First Amendment to HPA — Alabama 

TAMPA/134445.2

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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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/134445.2

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 — Alabama] 

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: 

ALABAMA HOUSING FINANCE 

AUTHORITY 

UNITED STATES DEPARTMENT OF THE 

TREASURY 

By: /s/ Robert Strickland By: 

Name: Robert Strickland Name: Herbert M. Allison, Jr. 

Title: Executive Director Title: Assistant Secretary for 

 Financial Stability 

 

ELIGIBLE ENTITY:

ALABAMA HOUSING FINANCE 

AUTHORITY 

By: /s/ Robert Strickland 

Name: Robert Strickland 

Title: Executive Director 

 

TAMPA/134445.2

EXHIBITS AND SCHEDULES

Schedule A Basic Information 

Schedule B Service Schedules 
TAMPA/134445.2

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information: 

Name of the Eligible Entity: Alabama Housing Finance Authority1

Corporate or other organizational form: a public corporation and instrumentality of 

 the State of Alabama, established and 

 existing under the Code of Alabama 1975 

 §24-1A-1 pursuant to Act No. 80-585 of the 

 Alabama Legislature.

Jurisdiction of organization: Alabama

Notice Information: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HFA Information: 

Name of HFA: Alabama Housing Finance Authority 

 

1

 References in the Agreement to the term “HFA” shall mean the Alabama Housing Finance Agency (“AHFA”) 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 AHFA, in its capacity as Eligible Entity as such term is used in the Agreement. 
TAMPA/134445.2

Organizational form: a public corporation and instrumentality of 

 the State of Alabama, established and 

 existing under the Code of Alabama 1975 

 §24-1A-1 pursuant to Act No. 80-585 of the 

 Alabama Legislature. 

Date of Application: August 31, 2010 

Notice Information: Same as notice information for Eligible Entity. 

Program Participation Cap: $162,521,345.00 

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $60,672,471.00 

Permitted Expenses: $11,664,100.00 

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/134445.2

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/134445.2

SERVICE SCHEDULE B-1 

ALABAMA HOUSING FINANCE AUTHORITY

PROGRAM TERM SHEET 

SUMMARY GUIDELINES 

 1. Program Overview AHFA will administer HHF to subsidize 100 percent of an eligible 

unemployed homeowner’s current mortgage payments and all other 

mortgage-related expenses (including subordinate liens, if applicable) 

during their time of unemployment. The assistance will not exceed a 

total of 12 consecutive monthly payments or $15,000 per household. 

Alabama’s HHF will provide a payment (not to exceed the lesser of 

six monthly payments plus fees and costs or $7,500) to a participating 

homeowner’s servicers to bring the homeowner current on his or her 

delinquent mortgage(s). If the maximum amount that AHFA will 

provide exceeds the total amount needed to bring the homeowner 

current on all existing mortgages, the homeowner must cover any 

shortfall. The AHFA payment can cover principal, interest, fees, 

escrow/impound expenses, delinquent taxes and/or escrow shortage 

for taxes and insurance. 

Interested homeowners will apply directly to AHFA via a secure 

website monitored and maintained by AHFA staff. Applications will 

be evaluated and approved by AHFA staff members. Approved 

homeowners will be expected to submit certain information 

documenting their inability to pay their mortgage and supporting their 

mortgage claims. 

Once in the program, homeowners will be expected to re-certify their 

continued unemployment and residence in the home on a monthly 

basis. HHF payments will be distributed to servicers by AHFA on a 

monthly basis, contingent upon homeowner recertification and 

continued eligibility for unemployment compensation from the 

Alabama Department of Industrial Relations. 

Assistance will continue for up to 12 consecutive monthly payments 

(including two months following re-employment), not to exceed 

$15,000, or until the property ceases to be the homeowner’s primary 

residence. 
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 2. Program Goals Provide mortgage payment assistance to unemployed Alabama 

homeowners with a chance of sustaining homeownership. 

 3. Target Population / 

Areas 

This program will assist low- to moderate-income families in 

Alabama. AHFA does not anticipate targeting this assistance on a 

geographic basis. 

