Eighth Amendment to HPA — North Carolina 

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EIGHTH AMENDMENT TO 

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT 

and 

HFA PARTICIPATION AGREEMENT 

This Eighth Amendment to Commitment to Purchase Financial Instrument and HFA 

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

Schedule A attached hereto as the Eighth 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”), as 

further amended by that certain Second Amendment to Commitment to Purchase Financial 

Instrument and HFA Participation Agreement (the “Second Amendment”), as further amended 

by that certain Third Amendment to Commitment to Purchase Financial Instrument and HFA 

Participation Agreement (the “Third Amendment”), as further amended by that certain Fourth 

Amendment to Commitment to Purchase Financial Instrument and HFA Participation Agreement 

(the “Fourth Amendment”), as further amended by that certain Fifth Amendment to Commitment 

to Purchase Financial Instrument and HFA Participation Agreement (the “Fifth Amendment”), as 

further amended by that certain Sixth Amendment to Commitment to Purchase Financial 

Instrument and HFA Participation Agreement (the “Sixth Amendment”) and as further amended 

by that certain Seventh Amendment to Commitment to Purchase Financial Instrument and HFA 

Participation Agreement (the “Seventh Amendment”; and together with the Original HPA as 

amended thereby and by the First Amendment, Second Amendment, Third Amendment, Fourth 

Amendment, Fifth Amendment and Sixth Amendment, the “Current HPA”), dated as of their 

respective dates 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, HFA and Eligible Entity submitted a request to Treasury to make certain revisions 

to their Service Schedules and Permitted Expenses, as applicable, and Treasury has agreed to the 

same; 

WHEREAS, HFA, Eligible Entity and Treasury wish to enter into this Eighth Amendment to 

document all approved modifications to the Service Schedules and Permitted Expenses, as 

applicable; 
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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 Eighth Amendment; and all references in the 

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

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

further amended by this Eighth 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 Eighth 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 Eighth Amendment. 

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

and replaced with Schedule C attached to this Eighth 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 Eighth Amendment and any other closing documentation delivered to 

Treasury in connection with this Eighth 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 

Eighth Amendment and any other closing documentation delivered to Treasury in 
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connection with this Eighth Amendment, and to perform its obligations hereunder and 

thereunder. 

3. Miscellaneous 

A. The recitals set forth at the beginning of this Eighth 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. 

A. This Eighth 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 Eighth Amendment shall be treated as originals for all purposes. 

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK] 
[Signature Page to Eighth Amendment to HPA — North Carolina] 

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

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

Instrument and HFA Participation Agreement as of the Amendment Date. 

HFA: TREASURY: 

NORTH CAROLINA HOUSING FINANCE 

AGENCY 

UNITED STATES DEPARTMENT OF THE 

TREASURY 

By: /s/ Robert Kucab By: 

Name: Robert Kucab Name: Mark McArdle 

Title: Executive Director Title: Chief Homeownership 

Preservation Officer 

 

ELIGIBLE ENTITY:

NORTH CAROLINA HOUSING FINANCE 

AGENCY 

By: /s/ Robert Kucab 

Name: Robert Kucab 

Title: Executive Director 

 
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EXHIBITS AND SCHEDULES 

Schedule A Basic Information 

Schedule B Service Schedules 

Schedule C Permitted Expenses 
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SCHEDULE A 

BASIC INFORMATION 

Eligible Entity Information: 

Name of the Eligible Entity: North Carolina Housing Finance Agency1

Corporate or other organizational form: a body politic and corporate under the laws 

of the State of North Carolina pursuant to N. 

C. G. S. Chapter 122A

Jurisdiction of organization: North Carolina

Notice Information: 

 With a copy to: 

 

HFA Information: 

Name of HFA: North Carolina Housing Finance Agency1

Organizational form: a body politic and corporate under the laws 

of the State of North Carolina pursuant to N. 

C. G. S. Chapter 122A 

Date of Application: June 1, 2010 

Date of Action Plan: September 1, 2010 

Notice Information: Same as notice information for Eligible 

Entity. 

Program Participation Cap: $482,781,786.00 

Portion of Program Participation Cap 

Representing Original HHF Funds: $159,000,000.00 

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $120,874,221.00 

 

1

 References in the Agreement to the term “HFA” shall mean the North Carolina Housing Finance Agency 

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

term “Eligible Entity” shall mean NCHFA, in its capacity as Eligible Entity as such term is used in the Agreement. 
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Permitted Expenses: $62,200,000.00

Closing Date: August 3, 2010 

First Amendment Date: September 23, 2010 

Second Amendment Date: September 29, 2010 

Third Amendment Date: December 16, 2010 

Fourth Amendment Date: May 25, 2011 

Fifth Amendment Date: January 25, 2012 

Sixth Amendment Date: August 9, 2013 

Seventh Amendment Date: December 12, 2013 

Eighth Amendment Date: June 25, 2015 

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. 
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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.
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SERVICE SCHEDULE B-1 

North Carolina Housing Finance Agency’s 

Mortgage Payment Program (MPP-1) 

Summary Guidelines 

1. Program Overview Because unemployed homeowners are not eligible for most loss 

mitigation programs, NCHFA proposes to use a majority of our 

HFA Hardest Hit Funds (HHF) to create the Mortgage 

Payment Program (MPP-1). 

