good standing and the borrower 

complies with program guidelines. Loan funds will only be repaid to 

Eligible Entity (CalHFA MAC) in the event of a sale or refinance with 

sufficient net equity proceeds prior to forgiveness. Recovered funds will 

be recycled in order to provide additional program assistance until 

December 31, 2017, at which time any recovered funds will be returned to 

Treasury. 

The lender/servicer shall be required to provide the borrower with a 

written approved forbearance plan for a period no less than three (3) 

months PITIA. The lender/servicer forbearance plan may precede or 

follow the HHF program assistance. 

After December 31, 2017, any remaining or returned funds will be 

returned to Treasury. 

9. Per Household 

Assistance 

Up to $18,000 per household total (average funding of $14,455.43), 

equaling the lesser of $3,000 per month or 100% of PITIA (and in all 

cases, subject to the HHF Program maximum benefit cap of $50,000 with 

respect to monies previously received under other HHF Programs, if any). 

10. Duration of 

Assistance 

Borrower participation in UMA is limited to six (6) months maximum. 

11. Estimated Number 

of Participating 

Households 

Approximately 34,951. This figure is based on loans with unpaid principal 

balances ranging from $200,000 to $400,000 with an average funding of 

$14,455.43. 

12. Program Inception 

/ Duration 

UMA will be available to borrowers no later than November 1, 2010 and 

will last up to three (3) years or until funding is fully reserved. 

13. Program UMA will serve as a gateway to borrower programs aimed at 
TAMPA/134433.2

Interactions with 

Other HFA

Programs 

reinstatement and principal reduction. 

14. Program 

Interactions with 

HAMP 

This benefit may precede or extend HAMP, including HAMP UP for 

temporary unemployment assistance which when combined may provide 

assistance for up to one year. HAMP UP currently offers a minimum of 

three months and up to six months for some borrowers.

15. Program Leverage 

with Other 

Financial 

Resources 

The applicable servicer/lender is required to complement UMA assistance 

with a written approved forbearance plan for a period no less than three 

(3) months PITIA. 

CalHFA MAC will request that the loan servicer waive fees (e.g., NSF 

and late charges). 

16. Qualify as an 

Unemployment 

Program 

; Yes  No 
TAMPA/134433.2

SCHEDULE B-2

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”) 

MORTGAGE REINSTATEMENT ASSISTANCE PROGRAM 

Summary Guidelines 

1. Program 

Overview 

The Mortgage Reinstatement Assistance Program (MRAP) is one of CalHFA 

MAC’s federally-funded programs developed to provide temporary financial 

assistance to eligible homeowners who wish to remain in their homes but are 

in imminent danger of losing their home to foreclosure. 

MRAP provides funds to assist income-qualified borrowers to help them 

cure their delinquent first mortgage loan arrearages, which may also include 

payments needed to reinstate their loans from foreclosure. 

2. Program Goals The MRAP program will prevent avoidable foreclosures by helping 

borrowers reinstate their past due first mortgage loans. 

MRAP will also mitigate the need for large reinstatement dollars to be 

capitalized with remaining loan balance, and thus, broaden the population of 

borrowers who otherwise may not qualify for modification. 

3. Target 

Population / 

Areas 

MRAP is designed to target low-to-moderate income homeowners and 

address the needs of a borrower’s specific situation in lieu of targeting 

certain regions or counties. 

4. Program 

Allocation 

(Excluding 

Administrative 

Expenses) 

$129,400,000.00 

5. Borrower 

Eligibility 

Criteria 

• Borrower must qualify as a low-to-moderate income household, as 

follows: 

o Low-to-moderate income of 120% or less of the Area Median 

Income in the county where borrower resides. 

o A loan financed in whole or in part by bonds that are taxexempt under IRC section 143, the borrower is presumed to 

satisfy income limits. 

• Borrower must complete and sign a Hardship Affidavit and 3rd Party 

Authorization documenting the reason for the hardship. 

• Borrowers who have recently encountered a financial hardship due to 

their military service. 

• Borrower has adequate income to sustain modified mortgage 

payments per lender guidelines. 
TAMPA/134433.2

• Borrower must agree to provide all necessary documentation to 

satisfy program guidelines established by CalHFA MAC. 