 4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

$150,857,245.00 

 5. Borrower Eligibility 

Criteria 

Alabama homeowners who have been declared eligible by the 

Alabama Department of Industrial Relations to receive state 

unemployment compensation benefits may apply for assistance. Also, 

applicants must have a total annual household income of less than 140 

percent of the state median income. Based on the current state median 

annual income of $54,100, the program’s maximum annual income 

limit, as of August 2010, will be $75,740. AHFA may change this 

income limit annually when new income data becomes available from 

the U.S. Department of Housing and Urban Development. 

Homeowners will be required to provide a financial Hardship 

Affidavit attesting to their inability to pay their mortgage. HHF will 

be available to qualified homeowners on a first-come, first-served 

basis. 

 6. Property / Loan 

Eligibility Criteria 

The homeowner must currently occupy the property as their primary 

residence, and the residence must be located within the state of 

Alabama. Eligible structures include single-family homes, attached or 

detached, and manufactured housing attached to real property. 

Existing mortgage loans on the property must have an unpaid 

principal balance totaling no more than $258,691. Alabama HHF will 

be available only for mortgages executed and recorded on or before 

September 1, 2010. 

 7. Program Exclusions Mortgage loans on second homes or investment properties will not be 

eligible for HHF assistance. 

 8. Structure of Assistance Homeowners receiving funds will execute a note and a subordinate 

mortgage lien in favor of AHFA that will be recorded in public 

records against the property. Loans will be zero percent and nonamortizing. 

Loans originated between the pilot program commencement and 

December 31, 2012, will be forgiven over a five-year term at 20 
TAMPA/134445.2

percent per year. Loans originated between January 1, 2013, and 

December 31, 2013, will be forgiven over a four-year term at 24 

percent per year. Loans originated between January 1, 2014, and 

December 31, 2014, will be forgiven over a three-year term at 33.3 

percent per year. No loans will be originated after December 31, 

2014. On or before December 31, 2017, or such later date allowed by 

Treasury, any remaining or recaptured funds will be returned to 

Treasury. 

Loans will be repayable only if the homeowner sells the property 

before the forgiveness period expires and there is sufficient equity to 

pay all or part of the unforgiven balance of the loan. Repaid HHF 

funds will be re-invested back into new homeowner loans until 

December 31, 2014. 

Ongoing monitoring, repayments and satisfactions will be conducted 

through AHFA. 

 9. Per Household 

Assistance 

Assistance per household not to exceed 100 percent of the household’s 

monthly mortgage payments for 12 consecutive months (including all 

payments needed to bring loans current), with total assistance per 

household never to exceed $15,000. 

 10. Duration of Assistance HHF payments will be distributed to servicers by AHFA on a monthly 

basis. Assistance will continue for no more than 12 consecutive 

monthly payments (including two months following re-employment), 

not to exceed $15,000, or until the property ceases to be the 

homeowner’s primary residence. Assistance will last only as long as 

the maximum available amount (which will be $15,000 less all total 

due payments required to bring homeowner current on eligible 

mortgage loans which are paid by AHFA) covers 100 percent of the 

household’s monthly mortgage payments. Assistance will cease two 

months after homeowner returns to work, regardless of whether the 

maximum available benefits have been received. 

 11. Estimated Number of 

Participating 

Households 

Based upon maximum assistance of $15,000 per household, it is 

projected that an estimated 3,500 households may be assisted. If the 

average assistance per household is $10,000, approximately 5,200 

households may be assisted. 

 12. Program Inception / 

Duration 

HHF will be available to homeowners after approval by Treasury and 

will last as long as funds are available. After successful completion of 

a pilot program to begin on December 1, 2010, AHFA anticipates that 

funds will be available statewide on or about February 1, 2011. 

AHFA expects the initial funding allocation to be expended within 

three years, though funds will be recycled until December 31, 2014. 
TAMPA/134445.2

 13. Program Interactions 

with Other HFA 

Programs 

As AHFA has access to the largest concentration of low- to moderateincome homeowners in Alabama with an in-house servicing portfolio 

of 21,000 loans, we anticipate that a number of existing AHFA 

customers will use HHF. 

 14. Program Interactions 

with HAMP 

This assistance can interact with any and all loan modification 

programs, including HAMP, provided that the homeowner meets the 

qualifications established by AHFA and Treasury for HHF. HHF 

funds can be utilized before or after assistance from HAMP UP. 

 15. Program Leverage 

with Other Financial 

Resources 

None. 

 16. Qualify as an 

Unemployment 

Program 

; Yes      No