This program will provide loans to unemployed homeowners 

and others 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 mortgage and mortgagerelated expenses (i.e. property taxes, homeowner insurance, 

homeowner dues) for eligible homeowners. 

2. Program Goals To assist 5,410 homeowners. The following types of assistance 

will be provided: 

Job Search or Short-term Assistance 

To help homeowners while they look for a new job or have 

experienced a temporary reduction in income. 

Job Training or Long-term Assistance 

To help homeowners while they complete a job 

training/education program to help secure a new job including 

veterans who are honorably or medically discharged from the 

military. 

Reinstatement Only or One-time Assistance 

To help homeowners who can resume future payments but need 

help to bring their mortgage current. 

3. Target Population/ 

Areas 

Homeowners who are unemployed, underemployed, suffered 

another temporary hardship, and/or are able to resume future 

payments but need help bringing their mortgage current. 

This Program will be available in all North Carolina counties. 

 

4. Program Allocation 

(Excluding 

Administrative 

$108,200,000.00 
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Expenses) 

5. Borrower Eligibility 

Criteria 

Homeowners who are unemployed, underemployed, or have 

suffered another eligible temporary hardship, who, through no 

fault of their own, are unable to make their mortgage payments 

and are at risk of a foreclosure. Homeowners will be required 

to provide a financial hardship affidavit with appropriate 

documentation on the cause of their hardship, per program 

guidelines. 

Homeowners who are delinquent because of a prior job loss or 

other program eligible hardship but who can resume future 

payments without additional assistance. 

Satisfactory mortgage payment history. 

 

All principal, interest, taxes, homeowner insurance, mortgage 

insurance, homeowner association dues, and the cost of utilities 

> 25% of household income after job loss/loss of income. 

Borrowers must meet program underwriting criteria. 

Eligibility for program assistance will be determined primarily 

by participating foreclosure prevention partners. 

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

basis. 

6. Property/Loan 

Eligibility Criteria 

Existing single-family homes, duplexes or condominiums 

(attached or detached) including manufactured homes on 

foundations permanently affixed to real estate owned by the 

borrower. 

North Carolina owner-occupied, primary residences only. 

7. Program Exclusions Total Unpaid Principal Balances > $300,000. 

 

Manufactured homes not considered real property. 

Non-legal U.S. resident. 

8. Structure of 

Assistance 

10 year, 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 after five years. At the end of the 10 years, the note will 

be considered satisfied, and NCHFA will release the lien 

securing the note. 
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All or a portion of the unforgiven loan funds are due and 

payable to NCHFA if home is sold, refinanced or no longer 

owner occupied (unless otherwise prohibited under applicable 

federal law). Loans are repayable only from proceeds to the 

borrower from a sale or refinance. If the property is sold or 

refinanced and has not increased in equity to the degree 

necessary to repay the loan, all or a portion of the loan 

remaining unpaid after the proceeds are applied will be 

forgiven. 

NCHFA will agree to subordinate the MPP-1 Loan for 

borrowers who refinance their mortgage(s) to receive more 

favorable loan terms. If a borrower refinances their loan to 

consolidate debt or receives cash out, the borrower would be 

required to repay the MPP-1 Loan according to the loan terms. 

All deferred, subordinate mortgages will be evidenced by a 

promissory note and secured by a deed of trust on the property. 

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, the 

funds will be returned to Treasury. 

9. Per Household 

Assistance 

The average loan amount will be $20,000 per borrower. 

Effective for all loans closed after January 31, 2012: 

Maximum assistance up to $36,000 and not to exceed 36 

months per household. 

10. Duration of Assistance Effective for all loans closed after January 31, 2012: 

Up to 36 months for those in job training/education program. 

Up to 18 months for those in a job search. 

11. Estimated Number of 

Participating 

Households 

5,410 homeowners over the next 3 years. 

Estimated number served based on average loan amount of 

$20,000 per homeowner. 

12. Program Inception/ 

Duration 

Program began October 18, 2010. Recaptured funds may be 

recycled and used in the program until December 31, 2017. 

 

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

Borrowers can access more than one of our HHF programs, if 

needed and appropriate. For example, a borrower can receive 

MPP-1 assistance while they look for a new job and then 
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programs) receive Second Mortgage Refinance Program or Modification 

Enabling Pilot Program assistance once they can resume future 

payments without additional assistance. Homeowners who 

continue to struggle with unaffordable mortgage payments may 

be eligible to participate in the Principal Reduction Recast/Lien 

Extinguishment for Unaffordable Mortgages Program. 

Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs. 

14. Program Interactions 

with HAMP 

The MPP-1 would help borrowers who need more than the 3-6 

months of assistance available through the new Home 

Affordable Unemployment Program (UP), which began August 

1, 2010. 

Borrowers who are eligible for MPP-1 would not be required to 

participate in UP prior to receiving assistance with MPP-1. 

In addition, MPP-1 would also help borrowers who don’t 

qualify for assistance under the new UP because they are more 

than 3 months behind in mortgage payments and/or they are not 

currently receiving unemployment (i.e., self-employed 

homeowners). 

Finally, borrowers can receive HAMP assistance prior to or 

after receiving Hardest Hit Fund assistance. For example, a 

borrower may receive UP assistance for 3-6 months and then 

receive MPP-1 assistance for several more months, if needed. 

MPP-1 assistance will not be available to a borrower who is in a 

trial loan modification. MPP-1 assistance may be available to a 

borrower who has received a permanent loan modification if the 

borrower has a need. 

Once MPP-1 assistance has ended, a borrower may be eligible 

to receive a loan modification from HAMP, if needed and 

eligible. 

15. Program Leverage 

with Other Financial 

Resources 

None 
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SERVICE SCHEDULE B-2 

North Carolina Housing Finance Agency’s 

Mortgage Payment Program (MPP-2) 

Summary Guidelines 

1. Program Overview The North Carolina Housing Finance Agency (NCHFA) 

Mortgage Payment Program (MPP-2) 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 (i.e. property taxes, homeowner insurance, 

mortgage insurance and homeowner association dues), including 

subordinate mortgage loans, until the homeowner secures 

employment or completes training for a new career. 

2. Program Goals To assist 14,100 homeowners. The following types of 

assistance will be provided: 

Job Search or Short-term Assistance 

To help homeowners while they look for a new job. 

Job Training or Long-term Assistance 

To help homeowners while they complete a job 

training/education program to help secure a new job. 

Reinstatement Only or One-time Assistance 

To help homeowners who have found a new job but need help 

to bring their mortgage current due to arrearages accumulated 

during a period of unemployment. 

3. Target 

Population/Areas 

Homeowners who are unemployed, or substantially 

underemployed, and/or reemployed but need help bringing their 

mortgage current. 

 

This Program will be available in all North Carolina counties. 

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

$282,381,786.00 

5. Borrower Eligibility 

Criteria 

Unemployed or substantially underemployed homeowners who, 

through no fault of their own, are unable to make their mortgage 
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payments and are at risk of a foreclosure. Homeowners will be 

required to provide a financial hardship affidavit with 

appropriate documentation of unemployment, per program 

guidelines. 

Homeowners who are delinquent due to arrearages accumulated 

during a period of unemployment but who can resume future 

payments without additional assistance. 

Satisfactory mortgage payment history. 

All principal, interest, taxes, homeowner insurance, mortgage 

insurance, homeowner association dues, and the cost of utilities 

> 25% of household income after job loss/loss of income. 

Borrowers must meet program underwriting criteria. 

Eligibility for program assistance will be determined primarily 

by participating foreclosure prevention partners. 

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

basis. 

6. Property/Loan 

Eligibility Criteria 

Existing single-family homes, duplexes or condominiums 

(attached or detached) including manufactured homes on 

foundations permanently affixed to real estate owned by the 

borrower. 

North Carolina owner-occupied, primary residences only. 

7. Program Exclusions Total Unpaid Principal Balances > $300,000. 

 

Manufactured homes not considered real property. 

Non-legal U.S. resident. 

8. Structure of 

Assistance 

10 year, 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 after five years. At the end of the 10 years, the 

note will be considered satisfied, and NCHFA will release the 

lien securing the note. 

All or a portion of the unforgiven loan funds are due and 

payable to NCHFA if home is sold, refinanced or no longer 

owner-occupied (unless otherwise prohibited under applicable 

federal law). Loans are repayable only from proceeds to the 
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borrower from a sale or refinance. If the property is sold or 

refinanced and has not increased in equity to the degree 

necessary to fully repay the loan , all or the excess portion of the 

loan remaining after the proceeds are applied will be forgiven. 

NCHFA will agree to subordinate the MPP-2 Loan for 

borrowers who refinance their mortgage(s) to receive more 

favorable loan terms. If a borrower refinances their loan to 

consolidate debt or receives cash out, the borrower would be 

required to repay the MPP-2 Loan according to the loan terms. 

All deferred, subordinate mortgages will be evidenced by a 

promissory note and secured by a deed of trust on the property. 

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, all 

remaining and recaptured funds will be returned to Treasury. 

 

9. Per Household 

Assistance 

The average loan amount is expected to be $20,000 per 

borrower. 