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by borrower’s hardship documentation. Loans in 

foreclosure are eligible. 

• General program eligibility is determined by CalHFA MAC, the 

housing counselor or servicer based on information received from the 

borrower. Program-specific eligibility is determined by CalHFA 

MAC on a first-come/first-approved basis until program funds and 

funding reserves have been exhausted. Loan servicer will implement 

the HHF program based on participation agreement terms and 

conditions. 

• Funding allocation will be tracked, monitored and performed by 

CalHFA MAC in a centralized processing operation. 

6. Property / Loan 

Eligibility 

Criteria 

• Property is encumbered by a first lien mortgage loan that was 

originated on or before January 1, 2009. 

• Current unpaid principal balance (UPB) of the first lien mortgage 

loan is not greater than $729,750 (GSE conforming limit for a oneunit property). 

• The property securing the mortgage loan must not be abandoned, 

vacant, condemned or in a serious state of disrepair. 

• The subject property is the borrower’s principal residence and the 

property is located in California. 

• The applicant must own and occupy the single family, one-unit home 

(an attached or detached house or a condominium unit) located in 

California and must currently reside in the home as their primary 

residence. 

7. Program 

Exclusions 

• Borrower owns other real property. 

• Borrower’s “hardship” is a result of voluntary resignation of 

employment. 

• Borrower consummated a “cash-out” refinance of the subject first 

lien mortgage property. 

o Refinancing for the sole purpose of obtaining a new interest 

rate and loan term is permissible. 

o Costs associated with the first mortgage refinance may be 

financed in the new loan. 

o Junior liens used to purchase the subject property first 

mortgage property are not excluded from eligibility. 

• Stand-alone second liens including home equity lines of credit are 

considered “cash-out.” Borrowers with junior liens that meet this 

description are not eligible for program assistance. 

8. Structure of 

Assistance 

In the event that CalHFA MAC receives less than 100% match by the 

lender/servicer, CalHFA MAC will structure the assistance as a nonrecourse, non-interest bearing subordinate loan in favor of the Eligible Entity 

(CalHFA MAC) secured by a junior lien recorded against the property in the 

amount of the HHF assistance. At the conclusion of (3) three years, the 
TAMPA/134433.2

subordinate loan will be forgiven provided the loan remains in good standing 

and the borrower complies with program guidelines. Loan funds will only 

be repaid to Eligible Entity (CalHFA MAC) in the event of a sale or 

refinance with sufficient net equity proceeds prior to forgiveness. Recovered 

funds will be recycled in order to provide additional program assistance until 

December 31, 2017, at which time any recovered funds will be returned to 

Treasury. 

If the lender/servicer matches the assistance in an amount equal to or greater 

than 100% of the HHF Program assistance provided to the borrower, then 

the assistance is not required to be structured as a loan to the borrower. 

After December 31, 2017, any remaining or returned funds will be returned 

to Treasury. 

9. Per Household 

Assistance 

Up to $15,000 per household (average funding of $7,484.15) or 50% of 

PITIA arrearages, whichever is less (and in all cases, subject to the HHF 

Program maximum benefit cap of $50,000 with respect to monies previously 

received under other HHF Programs, if any). 

10. Duration of 

Assistance 

Available on a one-time only basis, per household. 

11. Estimated 

Number of 

Participating 

Households 

Approximately 17,290. This figure is based on loans with unpaid principal 

balances ranging from $200,000 to $400,000 with an average funding of 

$7,484.15. 

12. Program 

Inception / 

Duration 

MRAP will be available to borrowers no later than November 1, 2010 and 

will last up to three (3) years or until funding is fully reserved. 

13. Program 

Interactions with 

Other HFA

Programs 

MRAP will serve as a gateway to other loss mitigation programs including 

loan modification which may include principal reduction, including other 

HHF Programs and the Principal Reduction Program. 

14. Program 

Interactions with 

HAMP 

MRAP will serve as a gateway to HAMP which may include principal 

reduction of borrower’s mortgage. 
TAMPA/134433.2

15. Program 

Leverage with 

Other Financial 

Resources 

The goal of the program is for the applicable servicer/lender to match MRAP 

funds on a dollar-for-dollar basis. The matching funds will be paid no later 

than at the time of CalHFA MAC program funding. 

