First Amendment to HPA — Tennessee 

TAMPA/134453.2

FIRST AMENDMENT TO 

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT 

and 

HFA PARTICIPATION AGREEMENT 

This First Amendment to Commitment to Purchase Financial Instrument and HFA Participation 

Agreement (the “First Amendment”) is entered into as of the date set forth on Schedule A

attached hereto as the First 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 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 First 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 Original HPA to the “Agreement” shall mean the 

Original HPA, as amended by this First Amendment; and all references in the Original HPA 

to Schedules A or B shall mean the Schedules A or B attached to this First Amendment. All 

references herein to the “HPA” shall mean the Original HPA, as amended by this First 

Amendment. 
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TAMPA/134453.2 

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

and replaced with Schedule A attached to this First Amendment. 

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

and replaced with Schedule B attached to this First 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 First Amendment and any other closing documentation delivered to 

Treasury in connection with this First 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 

First Amendment and any other closing documentation delivered to Treasury in 

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

thereunder. 

3. Administrative Expenses

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

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. 

4. Miscellaneous

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

and are incorporated herein by this reference. 
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TAMPA/134453.2 

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 First 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 

First Amendment shall be treated as originals for all purposes. 

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK] 
[Signature Page to First Amendment to HPA — Tennessee] 

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

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

Instrument and HFA Participation Agreement as of the Amendment Date. 

HFA: TREASURY: 

TENNESSEE HOUSING DEVELOPMENT 

AGENCY 

UNITED STATES DEPARTMENT OF THE 

TREASURY 

By: /s/ Ted R. Fellman By: 

Name: Ted R. Fellman Name: Herbert M. Allison, Jr. 

Title: Executive Director Title: Assistant Secretary for 

 Financial Stability 

 

ELIGIBLE ENTITY:

TENNESSEE HOUSING DEVELOPMENT 

AGENCY 

By: /s/ Ted R. Fellman 

Name: Ted R. Fellman 

Title: Executive Director 

 

TAMPA/134453.2 

EXHIBITS AND SCHEDULES

Schedule A Basic Information 

Schedule B Service Schedules 
TAMPA/134453.2 

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information: 

Name of the Eligible Entity: Tennessee Housing Development Agency1

Corporate or other organizational form: body, politic and corporate; political 

subdivision and instrumentality of the State 

of Tennessee, established and existing under 

the Tennessee Housing Development 

Agency Act, Tenn. Code Ann. § 13-23-101 

et seq. 

Jurisdiction of organization: Tennessee

Notice Information: 

 

 

HFA Information: 

Name of HFA: Tennessee Housing Development Agency1

Organizational form: body, politic and corporate; political 

subdivision and instrumentality of the State 

of Tennessee, established and existing under 

the Tennessee Housing Development 

Agency Act, Tenn. Code Ann. § 13-23-101 

et seq. 

Date of Application: September 1, 2010 

 

1

 References in the Agreement to the term “HFA” shall mean the Tennessee Housing Development Agency 

(“THDA”) in its capacity as an HFA as such term is used in the Agreement; references in the Agreement to the term 

“Eligible Entity” shall mean THDA, in its capacity as Eligible Entity as such term is used in the Agreement. 

Notwithstanding anything to the contrary in the Agreement, (A) for purposes of Section 4(G) thereof, annual audited 

financial statements shall be due no later than one hundred eighty (180) days after the end of THDA’s fiscal year, 

and (B) for purposes of Section 7 thereof, the powers and authority of THDA shall be governed and construed in 

accordance with the laws of the State of Tennessee. 

For the avoidance of doubt, THDA has no obligation to ensure that the funds in the Depository Account are 

collateralized should the amount of money in the account be in excess of the FDIC insurance limits. 
TAMPA/134453.2 

Notice Information: 

Program Participation Cap: $217,315,593.00 

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $81,128,260.00 

Permitted Expenses: $10,584,411.40 

Closing Date: September 23, 2010 

First 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/134453.2 

SCHEDULE B

SERVICE SCHEDULES

The Service Schedules attached as Schedule B to the Original 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/134453.2 

SCHEDULE B-1 

Tennessee Housing Development Agency 

Hardest Hit Fund Program (HHFP) 

Summary Guidelines 

1. Program Overview The Tennessee Housing Development Agency (THDA) Hardest 

Hit Fund Program (HHFP) will provide loans to unemployed or 

substantially underemployed homeowners who, through no fault 

of their own, are financially unable to make their mortgage 

payments and are in danger of losing their homes to foreclosure. 

Loan proceeds will be used to pay all mortgage and mortgagerelated expenses (e.g., property taxes, homeowner insurance, 

homeowner dues) until the homeowner secures employment or 

completes training for a new career. Homeowners who have 

found a new job, but during a period of unemployment 

accumulated payment arrearages, reinstatement assistance will 

be available. 

2. Program Goals To assist unemployed, or substantially underemployed, 

homeowners to remain in their homes and make monthly 

payments on their mortgages and mortgage related expenses 

such as property taxes, homeowner insurance, homeowner dues, 

and/or past-due mortgage payments (arrearages) that 

accumulated during a period of unemployment (or substantial 

underemployment) so that they may avoid delinquency and 

foreclosure. 

3. Target Population / 

Areas 

This program will be available in all Tennessee counties. 