Effective for all loans closed after January 31, 2012: 

Maximum assistance up to $36,000 and not to exceed 36 months 

per household. 

10. Duration of Assistance Effective for all loans closed after January 31, 2012: 

Up to 36 months for those in job training/education program. 

Up to 18 months for those in a job search. 

 

11. Estimated Number of 

Participating 

Households 

14,100 homeowners. 

Estimated number served based on average loan amount of 

$20,000 per homeowner. 

12. Program Inception/ 

Duration 

Program began November 7, 2011. Recaptured funds may be 

recycled and used in the program until December 31, 2017. 

13. Program Interaction 

with Other HFA 

Programs 

Borrowers can access more than one of our HHF programs, if 

needed and appropriate. For example, a borrower can receive 

MPP-2 assistance while they look for a new job and then receive 

Second Mortgage Refinance Program or Modification Enabling 

Pilot Program assistance once they secure a new job. 

Homeowners who continue to struggle with unaffordable 

mortgage payments may be eligible to participate in the 

Principal Reduction Recast/Lien Extinguishment for 

Unaffordable Mortgages Program. 
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Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs. 

 

14. Program Interaction 

with HAMP 

The MPP-2 would help borrowers who need more than the 3-6 

months of assistance available through the new Home 

Affordable Unemployment Program (UP), which began in 

August, 2010. 

Borrowers who are eligible for MPP-2 would not be required to 

participate in UP prior to receiving assistance with MPP-2. 

In addition, MPP-2 would also help borrowers who don’t 

qualify for assistance under the new UP because they are more 

than 3 months behind in mortgage payments and/or they are not 

currently receiving unemployment (i.e. self-employed 

homeowners). 

Finally, borrowers can receive HAMP assistance prior to or 

after receiving Hardest Hit Fund assistance. For example, a 

borrower may receive UP assistance for 3-6 months and then 

receive MPP-2 assistance for several more months, if needed. 

MPP-2 assistance will not be available to a borrower who is in a 

trial loan modification. MPP-2 assistance may be available to a 

borrower who has received a permanent loan modification if the 

borrower has a need. 

Once MPP-2 assistance has ended, a borrower may be eligible 

to receive a loan modification from HAMP, if needed and 

eligible. 

15. Program Leverage 

with Other Financial 

Resources 

None 
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SERVICE SCHEDULE B-3 

North Carolina Housing Finance Agency’s 

Second Mortgage Refinance Program (SMRP) 

Summary Guidelines 

1. Program Overview Government officials have estimated about 50% of troubled 

borrowers have a second mortgage. Homeowners are frequently 

unable to make their second mortgage payment and are in 

danger of losing their homes to foreclosure. 

The Second Mortgage Refinance Program (SMRP) will 

benefit homeowners with second mortgages who, through no 

fault of their own, are financially unable to make their mortgage 

payment because of a prior job loss, reduced income, or other 

program-eligible hardship. 

This program will provide a more affordable housing expense 

by refinancing the second mortgage to a 0%-interest, nonrecourse, deferred-payment subordinate loan. 

2. Program Goals To assist 400 homeowners facing foreclosure in all 100 North 

Carolina counties. 

The goal of this program is to extinguish the existing second 

mortgage and replace it with a 0%-interest, non-recourse, 

deferred-payment subordinate loan. This will reduce the 

borrower’s monthly mortgage payment and in some instances 

may expedite movement of a qualified applicant into a HAMP 

first mortgage modification process. 

3. Target Population/ 

Areas 

Our target population will be homeowners facing foreclosure in 

all 100 North Carolina counties who have a 1st and 2nd mortgage 

whereby the total mortgage payment is causing the home to be 

unaffordable under program guidelines. 

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

 $10,000,000.00 

5. Borrower Eligibility 

Criteria 

Eligible homeowners must be those facing foreclosure due to 

recent unemployment, loss of income, reduction in income, or 

other demonstrated financial hardships. Homeowners will be 

required to provide a financial hardship affidavit with 

appropriate documentation on the cause of the hardship. 
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Satisfactory mortgage payment history. 

All principal, interest, taxes, homeowner insurance, mortgage 

insurance, homeowner association dues, and the cost of utilities 

> 25% of household income after job loss/loss of income. 

Extinguishment of second loan with SMRP will only occur if 

the first mortgage loan is current. 

Borrowers must meet program underwriting criteria. 

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

basis. 

6. Property/Loan 

Eligibility Criteria 

Existing single-family homes, duplexes or condominiums 

(attached or detached) including manufactured homes on 

foundations permanently affixed to real estate owned by the 

borrower. 

North Carolina owner-occupied, primary residences only. 

7. Program Exclusions Total Unpaid Principal Balances > $300,000. 

Manufactured homes not considered real property. 

Second Mortgage Refinance will not be available to a 

homeowner that is eligible or participating in 2MP. 