CalHFA MAC will require that the servicer waive all accrued and unpaid 

late charges and NSF fees for all payments funded with MRAP benefits. 

16. Qualify as an 

Unemployment 

Program 

 Yes ; No 
TAMPA/134433.2

SCHEDULE B-3

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”) 

PRINCIPAL REDUCTION PROGRAM 

Summary Guidelines 

1. Program 

Overview 

The Principal Reduction Program (PRP) is one of CalHFA MAC’s 

federally-funded programs developed with a goal to provide capital on a 

dollar-for-dollar matching basis with participating lenders to reduce over a 

three-year period the outstanding principal balances of qualifying properties 

with negative equity. 

PRP will provide monies to reduce the principal balance of the first 

mortgage loan for the purpose of establishing an appropriate level of debt 

for eligible borrowers with qualifying properties. 

2. Program Goals The PRP program will, in cooperation with participating lenders, leverage 

the HHF dollars by reducing the principal balances of underwater 

mortgages and provide an incentive for qualifying homeowners to remain in 

their homes during this period of steep declines in value. 

A reduction in principal through PRP can achieve desired income ratios and 

affordability for a borrower on the existing mortgage loan or can be used in 

conjunction with a loan modification. 

3. Target 

Population / 

Areas 

PRP is designed to target low-to-moderate income homeowners and address 

the needs of a borrower’s specific situation in lieu of targeting certain 

regions or counties. 

4. Program 

Allocation

(Excluding 

Administrative 

Expenses) 

$420,729,999.00 

5. Borrower 

Eligibility 

Criteria 

• Borrower must qualify as a low-to-moderate income household, as 

follows: 

o Low-to-moderate income of 120% or less of the Area 

Median Income in the county where borrower resides. 

o A loan financed in whole or in part by bonds that are taxexempt under IRC section 143, the borrower is presumed to 

satisfy income limits. 

• Borrower must complete and sign a Hardship Affidavit and 3rd 

Party Authorization documenting the reason for the hardship. 

• Borrowers who have recently encountered a financial hardship due 
TAMPA/134433.2

to their military service. 

• Borrower has adequate income to sustain modified mortgage 

payments per lender guidelines. 

• Borrower must agree to provide all necessary documentation to 

satisfy program guidelines established by CalHFA MAC. 

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by borrower’s hardship documentation. Loans in 

foreclosure are eligible. 

• General program eligibility is determined by CalHFA MAC, the 

housing counselor or servicer based on information received from 

the borrower. Program-specific eligibility is determined by CalHFA 

MAC on a first-come/first-approved basis until program funds and 

funding reserves have been exhausted. Loan servicer will 

implement the HHF program based on participation agreement 

terms and conditions. 

• Funding allocation will be tracked, monitored and performed by 

CalHFA MAC in a centralized processing operation.

6. Property / Loan 

Eligibility 

Criteria 

• Property is encumbered by a first lien mortgage loan that was 

originated on or before January 1, 2009. 

• Current unpaid principal balance (UPB) of the first lien mortgage 

loan is not greater than $729,750 (GSE conforming limit for a oneunit property). 

• The property securing the mortgage loan must not be abandoned, 

vacant, condemned or in a serious state of disrepair. 

• The subject property is the borrower’s principal residence and the 

property is located in California. 

• The applicant must own and occupy the single family, one-unit 

home (an attached or detached house or a condominium unit) 

located in California and must currently reside in the home as their 

primary residence. 

7. Program 

Exclusions 

• Borrower owns other real property. 

• Borrower’s “hardship” is a result of voluntary resignation of 

employment. 

• Borrower fails to satisfy lender underwriting guidelines, including a 

LTV of 120% or less. 

• Borrower consummated a “cash-out” refinance of the subject first 

lien mortgage property. 

o Refinancing for the sole purpose of obtaining a new interest 

rate and loan term is permissible. 

o Costs associated with the first mortgage refinance may be 

financed in the new loan. 

o Junior liens used to purchase the subject property first 

mortgage property are not excluded from eligibility. 