THDA will provide additional assistance over a longer period of 

time to eligible homeowners living in targeted or “hardest hit” 

counties, defined as those counties showing greater than average 

distress based on a combination of unemployment rate, the 

percent of the state’s foreclosures in that county, and 

delinquency rates. Twenty-nine counties were chosen as targeted 

based on the fact that they scored high on two of three factors, as 

follows: having an unemployment rate at or above the state 

average rate, having a high percentage of the state’s foreclosure 

filings (in the 75th percentile of counties), having a high 

delinquency rate (again, in the 75th percentile of counties).

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

$206,731,181.60 

5. Borrower Eligibility 

Criteria 

Unemployed or substantially underemployed homeowners who, 

through no fault of their own, are unable to make their mortgage 

payments and are at risk of foreclosure. Homeowners will be 
TAMPA/134453.2 

required to provide a financial hardship affidavit with 

appropriate documentation as to the cause of their hardship. For 

most homeowners, this will be documentation from the 

Department of Labor and Workforce Development confirming a 

job loss and receipt of unemployment benefits. If information 

from the Department of Labor and Workforce Development is 

unavailable, a notarized letter from the former employer 

indicating job loss was not the fault of the borrower will serve as 

a substitute. Self-employed borrowers will be required to 

submit prior tax returns and a current profit and loss statement to 

show a loss of income. Homeowners will be required to provide 

continual documentation certifying to their ongoing hardship. 

Employed homeowners who have previously been unemployed 

or substantially underemployed and who are delinquent because 

of arrearages accumulated during such period of unemployment 

or substantial underemployment, but who can resume future 

payments without additional assistance. 

Substantially underemployed homeowners whose income has 

been reduced by 50% or more. 

The event or incident which results in unemployment or 

substantially underemployment must have occurred after 

January 1, 2008. 

History of timely mortgage payments prior to the job 

loss/reduction of income. 

Principal, Interest, Taxes and Insurance >31% of household 

income after job loss/reduction of income. 

Asset test: Borrower must not have >6 months reserves 

Borrower must be a low or moderate income homeowner 

(maximum $74,980 household income). 

Eligibility for program assistance will be determined primarily 

by participating foreclosure prevention partners using THDA 

underwriting criteria stated above. 

Funds will be allocated on a first come/approved, first served 

basis. 
TAMPA/134453.2 

6. Property / Loan 

Eligibility Criteria 

Existing single-family homes or condominiums (attached or 

detached) including manufactured homes on foundations 

permanently affixed to real estate owned by the borrower. 

Tennessee owner-occupied, primary residences only. 

7. Program Exclusions Total Unpaid Principal Balances > $226,100 

Manufactured Homes not considered real property 

Non-legal U.S. resident 

8. Structure of Assistance 0% interest, non-recourse, deferred-payment, forgivable, 

subordinate loan. A forgiveness clause will reduce the loan 

amount by 20% a year for every year the borrower stays in the 

home up until 5 years. At the end of 5 years the note will be 

considered satisfied and THDA will release the lien securing the 

note. 

Loan funds are due and payable if property is sold, refinanced or 

no longer owner occupied and there are sufficient equity 

proceeds available (unless otherwise prohibited under applicable 

federal law). 

All deferred, subordinate mortgages will be evidenced by a 

Home Equity Line of Credit promissory note and secured by a 

deed of trust on the property. Borrowers will be required to sign 

and acknowledge via written agreement indicating the program 

guidelines. 

Any funds returned according to established program guidelines 

will be recaptured and used to assist additional homeowners 

through December 31, 2017. After December 31, 2017, any 

remaining or recaptured funds will be returned to Treasury. 

9. Per Household 

Assistance 

Maximum amount available per homeowner: 

• Standard benefit counties: $12,000 up to 12 months 

• Targeted benefit counties: $18,000 up to 18 months 

• There is no maximum monthly payment amount; 

however, total loan amount cannot exceed applicable 

benefit. 
TAMPA/134453.2 

10. Duration of Assistance Homeowners may receive assistance up to a maximum of 12 or 

18 months (depending on county). Should a homeowner 

become reemployed within the applicable period, the 

homeowner may continue receiving assistance for up to an 

additional 2 months after reemployment. Additionally, if a 

homeowner becomes reemployed within the applicable period 

and the homeowner’s mortgage payment exceeds 31% of their 

current income, they are eligible for continued assistance. 

Any reinstatement assistance shall be made in one payment. 

11. Estimated Number of 

Participating 

Households 

5,015 homeowners over the next 3 years with an average loan 

amount of $14,640. Recaptured funds will be recycled and used 

for additional homeowners which could extend the program 

until as late as December 31, 2017. 

12. Program Inception / 

Duration 

Program will begin serving the targeted, hardest hit counties 

December 1, 2010. Subsequently, on February 1, 2011, the 

Standard benefit counties will become eligible for the program. 

Program is expected to run until December 31, 2013, but will 

continue until all funds are exhausted. Recaptured funds will be 

recycled and used for additional homeowners which could 

extend the program until as late as December 31, 2017. 

13. Program Interactions 

with Other HFA 

Programs 

Borrowers are eligible for THDA’s Great Save loan program 

through December 31, 2010, in order to refinance their existing 

sub-prime, ARM originated prior to January 1, 2008. 

14. Program Interactions 

with HAMP 

Borrowers can receive HAMP assistance (including UP program 

assistance) prior to or after receiving Hardest Hit Fund 

assistance. 

15. Program Leverage with 

Other Financial 

Resources 

None 

16. Qualify as an 

Unemployment 

Program 

; Yes  No