Non-legal U.S. resident. 

8. Structure of 

Assistance 

30 year, 0%-interest, non-recourse, deferred-payment 

subordinate loan. 

All loan funds are due and payable to NCHFA if home is sold, 

refinanced or no longer owner-occupied (unless otherwise 

prohibited under applicable federal law). Loans are repayable 

only from proceeds to the borrower from a sale or refinance. If 

the property is sold or refinanced and has not increased in 

equity to the degree necessary to repay the loan, all or a portion 

of the loan remaining unpaid after the proceeds are applied will 

be forgiven. 

NCHFA will agree to subordinate the SMRP Loan for 

borrowers who refinance their mortgage(s) to receive more 

favorable loan terms. If a borrower receives cash out with a 

refinance, the borrower would be required to repay the SMRP 
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Loan according to the loan terms. 

All deferred subordinate mortgages will be evidenced by a 

promissory note and secured by a deed of trust on the property. 

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, the 

funds will be returned to Treasury. 

 

9. Per Household 

Assistance 

Under this program, eligible borrowers may receive up to 

$50,000 plus all related fees as a subordinate loan. 

If $50,000 is insufficient to extinguish the second mortgage, the 

Agency will only offer these funds if the second lien holder is 

willing to take the amount supplied to extinguish the debt 

without a deficiency judgment. 

The average loan amount is expected to be $25,000 per borrower. 

10. Duration of Assistance Assistance under SMRP is a one-time payment. 

11. Estimated Number of 

Participating 

Households 

400 homeowners. 

12. Program Inception/ 

Duration 

The program began June 6, 2011. Recaptured funds may be 

recycled and used in the program until December 31, 2017. 

 

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

programs) 

Homeowners who participate in the Mortgage Payment 

Program (MPP) may be eligible to participate in SMRP if the 

borrower has the ability to resume first mortgage payment yet 

second mortgage payment remains unaffordable. Eligible 

delinquent borrowers will be brought current with MPP OneTime Reinstatement if necessary and then are eligible for 

SMRP. Homeowners struggling with unaffordable mortgage 

payments may be eligible to participate in the Principal 

Reduction Recast/Lien Extinguishment for Unaffordable 

Mortgages Program and SMRP program to achieve an 

affordable mortgage payment. 

Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs. 

14. Program Interactions 

with HAMP 

Extinguishing the second mortgage may expedite movement of 

qualified applicants into a HAMP first modification process. 
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15. Program Leverage 

with Other Financial 

Resources 

If $50,000 is insufficient to extinguish the second mortgage, the 

Agency will only offer these funds if the second lien holder is 

willing to take the amount supplied to extinguish the debt 

without a deficiency judgment. 

 
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SERVICE SCHEDULE B-4 

North Carolina Housing Finance Agency's 

Modification Enabling Pilot Program (MEP) 

Summary Guidelines 

1. Program 

Overview

The Modification Enabling Pilot Program (“MEP”) is being 

administered by the North Carolina Housing Finance Agency 

(“NCHFA”) in partnership with National Community Capital II LLC 

(“NCC”). Funding under this Pilot Program is designed to provide 

directed assistance to eligible borrowers under the NCC ReStart 

Program with the intent to permanently modify and reduce the 

borrower’s loan amount to an affordable level to achieve a monthly total 

housing payment that does not exceed 35% of the borrower’s monthly 

income. Borrowers meeting the eligibility requirements described in 

Section 5 below may be eligible for MEP assistance through the NCC 

ReStart Program. 

Eligible loan pools under this MEP Pilot Program include loans in North 

Carolina sold under the Department of Housing and Urban 

Development’s (“HUD”) Distressed Asset Stabilization Program 

(“DASP”) and other loan sales that are purchased by NCC. 

The NCHFA agreement with the NCC ReStart Program will be used to 

enable and facilitate permanent modifications by advancing a forgivable 

loan to eligible borrowers in an amount not to exceed $36,000 to enable 

a loan modification to occur immediately. MEP funding may not be 

used to reduce the principal balance of an eligible borrower’s mortgage 

loan below 100% of the current market value of the property. However, 

the NCC ReStart Program may reduce the principal amount of an 

eligible borrower’s mortgage loan below 100% of the property’s current 

market value to achieve a permanently modified mortgage loan as long 

as it uses its own capital and not MEP funding. As the funding formula 

for the maximum amount MEP assistance expressly states a floor of 

100% of the property’s current market value the MEP assures that its 

assistance is limited to funding principal reduction for eligible 

borrowers only down to 100% of the property’s current market value. 

Consistent with the terms of MEP, the NCC ReStart Program may 

permanently modify and reduce the existing first mortgage loan to an 

amount whose net present value does not exceed the lesser of: 

• A loan amount equal to 100% of the current market value of the 

property; or 

• A loan amount with a net present value (using a 30 year 

amortization at an interest rate equal to 300 basis points above 

the 30 year FHA rate as quoted by Wells Fargo Mortgage) that 
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results in a monthly total housing payment that does not exceed 

35% of the borrowers adjusted gross monthly income. 