• Stand-alone second liens including home equity lines of credit are 

considered “cash-out.” Borrowers with junior liens that meet this 

description are not eligible for program assistance. 
TAMPA/134433.2

8. Structure of 

Assistance 

In the event that CalHFA MAC receives less than 100% match by the 

lender/servicer, CalHFA MAC will structure the assistance as a nonrecourse, non-interest bearing subordinate loan in favor of the Eligible 

Entity (CalHFA MAC) secured by a junior lien recorded against the 

property in the amount of the HHF assistance. At the conclusion of (3) 

three years, the subordinate loan will be forgiven provided the loan remains 

in good standing and the borrower complies with program guidelines. Loan 

funds will only be repaid to Eligible Entity (CalHFA MAC) in the event of 

a sale or refinance with sufficient net equity proceeds prior to forgiveness. 

Recovered funds will be recycled in order to provide additional program 

assistance until December 31, 2017, at which time any recovered funds will 

be returned to Treasury. 

If the lender/servicer matches the assistance in an amount equal to or greater 

than 100% of the HHF Program assistance provided to the borrower, then 

the assistance is not required to be structured as a loan to the borrower. 

After December 31, 2017, any remaining or returned funds will be returned 

to Treasury. 

9. Per Household 

Assistance 

Up to $50,000 per household (average funding of $31,449.58), less program 

monies previously received under other HHF Programs. 

10. Duration of 

Assistance 

Available on a one-time only basis, per household. 

11. Estimated 

Number of 

Participating 

Households 

Approximately 13,378. This figure is based on loans with unpaid principal 

balances ranging from $200,000 to $400,000 with an average funding of 

$31,449.58. 

12. Program 

Inception / 

Duration 

PRP will be available to borrowers no later than November 1, 2010 and will 

last up to three (3) years or until funding is fully reserved. 

13. Program 

Interactions with 

Other HFA 

Programs 

PRP may be used in conjunction with MRAP aimed at reinstatement. 

14. Program 

Interactions with 

HAMP 

PRP may work in conjunction with a standard HAMP modification to help 

eligible borrowers achieve desired income ratios and affordability. PRP 

may not be combined or used in conjunction with the HAMP Principal 

Reduction Alternative (PRA). PRP layering with HAMP PRA is strictly 

prohibited. PRP funds are not eligible in any combination to qualify for 

HAMP PRA investor incentive compensation. 

15. Program The goal of the program is for the applicable servicer/lender to match PRP 
TAMPA/134433.2

Leverage with 

Other Financial 

Resources 

funds on a dollar-for-dollar basis. The servicer/lender’s matching funds 

will be paid no later than at the time of CalHFA MAC program funding. 

CalHFA MAC will require that the servicer waive all accrued and unpaid 

late charges and NSF fees at the time the modification agreement is 

completed 

16. Qualify as an 

Unemployment 

Program 

 Yes ; No 
TAMPA/134433.2

SCHEDULE B-4

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”) 

THE TRANSITION ASSISTANCE PROGRAM 

Summary Guidelines 

1. Program 

Overview 

The Transition Assistance Program (TAP) is one of CalHFA MAC’s 

federally-funded programs developed to provide eligible homeowners with 

transition assistance when it is determined that they can no longer afford 

their home. 

TAP will be used in conjunction with short sale and deed-in-lieu programs 

to help borrowers make a smooth transition to housing. Borrowers will be 

required to occupy and maintain the property until the home is sold or 

returned to the lender as negotiated. 

Program funds would be available on a one-time only basis up to $5,000 per 

household and can be used or layered with other CalHFA MAC HHF 

Programs. No funds will go directly to the borrower. All funds will be sent 

to the Servicer subject to Servicer/Investor approval of short sale or deedin-lieu of foreclosure. Funds are intended to help the borrower secure new 

housing (e.g., rent, moving expenses, and security deposits) and will be 

available for transition assistance counseling services. 

2. Program Goals CalHFA MAC envisions that these monies would be used to complement 

other federal or lender programs designed specifically to stabilize 

communities by providing assistance to borrowers who have suffered a 

financial hardship and as a result are no longer financially able to afford 

their mortgage payments. 