In order to make the mortgage payments affordable to the borrower, the 

MEP forgivable second mortgage loan will be made to eligible 

borrowers for up to $36,000 to fund a modification of the mortgage loan 

amount to an amount equal to 100% of the current market value (or as 

close to 100% of the current market value as the $36,000 in MEP 

assistance will permit and as long as the reduced mortgage loan amount 

results in a total housing payment not greater than 35% of the 

borrower’s adjusted gross monthly income). 

There is a required dollar-for-dollar private capital match under the 

NCC Restart Program. As a result of this private capital match, the final 

amount of MEP assistance will be determined by subtracting the Current 

Market Value of the property from borrower’s Unpaid Principal Balance 

(UPB) times 50% or $36,000, whichever is less. 

The structure of the MEP assistance is described in Section 8. 

2. Program Goals The central goal of MEP is to help homeowners avoid foreclosure by 

permanently modifying a borrower’s primary mortgage to achieve a 

monthly total housing payment that does not exceed 35% of the 

borrower’s adjusted gross monthly income. 

3. Target 

Population/Areas

The targeted populations are households whose loans NCC is able to 

acquire under the HUD DASP. 

4. Program 

Allocation 

(Excluding 

Administrative 

Expenses)

$5,000,000.00 

5. Borrower 

Eligibility Criteria

Eligible Borrowers under MEP must meet the following criteria: 

• Must be a legal U.S. Citizen or lawful permanent resident 

• Demonstrate an ability to maintain a financial obligation for the 

home based upon an affordable mortgage with a total monthly 

housing payment equal to or less than 35% of their gross 

monthly income. 

• Must meet the LTV requirements described in this Section. 

Borrowers with current UPBs equal to or greater than 105% of the 

property’s current market value are eligible for MEP assistance if they 

meet one of the following financial hardships and provide a financial 

hardship affidavit. Eligible financial hardships include reduced income 
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due to: 

• Changes in employment 

• Medical condition(s) 

• Divorce 

• Death 

Borrowers who are unable to document any of these financial hardships 

may be eligible for MEP assistance if their current UPB is equal to or 

greater than 125% of the property’s current market value. 

6. Property/Loan 

Eligibility Criteria

• Property must be the borrowers principal residence, located in North 

Carolina and may not be abandoned, vacant or condemned. 

• The property must be a single family home, duplex, a condominium, 

a townhome, a manufactured or mobile home on foundation 

permanently affixed to real estate owned by the mortgagor, or a 2-4 

family dwelling unit of which one unit is occupied by the mortgagor 

as their principal residence that is owner-occupied with a UPB equal 

to or less than $300,000. 

• Mortgage must be a distressed loan with a UPB that equals or 

exceeds the required percentages described in Section 5 above. 

Market value will be established by a FIRREA-compliant appraisal 

completed by an appraiser licensed and in good standing under the 

North Carolina statutes for NCC at the time the appraisal is 

performed. 

7. Program 

Exclusions

Borrowers whose current loan-to-value is less than 105% of the 

property’s current market value. 

Borrowers who are in an active Chapter 7 bankruptcy. 

8. Structure of 

Assistance

10 year, 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 after five 

years. At the end of the 10 years the note will be considered satisfied 

and NCHFA will release the lien securing the note. 

All or a portion of the unforgiven loan funds are due and payable to 

NCHFA if home is sold, refinanced or no longer owner occupied (unless 

otherwise prohibited under applicable federal law). Loans are repayable 

only from proceeds to the borrower from a sale or refinance. If the 

property is sold or refinanced and has not increased in equity to the 

degree necessary to repay the loan, all or a portion of the loan remaining 

unpaid after the proceeds are applied will be forgiven. 

All deferred subordinate mortgages will be evidenced by a promissory 

note and secured by a deed of trust on the property. 
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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 the funds will be returned to 

Treasury. 

9. Per Household 

Assistance

Under this program, eligible borrowers may receive up to $36,000. The 

estimated Median Amount of Assistance is $18,500. 

10. Duration of 

Assistance

Assistance under MEP is a one-time payment on behalf of qualified 

applicants of NCC ReStart Program. 

11. Estimated 

Number of 

Participating 

Households

It is anticipated that the MEP will assist a minimum of 270 households 

in avoiding imminent foreclosures. 

12. Program 

Inception/Duration

The program will be available approximately in January 2014 and is 

anticipated to run for a two-year period of time. Recaptured funds may 

be recycled and used in the program until December 31, 2017. 

13. Program 

Interactions with 

Other Programs 

(e.g. other HFA 

programs)

MEP will interact with NCHFA’s MPP-1, MPP-2, and SMRP in the 

following manner. At the time NCC assesses the borrower for 

eligibility under MEP, if it finds that the borrower is not eligible for 

MEP it will then assess whether the borrower is eligible for MPP-1, 

MPP-2 and/or SMRP assistance. If the borrower is eligible for MPP-1, 

MPP-2 and/or SMRP, the application and approval process will be 

completed in the manner prescribed by NCHFA. 

Homeowners who have participated in the Mortgage Payment Programs 

may be eligible to participate in MEP if the borrower has become 

reemployed or secured other source(s) of fixed income and has 

demonstrated a qualifying hardship. 

Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs. 

14. Program 

Interactions with 

HAMP

None. 

15. Program 

Leverage with 

Other Financial 

Resources

As the NCC ReStart Program will reduce the existing first mortgage 

loan in accordance with the MEP there will be a minimum 1:1 private 

capital leveraged match. However, as the NCC ReStart Program will 

likely fund with private capital additional principal reductions for 

eligible borrowers below 100% of the property’s current market value in 

order to achieve a principal reduction it is expected that the leveraged 

match of private funds to MEP will be closer to 3 to 1. Lender match 
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amounts shall be documented at the time of closing of the modification. 
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SERVICE SCHEDULE B-5 

North Carolina Housing Finance Agency's 

Principal Reduction Recast/Lien Extinguishment for Unaffordable Mortgages (PRRLE) 

Program 

Summary Guidelines 

1. Program Overview The Principal Reduction Recast/Lien Extinguishment for 

Unaffordable Mortgages (PRRLE) will provide eligible 

homeowners a principal reduction and reamortization (recast) of 

the remaining principal balance or a full lien extinguishment. The 

program will provide the homeowner an affordable and long term 

sustainable monthly mortgage expense payment. The PRRLE 

program is available to North Carolina homeowners who are 

financially unable to make their mortgage payments due to a 

qualifying hardship event. 

2. Program Goals To assist 600 homeowners facing foreclosure. 

The goal of the program is to decrease the number of home 

owners losing their homes to foreclosure by providing long-term 

housing payment sustainability. Secondary goals include 

stabilization of neighborhoods and protecting home values of 

surrounding properties. 

This program will provide immediate mortgage payment relief 

and stable long term mortgage or mortgage expense payments for 

the homeowner. 

3. Target Population/ 

Areas 

Homeowners suffering a program eligible financial hardship, as 

defined in the program guidelines, related to reduction of income 

or other demonstrated financial hardship. 

This Program will be available in all North Carolina counties. 

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

 $15,000,000.00 

5. Borrower Eligibility 

Criteria 

Eligible homeowners must be those with program eligible 

financial hardship due to unemployment, loss of income, 

reduction of income, or other demonstrated financial hardships 

through no fault of their own. Homeowners will be required to 

provide a financial hardship affidavit with appropriate 

documentation on the cause of the hardship. 
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All eligible homeowners must meet the following criteria: 

• Satisfactory mortgage payments prior to job loss, loss of 

income, reduction in income or other program eligible 

hardship. 

• Homeowner has become re-employed or secured a fixed 

income source. 

• Current housing debt-to income ratio > 25%. 

• Post assistance monthly housing related expenses 

including principal and interest on all liens attached to the 

property, property taxes, homeowners insurance and 

homeowners association dues ≤ 36% of gross monthly 

household income. 

Homeowners eligible to receive a full lien extinguishment must 

meet these additional following criteria: 

• Primary income source for household is from a fixed 

income source as defined in the program guidelines. 

• Gross household income is equal to or lesser than 125% of 

the state median income limit in North Carolina. 

• Post assistance monthly housing related expenses 

including principal and interest on all liens attached to the 

property, property taxes, homeowners insurance and 

homeowners association dues ≤ 36% of gross monthly 

household income.

Homeowners eligible to receive a principal reduction and recast 

and receiving a fixed income source as primary income must meet 

these additional following criteria: 

• Primary income source for household is from a fixed 

income source as defined in the program guidelines. 

• Gross household income is equal to or lesser than 125% of 

the state median income limit in North Carolina. 

• Post assistance monthly housing related expenses 

including principal and interest on all liens attached to the 

property, property taxes, homeowners insurance and 

homeowners association dues ≤ 36% of gross monthly 

household income. 

Homeowners eligible to receive a principal reduction and recast 

and not receiving a fixed income source as primary income must 

meet these additional following criteria: 
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Doc#: US1:10098075v1 

• Pre-assistance LTV >80%. 

• Post assistance LTV >80%. 

• Post assistance LTV may go below 80% only if exactly 

$10,000 in assistance is provided in order to achieve a 

post assistance housing debt-to-income ratio between 25% 

and 36%. 

• Post assistance monthly housing ratio target is 25% but 

may not exceed 36%. 