3. Target 

Population / 

Areas 

TAP is designed to target low-to-moderate income homeowners and address 

the needs of a borrower’s specific situation in lieu of targeting certain 

regions or counties. 

4. Program 

Allocation

(Excluding 

Administrative 

Expenses) 

$32,300,000.00 

5. Borrower 

Eligibility 

Criteria 

• Borrower must qualify as a low-to-moderate income household, as 

follows: 

o Low-to-moderate income of 120% or less of the Area 

Median Income in the county where borrower resides. 
TAMPA/134433.2

o A loan financed in whole or in part by bonds that are taxexempt under IRC section 143, the borrower is presumed to 

satisfy income limits. 

• Borrower must complete and sign a Hardship Affidavit and 3rd 

Party Authorization documenting the reason for the hardship. 

• Borrowers who have recently encountered a financial hardship due 

to their military service. 

• Borrower must agree to provide all necessary documentation to 

satisfy program guidelines established by CalHFA MAC. 

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by borrower’s hardship documentation. Loans in 

foreclosure are eligible. 

• General program eligibility is determined by CalHFA MAC, the 

housing counselor or servicer based on information received from 

the borrower. Program-specific eligibility is determined by CalHFA 

MAC on a first-come/first-approved basis until program funds and 

funding reserves have been exhausted. Loan servicer will 

implement the HHF program based on participation agreement 

terms and conditions. 

• Funding allocation will be tracked, monitored and performed by 

CalHFA MAC in a centralized processing operation. 

6. Property / Loan 

Eligibility 

Criteria 

• Property is encumbered by a first lien mortgage loan that was 

originated on or before January 1, 2009. 

• Current unpaid principal balance (UPB) of the first lien mortgage 

loan is not greater than $729,750 (GSE conforming limit for a oneunit property). 

• The property securing the mortgage loan must not be abandoned, 

vacant, condemned or in a serious state of disrepair. 

• The subject property is the borrower’s principal residence and the 

property is located in California. 

• The applicant must own and occupy the single family, one-unit 

home (an attached or detached house or a condominium unit) 

located in California and must currently reside in the home as their 

primary residence. 
TAMPA/134433.2

7. Program 

Exclusions 

• Borrower owns other real property. 

• Borrower consummated a “cash-out” refinance of the subject first 

lien mortgage property. 

o Refinancing for the sole purpose of obtaining a new interest 

rate and loan term is permissible. 

o Costs associated with the first mortgage refinance may be 

financed in the new loan. 

o Junior liens used to purchase the subject property first 

mortgage property are not excluded from eligibility. 

• Stand-alone second liens including home equity lines of credit are 

considered “cash-out.” Borrowers with junior liens that meet this 

description are not eligible for program assistance. 

8. Structure of 

Assistance 

TAP assistance will not be structured as a loan. 

After December 31, 2017, any remaining or returned funds will be returned 

to Treasury. 

9. Per Household 

Assistance 

Up to $5,000 per household (average funding of $5,000.00). 

10. Duration of 

Assistance 

Available on a one-time only basis, per household. 

11. Estimated 

Number of 

Participating 

Households 

Approximately 6,460. This figure is based on loans with unpaid principal 

balances ranging from $200,000 to $400,000 with an average funding of 

$5,000.00. 

12. Program 

Inception / 

Duration 

TAP will be available to borrowers no later than November 1, 2010 and 

will last up to three (3) years or until funding is fully reserved. 

13. Program 

Leverage with 

Other HFA 

Programs 

TAP benefits may be available to the borrower even if UMA, MRAP and/or 

PRP benefits have been utilized, subject to the HHF Program maximum 

benefit cap of $50,000. 

14. Program 

Interactions with 

HAMP 

TAP complements HAMP and HAFA. The funds will leverage monies 

being made available through HAFA. Servicer is required to follow HAFA 

guidelines for allowable costs. In cases where the Servicer has approved 

the borrower for a HAFA transaction, TAP dollars will be limited to $2,000 

in order to maintain the $5,000 HHF Program maximum per household.

15. Program 

Leverage with 

Other Financial 

None. 
TAMPA/134433.2

Resources 

16. Qualify as an 

Unemployment 

Program 

 Yes ; No