• Post assistance monthly housing related expenses 

including principal and interest on all liens attached to the 

property, property taxes, homeowners insurance and 

homeowners association dues > 25% of gross monthly 

household income. 

Homeowners must meet program underwriting criteria. Funds 

will be allocated on a first come/approved, first served basis. 

6. Property/Loan 

Eligibility Criteria 

• Existing single-family homes duplexes, or condominiums 

(attached or detached) including manufactured homes on 

foundations permanently affixed to real estate owned by the 

borrower. 

• North Carolina owner-occupied, primary residences only. 

• Homeowners with a fixed rate or adjustable rate mortgage. 

• Homeowners with interest-only or negative amortization 

mortgage can qualify if the recast results in a fully amortizing 

loan. 

7. Program Exclusions Total Unpaid Principal Balances > $300,000. 

Manufactured homes not considered real property. 

Non-legal U.S. resident. 

8. Structure of Assistance 10 year, 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 after five years. At the end of the 10 years the note will be 

considered satisfied and NCHFA will release the lien securing the 

note. 

All or a portion of the unforgiven loan funds are due and payable 

to NCHFA if home is sold, refinanced or no longer owner 

occupied (unless otherwise prohibited under applicable federal 

law). Loans are repayable only from proceeds to the borrower 

from a sale or refinance. If the property is sold or refinanced and 

has not increased in equity to the degree necessary to repay the 
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Doc#: US1:10098075v1 

loan, all or a portion of the loan remaining unpaid after the 

proceeds are applied will be forgiven. 

All deferred subordinate mortgages will be evidenced by a 

promissory note and secured by a deed of trust on the property. 

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 the funds 

will be returned to Treasury. 

9. Per Household 

Assistance 

Under this program, each eligible borrower may receive no less 

than $10,000 and no more than $50,000 structured as a 

subordinate loan. 

The average loan amount is expected to be $25,000 per borrower. 

10. Duration of Assistance Assistance under PRRLE is a one-time payment to the servicer. 

11. Estimated Number of 

Participating 

Households 

We anticipate approximately 600 homeowners will be helped. 

Program will be piloted with select servicers, NCHFA portfolio 

and existing HHF portfolio. Program may be expanded to other 

servicers if pilot is successful and funds are available. 

12. Program Inception/ 

Duration 

The program will be available in July 2015. Recaptured funds 

may be recycled and used in the program until December 31, 

2017. 

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

programs) 

Homeowners who have participated in the Mortgage Payment 

Program (MPP) or the Second Mortgage Refinance Program 

(SMRP) may be eligible to participate in PRRLE if the borrower 

has become reemployed or secured other source(s) of fixed 

income and has demonstrated a qualifying hardship. 

Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs. 

14. Program Interactions 

with HAMP 

Lien Extinguishment: 

• No HAMP interaction

Principal Reduction and Recast: 

• Borrowers suffering a program eligible financial hardship 

after the HAMP modification effective date are eligible 

for PRRLE.

15. Program Leverage with We will not require investors to match the contributions that are 
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Doc#: US1:10098075v1 

Other Financial 

Resources 

made with the Hardest Hit Funds for the Principal Reduction 

Recast/Lien Extinguishment Program. Servicers are expected to 

leverage PRRLE funds by providing a loan recast to help 

establish an affordable monthly mortgage payment based on new 

household income or fully extinguish the lien and release 

homeowners from future obligations or judgments. 
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 Schedule C 

Permitted Administrative Expenses 

North Carolina 

 

 

 One-time / Start-Up Expenses: 

Initial Personnel $0.00

Building, Equipment, Technology $225,400.00

Professional Services $100,000.00

Supplies / Miscellaneous $0.00

Marketing /Communications $130,000.00

Travel $0.00

Website development /Translation $300,000.00

Contingency $0.00

 Subtotal $755,400.00

 

Operating / Administrative 

Expenses: 

Salaries $18,982,051.00

Professional Services (Legal, 

Compliance, Audit, Monitoring) $700,000.00

Travel $118,500.00

Buildings, Leases & Equipment $1,085,400.00

Information Technology & 

Communications $5,434,082.00

Office Supplies/Postage and 

Delivery/Subscriptions $340,075.00

Risk Management/ Insurance $239,147.00

Training $1,037,500.00

Marketing/PR $1,260,000.00

Miscellaneous $400,000.00

 Subtotal $29,596,755.00

 

 Transaction Related Expenses: 

Recording Fees $2,456,295.00

Wire Transfer Fees $500,000.00

 Counseling Expenses 

File Intake $2,928,800.00

Decision Costs $554,750.00

Successful File $22,708,000.00
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Doc#: US1:10098075v1 

Key Business Partners On-Going $2,700,000.00

 Subtotal $31,847,845.00

 

 Grand Total $62,200,000.00

 

% of Total Award 12.88%

Award Amount $482,781,786.00